CRM Chapter 1 What is CRM? The good, the bad, and the ugly of CRM The good, the bad, and the ugly of CRM

Importance of CRM  2002 Goldman Sachs survey – 2 nd most important business initiative behind security  As of 2003, 37 percent of business were implementing CRM, 43 percent considering it (Forrester Research)

CRM Transition  From Technology driven to business process (Late 1990s-Today)  Not just about automating customer service  Balancing efficiency with quality service  Vendors try to sell solutions not software  ANGELA Example

Discussion Questions?  Can you think of ways in which internet and e-technology has helped and will help companies focused on CRM?  What is customer loyalty?  Why do I say CRM is an evolution of customer loyalty?

Loyalty  Loyalty is emotional, not rational  In essence, customer loyalty is training our customers to ultimately behave in a way that is mutually beneficial  Impact of Loyalty  5% increase in loyalty (customer retention) can increase profits from %  Reichold & Bain study

Developing Loyalty  How is loyalty developed?  Positive experiences and value perception  How can companies develop loyalty?

Customer Intimacy  Discussion  How does customer intimacy impact loyalty?  What do you value with companies that offer intimacy?

Operational Efficiency  How does operational efficiency impact CRM?

What is the purpose of CRM?  Gain a better understanding of customers and profitability  Quality of company/customer interaction  Improved operations  Shift from product to consumer focus**  Improve front-end customer interaction through data awareness  META Group 2000

Biggest cause for CRM failure  Lack of attention to the customer!  “Put the C back in CRM”

Who is involved in CRM?  Paying clients/customers  Your employees  Business partners  Suppliers/vendors  NSX5Xo&feature=related NSX5Xo&feature=related NSX5Xo&feature=related

CRM ROI  Goals of CRM help establish ability to determine return on investment (ROI)  Increasing customer acquisition rate  Decreasing churn (defection) rate  Increasing share of customer  Improving customer satisfaction  Decreasing front office staffing costs  How can an organization decide where to focus?

7 Tips for Effective CRM  Align with corporate strategy  Create an overall CRM vision for company  Evaluate process, people and tech changes  Secure commitment and buy-in of senior management  Develop iterative and incremental approach going after highest value opportunities first  Recognize changes and motivation required  Measure effectiveness and create accountability