Customer Relationship Management

1
Customer Relationship Management

• Process of creating and maintaining
  relationships with business customers or
  consumers
• A holistic process of identifying, attracting,
  differentiating, and retaining customers
• Integrating the firms value chain to create
  enhanced customer value at every step
• An integrated cross-functional focus on
  improving customer retention and profitability
  for the company.

2
Customer Relationship Management

• Bottom-line
• The use of information-enabled systems for
  enhancing individual customer relationships to
  ensure long-term customer loyalty and retention

3
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 retention20-125
  increase in profit

4
Is CRM New?

• No!
• 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

• Yes!
• 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
  all customer contact points

5
CRM Programs Can Potentially Improve

• Analytical CRM
• Customer Segmentation
• Trend Analysis
• Operational 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
• Collaborative CRM
• Enterprise Portals
• Customer Access
• Supplier Access
• Personalization

6
Areas of CRM Activity

• Sales Force Automation (SFA)
• Customer Service and Support (CSS)
• Help Desk
• Field Service
• Marketing Automation

7
Areas of CRM ActivitySales 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

8
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

9
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., Lands End Live allows customers browse
  FAQs but also click a link to talk directly with
  live representative.

10
Areas of CRM ActivityField 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

11
Areas of CRM ActivityMarketing Automation

• 3-5 of CRM, but growing 5X faster than all
  others
• Interfaces 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

12
New Frontiers in CRM

• Commercial E-Communities
• What are people loyal to?
• Families
• Football teams
• Schools
• Clubs
• Cultures
• Countries
• I.E. Communities not Corporations

13
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,
  Intergraph)
• Ex. Dell / Sony technical support communities
• Can be run internally or by an external
  organization such as Sift

14
Components of Commercial E-Communities

• Customer-focused transactions
• Ex. IKEA Stock Query, Amazon rare book finder
• Community Interactions
• User product ratings, User alerts/Newswires, Dell
  technical support
• Access to Relevant Information
• Dell technical library, Customer chat rooms,
  Zero-time search facility
• Value-added Services Based on Customer Data

15
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

16
Distinctions in Customerization
17
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