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CUSTOMER RELATIONSHIP MANAGEMENT. Learning Outcomes. Understand the customer relationship management (CRM) Define CRM Explore CRM. Introduction.
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Learning Outcomes • Understand the customer relationship management (CRM) • Define CRM • Explore CRM
Introduction • Customer Relationship Management (CRM) – concept giving organizations to plan, design and control strategy aiming to maintain customer relationship efficiently. • Globalization phenomena needs organizations to sustain competitive advantage and use CRM as a tool to distinguish them from competitors. • Enable organizations to create communication with customers at a new level. • Internet concept, e-CRM to overcome barriers.
Introduction • “the best organization in the world will be ineffective if the focus on ‘customers’ is lost. First and foremost is the treatment of individual students, alumni, parents, friends, and each other (internal customers). Every contact counts!” • The focus is currently shifting from improving internal operations to concentrating more on customers.
Customer Relationship Management (CRM) • CRM is a business strategy to select and manage customers to optimize long-term value. • CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes. • CRM applications can enable effective customer relationship management, and shows that there is a right leadership, strategy and culture that persists in the organization.
Customer Relationship Management (CRM) • Refers to the methodologies and tools that help businesses manage customer relationships in an organized way. • CRM processes identify and target the best customers, generate quality sales, and help organizations to plan and implement marketing campaigns with clear goals and objectives. • Individualized relationships with customers and provide the highest level of customer service to the most profitable customers. • Aim to improve customer satisfaction.
Customer Relationship Management (CRM) • Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value. • The purpose is to improve marketing productivity. Atul Parvatiyar & Jagdish N. Sheth (2001)
Customer Relationship Management (CRM) • Example: a comparison of a local grocery store where the seller has a good understanding of the needs of individual customers and maintain a long-term relationships. • How about in education sector? Can you give example about this?
Review of literature • For practitioners, CRM represents an enterprise approach to developing full-knowledge about customer behavior and preferences and to developing programs and strategies that encourage customers to continually enhance their business relationship with the company. • Marketing scholars are studying the nature and scope of CRM to formulate strategies and processes for customer classification and selectivity; one-to one relationships with individual customers; key account management and customer business development processes; frequency marketing, loyalty programs, cross-selling and up-selling opportunities; and various forms of partnering with customers including co-branding, joint-marketing, and other forms of strategic alliances. • Atul Parvatiyar & Jagdish N. Sheth (2001)
The Emergence of CRM Practice • Growing de-intermediation process in many industries due to the advent of sophisticated computer and telecommunication technologies that allow producers to directly interact with end-customers. • For example, in many industries such as the airline, banking, insurance, computer software, or household appliances industries and even consumables, the de-intermediation process is fast changing the nature of marketing and consequently making relationship marketing more popular.
The Emergence of CRM Practice • Total quality movement. When companies embraced the Total Quality Management (TQM) philosophy to improve quality and reduce costs, it became necessary to involve suppliers and customers in implementing the program at all levels of the value chain. • In the current era of hyper-competition, marketers are forced to be more concerned with customer retention and loyalty.
The Emergence of CRM Practice • Customer expectations have been changing rapidly. Consumers are less willing to make compromises or trade-offs in product and service quality. • Internationally oriented companies trying to become global by integrating their worldwide operations.
The Emergence of CRM Practice • CRM focuses on automating and improving the institutional processes associated with managing customer relationships in the areas of recruitment, marketing, communication management, service, and support. • In the case of a student, this might be seen through the interaction with and between the admissions, registration, financial aid, student accounts, and housing offices.
The Emergence of CRM Practice • For a faculty or staff member, a CRM business strategy would optimize interaction with departments administering benefits, payroll, staff training, information technology (IT), or facilities. • From the perspective of the college or university, the CRM business strategy provides a clear and complete picture of each individual and all the activities pertaining to the individual.
A CRM Process Framework • A four-stage CRM process framework. • Comprised of the following four sub-processes: a customer relationship formation process; a relationship management and governance process; a relational performance evaluation process, and a CRM evolution or enhancement process.
