Customer Relationship Management (CRM) ATTF Luxemburg R.J.Claessens&Partners Helping you through the learning curve

The structure of the course CRM Introduction ORGANISATION MARKETING ANALYSIS 1_Elements of CRM 2_Customer-supplier 3_Strategy 4_Relationship oriented 1_Customer knowledge 2_Customisation 3_Communication 4_Relationship policy 1_Relationship Data 2_Data mining 3_Data selection 4_Data reporting SYSTEMS 1_CRM systems 2_Implementation 3_The future 4_Conclusion

1_Elements of CRM

1_Elements of CRM The four cornerstones of the «elements of CRM » are: Customer knowledge Relationship strategy Communication The individual value proposition

1_Elements of CRM Customer knowledge Segmentation Awareness, Attitude Usage Concept Customer satisfaction Customer loyalty Brand Image Brand equity Pricing Advertising

1_Elements of CRM Relationship strategy A long lasting customer – supplier relationship The key is not only the stimulation of a transaction Success is not measured by market share

1_Elements of CRM Communication The issue is to carry on a dialogue with individual customers Shifts should be possible between distribution channels

1_Elements of CRM The individual value proposition The product, service and price are adapted to the individual circumstances The organisation has to build up the capacity to supply customisation in one form or another

1_Elements of CRM Systems If a relationship must be maintained with a large group of customers, a portion of which represents a low value to the supplier, the use of IT becomes inevitable. Integration is therefore a must between front-mid-back office

2_Customer – supplier relationship Weak relationship - No reciprocation Unilateral interaction Limited topics Superficial No mutual interest No intention of continuity Few barriers to end Easy alternatives Strong relationship -

2_Customer – supplier relationship Weak relationship - No reciprocation Unilateral interaction Limited topics Superficial No mutual interest No intention of continuity Few barriers to end Easy alternatives Strong relationship - Reciprocation No unilateral interaction Wide range of topics In depth Mutual interest Intention of continuity Many barriers to end No easy alternatives

2_Customer – supplier relationship Loyalty A commitment to re-buy a product/service in the future, thereby causing repetitive same-brand purchasing, despite influences and marketing efforts from the competition, which might cause a switching behaviour.

2_Customer – supplier relationship Trust A willingness to rely on an exchange partner in whom one has confidence Is the perception of confidence in the exchange partner’s reliability and integrity Is generated by corporate values!

2_Customer – supplier relationship The dynamics of a relationship A relationship cannot be forced, it needs time Should aim at providing total solutions A relationship based on consultation The ability to see the issue through someone else’s eyes Commitment = f(satisfaction,attractiveness, switching costs)

3_A CRM strategy

3_A CRM strategy The nature of a CRM strategy implies: Operational excellence Product leadership Customer intimacy

3_A CRM strategy Operational excellence Combination of : price, quality, ease of purchase Efficiency is rewarded Team is the key

3_A CRM strategy Product leadership Amaze customers Surprise customers Ideas are recognised and rewarded

3_A CRM strategy Customer intimacy The individual matters more than the market Exceptions are possible Transactions are subordinate in importance to relationship

3_A CRM strategy enlarge market offensive increase share strategy defensive enlarge market increase share barriers satisfaction

3_A CRM strategy In order to implement a CRM strategy certain conditions must be met: Quality of products Position Logistics Meeting competition Countering switching behaviour Segmentation

4_A relationship oriented organisation

4_A relationship oriented organisation Assuming you have a CRM strategy: If you’re not sure what your organization’s CRM strategy is, it is time to define it. Has the strategy been communicated to both internal and external customers.

4_A relationship oriented organisation Who is the owner of the major CRM tools currently in use? Often, this is the IT or information technology group. Other times it’s marketing or sales. Are they sharing the tools and generating useable data.

4_A relationship oriented organisation Here’s a checklist of information you should know about your customers: • Which of your competitors do they also do business with? What factors influence their purchase decisions? E.g., product quality, price, delivery options, customer service, speed of purchase, long-term relationship

4_A relationship oriented organisation Here’s a checklist of information you should know about your customers: • What is the typical life cycle for each of your products and customers? (This tells you when the customer will be ready to buy again.)

4_A relationship oriented organisation Here’s a checklist of information you should know about your customers: • How long have they done business with you? • What do they like most about your company? • What do they feel you could improve upon? • How often do they repeat purchase? (How does this compare with the industry norm?)

4_A relationship oriented organisation The ultimate goal is that individuals within the organisation derive motivation from their collaboration with customers. Customers with whom providing advice and effort proves to be a waste of time should be referred to competition It is about an environment in which relationships are rewarded

4_A relationship oriented organisation A relationship oriented company’s success depends upon senior management’s willingness: Not to focus too much on short term Not to be too number crunching Not to be too risk adverse Not to be too adverse to progress

4_A relationship oriented organisation One of the key considerations of CRM is the fact it is a commitment from all layers of the organisation and coincides with the behaviour of all involved, not just the contact person or contact point. CRM implies a culture of CRM!

4_A relationship oriented organisation What determines a CRM culture? Common values and norms (culture) Ambassadors Communication Information HR Performance measurement

4_A relationship oriented organisation What determines a CRM culture? Use customer satisfaction surveys and focus groups to find out both what satisfies and what disappoints your customers. If you are getting no complains, it means that you are interviewing the wrong people!

4_A relationship oriented organisation Not all customers are alike & not all require the same service or attention 5% 15% 80% Team based mgt Account mgt Direct sales

4_A relationship oriented organisation The role of the CRM system will vary for each of the three types of customers. 80 % is IT sensitive! 5% 15% 80%

4_A relationship oriented organisation 80 % is IT sensitive! However, people develop relationships, not the IT applications! At a point in time we are always going back to people!

4_A relationship oriented organisation The service profit chain Service Quality Employee satisfation retention productivity External Value Customer satisfaction loyalty Profits Growth T/O