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Customer Relationship Management (CRM) Systems

Customer Relationship Management (CRM) Systems. E CRM. Outline. CRM and CRM System Phases Applications CRM Software Capabilities Aspects of CRM Market Segments Business Value Performance Metrics Success Stories Challenges CRM, ERP, and SCM Systems Integration. CRM.

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Customer Relationship Management (CRM) Systems

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  1. Customer Relationship Management (CRM) Systems E CRM

  2. Outline • CRM and CRM System • Phases • Applications • CRM Software Capabilities • Aspects of CRM • Market Segments • Business Value • Performance Metrics • Success Stories • Challenges • CRM, ERP, and SCM Systems Integration

  3. CRM • Used to maximize the benefits of a company’s customer assets. • Used as a technology and business discipline. • Seeks to optimize revenue, profitability, customer satisfaction, and customer retention.

  4. CRM System • CRM system – provides integrated approach to all aspects of company-customer interaction • Marketing • Sales • Support / Service

  5. CRM Phases • Technology • Integration • Process • Customer-driven

  6. CRM Applications • Partner relationship management (PRM) • Employee relationship management (ERM)

  7. CRM Software Capabilities • Sales force automation (SFA) • Customer service • Marketing

  8. CRM Software Capabilities Example (Laudon and Laudon 2006) Customer Data Sales Marketing Service Account Mgmt Campaign Mgmt Service Delivery Lead Mgmt Channel Promotions Mgmt Customer Satisfaction Mgmt Order Mgmt Events Mgmt Returns Mgmt Sales Planning Market Planning Service Planning Field Sales Marketing Operations Call Center & Help Desk Sales Analytics Marketing Analytics Service Analytics

  9. Aspects of CRM • Operational CRM • Includes customer-facing applications • Analytical CRM • Includes applications that analyze customer data generated by operational CRM applications

  10. Operational vs. Analytical CRM Examples (Laudon and Laudon 2006)

  11. Analytical CRM Data Warehouse Customer Data • Channels • Call center • Web site • Wireless • Field sales • Direct mail • E-mail • Retail store • Partner • Other sources • Legacy systems • Demographic data • Third-party data • Marketing campaign data Customer data warehouse • Profitable customers • Market segments • Customer profiles • Churn rates • OLAP • Data mining • Other data analysis tools (Laudon and Laudon 2006)

  12. CRM Market Segments • Traditional out-of-the-box CRM • Traditional CRM with templates for specific vertical industries • Traditional out-of-the-box CRM with application development hooks • Industry-specific vertical CRM packages • Custom solutions from vertical systems integrators

  13. CRM Systems Business Value • Increased customer satisfaction • Reduced direct marketing costs • More effective marketing • Lower costs for customer acquisition and retention • Increased sales revenue • Reduced churn rate

  14. CRM Performance Metrics • Cost per lead • Cost per sale • Number of repeat customers • Reduction of churn • Sales closing rate • Customer lifetime value (CLTV)

  15. Cost Cutters Decrease cost of sales More time to sell; less time on administration Decrease cost of service Cost per service interaction Transition to more self-service Revenue Enhancers Increase sales effectiveness Add new customers at a higher rate Offer new products/services Provide a better customer experience Increase revenue per customer Sell more of current products/services Improve customer retention Cost Cutters and Revenue Enhancers from a CRM System Haag et al. 2005

  16. CRM Success Stories • Best Buy • Launched a “customer-centricity” effort • Trained store-level employees to recognize five types of highly valued customers • American Cancer Society • Used CRM system to better target members in its donor base

  17. CRM System Challenges • Broad company goals • Generic strategies • Software-centric implementations

  18. Integrating CRM with ERP and SCM Systems • CRM’s goal: to find the best customers and concentrate efforts on serving them better • CRM and ERP integration • CRM and SCM integration

  19. References • Greenberg, P. (2002). CRM: Capturing and Keeping Customers in Internet Real Time at the Speed of Light, 2nd edition, McGraw-Hill Companies, Berkeley, California. • Haag, S., Cummings, M. and McCubbrey, D.J. (2005). Management Information Systems for the Information Age, 5th edition, McGraw-Hill Companies, Inc., New York. • Harris, R. (2003). “What is a Customer Relationship Management (CRM) System,” Darwinmag, http://www.darwinmag.com/read/120103/question65.html [accessed: 19 October 2005]. • Huang, A., Yen, D.C., Chou, D.C. and Xu, Y. (2003). “Corporate applications integration: challenges, opportunities, and implementation strategies,” Journal of Business and Management (9:2), Spring, pp. 137-150. • Laudon, K.C. and Laudon, J.P. (2006). Management Information Systems: Managing the Digital Firm, Pearson Education, Inc., Upper Saddle River, New Jersey. • Martin, E.W., Brown, C.V., DeHayes, D.W., Hoffer, J.A. and Perkins, W.C. (2005). Managing Information Technology, 5th edition, Pearson Education, Inc., Upper Saddle River, New Jersey.

  20. References • McNurlin, B.C. and Sprague, Jr., R.H. (2006). Information Systems Management in Practice, 7th edition, Pearson Education, Inc., Upper Saddle River, New Jersey. • Motiwalla, L.F. and Thompson, J. (2009). Enterprise Systems for Management, Pearson Education, Inc., Upper Saddle River, New Jersey. • Peppers, D. and Rogers, M. (2005). “Best Buy Counts Customers,” CIO Magazine, July, http://www.cio.com/archive/070105/circuit_sidebar_three.html [accessed: 19 October 2005]. • Rigby, D.K. and Ledingham, D. (2004). “CRM done right,” Harvard Business Review, pp. 118-129. • Ross, D.F. (2005). “E-CRM from a supply chain management perspective,” Information Systems Management, Winter, pp. 37-44. • Wailgum, T. (2007). “CRM Definition and Solutions,” http://www.cio.com/article/print/40295 [accessed: 13 September 2010].

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