Customer Relationship Management

"Process of creating and maintaining

relationships with business customers or
consumers
"A holistic process of identifying, attracting,
differentiating, and retaining customers
"ntegrating the firm's value chain to create
enhanced customer value at every step
"An integrated cross-functional focus on
improving customer retention and profitability for
the company.
Customer Relationship Management
Bottom-line:
The use of information-enabled systems
for enhancing individual customer
relationships to ensure long-term customer
loyalty and retention
CRM Objectives
Lifetime Value (LTV)
Refers to the net present value of the potential
revenue stream for any particular customer over a #
of years
Starts with current purchase activity then
extrapolates to include potential additions from
cross-selling, upgrades, total ownership, etc.
Customer Ownership
Attempts to "own the lionshare of customer
spending and/or "share of mind in a particular
product category
Building brand equity, maintaining vigilant customer
contact, keeping current with the market trends is
critical
5% points increase in customer retention=20-125%
increase in profit
s CRM New?
4
Simply an extension of
relationship marketing
Builds on customer
service and satisfaction
concepts
Just the latest buzzword
for creating customer
orientation
Bottom-line is still the
same
08
A shift in corporate
philosophy concerning
the approach to value
delivery
Customer-centric
approach to value chain
New and technology-
enhanced processes
Focus is not just on
bottom-line, but on top-
line
Goal is to create
satisfying experiences
across , customer
contact points
CRM Programs Can Potentially mprove
AnaIyticaI CRM
Customer Segmentation
Trend Analysis
Op07ati4naI CRM
Campaign Management
Tele-Marketing/Tele-Sales
Activity and Time Management
Quotation and Order Processing
Delivery and Order Fulfillment
Customer Service and Support
Remote Access
C4IIab47ativ0 CRM
Enterprise Portals
Customer Access
Supplier Access
Personalization
Areas of CRM Activity
Sales Force Automation (SFA)
Customer Service and Support (CSS)
Help Desk
Field Service
Marketing Automation
Areas of CRM Activity:
Sales Force Automation
35-40% of all CRM activity
Manages lead generation, tracks movement of
leads through the pipeline, allows better usage
of customer data, integrates activities across
sales channels, simplifies relationship
management, forecasts for opportunities
(SWOT)
Goldmine and SalesLogix are examples of
prepackaged SFA solutions.
Ex. Staples used SFA to integrate catalog,
online, in-store sales efforts directed at its best
customers
Areas of CRM Activity:
Customer Service and Support (CSS)
20-25% of CRM
Assign, escalate, and track trouble tickets,
inquiries, solution attempts through resolution
Provides information to support customer call
center activity
Gleans customer data from those interactions
and records it in SFA for later use
Remedy, Siebel, Vantive, and Clarify are major
vendors
Ex., 3M Adhesive Products division
Areas of CRM Activity:
Help Desk
15-20% of all CRM
Allows individuals to access network database
to solve their own problems or find information.
Can be internal or external
Offers many bottom-line savings
Human Click, Tivoli, LivePerson, are providers
Ex., Land's End Live allows customers browse
FAQ's but also click a link to talk directly with
live representative.
Areas of CRM Activity:
Field Service CRM
3-5% of all CRM activity
Mobile service technicians can log information
about work orders and service calls, as well as
access information from the remote site.
Can feed information from customer problems
into SFA for salesperson leads.
Market information can be gathered and logged
into central database.
Ensures appropriate resource allocation by
matching available resources to job
requirements
Major vendors are RTS, Metrix, eDispatch
Areas of CRM Activity:
Marketing Automation
3-5% of CRM, but growing 5X faster than all
others
nterfaces with data warehouses and data
mining activities to tailor page views, products,
and promotions, so that the right offer goes to
the right person at the right time.
Can interact with SFA to support field sales
efforts
Provides customized customer interactions
critical to segment of one marketing, mass
customization, customerization, etc.
www.webgroove.com, Epiphany, Oracle, Siebel,
and Personify are leaders
New Frontiers in CRM
Commercial E-Communities
What are people loyal to?
Families
Football teams
Schools
Clubs
Cultures
Countries
.E.: Communities not Corporations
Commercial E-Communities
Goal is to create an environment where
people get meaningful interactions with the
company and other users so that they feel
part of the enterprise.
Adds human component and engages
customers.
Creates more stickiness and "ownership
Ex. User Groups for software products
(Oracle, ntergraph)
Ex. Dell / Sony technical support communities
Can be run internally or by an external
organization such as Sift
Components of Commercial E-Communities
Customer-focused transactions
Ex. KEA Stock Query, Amazon rare book finder
Community nteractions
User product ratings, User alerts/Newswires, Dell
technical support
Access to Relevant nformation
Dell technical library, Customer chat rooms, Zero-
time search facility
Value-added Services Based on Customer
Data
New Frontiers in CRM
Customerization
Mass Customization Using flexible processes and
organizational structures to produce varied and
individualized products and services at the price of
standard mass-produced offerings.
Personalization Customization of some features of
a product or services so that the customer enjoys
more convenience, lower costs, or some other
benefit.
Segment-of-One Marketing Based on the idea of
the firm learning individual reactions to marketing
strategies, then treating this customer differently than
other customers.
Customerization Mass customization +
personalization + segment-of-one, dependent on a
web-based or electronic interaction
Distinctions in Customerization
Mass Marketing Customerization
Relationship
with customers
Customer is passive
participant in
process
Customer is active
co-producer,
Customer needs Researched and
articulated
May not be
articulated
Product and service
offering
Marketing and R&D
drive offering
Customized based
on customer
interactions
Price Fixed prices with
discounting
Value based
pricing; customer
determined
Communication Advertising and PR ntegrated,
interactive
Distribution Mix of direct and Direct (online)
Making CRM Happen
Evaluate products and processes customers'
terms.
Analyze the multiple channels through which the
company interacts with customers.
Examine how the company understands its
customers. Does it keep good data? How does
it get that data? Does information flow between
functional areas?
Provide fingertip access to all information.
Analyze human resources and ensure that
everyone has an understanding of philosophy of
CRM