Chapter 11
pre-transaction elements
precede the sale Includes customer service policies, the mission statement, the organizational structure, system flexibility, etc
the perfect order
the seven R's + the right documentation =
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.
customer service as a performance measure
Customer service is a category of performance measures, such as the percentage of orders delivered on time and complete, the number of orders processed within acceptable time limits, etc
customer service as a philosophy
Customer service is a company-wide commitment to providing customer satisfaction by placing emphasis on quality and quality management.
customer defection analysis and churn reduction
go hand-in-hand to determine why customers leave and finding ways to retain them, 5% improvement in customer retention can result in a 75% increase in profits
simple CRM
it involves training users within the company to make customers feel valued
step 4: integrate existing CRM applications
CRM is a collection of various applications implemented over time. Customer contact mechanisms need to be coordinated so that every CRM user in the firm knows about all of the activity associated with each customer. Centralized database or data warehouse containing all customer information.
field service management
Management involves setting up the company operations to allow customers to _interact directly with the companys service personnel. Customers can call the service people directly, and make an appointment with the service person to come out to service the product. Since customers are communicating directly with product specialists for service issues, it is more likely that the right diagnosis can be made quickly, which will help to ensure customer satisfaction
Step 6: providing CRM training for all users
Provide and require training for all of the initial users and then provide training on an ongoing basis as applications are added Training can also help convince key users like sales, call center, and marketing personnel of the benefits and uses of CRM applications
customer data privacy
Rules and laws regarding invasion of privacy include Patriot Act in the US and Internet Privacy Law in the EU
sales activity management
Tool offering sales reps a guided sequence of sales activities
why companies need CRM
acquire new customers retain their existing customers help meet the changing expectation of customers
cloud computing
ala carte and on demand offerings accessed via web browser Changing the cost structure of CRM applications
complex CRM
also means finding affordable ways to identify potentially thousand, if not millions, of customers and their needs, and then designing customer contract strategies geared toward creating customer satisfaction and loyalty among your segments of customers
ways to group customers
by demographics, income, geography, buying preferences, etc.
post-transaction elements
occur after the sale Includes warranty repair capabilities, complaint resolution, product returns, operating information, etc
transaction elements
occur during the sale Includes the order lead time, the order processing capabilities, the distribution system accuracy, etc.
cross-selling
occurs when a company sells an additional related or complimentary product or service to an existing customer after the initial purchase. Example: "Would you like fries with that?" Example: If you're buying an item on Amazon.com, you may be shown other similar items to the one you are looking at, or companion products to the item that you are considering
customer relationship management
the transformation of the people, process, and technology required to become a customer-centric organization, involves acquiring, retaing, and partnering with selective customers to create superior value for both the company and the customer, it provides a means and a method to enhance the experience of individual customers so that they will remain customers for life
customer lifetime value
A prediction of the net profit attributed to the entire future relationship with a particular customer. Some customers are worth a lot more than others, and identifying your key or top tier customers can be extremely valuable to your business. an important metric for determining how much money a company is willing to spend on acquiring new customers and how much repeat business a company can expect from particular customers.
social media
Creating and cultivating virtual communities around product or brand is a powerful way to engage consumers
strategically significant customer are
Customers with _high life-time value, i.e., customers that will constantly buy the product(s) or use the service(s) 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
step 2: involve CRM users from outset
Employees should understand how it affects their jobs Create a project team with members from all affected organizational areas. Test with a pilot application
predicting customer behaviors
If a company is selling products and services to customers, they can also collect customers buying history, preferences, and trend information, which could then be used to predict customer buying behaviors going forward.
step 1: creating the CRM plan
Objectives of the CRM program CRM's fit with corporate strategy New applications to be purchased or developed Integration or replacement of existing legacy systems Personnel Requirements - personnel, training, policies, upgrades, and maintenance The costs and time frame for implementation
sales territory management
Sales managers obtain information on each sales rep's activities
lead management
Sales reps can follow prescribed tactics when dealing with prospects to aid in closing the deal.
personalizing customer communications
Understanding customer behaviors and preferences, allows a firm to customize communications aimed as specific groups of customers and is likely to result in greater levels of sales. When a company communicates with their customers they need to use the customer's "language" and communicate with them in a meaningful way. Communication that is personalized sends a message to the customer that the company cares about them. It is a powerful way to differentiate the company from its competitors and it helps to build customer loyalty.
