615644 Data Warehousing

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615-644 Data Warehousing
Week 11 Customer Relationship Management System
Benefits
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CRM System Benefits

• This paper proposes a framework for understanding
  the benefits of Customer Relationship Management
  (CRM) systems
• The framework comprises benefits grouped into
  categories and detailed indicators for each
  benefit

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CRM Systems

• CRM is concerned with the business processes and
  enabling technologies that focus on managing and
  improving relationships with customers in the
  areas of sales, marketing and customer support
  and service

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CRM Systems Implementation

• CRM systems implementation is both expensive and
  risky but firms continue to invest in CRM systems
• Anticipation of benefits is the driver for any
  information system implementation
• There is currently no comprehensive framework for
  understanding the benefits of CRM systems

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CRM Benefits Framework

• Practitioners
• Determining the feasibility of CRM projects
• Assessing which benefits have been achieved in
  post-implementation reviews
• Establishing benchmarks for CRM projects
• Researchers
• A systematic approach for exploring CRM system
  benefits

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How the Framework was Developed

• Extensive literature review construction of
  initial benefits framework
• Analysis of published case studies of CRM system
  implementations
• Interviews with CRM implementation experts
• Focus group of CRM implementation experts

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Interviewees
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Focus Group Participants
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CRM Benefits Framework
CRM Organizational Culture
Benefits in Other Internal Functional Areas
Benefits in External Partnerships
Benefits in Sales, Marketing and Customer
Service Functional Areas
Operational Benefits
Tactical Benefits
Strategic Benefits
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Operational Benefits

• Improved customer data management
• Improved process management
• Improved customer service
• Empowerment of staff
• Improved productivity
• Enables real-time responsiveness to trends

CRM Organizational Culture
Benefits in Sales, Marketing and Customer
Service Functional Areas
Benefits in Other Internal Functional Areas
Benefits in External Partnerships
Operational Benefits
Tactical Benefits
Strategic Benefits
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Operational Benefits

• Improved customer data management
• Improved accuracy of customer information
• Improved completeness of customer information
• Decrease in the number of duplicate records
• Reduction in time taken to access complete
  customer information
• Increase in timeliness of information
• Improved customer data history

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Operational Benefits

• Improved process management
• Reduction in the number of redundant processes
• Increase in efficiency at different stages of
  managing the customer
• Increase in efficiency in assignment of tasks

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Operational Benefits

• Improved Customer Service
• Increase in number of resolutions of first point
  of contact
• Reduced handling time for enquiries
• Increased access to up-to-date information at the
  point of customer contact

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Operational Benefits

• Empowerment of Staff
• Increased conversion rate of prospects
• Increased staff confidence level
• Reduction in administration of sales staff

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Operational Benefits

• Improved productivity
• Reduction in lost opportunity costs
• Reduction in costs for lead generation,
  marketing, customer sales and service
• Increase in the number of customers handles per
  sales representative

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Operational Benefits

• Enabling of real-time responsiveness to trends
• Increase in number of cross-sales
• Increase in number of up-sales
• Earlier detection of trends
• Reduction to time in market
• Increased number of effective campaigns
• Increase in number of pro-active services

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Tactical Benefits

• Facilitates market segmentation
• Facilitates key account management
• Improved channel management
• Improved analysis, reporting and forecasting

CRM Organizational Culture
Benefits in Sales, Marketing and Customer
Service Functional Areas
Benefits in Other Internal Functional Areas
Benefits in External Partnerships
Operational Benefits
Tactical Benefits
Strategic Benefits
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Tactical Benefits

• Facilitates market segmentation
• Increase in campaign response rates
• Increase in identification and utilization of
  business opportunities
• Increase in target marketing driven revenue
• Increase in profitability of market segments
• Increase in number of target marketing
  initiatives

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Tactical Benefits

• Facilitates key account management
• Increase in average customer lifetime
  value/profitability
• Increase in number of customers with high
  lifetime value
• Reduction in customer credit risk

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Tactical Benefits

• Improved channel management
• Reduction in the usage of cost-ineffective
  channels
• Reduction in channel cost per sale
• Increase in number of transactions through
  cost-effective channels
• Increase in the number of customer self-service
  activities

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Tactical Benefits

• Improved analysis, reporting and forecasting
• Improvement in monitoring of KPIs
• Improvement in reporting at customer rather than
  account level
• Increase in the number of relevant reports
  available
• Increase in accuracy of forecasts
• Improvement in timeliness of forecasts

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Strategic Benefits

• Improved customer satisfaction
• Improved business performance

CRM Organizational Culture
Benefits in Sales, Marketing and Customer
Service Functional Areas
Benefits in Other Internal Functional Areas
Benefits in External Partnerships
Operational Benefits
Tactical Benefits
Strategic Benefits
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Strategic Benefits

• Improved customer satisfaction
• Improved value perception
• Increase in period of customer loyalty
• Increase in the number of repeat customers
• Reduced number of complaints
• Increase in word-of-mouth recommendations

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Strategic Benefits

• Improved business performance
• Increase in profit
• Increase in share of wallet
• Increase in customer retention
• Increase in revenue per customer
• Increase in sales
• Increase in the number of customers

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Benefits in other Internal Functional Areas

• Improved innovative use of CRM systems

CRM Organizational Culture
Benefits in Sales, Marketing and Customer
Service Functional Areas
Benefits in Other Internal Functional Areas
Benefits in External Partnerships
Operational Benefits
Tactical Benefits
Strategic Benefits
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Benefits in other Internal Functional Areas

• Improved innovative use of CRM systems
• Increase in CRM system driven innovation

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Benefits in External Partnerships

• Improved value-added partnerships

CRM Organizational Culture
Benefits in Sales, Marketing and Customer
Service Functional Areas
Benefits in Other Internal Functional Areas
Benefits in External Partnerships
Operational Benefits
Tactical Benefits
Strategic Benefits
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Benefits in External Partnerships

• Improved value-added partnerships
• Increase in number of internal/external
  value-added linkages

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Use of the Framework in Practice

• Planning CRM systems implementation
• The benefits framework can be adapted of
  customised for particular projects
• Undertaking post-implementation reviews
• Enables identification of all benefits that can
  accrue
• Benchmarking CRM system projects
• Against standardised evaluations

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Use of the Framework in Research

• Exploring the gap between expected and realised
  benefits
• Multiple case study - could also identify factors
  that enable and inhibit CRM benefits realisation
• Development of an instrument to measure net
  benefits in CRM projects
• Benefits / indicators are a good starting point

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Conclusion

• The CRM benefits framework provides practitioners
  and researchers with a systematic means of
  understanding CRM system benefits