CHAPTER 11
Customer Relationship
Management (CRM)
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Harley-Davidson begins the Harley Owners Group
to encourage customer involvement
Learning Outcomes
 Compare operational and analytical CRM
 Identify the primary forces driving the
explosive growth of CRM
 Define the relationship between decision
making and analytical CRM
 Summarize the best practices for
implementing a successful CRM system
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Overview
 CRM is a business philosophy based on the
premise that those organizations that
understand the needs of individual customers
are best positioned to achieve sustainable
competitive advantages in the future
 This chapter discusses

The reasons for CRM’s explosive growth

Using CRM to enhance decision making

CRM success factors
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Overview
CRM enables an organization to:
 Provide better customer service
 Make call centers more efficient
 Cross sell products more effectively
 Help sales staff close deals faster
 Simplify marketing and sales processes
 Discover new customers
 Increase customer revenues
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Brother International experienced skyrocketing
growth in its sales of multifunction printers
A tremendous increase in customer service calls
When Brother failed to answer the phone fast
enough, product returns started to increase
After Brother deployed SAP’s CRM solution,
the 1.8 million calls in 2003, dropped to 1.57 million
The CRM system has also reduced call duration
by an average of one minute
CRM Business Drivers
Forecasts for CRM Spending (in billions)
Using Analytical CRM to
Enhancing Decisions
 Operational CRM – supports traditional
transactional processing for day-to-day frontoffice operations or systems that deal directly
with the customers
 Analytical CRM – supports back-office
operations and strategic analysis and
includes all systems that do not deal directly
with the customers
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Operational CRM and analytical CRM
CRM Success Factors
 Clearly communicate the CRM strategy
 Define information needs and flows
 Build an integrated view of the customer
 Implement in iterations
 Scalability for organizational growth
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Gearing Up at REI
 REI deserves recognition as an industry leader for its
“best practice” multichannel CRM strategy, which
allows customers to seamlessly purchase products at
the company’s 70 retail stores as well as by
telephone, mail order, and on the Internet
 REI’s CRM system benefits:




Minimizes maintenance costs
Scales easily as company grows
Provides sophisticated data warehouse for business
intelligence
Provides high availability
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Case Questions
1. Summarize why it is important for REI to use
CRM strategies to consolidate its customer
information
2. Determine two pieces of customer information
that REI could extrapolate from its CRM system
that would help it manage its business more
effectively
3. Explain how REI could use personalization to
give its customers a more satisfying shopping
experience
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