Chapter 10: Customer Relationship Management
Pretransaction elements
precede the sale (e.g., customer service policies, the mission statement, org. structure, & system flexibility)
churn reduction
reducing customer defections
QR codes
using the camera function on a smartphone and downloading a QR code reader app
Successful CRM programs require
- cultural change - effective CRM project management - employee engagement - strategies that cultivate long-term relationships with customers - information gathered from CRM software applications - treating customers right & making them feel valued
Knowledge Management System (KMS)
- Enables quick decision making, better customer service, & a better equipped & happy sales staff.
small data
▪ Data that was around prior to big data ▪ Meaningful insights about one customer's next purchase ▪ Provide demographic analyses of customers
Seven Deadly Sins of CRM Failure
1. Viewing CRM primarily from a technology perspective 2. Lack of customer-centric vision 3. Not understanding the concept of a customer's lifetime value 4. Insufficient top management support 5. Not reengineering business processes 6. Underestimating the challenges in integrating various sources of data 7. Underestimating the challenge in effecting change
Seven Rs Rule
1. the right product 2. the right quantity 3. the right quality 4. the right place 5. the right time 6. the right customer 7. the right costs + when all 7 R's are satisfied = THE PERFECT ORDER
cross selling
Additional products are sold as the result of an initial purchase (e.g., e-mails from Amazon.com describing other books the customer might like) If successful, customers perceive this as individualized attention, and it results in more satisfied and loyal customers
Measuring Customer Satisfaction
Customers are frequently given opportunities to provide feedback about a product, service, or organization • Customers communicate through surveys or feedback cards • Website surveys often don't ask the proper questions
Segmenting Customers
Grouping customers to create specialized communications about products
Continuous Connectivity
Integrated CRM anytime, anyplace, for quick decision-making ▪ Cloud CRM applications ▪ CRM on smart phones/tablets
Sales Territory Management
Sales managers obtain information of each sales rep's activities (e.g., total sales per sales rep.)
lead management
Sales reps can follow prescribed tactics when dealing with prospects to aid closing the deal
Designing & Implementing a Successful CRM Program
Step 1. Creating the CRM Plan Step 2. Involve CRM Users from the Outset Step 3. Select the Right Application Provider Step 4. Integrating Existing CRM Applications Step 5. Establishing Performance Measures Step 6. Training CRM Users
Sales Activity Management
Tool offering sales reps a guided sequence of sales activities
personalizing customer communications
Understanding customer behaviors & preferences, firms customize communications
Sales Force Automation (SFA)
Used for documenting field activities, communications with the home office, & retrieving sales history
CRM (Customer Relationship Management)
a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers
Target marketing efforts
addressing specific customer segments avoids becoming a nuisance to other customers
customer value determination
calculating the customer lifetime value for firms
call centers
can categorize calls, determine average resolution time, forecast future demand, and improve the overall productivity of the staff, increasing customer satisfaction levels • Virtual queuing allows callers to request a callback from an agent without losing their place in the phone queue • Viewed as a source of revenue - staff are expected to pursue cross-sell and up-sell opportunities
Relationship marketing or permission marketing
customers select the type & time of communication (opting-in or opting-out)
Customer Defection Analysis
finding methods to retain customers
Predicting Customer Behaviors
firms forecast likelihood of customers' future purchases
posttransaction elements
occur after the sale & include warranty repair capabilities, complaint resolution, product returns, & operating information
transaction elements
occur during the sale & include the order lead time, the order processing capabilities & the distribution system accuracy
event based marketing
offer the right products & services to customers at the right time
mobile marketing
placing advertising messages on mobile phones