Lecture Seven

1
Lecture Seven

• Ian Harris
• Entrepreneurial Champion

2
Customer Relationship Management (CRM)
Technologies (Part One of Two)

• Lecture Aim To give an in-depth overview of CRM
  / eCRM technologies so that the student better
  understands the mechanics in relation to
  eMarketing

3
Lecture Objectives

• In this lecture you will learn what the links
  between eMarketing and CRM actually are
• You will learn what CRM actually is with
  definitions provided and resources for further
  learning
• You will learn why CRM is important from the main
  provider of CRM Software (Siebel)
• You will be presented with an array of facts and
  figures surrounding the paradigm which is CRM and
  will include positive and negative statistics
• You will also learn and be given links to the
  main CRM software vendors
• You will learn what the main objectives of a CRM
  strategy is including areas such as customer
  acquisition, profitable and unprofitable
  customers, churn rates and many more

4
Content

• What is CRM?
• Why is CRM Important?
• Facts and Figures of CRM
• Objectives of a CRM Strategy
• Customer Acquisition
• Profitable Customers
• Unprofitable Customers
• Customer Retention
• Increase Customer Value and Customer Satisfaction
• Reducing Customer Churn
• Personalisation / Customisation
• Customer Segmentation
• Customer Loyalty
• Cross-Selling Opportunities
• Collaboration
• Differentiation

5
Links between eMarketing and CRM

• Upsetting your customers through any section of
  the transactional processes either online or
  offline may ultimately be the driver to enhancing
  your competitors revenue stream and profit
  margins
• Getting your customer relationships right and
  making your customers feel satisfied, fulfilled
  and valued is integral to the overall success of
  any eMarketing campaign and links to all the
  lectures within this module!

6
What is CRM?

• a.k.a. customer intelligence -or- e-business
  relationship management -or- e-CRM -or-
  personalisation
• CRM Definition
• There are several definitions of CRM
• CRM is the process in which business and
  technological techniques are combined to create
  and enhance long-term relationships between a
  business and its customers. Through one-to-one
  marketing techniques and processes a business
  aims to have a better understanding of who their
  customers are, what they like, and what they
  expect. The ultimate goal of a business to
  maximise customer retention, loyalty and
  profitability
• CRM is an effort to create the whole picture of a
  given customer, bringing together consistent,
  comprehensive and credible information on all
  aspects of the existing relationship, such as
  profitability information, risk profiles and
  cross-selling potential

Source http//www.netlingo.com/
Source Nolan, R, pp 5, 2001
Source Papows (1999) cited in Ryals et al (2000)
7
Why is CRM Important?

• The benefits of CRM are clear By streamlining
  processes and providing sales, marketing, and
  service personnel with better, more complete
  customer information, CRM enables organisations
  to establish more profitable customer
  relationships and decrease operating costs
• Sales organisations can shorten the sales cycle
  and increase key sales-performance metrics such
  as revenue per sales representative, average
  order size, and revenue per customer
• Marketing organisations can increase campaign
  response rates and marketing-driven revenue while
  simultaneously decreasing lead-generation and
  customer-acquisition costs
• Customer service organisations can increase
  service-agent productivity and customer retention
  while decreasing service costs, response times,
  and request-resolution times
• Across every sector and industry, effective CRM
  is a strategic imperative for corporate growth
  and survival. Research has shown that companies
  that create satisfied, loyal customers have more
  repeat business, lower customer-acquisition
  costs, and stronger brand valueall of which
  translates into better financial performance

Source http//www.siebel.com/
8
Facts and Figures of CRM

• This table shows the perceived important
  technologies in which CRM is required by
  businesses in 2001
• It also shows the perceived important technology
  increases for the following 2 years i.e. 2002-2003

Source http//www.consultants-advisory.com/
(2001) (Outstanding free resource)
9
Facts and Figures of CRM

• This is a graphical representation of the
  percentage of customers which used these various
  channels of communication to keep in touch with
  businesses in 2001. It also shows the perceived
  planned communication channels for the future
  from 2001

Source http//www.consultants-advisory.com/
(2001) (Outstanding free resource)
10
Facts and Figures of CRM