call centers
links an organization and its customers together. It is a facility housing personnel who _respond to customer queries. These personnel may provide customer service or technical support. It gives customers quick access to the information they want and enhances the _customer-to-business relationship_. Help continuously monitor customer service parameters in an effort to _gauge performance_and _improve quality and efficiency. By utilizing a Call Center, the company's _internal resources can be freed up to focus on the company's core competencies
churn reduction
the process of customers changing their buying preferences because they find better or cheaper products and services elsewhere, all of the efforts companies develop to stop losing customers to the competition
seven R's Rule
the right product, quantity, quality, place, time, customer, costs
target marketing
A segment of customers a company has decided to aim its marketing efforts_and ultimately its products and/or services towards. A well-defined target market is the first element of any marketing strategy, It is a more _efficient use of the company's resources_and it reduces the chances of being a nuisance to those potential customers who do not fit the targeted criteria. Using e-mail or direct mail _saves labor_and postage, and _reduces_ the chances of being a _nuisance___
relationship marketing/ permission marketing
An approach to selling products and services in which a customer explicitly agrees in advance to receive marketing information. Customers self-select the type and time of communication they want. Example: An "opt-in" e-mail, where a potential customer signs up in advance for information about certain products or services. The customer is giving permission to the company to provide them with marketing and sales information. about building an ongoing relationship of increasing depth with customers Permission marketing does not typically create immediate sales, but rather grabs a customer's attention and preserves a business relationship
customer service as an activity
Customer service is a particular task that a firm must accomplish to satisfy the customer's needs. Order processing, billing and invoicing, product returns, and claims handling are all typical examples of the customer service activity
knowledge management
Enables quick decision making, better customer service, and a better-equipped and happy sales staff.
Step 3: select the right application and provider
Find an appropriate application and determine the extent of customization Visit trade shows, read trade literature, hire consultant, etc. Compare based on performance, security, reporting capabilities, system availability, etc.
goals and benefits of crm
Increased _customer satisfaction__. Increased _customer loyalty and _retention________ _faster responses to customer inquiries. Increased _revenue_. _growth of the customer base through referrals. A simplified and more _cost effective marketing & sales process. Increase _sales effectiveness__. Closing sales faster. _increased sales through cross-selling and/or up-selling. Access to updated customer information and _personalized interactions. _automation_of repetitive tasks.
segmented customers
The practice of dividing a customer base into groupsof individuals that are similar in specific ways relevant to marketing, grouping customers to create specialized communications about products, allows a company to zero in on a particular population of customers to sell a specific product, or to define a specific product(s) for a particular segment of customers. If a company can identify different segments of customers, they can potentially be more efficient and effective in the use of their resources by tailoring programs and initiatives for each segment.
customer defection analysis
The process of analyzing the customers who have stopped buying to determine why.
Step 5: establish performance measures
This allows the firm to: Determine if objectives have been met Compare actual to planned variance (take action to correct issues)
measure customer satisfaction
This can be done through _surveys, _questionares and _direct phone calls to customers asking them their opinions. 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 It is of very little value until it can be analyzed and acted upon. Most companies will need some type of a _database__to manage the data.
sales force management (SFA)
Used for documenting field activities, communications with the home office, and retrieving sales history in the field
event base maketing
a form of marketing that identifies key events in the customer and business lifecycle. When an event occurs a customer specific marketing activity is undertaken. An event can be something basic and predicted, like the end of a contract, a holiday, a season, e.g., Memorial Day, 4th of July, Halloween, "Black Friday", "Cyber Monday", Christmas, etc., or something more detailed and personal, like a birthday, a marriage, or a graduation. Event-based marketing is a more _more expensive item or upgrade a product or service which can help to form personal connections with the customers.
up-selling
involves persuading a customer to buy a more expensive item or upgrade a product or service to make the sale more profitable. It also involves selling the customer extra features or add-ons to the product they are already buying or considering. Example: "Would you like to super-size your order?"
website self-service
portals for customers to access their account information, check operating hours, ask questions, see product information, find contact information, check on orders, get shipping information, etc. Customers can put their _own information into the system_ which avoids having the company take the time to do it, and also potentially eliminates errors. Customers can _edit and modify the information accordingly. Customer can _opt into or out of_future sales, subscriptions, corporate information, emails and other information if desired
relationships should be built with
strategically significant customers that are likely to provide the most value for the effort