1. CRM and external relationships Part 2 Presented by Mr. Ahmed El Seddawy AASTMT – EC Department

2.  Importance for organization to focus on needs, wants, preferences and values of customer  Use of IT and Internet to cause major transformation in ways organizations interact with customers 2

3. 3 企業策略 企業價值 B2B EC B2C EC BI KM SCM ERPCRM Customer Supplier

4.  Customer relationship management (CRM): A customer service approach that focuses on building long-term and sustainable customer relationships that add value both for the customer and the company 4

5. ‘There is only one boss. The customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.’ (Sam Walton, WalMart) 5

6. ‘Present a single face to the customer’ 6 Customer focus win and retain loyal and profitable customers

7. 1. Accurate view of internal operations 2. Service to customers Information 1.Across product lines 2.Across geographic locations 3.Across subsidiaries, business units 4.Across multiple channels 7 Major challenge for most organisations – cross-functional, complex

8. 8 Potential customer Customer Loyal customer Former customer Costs Benefits

9.  achievement costs gain once only  Benefits increase from:- ◦ Loyal customers referring other new customers ◦ Loyal customers tend to purchase more over time ◦ Loyal customers are less price sensitive ◦ Loyal customers incur fewer administrative costs over time  Note also: damage from dis-satisfied customers can rise 9 (Cash 1999)

10. 10 Dissatisfied customers Share bad experiences with others Loss of customer loyalty Dollars lost compound over time

11. 11 SupplierRetailerDistributorManufacturer Product / service flows Customer demand flows Consumer Supply chain perspective Demand chain perspective Concept of order sequence

12. 12 No visibility Advertisement, Brand image Low visibility Very low visibility Focal Company Focal Company Customer Channel Salesmen

13. 13 Focal Sales/ Channels Customer As is Focal Sales/ Channels Customer To Be

14.  Classification of CRM programs ◦ Loyalty program ◦ Prospecting ◦ Save or win back ◦ Cross-sell/up-sell  E-CRM: Customer relationship management conducted electronically 14

15.  Scope of CRM 1.Foundation of service 2.Customer-centered services 3.Value-added services 15

16.  Extent of service 1.Customer acquisition (pre-purchase support) 2.Customer support during purchase 3.Customer performance (purchase message) 4.Customer continuance support (post-purchase) 16

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18.  Customer and Product centric services  Differential Marketing ◦ Mass marketing ◦ Focused marketing ◦ One-to-one marketing  Customers are not born equal 18 Sales Management Database Marketing Marketing Management Service Management Customer Management

19.  Benefits of CRM ◦ Provides:  choices of products and services  fast problem resolution and response  easy and quick access to information  Limitations of CRM ◦ Needed integration with a company’s other information systems which is costly ◦ Difficult to support mobile employees 19

20.  CRM implementation issues ◦ Steps in building EC strategy focused on customer: 1.focus on the end customer 2.systems and business processes that are designed for ease of use and from the end customer ’ s point of view 3.efforts to foster customer loyalty 20

21.  Five factors required to implement a CRM program effectively: 1.Customer-centric strategy 2.Commitments from people 3.Improved or redesigned processes 4.Software technology 5.Infrastructure 21

22.  Justifying customer service and CRM programs  Metrics: Standards of performance; may be quantitative or qualitative 22

23.  Web-related metrics a company uses to determine the appropriate level of customer support: ◦ Response time ◦ Site availability ◦ Download time ◦ Timeliness ◦ Security and privacy ◦ On-time order fulfillment ◦ Return policy ◦ Navigability 23

24.  CRM applications improve upon traditional customer service by means of easier communications and speedier resolution of customer problems  Customer service adds value to products and services  It is an integral part of a successful business 24

25.  Classifications of CRM applications ◦ Customer-facing applications ◦ Customer-touching applications ◦ Customer-centric intelligence applications ◦ Online networking and other applications 25

26. 26 Front-end Communication CRM Back-end Analytical CRM Core Operational CRM CTI Net Banking B2C e-Commerce Data Mining OLAP EIS Customer Mgt Marketing Mgt Sales Mgt Service Mgt Database Data Mart Data Warehouse Demographic Data Transaction Data Extraction Transformation Loading Operational Database

27.  Customer-facing applications Customer interaction center (CIC): A comprehensive service entity in which EC vendors address customer service issues communicated through various contact channels  Intelligent agents in customer service and call centers 27

28.  Know your customer  Problems ◦ Customer relates to channel/salesmen, not company ◦ Lost of valuable customer data upon departure of sales personnel 28