• Two years ago, at the height of the CRM boom,
  almost two-thirds (64) of the companies who took
  part in this survey declared themselves convinced
  that investment in CRM systems was responsible
  for putting them ahead of the competition
• Last year (2002), that proportion slipped a
  little, down to 56, but still more than half of
  those polled felt that CRM was making a
  contribution to their success

• This years results show a marked change,
  however, with just 42 claiming that using CRM
  technology is a sure-fire way to stay on top

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
Further Resource http//www.CRMCommunity.com/
(Good resource)
11
Facts and Figures of CRM

• Last years survey (2001) showed that improving
  the lifetime value of customers was the number
  one goal in adopting a CRM strategy, with our
  respondents giving it an aggregated score of
  4.28. In contrast, retaining existing customers
  (4.26) or attracting new customers (4.00) were
  viewed as less important considerations
• However the respondents this year (2002) put the
  need to improve customer service levels top of
  the list (4.50), followed by retention of
  existing customers (4.18). Improving the
  customers lifetime value to the company

• drops to third place (4.10)

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
12
Facts and Figures of CRM

• Where companies have apparently got smarter is in
  using customer analytics (lecture 8) to determine
  their requirements
• A quarter of our sample (28) claim to be doing
  this to a great extent, while 34 are making
  moderate use of this technique and 24 say they
  make some use of it

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
13
Facts and Figures of CRM

• The fact that virtually all companies appear to
  accept the value that customer analysis can add
  to their business operations is significant. Only
  6 of our current sample fail to use this
  technology at all, whereas a quarter (24) of
  last years respondents did not
• The survey suggests that companies and their
  customers are gradually growing more comfortable
  at handling an online relationship. The vast
  majority (92) of those we polled report that
  customers or clients can contact their company
  via its website, for instance
• At the moment, the more established options
  such as email (100), telephone (100) and fax
  (96) currently top the list of communications
  channels in use. However, in the future companies
  expect to place more weight on options such as
  call centres (64, up from 56) and on PDAs (32
  up from 20). Once again, the use of interactive
  TV is predicted to grow strongly (10 currently,
  28 in future)
• With so many different channels either in use or
  viewed as potential options, it is not surprising
  that companies appear less concerned than before
  about achieving total channel integration. Only
  22 of those we spoke to believe this has a
  significant impact on customer acquisition,
  although a larger proportion (32) maintain it
  has an effect on customer loyalty (see Figure 4
  on previous slide)

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
14
Facts and Figures of CRM

• In contrast, there is widespread agreement that
  content is crucial no matter which channel is
  being used
• As Figure 5 shows, two-thirds (66) of our sample
  give this a high priority and 28 a medium
  priority, compared to just 4 who place a low
  priority on this and the 2 for whom it is not
  applicable

• Content is viewed as particularly important for
  telephone (66), email (60) and call centre
  (42) operations. Interestingly, companies give
  very low priority to the content requirements for
  either PDAs or WAP-based channels perhaps
  suggesting that the novelty of the channel should
  be sufficient enticement for consumers to want to
  make use of it

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
15
Facts and Figures of CRM

• For the first time in this survey, we asked our
  respondents about any plans they may have to
  expand their CRM applications to include other
  audiences, most notably their own employees or
  their suppliers and/or partners. A third (32)
  plan to do so in future

• Meanwhile, half the sample (50) already offer
  self-service facilities via the corporate
  website for customers, employees or partners

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
16
Facts and Figures of CRM

• Projected CRM growth in comparison to other
  technologies

Source Nolan, R , PhD Proposal, 2001
17
Facts and Figures of CRM

• CRM Software Leaders

SourceGartner Dataquest, 2000
18
Facts and Figures of CRM

• Some of the vendors of CRM Software for your
  reference. You can visit these and discover
  exactly what CRM Software can do to improve your
  customers relationships, Siebel in particular now
  offer a package for SMEs
• Accpac Europe http//www.eware.com/
• Applix http//www.applix.com/index.asp
• Epicor http//www.epicor.com/
• Mapics http//www.mapics.com/
• NORKOM Technologies http//www.norkom.com/
• Nortel Networks (UK) http//www.nortelnetworks.co
  m/corporate/global/emea/uk/index.html
• Oracle http//oracle.ittoolbox.com/
• PeopleSoft (UK) http//www.peoplesoft.com/corp/en
  /public_index.jsp
• Prime Response http//www.primeresponse.com/home.
  html
• Sales Page http//www.salespage.com/site/index.ht
  m
• SalesLogic / Interact http//www.interact.com/def
  ault.php3
• SAS (UK) http//www.sas.com/offices/europe/uk/
• Siebel http//www.siebel.com/

