Chapter 11 Customer Relationship Management
CRM is building and maintaining profitable long-term customer relationships BY:
Focusing on customer requirements Providing products and services in a manner resulting in high levels of customer satisfaction
Social Media
Creating and cultivating virtual communities around product or brand to engage consumers and develop loyalty
5. Cross Selling and Up-Selling CROSS SELLING
Cross-selling occurs when a company sells an additional related or complementary product or service to an existing customer after the initial purchase.
8. Customer Defection Analysis COntinued
Customer Defection Analysis leads to Churn Reduction by determining why customers leave and finding ways to retain them.
Methods of Customer Service Interactions Web-Self service
Customers can put their own information into the system which avoids having the company take the time to do it, and also potentially eliminates errors. Customers can edit and modify the information accordingly. Customer can opt into or out of future sales, subscriptions, corporate information, emails and other information if desired
Strategically significant customers are:
Customers with high life-time value, (customers that will constantly buy the products and services 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.
Tools to improve Call Center efficiency and effectiveness Part 1
Eliminate the call Web self service Chat Social media Voice response system
Knowledge Management
Establish data repository that can be used by all areas of the company to improve sales and supply chain performance.
4. Event Based Marketing
Event based marketing is a form of marketing that identifies key events in the customer and business lifecycle. Customer specific marketing activity is undertaken for the event.
Benefits of successful CRM Part 2
Growth of the customer base through referrals. A simplified and more cost effective marketing & sales process. Increase sales effectiveness. Closing sales faster.
Benefits of successful CRM
Increased customer satisfaction. Increased customer loyalty and retention Faster responses to customer inquiries. Increased revenue.
Benefits of successful CRM Part 3
Increased sales through cross-selling and/or up-selling. Access to updated customer information and personalized interactions. Automation of repetitive tasks.
CRM Part 1
It involves acquiring, retaining and partnering with selective customers to create superior value for both the company and the customer.
3. Target Marketing Part 3
It is a more efficient and effective use of the company's resources avoiding customers who do not fit the targeted criteria.
Customer Relationship Management (CRM)
is aligning the people, process, and technology of a company to be a customer-centric organization, focusing on customer requirements, rather than internal company goals.
3. Target Marketing Part 2
Target Marketing is usually more cost effective than mass marketing, as it allows the company to focus efforts on marketing to those customers most likely to respond.
Customer Data Privacy
Important issue is to assure privacy & data protection It is a legal and ethical responsibility of companies
Testimonials -
Validation for new customers
Call Centers
A Call Center links an organization to its customers. It is a facility housing personnel who respond to customer queries, whether general, specific or technical support. It's entire focus is handling current or potential customer inquiries. There are many KPI's used to measure efficiency and effectiveness.
Sales Force Automation (SFA)
A core component of CRM systems used to document and measure sales team activities.
9. Customer Lifetime Value (CLV)
A prediction of the net profit attributed to the entire future relationship with a particular customer. Some customers are worth more than others. Identifying your key customers is key to aligning your customer support resources.
3. Target Marketing
A segment of customers a company has decided to aim its marketing efforts. A well-defined target market is the first element of any marketing strategy
Increasing Customer Expectations
Access to product information, pricing, reviews, etc. Intense / global competition for each customer
7. 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. "opt-in" e-mail, where a potential customer signs up in advance for information about certain products or services. The customer is giving permission to the company to provide them with marketing and sales information.
4. Event Based Marketing COntinued
An event can be something basic and predicted, like the end of a contract, a holiday, a season (Halloween, "Black Friday", "Cyber Monday", Christmas, etc.) or something more detailed and personal, like a birthday, a marriage, or a graduation.
Call Center Effectiveness
Average resolution time Staff productivity Customer satisfaction rating Industry ranking Cost as % revenue Revenue generated
9. Customer Lifetime Value (CLV) Continued
CLV is an important metric for determining how much support to provide existing customers vs. money to spend on acquiring new customers. It is determined by forecasting the expected revenue generation for each strategic customer, understanding the margin structure and cost to support each.
Churn Reduction
Churn is the process of customers changing their buying preferences because they find better or cheaper products and services elsewhere. Churn Reduction is all of the efforts companies develop to stop losing customers to the competition
1. Predicting Customer Behaviors
Collect and analyze customer buying history, preferences, and trend information which could then be used to predict customer buying behaviors going forward.
6. Personalizing Customer Communications COntinued
Communication that is personalized sends a message to the customer that the company cares about them and the relationship is more then a transaction. It is a way to differentiate the company from its competitors and it helps to build customer loyalty.
Call Center Efficiency
Cost per contact / call Average wait time Abandon call % Average resolution time Staff productivity Self service vs. Agent supported
CRM Part 2
It provides a means and a method to enhance the experience of individual customers so that they will remain loyal customers.
Service -
Lower service costs as develop knowledge, support for other customers
Repeat Customers -
No acquisition costs, understand company products and services
CRM is building and maintaining profitable long-term customer relationships VIA:
Open Communication with customers Understanding their history, behavior and requirements Establishing an infrastructure to satisfy those requirements
Lead Management
Prescribed tactics to convert prospects into customers.
Magic Beanstalk of Customer Loyalty
Raving Fan Advocate Member Customer Shopper Prospect Suspect
Tools to improve Call Center efficiency and effectiveness Part 2
Reduce the call time / cost Multi level agent training Standard response scripts Agent incentives Charge for support
Profitable Revenue -
Reduced TCO
Focus on Strategically Significant Customers
Relationships should be built with strategically significant customers that are likely to provide the most value for the effort.
Sales Territory Management
Sales managers obtain information on each sales rep's activities
Social Media
Social Media is impacting ways companies interact with their customers Twitter, snapchat, instagram, youtube, facebook, loyalty club
CRM is not for every customer.
Some customers don't warrant the higher level of support and relationship.
2. Segmenting Customers
The practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing. In simple terms, grouping customers to create specialized communications about products.
8. Customer Defection Analysis
The process of analyzing the customers who have stopped buying to determine why.
2. Segmenting Customers CONTINUED
There are many different ways to group customers, (income, demographics, geography, buying preferences, etc.) Segmenting customers allows a company to focus on a particular population of customers to sell a specific product. If a company can identify different segments of customers, they can potentially be more efficient and effective in the use of their resources by tailoring programs and initiatives for each segment.
1. Predicting Customer Behaviors Part 2
This information could also be used to determine how effective marketing, advertising and promotions have been in the past and determine whether these practices should be continued or altered.
1. Predicting Customer Behaviors Part 3
This predictive information could be used to create a more accurate forecast and a more effective marketing and sales budget.
Sales Activity Management
Tool offering sales reps a guided sequence of sales activities
occur during the sale Includes the order lead time, the order processing capabilities, the distribution system accuracy, etc.
Transaction elements -
6. Personalizing Customer Communications
Understanding customer behaviors and preferences, allows a firm to customize communications aimed at specific groups of customers and is likely to result in greater levels of sales.
5. Cross Selling and Up-Selling UP SELLING
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.
Field Service
allows customers to interact directly with the company's service personnel.
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.
Post-transaction elements -
occur after the sale Includes warranty repair capabilities, complaint resolution, product returns, operating information, etc.
Pre-transaction elements -
precede the sale Includes customer service policies, the mission statement, the organizational structure, system flexibility, etc.
