CUSTOMER RELATIONSHIP MARKETING WHERE IS THE NEED FOR CRM?

What is Marketing Management? Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

Factors Influencing Marketing Strategy

Marketing Mix and the Customer Four P’s Product Price Place Promotion Four C’s Customer solution Customer cost Convenience Communication

New Mix Areas: Relationship Product policy:Value determined by Interactions - relationship specific offering Pricing: Each relationship is an investment in the customer Lifetime Value Communication: Learning from the communication with customers Distribution: The moment of truth

CRM is a holistic approach that utilises customers’s insight

Types of CRM Strategic: It is a core customer centric business strategy that aims at winning and keeping profitable customers. Operational: automation of customer facing processes e.g. selling etc Analytical : intelligent mining of customer related data for strategic or Tactical purposes Collaborative: It applies technology across organizational boundaries with a view to optimizing company partner and customer value.

CRM Defined It is the core business strategy that integrates processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high quality customer related data and enabled by information technology

MODELS of CRM IDIC Gartner Competency Model The CRM Value Chain Paynes Five Process Model

Framework for CRM- Peppers and Rogers (IDIC) Identify prospects and customers Differentiate customers by needs and value to company Interact to improve knowledge Customize for each customer

Gartner Competency Model

Gartner Competency Model

Features of a customer centric culture Identifying which customers to serve Understanding customers’ current and current and future requirements Obtaining and sharing customer knowledge across the company Measuring customer results: satisfaction, retention, future buying intention, referral behaviours (word-of-mouth), share of wallet Designing products and services which meet customers’ requirements better than competitors Acquiring and deploying resources (information, materials, people, technology) that create the products and services that satisfy customers Developing the strategies, processes and structure that enable the company to meet customer requirements

Model of a customer centric culture Customer-centric organisational culture leadership formal systems employee experience employee behaviour customer experience Internal relationships

The role of data in CRM Data are needed for 2 applications Business operations Order processing; Enquiry handling; Invoicing Analysis Customer portfolio analysis; Churn analysis Data are used across all 5 stages of the CRM Value Chain Data for CRM need to be of appropriately high quality, i.e higher for operational CRM applications than analytical CRM applications

People are important for CRM success People develop the CRM strategy People select & implement the IT solution(s) People need to coordinate with each other across functions to make CRM work People contribute importantly to customer satisfaction and retention when they interact with customers People may resist changing established work practices

Understanding business processes Processes are ‘how things are done’ Processes can be classified as Vertical and horizontal Front-office and back-office Primary and secondary CRM processes include all customer-facing (front-office) processes within sales, marketing and service functions

Typical analytical CRM processes Customer profiling process Opportunity management process Campaign management process

Campaign management process Customer phones in Check scores Buy product Offer product to high scores Open account on phone No interest 2 Send application form 7 42 Out bound phone follow-up 7 Check account balance Mail follow-up Do nothing (numbers are days)

Questions about CRM processes What are the important processes from a CRM point of view? How is the present process designed? What does it contribute to the achievement of CRM objectives? What do its customers, internal and/or external, receive from and think about the process? What process performance measures are in place? Cost, time, accuracy, satisfaction Can the process and its outcomes be improved?

Order fulfillment: cross-functional process flowchart

Process evaluation   Process rating Best practice (superiority) The process is substantially defect-free and contributes to CRM performance. Process is superior to comparable competitors and other benchmarks Parity A good process which largely contributes to CRM performance Stability An average process which meets expectations with no major problems but which has major opportunities for improvement Recoverability The process has identified weaknesses which are being addressed Criticality An ineffective and/or inefficient process in need of immediate remedial attention

CRM value chain II Customer profitability Customer Customer Network Value Manage Portfolio Intimacy Development Proposition the Analysis (SCOPE) Development Customer Lifecycle Customer Market segmentation Sales forecasting Life-time value Customer analysis toolkit -SWOT/ PEST/ 5 forces/ BCG matrix Customer database development Internal data Data enhancement Data warehousing Data mining Benchmarking Privacy Database technology and software Network management Internal buy-in External network -suppliers/ investors/ partners Network position E-commerce -EDI/Extranets/ portals - Sources of customer value -4Ps/7Ps -customisation Customer experience Process reengineering self-manufacture -self-service People issues Technology enablement Customer acquisition -who/how/what? KPIs Customer retention -who/how? KPIs - exceed expectations/ add value/ social and structural bonds/ commitment Customer development -who/what/how? KPIs Organisation design -physical/virtual? -KAM/cross- functional teams Metrics profitability

Data repository and information management process drive customer insight

CRM as a set of cross functional process

Case Discussion What Serves the customer best? Key issues

What Serves the customer best How many times must they hear from the company in a single year? It’s a constant quest to stay on consumers’ radar screens. If we aren’t somehow in their faces on a weekly basis, they will drift. Careful balance between front-end initiatives and product development. Allocate its marketing funds differently between building lifetime relationships with current customers and attracting new ones. The single-cask bottling he envisions would deliver a customized product to the company’s preferred upscale consumer. This type of offering would command higher margins, provide consumers with more individual choices, and allow them to trade up

What Serves the customer best Bob’s problem isn’t that he has difficult trade-offs to make. The new approach is working. It’s the organization that’s not. Bob should get all his stakeholders to think together about how to capitalize on this potentially breakthrough marketing idea. Bartenders in discotheques are great for talking up new vodka drinks—but is that where someone interested in scotch goes for guidance? Customer loyalty comes from the whole package, and Marketing’s job, in any company, is not simply to generate demand but to build brand strength and profitability over the long haul.