19
Objectives of a CRM Strategy

• There are several objectives to a business
  wishing to implement a CRM Strategy. The areas
  detailed below are important points to consider
  when implementing CRM
• Customer Acquisition
• Profitable Customers
• Unprofitable Customers
• Customer Retention
• Increase Customer Value and Customer Satisfaction
• Reducing Customer Churn
• Personalisation / Customisation
• Customer Segmentation
• Customer Loyalty
• Cross-Selling Opportunities
• Collaboration
• Differentiation

Source Nolan, R, PhD Proposal, 2001
Further Resource http//www.CRMCommunity.com/
(Outstanding free resource) http//www.opportu
nitywales.co.uk/ (Search here for CRM good
resource)
20
Customer Acquisition

• Customer acquisition in the context of CRM is the
  beginning of the CRM process
• Acquiring the customer and then being able to
  retain them is key
• If a business is unable to communicate
  efficiently and effectively with a prospective
  customer and support multiple channels then the
  business is not providing effective CRM (see
  slide 7)
• It has been suggested that Good CRM is
  pervasive Schreyer (2001)
• Knowing your customers from the moment of
  acquisition will help to build deeper
  relationships with them (Peppard, p321, 2000)
• and may ultimately lead to growth and increased
  margins (Swift, p42, 2001)
• On acquisition a business may then need to
  determine which channel and communication media
  the customer prefers to be contacted by and thus
  increase retention rates of customers

Source Nolan, R , pp 23 - 28, 2001
21
Customer Acquisition

• The customer should be known everywhere (Peppard,
  p313, 2000) by whichever channel they choose to
  communicate with the business
• Also, knowing the customers preferences, the
  channels they prefer, the technologies they use
  within the context of CRM is important, on this
  exact point it has been suggested that knowing
  where your customers interact and the types of
  technologies and transactions they prefer to
  utilise is important(Swift, 2001, p42) and
  ultimately key
• It could be suggested that effective CRM is
  about acquiring, analysing and sharing knowledge
  about and with your customers(Jutla et al)

Source Nolan, R , pp 23 - 28, 2001
Further Resources http//www.metagroup.com/
(simply go here and search for CRM) http//www.c
rmguru.com/members/papers/index.html (useful
resource)
22
Profitable Customers

• For the greater good of a business it is
  imperative that a customer becomes profitable
• A profitable customer is a person, household, or
  company that over time yields a revenue stream
  that exceeds by an acceptable amount the
  companys cost stream of attracting, selling, and
  servicing that customer. (Kotler, p 52, 1997)
• Profitable customers are those, which a business
  may like to continue transacting with for their
  natural lifetime, this is referred to as
  lifetime value (Swift, p20, 2001)
• As the relationship grows the customer may become
  someone who purchases profitable products on a
  regular basis, actively promotes the businesses
  products to friends, family and acquaintances in
  the form of referrals and will ultimately pay the
  premium price because in most business, old
  customers pay a higher price than newcomers
  (Gronroos, 2000, p131)

Source Nolan, R , pp 23 - 28, 2001
23
Unprofitable Customers

• From the perspective of CRM it is important for
  businesses to find out exactly who their
  unprofitable customers are so that they can be
  persuaded to become profitable
• It has been suggested by Reichheld and Schefter
  (p106, 2000) that if a business does not have the
  right customer from the point of acquisition then
  the business will face a dismal future catering
  to the whims of only the most price-sensitive
  buyers
• The technology and software, which helps to
  identify profitable customers, can also identify
  the unprofitable ones
• Once an unprofitable customer has been identified
  then a business would hope to transform them into
  a desirable customer (Davenport et al, p69, 2001)
  
• If an unprofitable customer becomes too costly to
  retain and the business has exhausted all avenues
  to make them profitable then they may want to
  offload these to competitors
• A business would need to be subtle in its
  approach to disposing of the customer, as they
  would not want them to become upset and so giving
  adverse word-of-mouth (Peck et al, p44, 1999)
  about the business. A way in which a business
  could do this is to take the customer off their
  mailing lists, not include them in promotions and
  so on

