CHAPTER 11
Building a CustomerCentric Organization –
Customer Relationship
Management
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
LEARNING OUTCOMES
1. Define customer relationship
management and its role in supporting
business operations.
2. Identify the benefits and challenges of
CRM.
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CUSTOMER RELATIONSHIP MANAGEMENT
• Customer Relationship Management (CRM) is a means of
managing all aspects of a customer’s relationship with an
organization to increase customer loyalty and retention and
an organization’s profitability
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CUSTOMER RELATIONSHIP MANAGEMENT
• CRM enables an organization to:
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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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THE BENEFITS OF CRM
• Firms can find their most valuable customers by
using the RFM formula: recency, frequency, and
monetary value
• Organizations MUST track:
– How recently a customer purchased items
– How frequently a customer purchased items
– The monetary value of each customer purchase
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EVOLUTION OF CRM
• There are three phases in the evolution of CRM:
– Reporting
– Analyzing
– Predicting
• CRM Reporting Technologies help organizations
identify their customers across other applications
• CRM Analysis Technologies help organizations
segment their customers into categories such as best
and worst customers
• CRM Predicting Technologies help organizations
predict customer behavior, such as which customers are
at risk of leaving
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OPERATIONAL AND ANALYTICAL CRM
• 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
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OPERATIONAL AND ANALYTICAL CRM
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CUSTOMER RELATIONSHIP MANAGEMENT
SUCCESS FACTORS
•
CRM success factors include:
1.
2.
3.
4.
5.
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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