BUSINESS DRIVEN
TECHNOLOGY
Chapter Eleven:
Building a Customer-Centric
Organization – Customer
Relationship Management
LEARNING OUTCOMES
11.1 Compare operational and analytical customer
relationship management
11.2 Identify the primary forces driving the explosive growth
of customer relationship management
11.3 Define the relationship between decision making and
analytical customer relationship management
11.4 Summarize the best practices for implementing a
successful customer relationship management system
1-800-flower
• Enterprise Minder (SAS) to
– reveal trends,
– explain outcomes,
– predict results
• Revenue increase 7.5%
• $124 million
New York Time
•
•
•
•
•
Find similarities among groups of readers
How to appeal to those groups
National Newspaper
Reach it offers to advertiser
Achieve a customer retention rate of 94% while
industry rate is at 60%
National Basketball Association’s
New York Knicks
• Better than ever communicating with their fans
• Which seasons ticket holders like which players
• Which merchandise they buy and where they buy
Brother International Corporation
• Skyrocket growth in its sales of multifunction
centers, fax machines, printers labeling system
• Increase in customer service calls
• Failed to answer the phone fast enough, product
return started to increase
• Upping call center capacity, return began to drop
• CIO realize that the company losing a world of
valuable market intelligence
Brother International Corporation (2)
• Deploy SAP’s CRM,
– Reduce calls handle from 1.8 to 1.57 million calls
– Reduce agents from 180 to 160 agents
• Customer demographic info is now stored and
display on the agents screen based on incoming
telephone number
– Reduced call duration by 1 minutes
– Reduced cost by $600,000/year
CHAPTER ELEVEN 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
CHAPTER ELEVEN 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
CUSTOMER RELATIONSHIP
MANAGEMENT’S EXPLOSIVE GROWTH
• CRM Business Drivers
CUSTOMER RELATIONSHIP
MANAGEMENT’S EXPLOSIVE GROWTH
• Forecasts for CRM Spending (in billions)
USING ANALYTICAL CRM
TO ENHANCE DECISIONS
• Operational CRM – supports traditional
transactional processing for day-to-day front-office
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
USING ANALYTICAL CRM
TO ENHANCE DECISIONS (2)
• Operational CRM and analytical CRM
USING ANALYTICAL CRM
TO ENHANCE DECISIONS (3)
• Operational CRM
– Automates call centers and sales forces with the aim of
enhancing customer transactions
• Analytical CRM
– Designed to dig deep into a company’s historical
customer information and expose patterns of behavior
on which a company can capitalize
– Use to enhance and support decision making and
works by identifying patterns in customer information
collected from the various operational CRM
CUSTOMER RELATIONSHIP
MANAGEMENT SUCCESS FACTORS
•
CRM Success factors include:
1.
2.
3.
4.
5.
Clearly communicate the CRM strategy
• to both employee at all level and customers
Define information needs and flows
Build an integrated view of the customer
Implement in iterations
• In pieces
Scalability for organizational growth
• Estimate future needs is the hardest part
–
–
–
How the organization is going to grow
How technology is going to change
How customers are going to evolve
OPENING CASE STUDY QUESTIONS
Revving Up Sales at Harley-Davidson
1. Assess the impact on Harley-Davidson’s
business if it decided to sell accessories directly
to its online customers, be sure to include a brief
discussion of the ethics involved in this decision
2. Evaluate the HOG CRM strategy and recommend
an additional benefit Harley-Davidson could
provide to its HOG members to increase
customer satisfaction
CHAPTER ELEVEN CASE
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
CHAPTER ELEVEN 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