Customer Relationship Management & Supply Chain Management

Customer Relationship Management & Supply Chain Management
11 Customer Relationship Management & Supply Chain Management 85 Slides

[ LEARNING OBJECTIVES]
Identify the primary functions of both customer relationship management (CRM) and collaborative CRM strategies. Describe how businesses might utilize applications of each of the two major components of operational CRM systems. Discuss the benefits of analytical CRM systems to businesses. Explain the advantages and disadvantages of mobile CRM systems, on-demand CRM systems, and open-source CRM systems. Describe the three components and the three flows of a supply chain. Identify popular strategies to solving different challenges of supply chains. Explain the utility of each of the three major technologies that supports supply chain management.

Defining Customer Relationship Management
11.1 Defining Customer Relationship Management Customer Touch Points Customer Touch Points: All the different ways that customers use to interact business with you.

FIGURE 11.2 Customer touch points.
telephone contact, direct mailings, and actual physical interactions with customers during their visits to a store , Web sites, and communications via smartphones

Defining Customer Relationship Management
11.1 Defining Customer Relationship Management Customer Touch Points Data Consolidation Data Consolidation: the systems have to make all customer-related data available to every unit of the business.

FIGURE 11.1 The customer relationship management process
Customer Relationship Management is a different philosophy. It’s not just about making a one-shot sale. Technology has made it possible to know your customer better than ever before to get to know your customers.

Customer Relationship Management (CRM)
Lifetime value A loyal customer is a great customer. They have a lifetime value.

Lifetime value Customer churn The customer likes you so much that you can keep on selling to that customer. You keep selling them on better products or similar services. That’s why companies today have you sign a non-compete agreement, stating that if you decide to open your own business, you have to do it in another county or a certain distance away.

Lifetime value Customer churn CRM Strategy versus CRM Systems Once you have decided that developing a relationship with your customers is for you, then you are ready to invest in systems that enable you to do this. The systems are there to enable you to collect and share information about the customer.

Lifetime value Customer churn CRM Strategy versus CRM Systems Low-end CRM Systems versus High-end CRM Systems You go out for frozen yogurt, for instance. If you have a discount card that a cashier punches at the register. After 10 punches, you get a free yogurt. This is a low end CRM system. Very little technology is used. A high end CRM system is much more sophisticated. It involves tracking your customer’s every purchase. You go to staples, for instance, you give them your card. They scan it in. It’s linked to your address. They know exactly what you buy, Staples sends you special offers. That’s a high end CRM System. You pay your MasterCard bill on time every month. You call MasterCard to ask them a question. They put you on hold. Did you know that they don’t have to answer the call in the order it was received? They move the people who have good payment records to the front of the line.

Data Consolidation 360-degree view
Data Consolidation: your CRM systems have to manage customer data effectively. The systems we have today are built around a data warehouse that make all customer-related data available to every unit of the business. 360° Data View Customer: complete data set on each customer that allows you to enhance your relationship with your customers and ultimately make more productive and profitable decisions.

Data Consolidation 360-degree view Collaborative CRM
Collaborative CRM Systems: provide effective and efficient interactive communication in all aspects of marketing, sales, and customer support with the customer throughout the entire organization. You know when they tell you that your phone call is going to be recorded for training or development purposes? This is why they do that.

Operational Customer Relationship Management Systems
11.2 Operational Customer Relationship Management Systems Operational CRM Systems Operational CRM: systems that support front-office business processes. Front-Office Processes: those processes that directly interact with customers (i.e., sales, marketing, and service).

11.2 Operational Customer Relationship Management Systems Operational CRM Systems Customer-Facing Applications Customer-Facing Applications: allow an organization’s sales, field service, and customer interaction center representatives interact directly with customers This is done through customer service and support, sales force automation, marketing, and campaign management.

11.2 Operational Customer Relationship Management Systems Operational CRM Systems Customer-Facing Applications Customer-Touching Applications Customer-Touching Applications: customer self-help applications/technologies. This is also called an electronic CRM e-CRM.

Operational CRM Systems
Two Major Components Customer-facing applications Customer touching applications Operational CRM Systems provide the following benefits: Efficient, personalized marketing, sales, and service A 360-degree view of each customer The ability of sales and service employees to access a complete history of customer interaction with the organization, regardless of the touch point. Have students read and copy/paste

Customer-Facing Applications
Customer Service and Support Customer-Facing Applications: allow an organization’s sales, field service, and customer interaction center representatives interact directly with customers through customer service and support, sales force automation, marketing, and campaign management.

