MIS Chapter 11
Disadvantages of On-Demand CRM (SaaS)
-Vendor could be unreliable, therefore poor functionality -Hosted software is difficult or impossible to modify -Hosted software may be difficult to integrate with organization's existing software
Two reasons for online customer ratings
1. Customer can see how well companies are performing in a variety of areas 2. Companies can see how well they are performing compared to competitors
Two components of Operational CRM Systems:
1. Customer-facing applications 2. Customer-touching applications
3 flows in the supply chain
1. Material flows 2. Information flows 3. Financial flows
Two major components of a CRM system:
1. Operational CRM Systems 2. Analytical CRM Systems
5 Basic components of SCM
1. Plan- strategic component 2. Source- choosing suppliers 3. Make- manufacturing component 4. Deliver- customers 5. Returns- support
Two sources of problems in supply chain
1. Uncertainties 2. The need to coordinate multiple activities, internal units, and business partners
Call Center (one of most well-known CICs)
A centralized office set up to receive and transmit a large volume of requests by telephone
Electronic Data Interchange (EDI)
A communication standard that enables business partners to exchange routine documents, like purchasing orders, electronically
Customer Churn
A company losing a percentage of its customers over time
Lifetime Value
A customer's potential revenue stream over a number of years
Bundling
A form of cross-selling where companies sell a group of products together for a cheaper price than buying them individually
1st type of Extranet
A single company and its dealers, customers, or suppliers ex. FedEx
Purchasing Profile
A snapshot of a consumer's buying habits that may lead to additional sales through cross-selling, upselling, and bundling (made through data mining)
Supply Chain Visibility
Ability of all organizations within a supply chain to access or view relevant data on purchased materials
2nd type of Extranet
An industries extranet (major players in an industry work together)
Customer-facing applications
An organization's sales, field service, and customer interaction center reps interact directly with customers ex. Customer Service, Marketing
Procurement Portals
Automate the business processes of purchasing or procuring products between a single buyer and multiple suppliers
Distribution Portals
Automate the business processes of selling or distributing products from a single supplier to multiple buyers
Sales Force Automation
Automatically records all of the components of a sales transaction process
CRM systems are information systems designed to support an organization's
CRM strategy
Product knowledge system
Comprehensive source of information regarding products and services
Customer-Touching Applications
Customers interact directly with the applications themselves aka electronic CRM (e-CRM)
Information flows
Data related to demand, shipments, orders, etc that flow across the chain
Examples of Analytical CRM Systems
Data warehouses, data mining, decision support
Examples of more modern customer touch points
Email, websites, Smartphones
Configurators
Enable customers to model the product to meet their specific needs
high-end CRM Systems
For companies with many large customers
low-end CRM Systems
For companies with many small customers
Campaign Management Applications
Help organizations plan campaigns that send the right messages to the right people through the right channels
Supply Chain Management (SCM)
Improving of the processes a company uses to acquire raw materials, make product(s) or services, and then deliver to customer
Analytical CRM Systems
Instead of front-office processes, analytical provide business intelligence by analyzing customer behavior
Collaborative CRM Systems
Integrate communications between the organization and its customers in all aspects of Functional Areas (data consolidation and 360 view of customer)
Mobile CRM Systems
Involves interacting directly with customers via mobile devices like smartphones
Just-in-time (JIT) Inventory System
JIT Systems deliver the precise number of parts to be assembled into a finished product at precisely the right time
3rd type of Extranet
Joint ventures or business partnerships
Extranets
Link business partners over the internet by allowing them access to certain areas of each other's intranets -use VPN (virtual private networks)
Sales lead tracking system
Lists potential customers
Cross-selling
Marketing of additional related products to customers based on a previous purchase "Because you bought this"
CRM System
Marketing to each customer individually rather than to a mass of people or companies
Sales forecasting system
Mathematical technique for estimating future sales
Financial flows
Money transfers, payments, credit card info, etc.
On-demand CRM Systems
New way where system is hosted by an external vendor
Market Capitalization
Number of shares of company stock TIMES price per share of company stock
On-premise CRM Systems
Old way where companies purchased systems from a vendor and then installed them on site
Upstream
Procurement of necessary materials from external suppliers
Upselling
Providing customers the opportunity to buy related products/services of greater value in place of, or along with the initial product
Loyalty Programs
Recognize customers who repeatedly use a vendor's products or services
Who are the largest revenue generators for a enterprise?
Repeat Customers
Outbound Telesales
Sales team has a call list to contact sales prospects
Examples of Customer-Touching Apps (e-CRM)
Search and Comparison Capabilities, customized products and services, personalized webpages, FAQs
On-demand CRM Systems are also known as
Software as a Service (SaaS)
Open-source CRM Systems
Source code is available (for modification) to both developers and users
Examples of traditional customer touch points
Telephone contact, direct mailings, actual physical interactions
Supply Chain
The flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to the end customers
Customer Touch Points
The numerous and diverse interactions companies have with their customers
Material flows
The physical products, raw mats., supplies that flow across the chain
Inventory Velocity
The quickness with which a company can deliver products and services after receiving the required materials
Social CRM
The use of social media- looking at tags on Facebook, Twitter, Instagram, etc.
Front-office processes
Those that interact directly with customers (sales, marketing, service)
Contact Management System
Tracks all communications with customers
Bullwhip Effect
Variables that affect customer demand can become magnified (overthought) when viewed through the eyes of managers at their own respective link in the chain -results in overstock
Data Mining
When CRM Marketing Applications sift through volumes of customer data
Vertical Integration
When a company purchases its upstream suppliers to ensure that its essential supplies are available as soon as they are needed
Inbound Teleservice
When customers communicate directly to sales team to initiate a sale, inquire about products, inquire about previous sales
Vendor-managed Inventory (VMI)
When the supplier, rather than the retailer, manages the entire inventory process for a particular product or group of products
Downstream
Where distribution takes place
Customer Interaction Centers (CIC)
Where organizational reps use multiples channels (web, telephone, face-to-face) to communicate with customers
Internal
Where packaging, assembly, or manufacturing takes place
Pull Model of SCM
aka make-to-order Begins with customer order, then goes down the line
Push Model of SCM
aka make-to-stock Begins with a forecast, makes amount of said forecast, and "pushes" out to customers (can sometimes be wrong)
CRM Approach is designed to achieve
customer intimacy
Operational CRM Systems support _______-office business processes
front
Boeing sells 787 aircrafts to Delta Airlines, and is an example of _____-end CRM Systems
high
Amazon is an example of _____-end CRM Systems
low
Collaborative CRM Systems also allow customers to...
provide direct feedback to organization