SCM 12: Customer Relationship Mgmt

building/maintaining profitable long-term customer relationships

what: - focus on customer reqs - delivering products and services in a manner resulting in high levels of customer satisfaction how: - talking to customers - understanding their behavior and their reqs - building a system to satisfy those reqs

6 steps to a successful CRM program: establish performance measures

- allows the firm to determine if objectives have been met and compare actual to planned variance

call centers

- can categorize calls - determine avg resolution time - increasing customer satisfaction levels - provide input to forecast future demand - improve the productivity of the overall staff

6 steps to a successful CRM program: integrate existing CRM applications

- 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 info

relationship/permission marketing

- customers self-select the type/time of communication they want - requires software and active customer participation

customer value determination

- determine customer lifetime value so that appropriate communications, benefits, services or policies can be established for each customer segment

target marketing efforts

- email/direct mail saves labor and postage - reduces chances of being a nuisance

6 steps to a successful CRM program: involve CRM users from outset

- employees should understand how it affects their jobs - create a project team w/ members from all affected org areas - test with a pilot application

predicting customer behaviors

- facilitates forecasting the likelihood of customers' purchases

trends in CRM

- customer data privacy - social media - cloud computing

6 steps to a successful CRM program: 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 apps are added - training can also help convince key users like sales, call center, and marketing personnel of the benefits and uses of CRM apps

- churn reduction

- reducing customer defections

automated sales force tools

- sales force automation: used for documenting field activities, communications with the home office, and retrieving sales history in the field - sales activity mgmt: offers a guided sequence of sales activities - sales territory mgmt: obtain info on each sales rep's activities - lead mgmt: sales reps can follow prescribed tactics when dealing with prospects to aid in closing the deal - knowledge mgmt: enables quick decision making, better customer service, and a better-equipped and happy sales staff

cross selling

- selling additional products as the result of an initial purchase

6 steps to a successful CRM program: select the right application and provider

- find an appropriate application and determine the extent of customization - visit trade shows, read trade lit, etc. - compare based on performance, security, reporting capabilities, etc.

customer defection analysis

- finding methods to retain customers

segmenting customers

- grouping customers to create specialized communications about products

additional components

- measuring customer satisfaction - website self-service - field service mgmt

6 steps to a successful CRM program: creating the CRM plan

- objectives of the CRM program - CRM's fit with corporate strategy - new apps to be purchased/developed - integration or replacement of existing legacy systems - personnel reqs - the costs/time frame for implementation

post-transaction elements

- occur after the sale - include warranty repair capabilities, complaint resolution, product returns, and operating info

transaction elements

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

event based marketing

- offer the right products and services to customers at the right time - offer individual promotions tied to specific events

pre-transaction elements

- precede the sale - includes customer service policies, the mission statement, org structure, system flexibility

CRM's role in SCM

- to be successful, a company must find ways to meet its customers' needs otherwise the customer goes elsewhere and takes years of future purchases with them - companies must create methods for becoming and staying good suppliers themselves - b/c many companies don't sell their products directly to end-product consumers, companies need to train and certify that their intermediate customers are able to adequately represent their company's products

personalizing customer communications

- understanding customer behaviors and preferences, allows a firm to customize communications aimed as specific groups of customer and is likely to result in greater levels of sales - 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 (7 R's Rule)

Right: 1) product 2) quantity 3) quality 4) place 5) time 6) customer 7) costs + the right documentation = the perfect order

traits of a successful CRM program

simple: - involves training users and treating customers right, to make them feel valued complex: - find affordable ways to identify customers and their needs - designing customer contact strategies geared toward creating customer satisfaction and loyalty among your segments of customers