1. CUSTOMER RELATIONSHIP MANAGEMENT
CHAPTER 9
CUSTOMER RELATIONSHIP MANAGEMENT

2. 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 – CUSTOEMR RELATINSHIP MANAGEMENT STRATEGIES
Customer Relationship Management’s Explosive Growth
Customer Relationship Management Success Factors
Current Trends: SRM, PRM, ERM
Future CRM Trends

3. CUSTOMER RELATIONSHIP MANAGEMENT
SECTION 9.1
CUSTOMER RELATIONSHIP MANAGEMENT

4. LEARNING OUTCOMES
Compare operational and analytical customer relationship management
Explain the formula an organization can use to find its most valuable customers
Describe and differentiate the CRM technologies used by sales departments and customer service departments
Describe and differentiate the CRM technologies used by marketing departments and sales departments

5. BUSINESS BENEFITS OF CRM
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

6. 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)

7. The Evolution of CRM
CRM reporting technology – help organizations identify their customers across other applications
CRM analysis technologies – help organization segment their customers into categories such as best and worst customers
CRM predicting technologies – help organizations make predictions regarding customer behavior such as which customers are at risk of leaving

8. The Evolution of CRM
Three phases in the evolution of CRM include reporting, analyzing, and predicting

9. The Evolution of CRM

10. Operational and Analytical CRM
Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers
Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers

11. Operational and Analytical CRM

12. Using IT to Drive Operational CRM

13. Marketing and Operational CRM
Three marketing operational CRM technologies:
List generator – compiles customer information from a variety of sources and segment the information for different marketing campaigns
Campaign management system – guides users through marketing campaigns
Cross-selling and up-selling
Cross-selling – selling additional products or services
Up-selling – increasing the value of the sale

14. 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

15. Sales and Operational CRM
Sales and operational CRM technologies
Sales management CRM system – automates each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts
Contact management CRM system – maintains customer contact information and identifies prospective customers for future sales
Opportunity management CRM system – targets sales opportunities by finding new customers or companies for future sales

16. Sales and Operational CRM
CRM Pointers for Gaining Prospective Customer
Get their attention
Value their time
Overdeliver
Contact frequently
Generate a trustworthy mailing list
Follow up

17. Customer Service and Operational CRM
Three customer service operational CRM technologies:
Contact center (call center)
Web-based self-service system
Click-to-talk
Call scripting system

18. Customer Service and Operational CRM

19. 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

20. USING IT TO DRIVE ANALYTICAL CRM
Analytical CRM information examples
Give customers more of what they want
Value their time
Overdeliver
Contact frequently
Generate a trustworthy mailing list
Follow up

21. OPENING CASE QUESTIONS Customer First Awards
Summarize the evolution of CRM and provide an example of a reporting, analyzing, and predicting question Progressive might ask its customers
How could Progressive’s marketing department use CRM technology to improve its operations?
How could Mini’s sales department use CRM technology to improve its operations?

22. OPENING CASE QUESTIONS Customer First Awards
How could Progressive and Mini’s customer service departments use CRM technology to improve their operations?
Define analytical CRM and its importance to companies like Progressive and Mini

23. CUSTOMER RELATIONSHIP MANAGEMENT STRATEGIES
SECTION 9.2
CUSTOMER RELATIONSHIP MANAGEMENT
STRATEGIES

24. LEARNING OUTCOMES
Identify the primary forces driving the explosive growth of customer relationship management
Summarize the best practices for implementing a successful customer relationship management system
Compare customer relationship management, supplier relationship management, partner relationship management, and employee relationship management

25. CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH
CRM Business Drivers

26. CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH
Forecasts for CRM Spending (in billions)

27. CUSTOMER RELATIONSHIP MANAGEMENT’S SUCCESS FACTORS
CRM success factors include:
Clearly communicate the CRM strategy
Define information needs and flows
Build an integrated view of the customer
Implement in iterations
Scalability for organizational growth

28. 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

29. 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

30. OPENING CASE QUESTIONS Customer First Awards
How might Progressive’s business model change if it decreased its investments in CRM technologies?
How might Mini’s business model change if it decreased its investments in CRM technologies?
Describe the CRM industry best practices and explain how Progressive is using each

31. OPENING CASE QUESTIONS Customer First Awards
Explain SRM and how Mini could use it to improve its business
Explain ERM and how Progressive could use it to improve its business

32. CLOSING CASE ONE Fighting Cancer with Information
How could the ACS’s marketing department use operational CRM to strengthen its relationships with its customers?
How could the ACS’s customer service department use operational CRM to strengthen its relationships with its customers?
Review all of the operational CRM technologies and determine which one would add the greatest value to ACS’s business

33. CLOSING CASE ONE Fighting Cancer with Information
Describe the benefits ACS could gain from using analytical CRM
Summarize SRM and describe how ACS could use it to increase efficiency in its business

34. CLOSING CASE TWO Calling All Canadians
What are the two different types of CRM and how can they be used to help an organization gain a competitive advantage?
Explain how a contact center (or call center) can help an organization achieve its CRM goals
Describe three ways an organization can perform CRM functions over the Internet

35. CLOSING CASE TWO Calling All Canadians
How will outsourcing contact centers (call centers) to Canada change as future CRM technologies replace current CRM technologies?

36. CLOSING CASE THREE The Ritz-Carlton
What are the two different types of CRM and how has the Ritz-Carlton used them to become a world-class customer-service business?
Determine which of Ritz-Carlton’s six steps of customer service is the most important for its business
Rank Ritz-Carlton’s six steps of customer service in order of greatest to least importance in a CRM strategy for an online book-selling business such as Amazon.com

37. CLOSING CASE THREE The Ritz-Carlton
Describe three ways Ritz-Carlton can extend its customer reach by performing CRM functions over the Internet
What benefits could the Ritz-Carlton gain from using analytical CRM?
Explain ERM and describe how the Ritz-Carlton could use it to increase efficiency in its business