Source Nolan, R , pp 23 - 28, 2001
24
Customer Retention

• Customer retention is important as it plays a
  major role within the overall context of the CRM
  process
• The retention of customers can help to produce
  increased profitability (Swift, p75, 2001),
  loyalty (Kotler, p46, 1997), lifetime value (Peck
  et al, p47, 1999) and increase the chances of
  cross-selling (Peppard, p321, 2000).
• With this in mind it could be said that customer
  retention is an integral part of the overall CRM
  process. In this day and age of ever-increasing
  choices customer retention may be described as a
  priority for businesses
• The price of attracting new customers can be
  costly. It could be said that retaining existing
  customers is less expensive than trying to
  attract a new one away from a competitor or find
  new ones (Davenport et al, p66, 2001)

Source Nolan, R , pp 23 - 28, 2001
25
Customer Retention

• The amount a business can save or indeed make by
  retaining customers is varied depending on the
  type of business sector, which it is in
• If a business can improve its retention rate by
  5 then it may be able to increase its
  profitability by between 20 and 125 (Reichheld
  cited in Peck et al, p47, 1999)
• A way in which a business may endeavour to retain
  its customers may be through providing its
  customers with high levels of satisfaction
  (Peppard, p321, 2000) and value which may
  ultimately lead to stronger bonds and loyalty
  (Kotler, p46, 1997) between the customer and
  business
• It could also be achieved through the business
  encompassing high switching costs into its
  service in other words locking them into the
  service without making it look as though you are
  i.e. mobile phone companies lock you in with a
  minimal 12 month contract, which you would have
  to pay (in some way) to cancel
• It could be suggested that customer value and
  satisfaction are of paramount importance when it
  comes to retaining customers (see next two slides)

Source Nolan, R , pp 23 - 28, 2001
26
Increase Customer Value and Customer Satisfaction

• Within the context of CRM it could be suggested
  that building customer value and satisfaction are
  very important
• It has been suggested by Davenport et al (2001)
  that adding value for the customer builds
  credibility and trust between the business and
  customer and so enhancing the relationship
• Businesses seeking to gain advantage over
  competitors and differentiate themselves from
  them could possibly do this by offering the
  customer superior customer value (Day Wensley,
  p1, 1988)
• Julta et al (1999) suggest that value is
  essential (Julta et al, p1, 1999) when a customer
  is willing to exchange cash for a product or
  service
• In a recent publication Naumann et al (2001)
  suggest that satisfaction is undoubtedly one of
  the top strategic issues of recent times
• A customer who receives high value and
  satisfaction may also be more inclined to refer
  the business to friends, family and colleagues
• Naumann et al (2001) suggest that satisfaction
  has strong links with retention, profitability,
  loyalty, market share and growth

Source Nolan, R , pp 23 - 28, 2001
27
Increase Customer Value and Customer Satisfaction

• Naumann et al also suggest that it is crucial to
  have some sort of satisfaction program in place
  in fact they suggest that having an effective
  program is critical (Naumann, p37, 2001)
• DeRose describes value as the satisfaction of
  customer requirements at the lowest possible cost
  of acquisition, ownership and use (DeRose cited
  in Kotler, p10, 1997)
• In simple terms a customer will weigh up the
  advantages and disadvantages of a businesses
  wares and decide which one offers the best value
  for money
• A number of deciding factors could influence
  their choice including brand, the businesses
  image, the sales people, expected after sales
  service, the products reliability, durability and
  performance
• The customer may also be influenced by values
  such as monetary, time, energy and the psychic
  costs of obtaining the product or service
• Businesses, which have been successful in recent
  times for adding value, include the likes of
  Intel, Ericsson, Rover Group and BT (Cannon,
  p255, 1996)

Source Nolan, R , pp 23 - 28, 2001
28
Facts and Figures of CRM

• From a survey of Siebel Software Users
• Showing a 1 increase in customer satisfaction
  yields and a 3 increase in market capitalisation

