supply chain ch 11

CRM is not for every customer

Some customers don't want to be committed to every brand and/or relationship.

Customer Service Elements

*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 Pre-transaction Elements Transaction Elements Post-transaction Elements

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.

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

Strategically significant customers 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.

Trends in CRM

-customer data privacy -social media -cloud computing

Why do companies need CRM?

1. Acquire new customers 2. Retain their existing customers 3. Help meet the changing expectations of customers *Loyal customers are the source of most profits and a relatively small percentage of those customers may generate most of the profits for the company

Call Center (what can they do)

1. Categorize calls 2. Determine average resolution time 3. Increase customer satisfaction levels 4. Provide input to forecast future demand 5. Improve the productivity of the overall staff 6. May be in-house or outsourced

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.

The Seven Rights Rule

1. Right product 2. Right quantity 3. Right quality 4. Right place 5. Right time 6. Right customer 7. Right cost & The right documentation All of this together = the perfect order

Customer Lifetime Value (CLV)

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 top tier customers can be extremely valuable to your business

Target Marketing

A segment of customers a company has decided to aim marketing efforts and ultimately its products/services towards. Usually more effective than mass marketing More efficient use of the company's resources

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 ex. would you like to super-size your order?

Churn Reduction

All of the efforts companies develop to stop losing customers to the competition

Relationship or 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. Ex. an opt-in email where a customer signs up in advance to get the information About building an ongoing relationship of increasing depth with customers Doesn't typically create immediate sales, but grabs customer's attention and preserves a business relationship

CRM is about...

Building and maintaining profitable long-term customer relationships beyond the one-off buy and sell transaction BY: Focusing on customer requirements Delivering products and services in a manner resulting in high levels of customer satisfaction HOW: Communicating with customers Understanding their behavior and their requirements Building a system to satisfy those requirements

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.

Predicting Customer Behavior

Companies can collect customers buying history, preferences and trends which can be used to predict customer buying behaviors going forward. Info can be used to determine how effective marketing, advertising and promotions have been in the past & whether to alter them. Can create a more accurate forecast & more effective marketing and sales budget

CRM's Role in Supply Chain Management

Company must find ways to meet customer needs or else customers will go elsewhere. Companies must create methods for becoming and staying good suppliers themselves. Companies may also need to train & certify that their intermediate customers are able to adequately represent their company's products (since many companies don't sell their products directly to end-product consumers)

Social Media

Creating and cultivating virtual communities around product or brand is a powerful way to engage consumers

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 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.

Measuring Customer Satisfaction

Customers are frequently given opportunities to provide feedback about a product, service, or organization. Can be done through surveys, questionnaires, direct phone calls.

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

Knowledge Management

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

A successful CRM program is both..

Simple and complex

Event-Based Marketing

Identifies key events in the customer and business lifecycle A more personalized form of marketing which can help to form personal connections with the customers.

It is complex in that...

It also means finding affordable ways to identify potentially thousands, if not millions, of customers and their needs and then designing customer contact strategies geared toward creating customer satisfaction and loyalty among your segments of customers.

It is simple in that...

It involves training users within the company to make customers feel valued.

Call Centers

Links an organization and its customers together. Gives customers quick access to the info they want and enhances the customer to business relationship

Post-Transaction 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.

Cross-Selling

Occurs when a company sells an additional related or complementary product or service to an existing customer after the initial purchase ex. would you like fries with that?

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

Pre-Transaction Elements

Precede the sale. Includes customer service policies, the mission statement, the organizational structure, system flexibility, etc.

Key Tools and Components of CRM

Predicting Customer Behaviors Segmenting Customers Target Marketing Event Based Marketing Cross Selling and Up-Selling Personalizing Customer Communications Relationship or Permission Marketing Analyzing Customer Defection Customer Lifetime Value (CLV)

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

Focus on Strategically Significant Customers

Relationships should be built with strategically significant customers that are likely to provide the most value for the effort.

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 sales rep's activities

Lead Management

Sales reps follow prescribed tactics when dealing with prospects to aid closing the deal

Performance measures are designed around satisfying the...

Seven R's

6 Steps to a Successful CRM Program

Step 1. Creating the CRM Plan Step 2- Involve CRM users from Outset Step 3- Select the Right Application & Provider Step 4- Integrate Existing CRM Applications Step 5- Establish Performance Measures Step 6- Providing CRM Training for All Users

Customer Segmentation

The practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests and spending habits. Allows a company to zero in on a particular population of customers to sell a specific product Can tailor programs and initiatives for each segment.

Customer Defection Analysis

The process of analyzing the customers who have stopped buying to determine why.

Churn

The process of customers changing their buying preferences because they find better or cheaper products and services elsewhere.

Customer Relationship Management (CRM)

The transformation of the people, process and technology required to become a customer-centric organization. *Philosophy of putting the customer first Involves acquiring, retaining and partnering with selective customers to create superior value for both the company and the customer. Provides a means and a method to enhance the experience of individual customers so that they will remain customers for life.

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)

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.

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. Need to use the customer's "language" & communicate in a meaningful way Powerful way to differentiate the company from its competitors and helps to build customer loyalty

Sales Force Automation (SFA)

Used for documenting field activities, communications with the home office, & retrieving sales history.

Cloud Computing

ala carte and on demand offerings accessed via web browswe Changing the cost structure of CRM applications

Field Service Management

involves setting up the company operations to allow customers to interact directly with the company's service personnel. Customers can call the service people directly and make an appointment. Helps ensure customer satisfaction better because it is very direct.