Indicator 3.09 Understand the nature of customer relationship management to show its contributions to a company.
Vocabulary • Customer relationship management (CRM) • Strategies, processes, and policies used by businesses to build, maintain, and maximize the long-term value of customer relationships • Helps businesses to understand and respond to customers’ changing needs • Emphasizes positive, meaningful, and long-term communication and interaction with customers • Involves the collection of customer information to draw conclusions about the customer’s needs and wants as well as predict the customer’s loyalty and value in the future
Explain goals of customer relationship management (CRM) • To maximize the value and effectiveness of all customer touch points • Touch points: All the opportunities that businesses have to connect with customers and reinforce their brand value • To provide outstanding service to customers • To maximize customer satisfaction • To attract and retain loyal customers • To cultivate and maintain positive, profitable relationships with customers • To develop individualized relationships with customers • To gather and track information about customers for use in business decision-making • To understand customers and their needs so that these needs can be fulfilled in a manner satisfactory to customers and businesses • To develop products that meet or exceed customer expectations • To increase business profit • To develop a competitive advantage
Describe common CRM processes • Campaign management (usually conducted by the marketing department) • Targeting prospective customers • Distributing promotional materials to targeted prospects • Tracking response to promotional materials • Generating leads for sales • Sales management (sometimes divided into lead management, offer management, and contract management) • Recording lead information • Qualifying leads • Prioritizing leads • Contacting leads • Making sales
Describe common CRM processes • Service management • Providing after-sales services, such as: • Maintenance and repair services • Warranties and guarantees • Retaining customers • Complaint management • Receiving customer complaints • Resolving customer problems • Communicating customer complaints to the organization • Retaining customers
Discuss the use of customer information in customer relationshipmanagement • By gathering and organizing customer information, a business can better determine and fulfill its customers’ needs and wants. • Customer information is also used to identify the most profitable, loyal customers. After identifying these customers, the business may provide higher, better service to these customers to maintain their loyalty and increase their profitability.
Discuss the nature of customer relationships in today’s society • Because customers now have so many different choices in the marketplace, they have become more selective about whom they do business with. When given the choice to do business with one of two businesses that sell nearly identical products at similar prices, customers often choose to purchase from the business that offers better customer service. As a result, customers’ expectations for customer service are higher.
Describe the role of customer experience management (CEM) in customer relationship management (CRM). • The business world has become increasingly focused on the customer versus the product. • Many businesses have adopted customer-centric attitudes and strategies. • Customer-centric strategy: A plan of action used by businesses that shifts the focus from businesses and their products to customers and their needs • An important component of CRM is customer experience management (CEM). • Customer experience management (CEM): Strategies, processes, and policies used by businesses to meet or exceed customer expectations for service and to provide customers with outstanding experiences/interactions at every touch point throughout their business transactions
Explain the impact of organizational structure on customer relationshipmanagement • The organization should be structured so that customers have “seamless,” easy interactions with the company. • To ensure that customers have “seamless” interactions with the company, all customer information must be available in one location to all employees who require it (usually using CRM technology). • Companies with superior customer relationship management processes are much more likely to be organized according to customer segment or group.
Discuss the role of corporate culture in customer relationship management • For customer relationship management to be successful, it must be supported by the corporate culture (i.e., the values, beliefs, and encouraged behaviors in an organization). • Senior executives must believe and demonstrate that building and maintaining customer relationships is a corporate priority.
Discuss the role of corporate culture in customer relationship management • Corporate values must be understood and embraced by all employees. • Employee incentives, such as prizes and bonuses, can help ensure that employees embrace CRM strategies and processes. • Also, employees must be given leeway to do what is necessary to satisfy customers.
Discuss the importance of formulating a CRM strategy prior to implementingCRM processes and tools. • Each company should design a unique CRM strategy that directly addresses its needs, organization, and customers. • An important step in developing a CRM strategy is identifying the objectives/goals of the CRM program (e.g., to increase customer retention, to improve product offerings, etc.). • Before implementing CRM processes and tools, each company must determine which members of its organization will be involved in CRM so that these individuals can be trained. • CRM technology and tools should be selected after determining the company’s CRM strategy, objectives, and program participants.
Discuss the relationship of customer relationship management andbusiness process management. • Customer relationship management and business process management work together to satisfy customers. • Business process management: A type of management that focuses on the design and improvement of business processes (including CRM processes) to make them as efficient and effective as possible; strives to align business processes with customers’ needs and wants • Business process management ensures that CRM processes meet the needs, wants, and expectations of customers, while CRM processes can gather customer information that can be used to ensure that business processes are designed with the end user—the customer—in mind.
Describe the relationship of customer relationship management andcontinuous improvement. • Continuous improvement: The activity of regularly updating one’s processes for better efficiency • After developing a CRM strategy and implementing CRM processes, continuous improvement must occur to ensure that: • Company values remain in line with the CRM strategy • CRM processes remain effective
Explain ways in which customer relationship management can benefit a business • Increased customer satisfaction and loyalty • More customers and customer referrals • Reduced costs • Fewer complaints • Lower employee stress levels • Increased access to customer information (for use in business decisionmaking) • Long-term profitability
Vocabulary • Informed consent • Integrity
Describe the importance of trust in customer/business relationships
Describe ethical issues related to the collection of customer information
Explain situations in which employees/departments involved in customer relationship management may be reluctant to share customer information with each other
Discuss ethical issues related to the sale of customer information to third parties
Discuss the impact of poor/unethical privacy practices on customer relationships
Vocabulary • Client intelligence • Cross-selling • Up-selling • Relationship mapping • Personalization • Segmentation • Clustering
Explain the difference between customer relationship management technology and customer relationship management
Describe types of customer relationship management tools • CRM Applications • Databases • Data warehouses
Discuss customer relationship management software approaches • Operational • Analytical • Collaborative • Sales force automation
Explain types of datacommonly stored in a CRM system • Contact data • Demographic data • Transactional data • Relationship data
Explain how CRM technology can be used to create a “single view” of a customer
Explain the importance of cleansing, standardizing, and updating data in a CRM data warehouse