2012 Carl-Johan Rosenbrijer

CRM part 1
Dr.Sc. (Econ.) Carl-Johan Rosenbrijer Department of Economy, Media and Engineering ARBIT Applied Research in Business an IT carl-johan.rosenbroijer@arcada.fi arbit.arcada.fi

2012 Carl-Johan Rosenbrijer

Customer Relationship Management: 30.81.9.2012

What is marketing Introduction to CRM - development of marketing Business and CRM strategy The nature and complexity of customer relationships The network approach Group assignment part 1 Customer loyalty Customer value and the value creation process Group assignment part 2 Future of CRM
2012 Carl-Johan Rosenbrijer

Business and CRM strategy

Strategic dimensions to CRM Business vs. CRM strategy Business relationship strategy

2012 Carl-Johan Rosenbrijer

Strategy and organisational issues

Individual attitudes affect ability and willingness to change and adapt
Thoughts
Vision

Feeling Activity
2012 Carl-Johan Rosenbrijer

Passion Action
Adapted from: Karlf (1987)

Strategic dimensions to CRM

What is strategic leadership? An ability to see the totality (holistically) - complexity An ability to identify the need for change turning points An ability to create a strategy for change An ability to know and use tools for the change process An ability to firmly and consistently lead the change process

2012 Carl-Johan Rosenbrijer

Strategic dimensions to CRM

Customers business strategy: Vision Mission Objectives Transaction based Customers business strategy: Vision Mission Objectives Co-operation based

&

non transparent relationship

&

transparent relationship

Our business strategy: Vision Mission Objectives

Our business strategy: Vision Mission Objectives

2012 Carl-Johan Rosenbrijer

Strategic dimensions to CRM

The obstacle removal business

Value creation!
Customer
Customers position now Customer Vision

Obstacles

Supplier

Suppliers position now

Obstacles

Supplier Vision

Subsupplier

Sub-suppliers position now

Obstacles

Sub-supplier Vision

The resource base!

2012 Carl-Johan Rosenbrijer

Business and CRM strategy

Turnover growth
Business Strategy
M & A operations Industry consolidation CRM Strategy
Acquiring and exiting customer relationships Gain, develop and keep customer relationships

Organic growth

2012 Carl-Johan Rosenbrijer

Business and CRM strategy

Profitability growth
Business Strategy Increase revenue CRM Strategy

Offering development, cross-sell and up-sell Partnerships

Customer relationship profitability Exiting relationships Coordintation and efficiency in customer interaction

Cut costs

Out-sourcing Shareholder value

Key supplier partnerships

Customer value

2012 Carl-Johan Rosenbrijer

Business and CRM strategy

Investments
Business Strategy CRM Strategy Supplier relationship management Customer oriented machine investments Supplier and customer relationship management Personnel Developing customer relationship competence Machinery R&D

M&A

Integration and coordination of both parties supplier and customer relationships 2012 Carl-Johan Rosenbrijer

Business relationship strategy

Strategically different customer relationships
Growing customer

Our company

Shrinking business potential!

Shrinking customer

Demanding customer

Stable & easy customer

2012 Carl-Johan Rosenbrijer

Business relationship strategy

Creating different interaction strategies for different customers

Business potential
Shrinking customers Growing customers

Demanding customer rel.

Managerial effort in the rel.

Stable & easy customer rel.

CRITICAL QUESTIONS: Why is the customer skrinking or growing? Why is the customer rel. easy or difficult to manage (nature of rel.)? How should we allocate or reallocate our managerial resources How should we interact with the customer? (hierarchical level, way of interacting)

2012 Carl-Johan Rosenbrijer

Business relationship strategy

Interaction strategy created with the strategic objective of moving the customer relationship to a new position in (or outside) the customer relationship portfolio Business potential
Shrinking customers Growing customers

EXIT!

Demanding customer rel.

Managerial effort in the rel.

Stable & easy customer rel.

2012 Carl-Johan Rosenbrijer

The nature and complexity of customer relationships

CRM perspectives and customer orientation

The customer relationship as an interaction process

2012 Carl-Johan Rosenbrijer

Key areas in customer oriented relationship management example professional services/ auditing company
ATTITUDES

ORGANIZATION

I am interested in doing my own tasks, We have the best possible competence for example auditing, tax or legal services in for example as good as I can. auditing, tax and legal services

Only

I am also interested Only We are also organized according to the in the customers situation, customers i.e. their challenges and concerns needs/concerns and we and even developing the manage the customer relationship customers business. as a whole, for example over the service areas 2012 Carl-Johan Rosenbrijer

What is CRM?
Customer Relationship Management: Managing a customer relationship in which additional value is created by developing the interaction in the way that the customers needs and concerns are taken care of. Starting point: Who is the customer?
2012 Carl-Johan Rosenbrijer

Who is the customer? Example: the facility business

THE INVESTOR? THE OWNER? THE TENANT?