Source http//www.siebel.com/
29
Reducing Customer Churn

• Customer churn or defection rate is the process
  in which customers move from one business to
  their competitors
• In the context of CRM reducing churn rates is
  especially important from the perspective of the
  business
• A loss of a customer may prove to be the loss of
  profit
• The proliferation rate within competitive markets
  such as the mobile telephone sector can be
  especially high where the churn rates can be
  anywhere between 20 and 30 (Swift, p7, 2001)
• It may be wise for businesses to stem the flow of
  churn from their business by trying to find out
  who the likeliest candidates are and then do all
  they can to try and stop them defecting,
  especially if they are a profitable customer
• This can be achieved with the help of technology
  and software to help analyse customers behaviour
  and habits
• One such mobile telephone business using
  technology in its battle to beat customer churn
  is the Pele-Phone Company of Israel

Source Nolan, R , pp 23 - 28, 2001
30
Reducing Customer Churn

• The technology they have in place includes a data
  warehouse (lecture 8) coupled with sophisticated
  data mining techniques (lecture 8) enables them
  to pinpoint a customer who they think may be
  about to defect, this is achieved by analysing
  the customers usage
• Once a possible defector has been detected the
  business can try to regain the customers loyalty
  by targeting them with special promotions or
  tailored services (Swift, p61, 2001) and so
  keeping the customer interested in Pele-Phones
  services and helping to retain them as a customer
• Another way to reduce churn may be to devise a
  system, which locks the customer into a
  business
• That is to say it is difficult for a customer to
  move to a competitor because it may involve time
  or other restrictions, for example, moving banks
  may include changing direct debits, standing
  orders, moving mortgages, savings, loans and or
  debit / credit cards, so in a way customers are
  locked into a business unless they are prepared
  to invest in the necessary time it would take to
  move to a competitor
• To help reduce churn a business may like to
  review its customer satisfaction and value added
  specifics because a lot can be done to influence
  poor service, shoddy products, high prices and so
  on (Kotler, p47, 1997)

Source Nolan, R , pp 23 - 28, 2001
31
Personalisation / Customisation

• In the early days of mass marketing Ford was
  famous for saying that customers could have their
  Model-T car in any colour as long as it was black
  (Kotler, p250, 1997)
• Personalisation, customisation or one-to-one
  marketing is becoming an integral part of the
  overall CRM process, as Peppard (p313, 2000)
  argues the effective management of information
  has a crucial role to play in CRM
• Getting to know your customers, their habits,
  their likes and dislikes may have its advantages
  if the information is used strategically
• Hagel III and Rayport (p5, 1996) suggest
  companies have good reason to collect information
  about customers as it helps the business to
  target their most valued customers, enable them
  to tailor its marketing strategies more
  effectively and efficiently and ultimately helps
  to improve customer satisfaction and retention
• and it will help to increase customer value also
  (Peck et al, p410, 1999)

Source Nolan, R , pp 23 - 28, 2001
32
Personalisation / Customisation

• An example of personalisation within CRM could
  include Amazon.com who, once a user has
  registered their details and / or made their
  first purchase steers its repeat book buyers to
  other types of products according to interests
  theyve shown in past purchases (Davenport et al,
  p66, 2001)
• Through the use of technology the Web site
  recognises a user when they return and greets
  them accordingly

Source Nolan, R , pp 23 - 28, 2001
33
Customer Segmentation

• Customer segmentation is linked with
  personalisation and could be described as
  segments of one (Kotler, p252, 1997)
• Peck et al (p37, 1999) argue that segmentation of
  the markets is a process of dividing up a broad
  generic market into a number of smaller groups,
  or market segments, given the characteristics of
  customers in those segments
• It is linked with personalisation in the fact
  that once a customer can be segmented as an
  individual market then they may be targeted with
  greater accuracy and efficiency
• That is to say a business segmenting its
  customers into singular individual markets
• It was reported on the IBM Website that Safeways
  idea of customer segmentation was to create a
  marketplace of one. With the Safeway
  representative going on to say We want to market
  our services to the individual. In fact,
  everything we do here is customer-centered.
  Thats our business advantage. (Mike Winch cited
  at www-3.ibm.com)

Source Nolan, R , pp 23 - 28, 2001
34
Customer Loyalty

• From a CRM perspective building loyalty can
  markedly help a business towards higher retention
  rates, higher profitability, increase
  cross-selling opportunities and increase
  competitive advantage over rival businesses
• However, not only does a business need to build
  loyalty for these reasons alone, but also because
  it has been suggested that building loyalty is
  essential for survival (Reichheld Schefter,
  p113, 2000)
• Customer loyalty is built up over time and forms
  an integral basis of a relationship between a
  customer and a business
• Loyalty is about earning the trust of customers
  (Reichheld Schefter, p106 2000, Gronroos,
  p129, 2000)
• It can also be influenced by branding (OReilly
  cited in Kotler, p444 1997)
• Loyalty may also be influenced by other
  contributing factors such as satisfaction, value,
  geography, availability and convenience

