Supply Chain Chapter 11

social media

creating and cultivating virtual communities around product or brand is a powerful way to engage consumers

Companies work very hard to reduce the number of their present customers which never return. This customer defection is often referred to as?

customer churn

post-transaction element

occur after the sale - includes warranty repair capabilities, complaint resolution, product returns, operating info.

transaction elements

occur during the sale - includes the order lead time, the order processing capabilities, the distribution system accuracy

website self-service

portals for customers to access their account info., check operating hours, ask questions, see product info, find contact info, check on orders, get shipping info customers can put their own info into the system can edit and modify the info accordingly customer can opt into or out of future sales, subscriptions corporate info, emails and other info if desired

pre-transaction elements

precede the sale - includes customer service policies, the mission statement, the organizational structure, system flexibility, etc.

up-selling

remove customer from existing product to more expensive product or service ex: "would you like to super-size your order?"

customer data privacy

rules and laws regarding invasion of privacy include Patriot Act in the US and Internet Privacy Law in the EU

sales territory management

sales managers obtain info. on each sales rep's activities

lead management

sales reps can follow prescribed tactics when dealing w prospects to aid in closing the deal

Which of the following is a required element of an effective CRM initiative?

segmenting customers

customer service

the act of taking care of the customer's needs by providing and delivering professional, high quality service before, during and after the customer's requirements are met.

customer defection analysis

the process of analyzing the customers who have stopped buying to determine why FINDING NEW CUSTOMER COSTS 5-10 TIMES AS MUCH AS KEEPING AN EXISTING ONE

cross selling

"would you like fries with that" occurs when a company sells an additional related or complementary product or service

Some of the ways customers evaluate the customer service capabilities of an organization are through their experiences with human response call centers, automated response call centers, and consumer web sites

TRUE

Through the use permission marketing programs, customers are allowed to select the type of communications companies can make with them, and even choose to be completely eliminated from both e-mail and traditional mailing lists.

TRUE

target marketing

- a segment of customers a company has decided to aim its marketing efforts towards - focus efforts on marketing to those customers most likely to respond - efficient use of the company's resources - reduced the chances of being a nuisance - using e-mail saves labor and postage and reduces chance of being a nuisance

predicting customer behavior

- buying history, preferences, and trend information - can be used to create a more accurate forecast

call centers

- can categorize calls - determine average resolution time - increase customer satisfaction levels - provide input to forecast future demand - improve the productivity of the overall staff - may be in-house or outsourced

HOW:

- communicating with customers - understanding their behavior and their requirements - building a system to satisfy those requirements

Companies need CRM to:

1) acquire new customers 2) retain their existing customers 3) help meet the changing expectations of customers *loyal customers are the source of most profits and a relatively small percentage of those customers may generate most of the profits for the company

steps to a successful CRM program

1) creating the CRM plan 2) involve CRM users from Outset 3) select the right application and provider 4) integrate existing CRM applications 5) establish performance metrics 6) providing CRM training for all users

Goals and benefits of CRM:

1) inc. customer satisfaction 2) inc. customer loyalty and retention ***3) faster response to customer inquiries 4) inc. revenue ***5) growth of the customer base through referrals 6) a simplified and more cost effective marketing and sales process 7) inc. .sales effectiveness. closing sales faster ***8) inc. sales through cross-selling and/or up-selling 9) access to updated customer info. and personalized interactions ***10) automation of repetitive tasks

Companies should adopt a Customer Relationship Management (CRM) strategy for every customer.

FALSE

Segmenting customers on the basis of things like products purchased, sales history, demographic information, and desired product features can dilute the results of a CRM program.

FALSE

When websites suggest other items for purchase based on already purchased items, this is an example of Clickstream selling.

FALSE

You are a manager at Sunnydale Appliances. A customer who recently purchased a dishwasher contacts you with a problem and requests warranty information. This is an example of?

Post-transaction customer service

QUIZ

QUESTIONS

Customer Service is?

a philosophy, an activity and a performance measure

customer lifetime value (CLV)

a prediction of the net profit attributed to the entire future relationship with a particular customer - determines how much money a company is willing to spend on acquiring new customers

cloud computing

ala carte and on demand offerings accessed via web browser changing the cost structure of CRM applications

relationship marketing or permission marketing

an approach to selling products and services in which a customer explicitly to receive marketing info. ex: "opt-in" e-mail permission - doesn't grab immediate sales, but grabs a customer's attention

knowledge management

enables quick decision making, better customer service, and a better-equipped and happy sales staff

When an organization attempts to offer the right products and services to customers at the right time through the offer of individual promotions tied to specific events, like birthdays and anniversaries, this is referred to as?

event-based marketing

field service management

involves setting up the company operations to allow customers to interact directly w the company's service personnel ex: bought an item that needs repair - can make arrangements w service repair technician - facilitates better relationship - feel they have an expert

CRM

is about building and maintaining profitable long-term customer relationships beyond the one-off buy and sell transaction

churn reduction

is all of the efforts companies develop to stop losing customers goes hand-in-hand with customer defection analysis

customer relationship management (CRM)

is the transformation of the people, process, and technology required to become a customer-centric organization - involves acquiring, retaining, and partnering w selective customers to create superior value for both the company and the customer - want them to remain customers for life ONLY SELECTIVE CUSTOMER NOT ALL OF THEM A PHILOSOPHY

call centers

links an organization and its customers together facility housing personnel who respond to customer queries - technical support customer-business relationship helps continuously monitor customer service parameters in an effort to gauge performance and improve quality and efficiency the company's internal resources can be freed up to focus on the company's core competencies

sales activity management

tool offering sales reps a guided sequence of sales activities

clickstream

tracking how a customer navigates a website can help tailor a website's images, ads, or discounts based on past usage of the site.

sales force automation

used for documenting field activities, communications w the home office, and retrieving sales history in the field

CRM's role in scm

- customer can go elsewhere and takes years worth of purchases with them - companies must create methods for becoming and staying good suppliers themselves - may need to train and certify that their intermediate customers are able to represent their company's products

focus on strategically sig. customers

- customers w high life-time value (will constantly buy products in the long-term) - customers who serve as role models or benchmarks for other customers - customers who inspire change in the supplier and/or the supply chain NOT FOR EVERY CUSTOMER

segmenting customers

- dividing a customer base into groups of similar in specific ways relevant to marketing ex: demographics, income, geography, buying preferences - allows a company to zero in on a particular population - tailoring programs and initiatives

BY:

- focusing on customer requirements - delivering products and services in a manner resulting in high levels of customer satisfaction

event based marketing

- identifies key events in a customer and business life cycle - can be something basic and predicted - something more detailed and personal - personalized form of marketing

Customer service is

- philosophy - activity - performance measure

the seven R's rule

- right product - quantity - quality - place - time - customer - costs and the right documentation = THE PERFECT ORDER

automated sales force tools

- sales force automation (SFA) - sales activity management - sales territory management - lead management - knowledge management

A successful CRM program is both SIMPLE and COMPLEX

- simple in that it involves training users within the company to make customers feel valued - complex in that you need to find affordable ways to identify customers and their needs and then create customer contact strategies

measuring customer satisfaction

- surveys, questionnaires, direct phone calls - decisions have to be made regarding how to capture the data, and how to analyze the information so you can use it productively going forward - most companies will need some type of a database to manage the data

personalizing customer communication

- understand customer behaviors and preferences allows a firm to customize communications aimed at specific groups - use the customer's "language" to communicate w them in a meaningful way - sends a message to the customer that the company cares about them - build customer loyalty