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