Source Nolan, R , pp 23 - 28, 2001
35
Customer Loyalty Example

• An example of a business building loyalty in
  recent times would be Tesco PLC who in 1995
  launched a loyalty card called Tesco Clubcard
  (Peck et al, 1999)
• Within the first six months the Clubcard had
  increased the businesses six monthly profits by
  16 and market share increased by 2.1 (Peck et
  al, p86, 1999), which led the Chairman of Tesco
  to proclaim that the Tesco Clubcard is the
  loyalty card in retailing (Sir Ian McLaurin cited
  in Peck et al, p87, 1999)

Source Nolan, R , pp 23 - 28, 2001
36
Cross-Selling Opportunities

• In the context of CRM cross-selling is highly
  important as it can help create higher retention
  rates and increase customer loyalty (Davenport et
  al, p69, 2001)
• It may also help in the context of reducing
  customer churn rates and increase customer
  referrals
• Cross-selling and up-selling are techniques used
  to entice customers to buy all of their purchases
  from one business as oppose to them going to
  multiple suppliers
• Although, cross-selling could be linked with
  acquisition in the fact that once a customer is
  acquired then cross-selling opportunities exist.
  It would have to be argued that until a customer
  is completely satisfied with a business and is
  also happy that the business is trustworthy, then
  cross-selling would become an opportunity in its
  own right

Source Nolan, R , pp 23 - 28, 2001
37
Cross-Selling Opportunities - Example

• If a bank acquires a new customer with them
  opening a new account cross-selling opportunities
  may become immediately apparent from the
  interview conducted by the manager before the new
  account was authorised. Questions such as pension
  provision, savings provision, mortgage
  requirements may have all been asked by the
  manager, which would give the bank multiple
  cross-selling opportunities, if the customer can
  be satisfied, feels they are getting value and
  can trust the bank

Source Nolan, R , pp 23 - 28, 2001
38
Collaboration

• Success within CRM may be helped by collaboration
• That is to say that a business may find it
  helpful to collaborate in the following ways
• Via internal mechanisms and communications
• Departments within businesses do not always have
  the most effective and efficient communication
  channels. However collaboration between key
  departments is essential for businesses to
  succeed within CRM. Information collected in
  databases about customers needs to be made
  available to all so that everyone is aware of the
  customer they may be conversing with
• Building and forming strategic alliances /
  partnerships, joint ventures with other
  businesses
• An example of collaboration could be that of
  businesses becoming part of one anothers supply
  chain. For instance, a supermarket being supplied
  with its products gives the necessary hardware to
  its suppliers to enable it to deliver its goods
  using a more efficient form of just-in-time
  delivery, for instance, when the supplier can see
  the level of stock on the supermarket shelf is at
  a low level it could dispatch an order. The
  supply chain becomes more streamlined, cost
  efficient and reliable because of this
  collaboration

Source Nolan, R , pp 23 - 28, 2001
39
Collaboration

• Success within CRM may be helped by collaboration
• That is to say that a business may find it
  helpful to collaborate in the following ways
• With its Customers
• To collaborate with customers in the form of
  building alliances with them could be a way in
  which businesses gain competitive advantage
  through CRM in the future?
• Customers may be willing to give information
  about themselves if they are going to get
  something in return such as a money off voucher.
  Hagel III and Rayport (1996, p7) argue that most
  consumers have shown that they are willing to
  release personal data if they can profit by doing
  so
• From the perspective of CRM this type of
  collaboration would help to build a clearer
  picture faster of a businesses customer base and
  enable more precise and accurate segmentation of
  its markets

