Customer Relationship Management Managing with an organization with the goal of increasing customer loyalty and retention and an organization's profitability Chapter 11 pages Business Plug-In B9 pages

Customer Relationship Management (CRM) CRM is a business philosophy based on the premise that those organizations of individual customers are best positioned to achieve a sustainable competitive advantage. – A customer first approach that revolves around – Shift from product focus to customer focus Product: sell one product to as many customers as possible Customer: sell one customer as many products as possible

CRM Philosophy What are companies trying to do through CRM? – Provide – 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 For many companies, approximately of their overall IT budget is devoted to CRM. Is the customer always right?Feedback

THE UGLY SIDE OF CRM: WHY CRM MATTERS MORE NOW THAN EVER BEFORE

Using CRM, companies are interested in finding out: W the best customers? W are the most profitable? Companies are using CRM technologies to figure out: – H a customer purchased items (recency) – H a customer purchases items (frequency) – H a customer spends on each purchase (monetary value)

Phases of CRM What are we trying to do with CRM? – K who are? – A to understand what the customer is doing. – F customers just like our existing customers

Using Technology in CRM (examples) T in order to for each customer. I and behavior Segment customers () User-generated content can be incorporated into new product ideas (YouTube, Twitter, Lego) C at point of contact (phone, web, in-person) Make info who interact with customers. D to uncover patterns of behavior that the company can capitalize. Personalization of web site (site changes to reflect viewer preferences and interests)

Operational CRM – supports traditional transactional processing for front-office or systems that (marketing, customer service, sales, billing, etc.) Analytical CRM – supports back-office operations and and includes all systems that (accounting, finance, human resources, data warehouses) Types of CRM

OPERATIONAL CRM 1.List generator – customer from a variety of sources and then that information by for different marketing campaigns 2.Cross-selling and up-selling – Cross-selling – selling or services – Up-selling – of the sale 3.Sales force automation software is used to automatically tracks all of the steps in the sales process – Sales reps had too much info to maintain and track – Needed to get info out of sales rep heads and into a system that could be used by all.

OPERATIONAL CRM 4.Sales reps can so that one reps lead can become a sale by the organization (even if it means someone else makes the sale) 5.Contact management systems can be used to and all with that customer 6.After acquiring a customer, you need to keep the customer through excellent customer service – If you want to ensure customer loyalty and satisfaction, you must AProvide to problems

OPERATIONAL CRM (Customer Service) 1.Provide to questions ( ) 2.Make sure customers don’t have to explain their problems AGAIN (, avoid customer frustration) 3.E to detect when someone is distressed and upset (determine baseline during first few seconds of contact and then looks for deviations) 4.Web-based allows customers to find their own answers. – Federal Express, UPS and other sites with shipment tracking 5.Click-to-talk buttons on a web site 6.Call scripting systems automatically generate the next item or question. – Good way to be

Operational CRM supports front-office systems that Analytical CRM doesn’t directly deal with customers. It is used to support and by identifying patterns to help the organization Types of CRM

Analytical CRM Analytical CRM relies heavily on technologies and to glean insights into customer behavior These systems quickly aggregate, analyze, and disseminate customer information throughout an organization Personalization – when a website knows enough about a person’s likes and dislikes that it can fashion offers that are more likely to appeal to that person Determine the – Who should we invest in? – Who should we service at an average level? – Who should we not invest in at all? – Since we can’t focus on all of our customers, who should be focus on ? Where can we get the biggest bang for the buck?

Information Technology and Customer Relationship Management Advances in information technology are making it possible to who are buying your products. If an organization understands the characteristics of its customers, it is then in a better position to meet customer needs, and therefore generate even more business. – How are we going to use all of this customer data that we have collected? Information Technology is simply a that can be used to the customer. – How can customer interactions be made easier? – If you understand customer characteristics, you are then positioned to better serve customers (mine what you have to gain a clearer understanding). Result: increase customer loyalty and probably increase revenues