Formation Management and Governance Performance Team Structure Purpose - Increase Effectiveness - Improve Efficiency Role Specification Communication Performance - Strategic Goals - Financial Goals - Marketing Goals • Loyalty • Satisfaction Program - Features & Offerings Common Bonds Planning Process Process alignment Partners - Selection Criteria & Process Employee motivation Monitoring process Evolution - Enhancement - Termination Figure 1: The CRM Process Framework
The Purpose of CRM and Its Operational Goals • To improve marketing productivity and to enhance mutual value for the parties involved in the relationship. • To enhance marketing effectiveness by carefully selecting customers for their various programs, by individualizing and personalizing their market offerings to anticipate and serve the emerging needs of individual customers. • To fulfill consumers expectations and their goals related to efficiencies and effectiveness in their purchase and consumption behavior. • To build customer loyalty and commitment and to develop new products, and to redefine the competitive playing field for the company.
Customer Relationship Management (CRM) Two categories: • Operational CRM • Analytical CRM
Operational CRM • Products, services and operational capabilities that enable the organization to take care of its customers. • Examples: contact centers, data aggregation system, and web sites.
Analytical CRM • Strategies and tools that drive customer-centric business decisions. • Examples: business intelligent systems, data mining tools, and customer-tier strategies.
Categories of CRM • Marketing automation • Sales automation • Service and service fulfillment • Customer self-service • E-commerce
Marketing Automation • Bringing technology to the marketing process. • CRM generates personalization, profiling, telemarketing, e-mail marketing, and campaign management. • Involves understanding what customers do and want, matching that knowledge with product and service information, presenting opportunities to customers and measuring success. • Can you give examples in our education environment?
Sales Automation • Sales involve direct transferring of products and services to customers. • Put sales representatives in direct contact with customers. • Campaign management, pricing. • Can you give examples in our education environment?
Service and service fulfillment • Encompasses the ability of the organizations to serve customers that they already have. • E-mail response management, telephony capabilities, computer telephony integration, interactive voice response, and predictive dialing. • Can you give examples in our education environment?
Customer self-service • Aims to make the customer more active in self-service through web self-service, search, interactive chat, e-mail, call-me capabilities. • Also known as e-CRM (electronic customer relationship management), involving internet access and wireless devices. • Can you give examples in our education environment?
E-commerce • Capabilities such as shopping, marketplace, transaction and payment processing, and security of transactions are the prime focus. • Involving internet access and wireless devices. • Can you give examples in our education environment?
e-CRM Two components: • The use of direct-to-customer channels, principally e-mail and web. Emerging trends are the use of ATMs and kiosks. • Using IT to select relevant material to be presented to the customer, in terms of content, offers, and support information. • Can you give examples in our education environment? Paying fees through internet.
e-CRM The key points to e-CRM: • Fast service – customers are supposed to find adequate information immediately. • Meaningful – customers expect content will be presented in an interesting interactive and focused manner. • Customer driven – information provided should be what customers want to know, not what the organization thinks customers might be interested in. • Let’s try on UPM web page and check.
e-CRM Technology The channels to e-CRM: • E-mail – however, can be voluminous and may not be answered timely and in accurate fashion. • Web-form technology – web forms are structured, pre-formatted static web pages with inputs fields that allow customers to fill out information. Simple and inexpensive interaction. However, there is a privacy intrusion. • Chat technology – allows real time interactions with customers and is becoming more popular to replace the traditional phone call. • Can you give examples?
8 Rules For Good Customer Service • Answer your phone. • Don’t make promises unless you WILL keep them. • Listen to your customers. • Deal with complaints. • Be helpful - even if there’s no immediate profit in it. • Train staff to be ALWAYS helpful, courteous, and knowledgeable. • Take the extra step. • Throw in something extra.
Good Customer Service Is No Longer Enough • Customers have more options than ever before-and feel less loyalty. • They want products and services fast, cheap, quick-from whoever will provide them. • The competitive advantage is now in our ability to KEEP customers and build repeat business and this applies in education sector as well.
Good Customer Service Is No Longer Enough • It has to be superior, WOW, unexpected service. In a nutshell, it means doing what you say you will, when you say you will, how you say you will, at the price you promised-plus a little extra tossed.
Conclusion • CRM refers to a conceptually broad phenomenon of business activity, and if the phenomenon of cooperation and collaboration with customers becomes the dominant paradigm of marketing practice and research, CRM has the potential to emerge as the predominant perspective of marketing which is also applicable to the education sector especially the higher education sector.