Source Nolan, R , pp 23 - 28, 2001
40
Differentiation

• Within the context of CRM a business
  differentiating itself from others may prove to
  be beneficial
• A business may be able to differentiate itself by
  increasing value and customer satisfaction,
  personalisation and one-to-one marketing
  including segmentation and affiliation with
  customers (Evans and Wurster, p87, 1999)
• These in turn may help to acquire new customers
  as they may be attracted by the differences
  available
• These attributes may also reduce retention rates,
  improve profitability, reduce customer churn,
  improve customer loyalty and increase
  cross-selling opportunities
• Peppers and Rogers have what they call their
  customer differentiation matrix (Peppers and
  Rogers cited in Puschmann and Alt, p6, 2001),
  which could prove useful when a business is
  ascertaining exactly how it may differentiate
  itself from competitors

Source Nolan, R , pp 23 - 28, 2001
41
Summary of Learning Outcomes

• In this lecture you will have learnt what the
  links between eMarketing and CRM actually are
• In this lecture you will have learnt what CRM
  actually is
• You will also have learnt why CRM is important
  from one of the main providers of CRM Software
  (Siebel)
• You were presented with an array of facts and
  figures surrounding the paradigm of CRM which
  should have opened you eyes to the buzz factors
  surrounding CRM
• You will also have been presented with the main
  CRM software vendors for reference and can now
  discover what they offer
• You will learnt what the main objectives of a
  businesses CRM strategy may be including areas
  such as customer acquisition, profitable and
  unprofitable customers, churn rates and many more

42
Assessment Question

• In your own words please describe the different
  areas and their importance a business would need
  to consider when devising their own objectives
  within a CRM strategy?

43
References and Useful URLs (Lectures 7 8)

• Brown, S 2000, Customer Relationship Management
  A Strategic Imperative in the World of
  e-Business, John
• Wiley Sons Canada Limited
• Cannon, T 1996, Welcome to the Revolution
  Managing Paradox in the 21st Century, Pitman
  Publishing, London
• Christopher, M Clark, M Payne, A Peck H 1999,
  Relationship Marketing Strategy and
  Implementation,
• Butterworth-Heinemann, Oxford
• Davenport, T H Harris, J G Kohli, A K 2001,
  How Do They Know Their Customers So Well?, Sloan
• Management Review, Winter 2001, pp 63 73
• Evans, P Wurster, T S 1999, Getting Real about
  Virtual Commerce, Harvard Business Review,
  November
• December 1999, pp 85 93
• Feeny, DF Ives, B 1990, In Search of
  Sustainability Reaping Long-term Advantage from
  Investments in
• Information Technology, Journal of Management
  Information Systems, Summer 1990, Volume 7,
  Number 1,
• pp 27 46
• Feeny, DF Willcocks, LP 1998, Core IS
  Capabilities for Exploiting Information
  Technology, Sloan
• Management Review, Spring 1998, pp 9 21
• Greenberg, P 2001, CRM at the Speed of Light
  Capturing and Keeping Customers in Internet Real
  Time,
• Osborne / McGraw-Hill, USA
• Gronroos, C 2000, Service Management and
  Marketing A Customer Relationship Management
  Approach, John
• Wiley and Sons Limited, England
• Hagel III, J Rayport, J F 1996, The Coming
  Battle for Customer Information, Harvard Business
  Review,

44
References and Useful URLs (Lectures 7 8)

• http//www.CRMguru.com
• http//www.crmguru.com/members/papers/index.html
  (useful resource)
• http//www.lloydstsb.com
• http//www.netlingo.com/
• http//www.nwfusion.com/
• http//www.metagroup.com/ (simply go here and
  search for CRM)
• http//www.opportunitywales.co.uk/ (Search here
  for CRM good resource)
• http//www.siebel.com/
• Ives, B Learmonth, GP 1984, The Information
  System as a Competitive Weapon, Communications of
  the
• ACM, December 1984, Volume 27, Number 12, pp 1193
  1201
• Jutla, D Craig, J Bodorik, P 2001, Enabling
  and Measuring Electronic Customer Relationship
  Management
• Readiness, Proceedings of the 34th Hawaii
  International Conference on System Sciences
  2001
• Kahaner, L 1997, Competitive Intelligence How
  to Gather, Analyze, and use Information to move
  your
• Business to the top, Simon Schuster Inc. USA
• Kotler, P 1997, Marketing Management Analysis,
  Planning, Implementation and Control,
  Prentice-Hall
• International (UK) Limited, London
• Kundisch, D Wolfersberger, P Calaminus, D
  Kloepfer, E 2001, Enabling eCCRM Content Model
  and
• Management for Financial services, University of
  Augsburg, Business School, Department of
  Information
• Systems, Germany / Proceedings of the 34th Hawaii
  International Conference on System Sciences
  2001

