Customer Relationship Management

Chapter 11 pages 147-155 Business Plug-In B9 pages 348-362 Customer Relationship Management Managing with an organization with the goal of increasing customer loyalty and retention and an organization's profitability

Customer Relationship Management (CRM) • CRM is a business philosophy based on the premise that those organizations of individual customers are best positioned to achieve a sustainable competitive advantage. • A customer first approach that revolves around • Shift from product focus to customer focus • Product: sell one product to as many customers as possible • Customer: sell one customer as many products as possible

CRM Philosophy • What are companies trying to do through CRM? • Provide • Make call centers more efficient • Cross sell products more effectively • Help sales staff close deals faster • Simplify marketing and sales processes • Discover new customers • Increase customer revenues • For many companies, approximately of their overall IT budget is devoted to CRM. • Is the customer always right? Feedback

THE UGLY SIDE OF CRM: WHY CRM MATTERSMORE NOW THAN EVER BEFORE

Using CRM, companies are interested in finding out: • W the best customers? • W are the most profitable? • Companies are using CRM technologies to figure out: • H a customer purchased items (recency) • H a customer purchases items (frequency) • H a customer spends on each purchase (monetary value)

Phases of CRM • What are we trying to do with CRM? • K who are? • A to understand what the customer is doing. • F customers just like our existing customers

Using Technology in CRM (examples) • T in order to for each customer. • I and behavior • Segment customers ( ) • User-generated content can be incorporated into new product ideas (YouTube, Twitter, Lego) • C at point of contact (phone, web, in-person) • Make info who interact with customers. • D to uncover patterns of behavior that the company can capitalize. • Personalization of web site (site changes to reflect viewer preferences and interests)

Types of CRM • Operational CRM – supports traditional transactional processing for front-office or systems that (marketing, customer service, sales, billing, etc.) • Analytical CRM – supports back-office operations and and includes all systems that (accounting, finance, human resources, data warehouses)

OPERATIONAL CRM • List generator – customer from a variety of sources and then that information by for different marketing campaigns • Cross-selling and up-selling • Cross-selling – selling or services • Up-selling – of the sale • Sales force automation softwareis used to automatically tracks all of the steps in the sales process • Sales reps had too much info to maintain and track • Needed to get info out of sales rep heads and into a system that could be used by all.

OPERATIONAL CRM • Sales reps can so that one reps lead can become a sale by the organization (even if it means someone else makes the sale) • Contact management systems can be used to and all with that customer • After acquiring a customer, you need to keep the customer through excellent customer service • If you want to ensure customer loyalty and satisfaction, you must • A Provide to problems

OPERATIONAL CRM (Customer Service) • Provide to questions ( ) • Make sure customers don’t have to explain their problems AGAIN ( , avoid customer frustration) • E to detect when someone is distressed and upset (determine baseline during first few seconds of contact and then looks for deviations) • Web-based allows customers to find their own answers. • Federal Express, UPS and other sites with shipment tracking • Click-to-talk buttons on a web site • Call scripting systems automatically generate the next item or question. • Good way to be

Types of CRM • Operational CRM supports front-office systemsthat • Analytical CRM doesn’t directly deal with customers. It is used to support and by identifying patterns to help the organization

Analytical CRM • Analytical CRM relies heavily on technologies and to glean insights into customer behavior • These systems quickly aggregate, analyze, and disseminate customer information throughout an organization • Personalization – when a website knows enough about a person’s likes and dislikes that it can fashion offers that are more likely to appeal to that person • Determine the • Who should we invest in? • Who should we service at an average level? • Who should we not invest in at all? • Since we can’t focus on all of our customers, who should be focus on ? Where can we get the biggest bang for the buck?

Information Technology and Customer Relationship Management • Advances in information technology are making it possible to who are buying your products. If an organization understands the characteristics of its customers, it is then in a better position to meet customer needs, and therefore generate even more business. • How are we going to use all of this customer data that we have collected? • Information Technology is simply a that can be used to the customer. • How can customer interactions be made easier? • If you understand customer characteristics, you are then positioned to better serve customers (mine what you have to gain a clearer understanding). • Result: increase customer loyalty and probably increase revenues

Customer Relationship Management