McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved CHAPTER 9 CUSTOMER RELATIONSHIP MANAGEMENT

ITO Bild 9-2 Customer Relationship Management Overview Chapter Nine Overview SECTION 9.1 – CUSTOMER RELATIONSHIP MANAGEMENT –Business Benefits of CRM –Using Information Technology to Drive Operational CRM –Using Information Technology to Driver Analytical CRM SECTION 9.2 – CUSTOMER RELATINSHIP MANAGEMENT STRATEGIES –Customer Relationship Management’s Explosive Growth –Customer Relationship Management Success Factors –Current Trends: SRM, PRM, ERM –Future CRM Trends

ITO Bild CUSTOMER RELATIONSHIP MANAGEMENT CRM enables an organization to: –Provide better customer service –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

ITO Bild 9-4 Crm basics Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value –How recently a customer purchased items (Recency) –How frequently a customer purchased items (Frequency) –How much a customer spends on each purchase (Monetary Value)

ITO Bild 9-5 The Evolution of CRM Three phases in the evolution of CRM include reporting, analyzing, and predicting

ITO Bild 9-6 The Evolution of CRM

ITO Bild 9-7 Operational and Analytical CRM

ITO Bild 9-8 Using IT to Drive Operational CRM

ITO Bild 9-9 Sales and Operational CRM The sales department was the first to begin developing CRM systems with sales force automation – a system that automatically tracks all of the steps in the sales process

ITO Bild 9-10 Using IT to drive analytical CRM Personalization – when a Web site knows enough about a persons likes and dislikes that it can fashion offers that are more likely to appeal to that person Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behavior These systems quickly aggregate, analyze, and disseminate customer information throughout an organization

ITO Bild 9-11 Using IT to drive analytical CRM Analytical CRM information examples 1.Give customers more of what they want 2.Value their time 3.Overdeliver 4.Contact frequently 5.Generate a trustworthy mailing list 6.Follow up

ITO Bild CUSTOMER RELATIONSHIP MANAGEMENT STRATEGIES CRM Business Drivers

ITO Bild 9-13 Customer relationship management’s success factors CRM success factors include: 1.Clearly communicate the CRM strategy 2.Define information needs and flows 3.Build an integrated view of the customer 4.Implement in iterations 5.Scalability for organizational growth

ITO Bild 9-14 Current trends : SRM, PRM, AND ERM Current trends include: –Supplier relationship management (SRM) – focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection –Partner relationship management (PRM) – focuses on keeping vendors satisfied by managing alliance partner and reseller relationship that provide customers with the optimal sales channel –Employee relationship management (ERM) – provides employees with a subset of CRM applications available through a Web browser

ITO Bild 9-15 Future CRM trends CRM future trends include: –CRM applications will change from employee-only tools to tools used by suppliers, partners, and even customers –CRM will continue to be a major strategic focus for companies –CRM applications will continue to adapt wireless capabilities supporting mobile sales and mobile customers –CRM suites will incorporate PRM and SRM modules