THE USER?

THE BUILDER?

THE SERVICE PROVIDER?

SOMEBODY ELSE?

2012 Carl-Johan Rosenbrijer

Who is the customer? Example: the facility business

PERSON ORGANIZATION
Top management Middle management

The owner
The tenant The user The investor The builder
Operative level

The service provider

Somebody else

2012 Carl-Johan Rosenbrijer

Interaction process of the customer relationship

Process aspect essential management challenges

How does a customer relationship arise?

From where has the customer come? How has the customer come? Why has the customer come? When has the customer come?

How does the customer relationship fade/end?

Why does the customer relationship fade/end? Where to does the customer move? How does the customer move? When does the customer move?
CUSTOMER RELATIONSHIP FADES

CRM TODAY!

CUSTOMER RELATIONSHIP ARISES

CUSTOMER RELATIONSHIP DEVELOPES

THE LIFE CYCLE OF CUSTOMER RELATIONSHIPS

2012 Carl-Johan Rosenbrijer

Competition and offers a new world, but why? The Auditor Case
Accounting scandals

Transparency of price: Annual reports and corporate governance

Rotation (EU 8th directive)

Increased price awareness and demand for change (top management & owners)

Independence (EU 8th directive)

Other reasons?

From profession

to service business!

2012 Carl-Johan Rosenbrijer

One customer has many service prov. relationships The Auditor Case
Who has ERNST & YOUNG a rel. KPMG and with DELOITTE what service?
ETC. PWC Auditing services

Tax services

Financial advisory services

How is the service provider chosen and how/from where is the relationship managed?

C U S T O M E R

Other services

2012 Carl-Johan Rosenbrijer

Interaction process of the customer relationship

The b-to-b customer relationship is complex Several active persons from suppliers and customers side Who is the decision maker (the fox)? Which incidents affect customers decision? Suppliers offering (i.e. products and services) is often integrated to customers activities and affects customers own success Exchange in one customer relationship affects other customer relationships (network effect)
2012 Carl-Johan Rosenbrijer

Interaction process of the customer relationship

B-to-b customer relationship is complex

Customer
Management

Coordination of the interaction process between organisation levels

Middle management
Operative level

CUSTOMER RELATIONSHIP
Operative level

Middle management Management

Supplier
Coordination of the interaction process between divisions and departments 2012 Carl-Johan Rosenbrijer

Interaction process of the customer relationship

Who is managing the relationship? Supplier traditionally in production based business (for example forest industry) Customer traditionally in purchasing based business (for example construction industry and retailing) Both traditionally in product development based business

2012 Carl-Johan Rosenbrijer

Interaction process of the customer relationship

The nature of the customer CUSTOMER relationship
DOMINATED

COMPETITION

COOPERATION

SUPPLIER DOMINATED
Source: Alajoutsijrvi (1996)

2012 Carl-Johan Rosenbrijer

The network approach and group assignment part 1

A network approach Group assignment part 1

2012 Carl-Johan Rosenbrijer

A network approach
Markets Transactions Relationships/Partnerships Supplier Buyer/End User/Consumer Institutional Strategic Alliances Hierarchies Acquisitions Mergers Divestitures Joint Ventures

2012 Carl-Johan Rosenbrijer

A network approach
Supplier Customer
Customers customer

Subsupplier Supplier
Subsupplier Supplier

Exchange
Customer

Isolated?

Customers customer

Customer

No!

2012 Carl-Johan Rosenbrijer

A network approach
Other Suppliers Equipment Manufacturers Pulp Producers Forest Owners Owners Authorities Banks Capital Markets Research Institutes Consultants

Environmental Organisations
Media Trade Unions

Paper Producers Printers Merchants

Publishers

Customer Adv. Company Agencies End Users / Consumers

2012 Carl-Johan Rosenbrijer

Group Assignment: Part 1

Create a total view of the chosen customer companys/units business network (current situation), I.e. network picture: all central companies and organisations all central supplier/buyer and other interorganisational relationships of importance

2012 Carl-Johan Rosenbrijer

Thank You!
carl-johan.rosenbroijer@arcada.fi

2012 Carl-Johan Rosenbrijer