45
References and Useful URLs (Lectures 7 8)

• Nolan, R J, 2001, PhD Proposal, Henley Management
  College, 2001
• Nolan, R J, 2001, Towards A Model of IT enabled
  CRM, 10th EDAMBA European Conference Summer
  School,
• July 2001
• Nolan, R J, 2001, What is CRM Customer
  Relationship Management?, Henley Management
  College, 2001
• Nolan, R J, Ezingeard, J-N, Money, A, 2001, A
  Taxonomy of Objectives of IT-Enabled Customer
  Relationship
• Management as a Basis of Evaluation of CRM
  Success, Eighth European Conference on
  Information
• Technology Evaluation, Oriel College, Oxford, UK,
  Sept, 2001
• Peppard, J 2000, Customer Relationship Management
  (CRM) in Financial Services, European Management
• Journal, June 2000, Volume 18, Issue 3, pp 312
  327
• Porter, ME 2001, Strategy and the Internet,
  Harvard Business Review, March 2001, pp 63 78
• Puschmann, T Alt, R 2001, Customer Relationship
  Management in the Pharmaceutical Industry,
  Proceedings
• of the 34th Hawaii International Conference on
  System Sciences 2001
• Reichheld, F F Schefter, P 2000, E-Loyalty Your
  Secret Weapon on the Web, Harvard Business
  Review,
• July August 2000, pp 105 113
• Rockart, JF 1979, Chief Executives Define Their
  Own Data Needs, Harvard Business Review, March
  April
• 1979, pp 81 92
• Rockart, JF, Earl, MJ Ross, JW 1996, Eight
  Imperatives for the new IT Organisation, Sloan
  Management
• Review, Fall 1996, pp 43 55
• Ross, JW, Beath, CM Goodhue, DL 1996, Develop
  Long-Term Competitiveness Through IT Assets,
  Sloan

46
References and Useful URLs (Lectures 7 8)

• Swift, R S 2001, Accelerating Customer
  Relationships Using CRM and Relationship
  Technologies, Prentice-Hall
• International (UK) Limited, London
• Thompson, J 1997, Strategic Management Awareness
  and Change, International Thomson Business Press
• Vandermerwe, Sandra 2000, Ford Motor Company
  Using Web-Strategies to Drive Customer
  Relationship
• Management, The Management School, Imperial
  College of Science, technology and medicine,
  London
• Venkatraman, N, Henderson, JC, Oldach, S 1993,
  Continuous Strategic Alignment Exploiting
  Information
• Technology Capabilities for Competitive Success,
  European Management Journal, June 1993, Volume
  11,
• Number 2, pp 139 149

47
Glossary of Terms

• Please refer to the following references to help
  you understand
• IT terms used throughout all of the lectures
• http//www.marketingterms.com/ (Internet
  Marketing Dictionary and Acronyms)
• http//www.xetg.com/articles/search_engine_secrets
  /glossary.shtml (Xtreme eMarketing Techniques and
• Guide)
• http//www.activemarketingtips.com/amthome/dict.ht
  m (Essential Tips for Marketing Success)
• http//www.atwebo.com/glossary.htm (_at_WEBO
  eMarketing Glossary)
• http//www.matisse.net/files/glossary.html
  (General IT Glossary of Terms)
• http//www.animatedsoftware.com/statglos/statglos.
  htm (Internet Glossary of Statistical Terms)
• http//www.weihenstephan.de/schlind/genglos.html
  (A Hypermedia Glossary of Genetic Terms)
• http//www.webopedia.com/ (The only online
  dictionary and search engine you need for
  computer and
• Internet technology)
• http//www.grantasticdesigns.com/glossary.html
  (Glossary of Graphic Design and Web Page Design
• Terms)
• http//www.walthowe.com/glossary/ (Glossary of
  Internet Terms)
• http//www.wwli.com/translation/netglos/glossary/g
  lossary.html (Internet Terms)
• http//www.sharpened.net/glossary/index.php
  (Glossary of Computer and Internet Terms).
• http//www.lib.berkeley.edu/TeachingLib/Guides/Int
  ernet/Glossary.html (Glossary of Internet and Web