MIS Chapter 11

Disadvantages of On-Demand CRM (SaaS)

-Vendor could be unreliable, therefore poor functionality -Hosted software is difficult or impossible to modify -Hosted software may be difficult to integrate with organization's existing software

Two reasons for online customer ratings

1. Customer can see how well companies are performing in a variety of areas 2. Companies can see how well they are performing compared to competitors

Two components of Operational CRM Systems:

1. Customer-facing applications 2. Customer-touching applications

3 flows in the supply chain

1. Material flows 2. Information flows 3. Financial flows

Two major components of a CRM system:

1. Operational CRM Systems 2. Analytical CRM Systems

5 Basic components of SCM

1. Plan- strategic component 2. Source- choosing suppliers 3. Make- manufacturing component 4. Deliver- customers 5. Returns- support

Two sources of problems in supply chain

1. Uncertainties 2. The need to coordinate multiple activities, internal units, and business partners

Call Center (one of most well-known CICs)

A centralized office set up to receive and transmit a large volume of requests by telephone

Electronic Data Interchange (EDI)

A communication standard that enables business partners to exchange routine documents, like purchasing orders, electronically

Customer Churn

A company losing a percentage of its customers over time

Lifetime Value

A customer's potential revenue stream over a number of years

Bundling

A form of cross-selling where companies sell a group of products together for a cheaper price than buying them individually

1st type of Extranet

A single company and its dealers, customers, or suppliers ex. FedEx

Purchasing Profile

A snapshot of a consumer's buying habits that may lead to additional sales through cross-selling, upselling, and bundling (made through data mining)

Supply Chain Visibility

Ability of all organizations within a supply chain to access or view relevant data on purchased materials

2nd type of Extranet

An industries extranet (major players in an industry work together)

Customer-facing applications

An organization's sales, field service, and customer interaction center reps interact directly with customers ex. Customer Service, Marketing

Procurement Portals

Automate the business processes of purchasing or procuring products between a single buyer and multiple suppliers

Distribution Portals

Automate the business processes of selling or distributing products from a single supplier to multiple buyers

Sales Force Automation

Automatically records all of the components of a sales transaction process

CRM systems are information systems designed to support an organization's

CRM strategy

Product knowledge system

Comprehensive source of information regarding products and services

Customer-Touching Applications

Customers interact directly with the applications themselves aka electronic CRM (e-CRM)

Information flows

Data related to demand, shipments, orders, etc that flow across the chain

Examples of Analytical CRM Systems

Data warehouses, data mining, decision support

Examples of more modern customer touch points

Email, websites, Smartphones

Configurators

Enable customers to model the product to meet their specific needs

high-end CRM Systems

For companies with many large customers

low-end CRM Systems

For companies with many small customers

Campaign Management Applications

Help organizations plan campaigns that send the right messages to the right people through the right channels

Supply Chain Management (SCM)

Improving of the processes a company uses to acquire raw materials, make product(s) or services, and then deliver to customer

Analytical CRM Systems

Instead of front-office processes, analytical provide business intelligence by analyzing customer behavior

Collaborative CRM Systems

Integrate communications between the organization and its customers in all aspects of Functional Areas (data consolidation and 360 view of customer)

Mobile CRM Systems

Involves interacting directly with customers via mobile devices like smartphones

Just-in-time (JIT) Inventory System

JIT Systems deliver the precise number of parts to be assembled into a finished product at precisely the right time

3rd type of Extranet

Joint ventures or business partnerships

Extranets

Link business partners over the internet by allowing them access to certain areas of each other's intranets -use VPN (virtual private networks)

Sales lead tracking system

Lists potential customers

Cross-selling

Marketing of additional related products to customers based on a previous purchase "Because you bought this"

CRM System

Marketing to each customer individually rather than to a mass of people or companies

Sales forecasting system

Mathematical technique for estimating future sales

Financial flows

Money transfers, payments, credit card info, etc.

On-demand CRM Systems

New way where system is hosted by an external vendor

Market Capitalization

Number of shares of company stock TIMES price per share of company stock

On-premise CRM Systems

Old way where companies purchased systems from a vendor and then installed them on site

Upstream

Procurement of necessary materials from external suppliers

Upselling

Providing customers the opportunity to buy related products/services of greater value in place of, or along with the initial product

Loyalty Programs

Recognize customers who repeatedly use a vendor's products or services

Who are the largest revenue generators for a enterprise?

Repeat Customers

Outbound Telesales

Sales team has a call list to contact sales prospects

Examples of Customer-Touching Apps (e-CRM)

Search and Comparison Capabilities, customized products and services, personalized webpages, FAQs

On-demand CRM Systems are also known as

Software as a Service (SaaS)

Open-source CRM Systems

Source code is available (for modification) to both developers and users

Examples of traditional customer touch points

Telephone contact, direct mailings, actual physical interactions

Supply Chain

The flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to the end customers

Customer Touch Points

The numerous and diverse interactions companies have with their customers

Material flows

The physical products, raw mats., supplies that flow across the chain

Inventory Velocity

The quickness with which a company can deliver products and services after receiving the required materials

Social CRM

The use of social media- looking at tags on Facebook, Twitter, Instagram, etc.

Front-office processes

Those that interact directly with customers (sales, marketing, service)

Contact Management System

Tracks all communications with customers

Bullwhip Effect

Variables that affect customer demand can become magnified (overthought) when viewed through the eyes of managers at their own respective link in the chain -results in overstock

Data Mining

When CRM Marketing Applications sift through volumes of customer data

Vertical Integration

When a company purchases its upstream suppliers to ensure that its essential supplies are available as soon as they are needed

Inbound Teleservice

When customers communicate directly to sales team to initiate a sale, inquire about products, inquire about previous sales

Vendor-managed Inventory (VMI)

When the supplier, rather than the retailer, manages the entire inventory process for a particular product or group of products

Downstream

Where distribution takes place

Customer Interaction Centers (CIC)

Where organizational reps use multiples channels (web, telephone, face-to-face) to communicate with customers

Internal

Where packaging, assembly, or manufacturing takes place

Pull Model of SCM

aka make-to-order Begins with customer order, then goes down the line

Push Model of SCM

aka make-to-stock Begins with a forecast, makes amount of said forecast, and "pushes" out to customers (can sometimes be wrong)

CRM Approach is designed to achieve

customer intimacy

Operational CRM Systems support _______-office business processes

front

Boeing sells 787 aircrafts to Delta Airlines, and is an example of _____-end CRM Systems

high

Amazon is an example of _____-end CRM Systems

low

Collaborative CRM Systems also allow customers to...

provide direct feedback to organization