Dr' Michael Williams

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Competition, Strategy IT
Dr. Michael Williams MBAM 603 Fall 2008
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Class Agenda
600 - Introductory comments 610 - Quiz 625
- Presentation CRM 720 - Break 740 - CRM
Follow Up Discussion 830 - Team Exercise on
Strategy CRM 900 - Preview of Week 4
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Quiz
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BREAK!
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Customer Relationship Management
A review of how technology enables closer
relationships with customers
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a little history
Technology tends to move in waves
Early 2001 -
1990s - ERP
Then
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Whats the problem?

• Who are your customers?
• What do they want?
• How can you drive demand for your products?
• What new products would be most appealing to
  them?
• What ad dollars drive new sales?

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The changing face of IT
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Angels Demons

• CRM is more of a mindset than a single system.
• Customer Relationship Management
• A strategy that uses IT to capture and manage
  information about customers needs and behaviors
  in order to develop stronger ties to them.
• CRM helps firms to identify and manage both
  angel and demon customers.

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Seeing it in Practice

• Read the article on Angel customers at Best Buy
  from the Wall Street Journal.
• In your teams discuss the article and post your
  responses in the Discussion Forum.

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Week 4

• All participation MUST be completed by Monday,
  9/22.
• Instructions are in Bb.
• You may collaborate an all assignments except the
  quiz.

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The End
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Comparing Customers
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Why manage customer relationships?

• Segmentation
• Prioritization
• Acquisition
• Customization
• Personalization
• Anticipation

• Education
• Innovation
• Cross- and Up-Selling
• Loyalty through delight, value and relationship
• Retention

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CRM Market What is CRM?
Marketing Encyclopedia
Contact Management
Lead Generation
Account Management
Data Mining/ Warehousing
Opportunity Management
Company
Direct Mail/Email
Vendors
Info
Marketing Automation
Bills
Sales Force Automation
Lead Distribn Mgmt
Customers
PACE
CRM
Marketing Campaign
Payments
Pricing Config Engines
Products
Inventory
Customer Service
Accounts
Personalization/ Recommendation
Ledger
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Knowledge Base
Field Service
Live/Chat Interaction
Web Self-Service
Call Center
Help Desk
Knowledge Management
Order Management
Partner Management
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CRM-Sales Force Automation

• What information and processes does management
  need from sales staff?
• What information and processes do sales staff
  need to achieve superior results?

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CRM-Customer Service
Communication Efforts
Customer Information
WITHOUT CRM
WITH CRM
Web
Web
The Firm
Email
Email
One message to customers
Catalog
Catalog
Phone
Phone
Store
Store
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CRM - Marketing Automation
The effective management and tracking of all
marketing media to personalize your message to
each customer and increase marketing ROI.
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CRM Components
Optimized Customer Contacts Develop and implement
business processes to ensure consistent,
high-quality, and tailored interactions with
customers that increases customer satisfaction
and collects valuable data on their needs and
preferences.
Customer Knowledge Management Capture, analyze,
and apply information about customer needs,
behavior, and transaction history needs to
maximize value delivered to the customer and
value captured by the firm across the customer
lifecycle.
CRM
Integrated Technology A comprehensive integrated
technology architecture must be put in place that
cuts across existing organizational boundaries
and is founded upon a customer-centric view of
the business.
Collaborative Organization The organization must
evolve a consistent customer-centric philosophy
across human resource management and internal
communications.
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CRM Technologies

• No single CRM technology, but there are
  attempts at one-stop CRM solutions.
• Some CRM technologies include
• Data warehouse
• Data mining
• Intelligent agents
• Unified marketing management
• Unified Multi-channel customer contact
  technologies (web, email, chat, voice)?
• Contact management
• Web-based customer self-service

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Comparing Vendors

• In your teams, watch these three videos and
  compare the products. What can you learn about
  the relative strengths of each, and which might
  be best for a) a large Fortune 500 bank b) a
  startup food producer?
• Microsoft CRM
• Oracle/Siebel Systems (try this one)?
• SalesForce.com

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CRM Costs

• It depends on your target
• Single applications can cost as little as
  10,000-50,000. But these usually dont provide
  too much value.
• CIO Magazines 2001 survey found that 50 of
  firms (n1600) had a CRM budget of less than
  500,000.
• That same survey showed some firms spend gt 10 M
  on CRM projects.

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Benefits of CRM

• Discover, Acquire, and Retain Customers
• Increase Customer Satisfaction and Profitability
• Help Sales Staff Close Deals Faster
• Cross Sell Products More Effectively
• Make Call Centers More Efficient
• Simplify Marketing and Sales Processes
• Purchase Inventory with Better Accuracy
• Allocate Labor Dollars More Strategically
• Streamline the Supply Chain

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Where and How to Start?

• Give every customer a unique ID
• Capture transaction data
• Capture human insights
• Create and articulate a customer strategy
• Create a customer-focused organization
• Identify useful information benefiting users
• Provide simple, fast, convenient access to
  customer information and knowledge
• Dont irritate or stalk customers employees
• Start small, solve problems, add value, build on
  successes

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CRM Target and Lessons
What was unique, interesting, insightful, or
revelatory about the Goodhue et al. article?
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CRM Targets

• Install individual customer-oriented applications
  (e.g., database marketing 56, call centers 53,
  web portals 40)?
• Build CRM infrastructure into organization (e.g.,
  network and consistent data)?
• Transform the organization to customer centered
  (e.g., process redesign)?

Source Goodhue et al., 2002 MISQE 12
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CRM Lessons

• Each target has unique costs and benefits
• Sponsorship varies by target
• Each target evolves
• Each target is messy
• Scalability is key since each target evolves
• Targets involve increasing role from users

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Team Exercise

• In your teams, review the Tesco, UK case on p. 59
  in the textbook. (10 minutes)?
• Discuss the three questions following the brief
  case.
• Post your responses in Blackboard.

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BREAK!
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IT Strategy
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Strategy and IT
How are / might Information and Process Systems
help your firm address these strategic
challenges and opportunities?
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Achieving a Competitive Advantage
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Strategy and the Internet
What was unique, interesting, insightful, or
revelatory about the Porter article?
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Strategy and the Internet

• With your team identify and define at least 3
  terms in the Porter paper that are new and
  relevant (i.e., switching costs, barrier to
  entry, network effects). Post your terms and
  definitions in Bb.

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Discussion Questions

• In your teams discuss the following and submit
  your answers to Blackboard
• Who will capture the economic benefits that the
  Internet creates?
• Will all the value end up going to customers, or
  will companies be able to reap a share of it?
  How?
• What is the Internets impact on industry
  structure?