Customer Relationship Management

relationship marketing/permission marketing

an approach to selling products and services in which a customer agrees in advance to receive marketing information - customers self-select the type and time of communication they want ex) an opt-in email - where a potential customer signs up in advance for information about certain products or services

permission marketing is about building:

an ongoing relationship of increasing depth with customers

CRM is about:

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

customer service as a performance measure

category pf performance measures, such as the percentage of orders delivered on time and complete

customer service as a philosophy

company-wide commitment to providing customer satisfaction by placing emphasis on quality and quality management

pre transactions

elements preceding the sale - customer service policies, mission statement

knowledge management

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

CRM is complex in that:

finding affordable ways to identify customers and their needs, and then design customer contact strategies geared toward creating customer satisfaction

field service management

involves setting up the company operations to allow customers to interact directly with the company's service personnel

CRM is simple in that it:

involves training users within the company to make customers feel valued

post transaction

occur after the sale - warranty repair capabilities, complain resolution

transaction

occurs during the sale - order lead time, order processing capabilities

cross selling

occurs when a company sells an additional related or complementary product to an existing customer after the initial purchase ex) being shown similar items when buying something on amazon

up-selling

persuading a customer to buy a more expensive item or upgrade a product or service to make the sale more profitable - selling the customer extra features or add-ons to the product they are already considering buying

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 information on each when dealing with prospects to aid in closing the deal

lead management

sales reps can follow prescribes tactics when dealing with prospects to aid in closing the deal

relationships should be built with:

strategically significant customers that are likely to provide the most value for effort

customer service is 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

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

CRM is the:

transformation of the people, process, and the technology required to become a customer-centric organization - involves acquiring, retaining, 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

sales force automation

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

CRM role in supply chain management

- a company must find ways to meet its customers needs - companies must create methods for becoming and staying good suppliers themselves - companies may also need to train and certify that their intermediate customers are able to adequately represent their company's products

customer lifetime value

- a prediction of the net profit attributed to the entire future relationships with a particular customer - 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

target marketing

- a segment of customers a company has decided to aims its marketing efforts at - first element of any marketing strategy - more effective than mass marketing

predicting customer behavior

- collect buyer history, preferences, and trend information - info can also be used to determine how effective marketing, advertising, and promotions are - creates a more accurate forecast

How CRM builds and maintains long-term customers:

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

trends in CRM

- customer data privacy - social media - cloud computing

strategically significant customers are:

- customers with high life time value - customers who serve as role models - customers who inspire change

CRM builds and maintains long-term customers by:

- focusing on customer requirements - delivering products in a high level customer satisfaction

event based marketing

- form of marketing that identifies key events in the customer and business life cycle - examples include end of a contract, holidays, or a season - a more personalized form of marketing

segmenting customers

- practice of dividing a customer base into groups - by demographics, income, geography, etc. - can be more efficient and effective in the use of their resources by tailoring programs and initiatives for each segment

churn reduction

- the process of customers changing their buying preferences because they find better of cheaper products somewhere else - all of the efforts companies develop to stop losing customers to the competition

goals and benefits of CRM

1. Increased customer satisfaction. 2. Increased customer loyalty and retention 3. Faster responses to customer inquiries. 4. Increased revenue. 5. Growth of the customer base through referrals. 6. A simplified and more cost effective marketing & sales process. 7. Increase sales effectiveness. Closing sales faster. 8. Increased sales through cross-selling and/or up-selling. 9. Access to updated customer information and personalized interactions. 10. Automation of repetitive tasks.

Companies need a customer relationship management program in order to:

1. acquire new customers 2. retain their existing customers 3. meet the changing expectations of customers

6 steps to creating a successful CRM plan

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 measures 6. Providing CRM training for all users

7 r's of managing customer service capabilities

1. right product 2. right quantity 3. right quality 4. right place 5. right time 6. right customer 7. right costs

customer service as an activity

a particular task that a firm must accomplish to satisfy the customer's needs - order processing, billing, invoicing