Chapter 10- Customer Relationship Management
Key Tools and Components of CRM Target marketing efforts
addressing specific customer segments avoids becoming a nuisance to other customers
More simply - CRM is
building & maintaining profitable, long-term customer relationships
Key Tools and Components of CRM Customer Value Determination
calculating the customer lifetime value for firms
CRM refers to
automated transaction and communication applications—a suite of software modules or a portion of the larger enterprise resource planning system
Call Centers
can categorize calls, determine average resolution time, forecast future demand, and improve the overall productivity of the staff, increasing customer satisfaction levels
Key Tools and Components of CRM Relationship marketing or permission marketing
customers select the type & time of communication (opting-in or opting-out)
Key Tools and Components of CRM Predicting Customer Behaviors
firms forecast likelihood of customers' future purchases
CRM means- "Finding a new customer costs five times as much as keeping an old customer"
focusing on customer requirements, then delivering products and services in a manner resulting in high levels of customer satisfaction
Customer Relationship Management Defined-2
managing the relationships among people within an organization and between customers and the company's customer service representatives in order to improve the bottom line
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
Key Tools and Components of CRM Event based Marketing
offer the right products & services to customers at the right time
Step 2---
Involve CRM Users from the Outset - Employees should understand how it affects their jobs -Create a project team with members from all affected organizational areas. -The team should be heavily involved in evaluating and selecting the CRM applications. -During implementation, closely monitoring system performance will keep users convinced of the value of the initiative.
Step 6---
Training for CRM Users - -Provide & require training for all of the initial users -Provide training on an ongoing basis as applications are added -Training can also help convince key users like sales, call center, & marketing personnel of the benefits & uses of CRM applications
Call Center (pt 3)
Viewed as a source of revenue - staff are expected to pursue cross-sell and up-sell opportunities
Call center (pt 2)
Virtual queuing allows callers to request a callback from an agent without losing their place in the phone queue
Perfect order
When the seven Rs are all satisfied.
Key Tools and Components of CRM Customer Defection Analysis
- finding methods to retain 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
Pretransaction elements
precede the sale (e.g., customer service policies, the mission statement, org. structure, & system flexibility)
Key Tools and Components of CRM Churn reduction
reducing customer defections
CRM must
still include talking to customers, understanding their behavior and their requirements, and then building a system to satisfy those requirements
Key Tools and Components of CRM QR codes
using the camera function on a smartphone and downloading a QR code reader app
Key Tools and Components of CRM Personalizing Customer Communications
- Understanding customer behaviors & preferences, firms customize communications Clickstream- how a customer navigates a Web site
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
Key Tools and Components of CRM 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
Small data
Data that was around prior to big data Meaningful insights about one customer's next purchase Provide demographic analyses of customers
Trends in CRM Ease of Use
Easy CRM interfaces eliminate much of the training Empowers users and enhances CRM adoption
Knowledge Management System (KMS)
Enables quick decision making, better customer service, & a better-equipped & happy sales staff.
Step 5---
Establish Performance Measures - This allows the firm to monitor progression of the system -Determine if objectives have been met -Identify implementation or usage problems as they occur -Compare actual to planned variance -Metrics should be transparent and easy to measure
Key Tools and Components of CRM
Facebook, LinkedIn, and Instagram users create their own customized Web pages that potential consumers can choose to visit
Key Tools and Components of CRM Segmenting Customers
Grouping customers to create specialized communications about products
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 contains all customer information. -Big data analytics - analyzing large volumes of data to make quick decisions
Continuous Connectivity
Integrated CRM anytime, anyplace, for quick decision-making Cloud CRM applications CRM on smart phones/tablets
Designing & Implementing a Successful CRM Program Step 1---
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, & maintenance -Costs & time frame for implementation
What does customer service actually mean?
The "Seven Rs Rule": Having the right product, in the right quantity, in the right condition, at the right place, at the right time, for the right customer, at the right costs. Performance measures are often designed around satisfying the seven Rs. These kinds of services can come at a cost.
Sales Activity Management
Tool offering sales reps a guided sequence of sales activities
Sales Force Automation (SFA)-
Used for documenting field activities, communications with the home office, & retrieving sales history
Key Tools and Components of CRM Mobile marketing
placing advertising messages on mobile phones
Customer Service Elements
Pretransaction elements Transaction elements Posttransaction elements
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.
Step 3---
Select the Right Application & Provider - Find an appropriate application & determine the extent of customization -Visit trade shows, read trade literature, hire consultant -Use the knowledge of internal IT personnel -Search CRM supplier directories and websites -Consider extent of support available from each application provider -Carefully consider cost and contract negotiations
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
Trends in CRM Personal Value Creation
Brings useful information and insights to users In many cases, basic platform is free
Customer Relationship Management Defined
The infrastructure that enables the delineation of and increase in customer value, and the correct means by which to motivate valuable customers to remain loyal—indeed to buy again."
Customer Relationship Management Defined-3
a core business strategy for managing and optimizing all customer interactions across an organization's traditional and electronic interfaces."