29.  Online ◦ Membership ◦ One-to-one relationship  Traditional channel ◦ Membership ◦ Data collection and usage ◦ Closer tie to customer 29

30.  Auto-responders: Automated e-mail reply systems (text files returned via e-mail), which provide answers to commonly asked questions  Sales force automation (SFA): Software that automates the tasks performed by sales people in the field, such as data collection and its transmission 30

31.  Customer-touching applications ◦ Personalized Web Pages ◦ E-Commerce Applications ◦ Campaign Management  DM: Direct Mail ◦ For traditional market 31

32. ◦ Web Self-Service Activities conducted by users on the Web to provide answers to their questions (e.g., tracking) or for product configuration  Self-tracking  Self-configuration and customization 32

33.  Customer-centric applications ◦ Data reports ◦ Data warehouse A single, server-based data repository that allows centralized analysis, security, and control over the data 33

34.  Data analysis and mining ◦ Analytic applications automate the processing and analysis of CRM data can be used to analyze the performance, efficiency, and effectiveness of an operation ’ s CRM applications ◦ Data mining involves sifting through an immense amount of data to discover previously unknown patterns 34

35.  Online networking and other applications ◦ Forums ◦ Chat rooms ◦ Usenet groups ◦ E-mail newsletters ◦ Discussion lists 35

36.  Mobile CRM the delivery of CRM applications to any user, whenever and wherever needed  Voice communication people are more comfortable talking with a person, even a virtual one, than they are interacting with machines. The smile and the clear pronunciation of the agent ’ s voice increases shoppers ’ confidence and trust 36

37.  Internal and external data is gathered, stored and analysed to provide important information to support decision making of executives  Provide better forecasts of end consumer demand, improved understanding of changing consumer preferences and wants, and so on 37

38.  Role of knowledge management and intelligent agents in CRM ◦ Automating inquiry routing and answering queries requires knowledge ◦ Generated from historical data and from human expertise and stored in knowledge bases for use whenever needed ◦ Intelligent agents support the mechanics of inquiry routing, auto-responders, and so on 38

39. Concept and Management 39

40.  Organizational buyer behavior ◦ number of organizational buyers is much smaller than the number of individual buyers ◦ transaction volumes are far larger ◦ terms of negotiations and purchasing are more complex 40

41.  Methods for B2B online marketing ◦ Targeting customers  contact all of its targeted customers individually when they are part of a well-defined group  affiliation service  advertising ◦ Electronic wholesalers intermediary sells directly to businesses, but does so exclusively online 41

42.  Connect programs ◦ Placing banners on another vendor ’ s Web site ◦ Content alliance program in which content is exchanged so that all can obtain some free content  Online data mining services “My master degree case study !! “ 42

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44.  One-to-one marketing: Marketing that treats each customer in a unique way  Personalization: The matching of services, products, and advertising content to individual consumers  User profile: The requirements, preferences, behaviors, and demographic traits of a particular customer 44

45.  Major strategies used to compile user profiles ◦ Solicit information directly from the user ◦ Observe what people are doing online ◦ Build from previous purchase patterns ◦ Perform marketing research 45

46.  Cookie: A data file that is placed on a user ’ s hard drive by a Web server, frequently without disclosure or the user ’ s consent, that collects information about the user ’ s activities at a site 46

47.  Collaborative filtering: A personalization method that uses customer data to predict, based on formulas derived from behavioral sciences, what other products or services a customer may enjoy; predictions can be extended to other customers with similar profiles 47

48.  Variations of collaborative filtering: ◦ Rule-based filtering ◦ Content-based filtering ◦ Activity-based filtering  Legal and ethical issues in collaborative filtering ◦ Invasion-of-privacy issues ◦ Permission-based personalization tools to request customer permission 48

49.  Customer loyalty ◦ Customer loyalty: Degree to which a customer will stay with a specific vendor or brand ◦ Increased customer loyalty produces cost savings through:  lower marketing costs  lower transaction costs  lower customer turnover expenses  lower failure costs ◦ E-loyalty: Customer loyalty to an e-tailer 49

50.  Trust in EC ◦ Trust: The psychological status of involved parties who are willing to pursue further interaction to achieve a planned goal ◦ Trust is influenced by many variables 50

51.  How to increase EC trust ◦ between buyers and sellers trust is determined by:  degree of initial success that each party experienced with EC and with each other  well-defined roles and procedures for all parties involved  realistic expectations as to outcomes from EC 51

52.  Issues in personalization ◦ brand recognition ◦ security mechanisms help solidify trust ◦ disclose and update latest business status and practices to potential customers and to build transaction integrity into the system ◦ guarantee information and protection privacy through various communication channels 52