Customer Service and Support Sales Force Automation (SFA) Sales Force Automation (SFA): automatically records all of the components in a sales transaction.

Customer Service and Support Sales Force Automation (SFA) Marketing Marketing applications : use data mining to sift through volumes of customer data

Customer Service and Support Sales Force Automation (SFA) Marketing Campaign Management Campaign Management: help your company plan campaigns that send the right messages to the right people through the right channels And avoid targeting people who have opted out of receiving marketing communications.

Customer Service and Support
Customer Interaction Centers (CIC) Call center Outbound telesales Inbound teleservice Customer Service and Support: systems that automate service requests, complaints, product returns, and requests for information. Customer Interaction Centers (CIC): uses multiple channels such as the Web, telephone, fax, and face-to-face interactions to communicate with customers.

Customer Interaction Centers (CIC) Call center Outbound telesales Oubound Telesales: the software generates a call list for the sales team, so that the sales people have prospects to contact. How do you think a customer gets on this list?

Customer Interaction Centers (CIC) Call center Outbound telesales Inbound teleservice Help Desk Live Chat Inbound Teleservice: is when customers contact your company first. They do this to initiate a sales order, inquire about products and services before placing an order, or to obtain information about a transaction they already made. They might contact your Information Help Desk with a complaint or connect through the live chat. Live Chat: allows customers to connect to a company representative and conduct an instant messaging session enabling the participants to share documents and photos.

Sales Force Automation
A second Customer-Facing Application component is Sales Force Automation (SFA) This automatically records all of the components in a sales transaction process.

Contact management system The Contact Management System: tracks all communications between the company and the customer, the purpose of each communication, and any necessary follow-up This enables duplicated contacts and redundancy, which in turn reduces the risk of irritating customers.

Contact management system Sales lead tracking system Sales Lead Tracking System: lists potential customers or customers who have purchased related products; --- products that are similar to those that the salesperson is trying to sell.

Contact management system Sales lead tracking system Sales forecasting system The Sales Forecasting System: uses mathematical techniques for estimating future sales.

Contact management system Sales lead tracking system Sales forecasting system Product knowledge system Product Knowledge System: a comprehensive source of information regarding products and services. This way, the sales person can answer questions about the product.

Contact management system Sales lead tracking system Sales forecasting system Product knowledge system Configurators Configurator: an online product-building feature that enables customers to build the product to meet their specific needs. This enables the buyer to pick the color or other features that they want.

Marketing The marketing application uses data mining to sift through volumes of customer data.

Marketing Cross selling
Cross-Selling: the marketing of additional related products to customers based on a previous purchase. The customer buys a refrigerator, you suggest the extended warranty.

Marketing Cross selling Up selling Bundling
Upselling: you provide customers with the opportunity to purchase products or services of greater value in place of, or along with, the initial product or service selection.

Marketing Cross selling Up selling Bundling
Bundling: is when you give your a group of products or services together at a lower price than their combined individual prices. Time Warner Cable and Verizon FIOS does this with Phone, Internet, and TV Stations.

Customer-Touching Applications
Customer-Touching Applications: (or electronic CRM e-CRM) customer self-help applications/technologies. Customer deals with a computer and not a human being.

Search and Comparison Capabilities Search and Comparison Capabilities: search and comparison capabilities offered to customers by online stores, online malls, and independent comparison Web sites.

Search and Comparison Capabilities Technical and Other Information and Services Technical and Other Information and Services: allowing customers to download product manuals; providing detailed technical information, maintenance information, and replacement parts to customers

Search and Comparison Capabilities Technical and Other Information and Services Customized Products and Services Customized Products and Services: offering customers the ability to customize products, view account status, check shipping status of an order, etc. Mass Customization: a process in which customers can configure their own products (e.g., customized computer systems from Dell).

Search and Comparison Capabilities Technical and Other Information and Services Customized Products and Services Personalized web pages Personalized Web Pages: organizations permit their customers to create personalized Web pages used to record purchases and preferences, as well as problems and requests. Any time that you’re asked to create an account using your user name and password….

Search and Comparison Capabilities Technical and Other Information and Services Customized Products and Services Personalized web pages FAQs and Automated Response Loyalty Programs Customer-Touching Applications: (or electronic CRM e-CRM) customer self-help applications/technologies. Search and Comparison Capabilities: search and comparison capabilities offered to customers by online stores, online malls, and independent comparison Web sites. Technical and Other Information and Services: personalized experiences offered by organizations to induce customers to make purchases or to remain loyal (e.g., allowing customers to download product manuals; providing detailed technical information, maintenance information, and replacement parts to customers). Customized Products and Services: offering customers the ability to custimize products, view account balances, check shipping status of an order, etc. Mass Customization: a process in which customers can configure their own products (e.g., customized computer systems from Dell). Personalized Web Pages: organizations permit their customers to create personalized Web pages used to record purchases and preferences, as well as problems and requests. Frequently Asked Questions (FAQs): a simple tool for answering repetitive customer queries and when customers find the information they need by using FAQs the need to communicate with an actual person is eliminated. and Automated Response: the most popular tool for customer service, inexpensive, fast, and companies use not only to answer customer inquiries but also to disseminate information, send alerts and product information, and conduct correspondence on any topic. Loyalty Programs: programs that recognize customers who repeatedly use a vendor’s products or services.

Search and Comparison Capabilities Technical and Other Information and Services Customized Products and Services Personalized web pages FAQs Frequently Asked Questions (FAQs): a simple tool for answering repetitive customer queries and when customers find the information they need by using FAQs the need to communicate with an actual person is eliminated.

Search and Comparison Capabilities Technical and Other Information and Services Customized Products and Services Personalized web pages FAQs and Automated Response and Automated Response: is the most popular tool for customer service. It’s inexpensive, and fast Your company can use it not only to answer customer questions but also to disseminate information, send alerts and product information, and conduct correspondence on any topic.

Search and Comparison Capabilities Technical and Other Information and Services Customized Products and Services Personalized web pages FAQs and Automated Response Loyalty Programs Loyalty Programs: programs that recognize frequent buyers.

Analytical Customer Relationship Management Systems
11.3 Analytical Customer Relationship Management Systems Analytical CRM systems analyze customer data for a variety of purposes Analytical CRM Systems Analyze Customer Data for: Designing and executing targeted marketing campaigns Increasing customer acquisition, cross-selling, and upselling Providing input into decisions relating to products and services (e.g., pricing and product development) Providing financial forecasting and customer profitability analysis

FIGURE 11.3 The relationship between operational CRM and analytical CRM.
An operational CRM collects information about customers. An analytical CRM uses it to help you make decisions.

Analytical CRM systems analyze customer data for a variety of purposes, including:
Designing and executing targeted marketing campaigns Increasing customer acquisition, cross selling, and up selling Providing input into decisions relating to products and services (e.g., pricing and product development) Providing financial forecasting and customer profitability analysis Call on students to read bullet points and have them copy.

Other Types of Customer Relationship Management Systems
11.4 Other Types of Customer Relationship Management Systems On-demand CRM systems On-Demand CRM Systems: If you don’t want to store the data yourself, you get an outside company to do it. This is also known as utility computing or soft ware-as-a-service (SaaS).

11.4 Other Types of Customer Relationship Management Systems On-demand CRM systems Mobile CRM Systems Mobile CRM Systems: Anything related to sales, marketing, and customer service is done through mobile devices. Everyone today knows what Spam is on computers. On smart phones, it not called spam. It’s called Spim.

11.4 Other Types of Customer Relationship Management Systems On-demand CRM systems Mobile CRM Systems Open-Source CRM Systems Open-Source CRM Systems: people use open source systems like SugarCRM because the source code for open-source software is free to use.

11.4 Other Types of Customer Relationship Management Systems On-demand CRM systems Mobile CRM Systems Open-Source CRM Systems Social CRM Systems Social CRM: Companies use social media technology and services to to engage their customers in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent manner. You feel like you’re talking to a friend on Facebook.

11.5 Supply Chains Supply Chain Supply Chain Visibility
The Structure and Components of Supply Chains This chapter also takes time to introduce to supply chains.

11.5 Supply Chains This chapter also takes time to introduce to supply chains.

11.5 Supply Chains Supply Chain
Supply Chain: the flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to the end customers.

11.5 Supply Chains Supply Chain Supply Chain Visibility
Do all the members of that supply chain, all the suppliers and distributors, have the ability to access or view relevant data on purchased materials as these materials move through their suppliers’ production processes and transportation networks to their receiving docks?

FIGURE 11.4 Generic supply chain.
Information going from your company to your suppliers is called upstream flowing of information. Information that your company passes along to its customers is called downstream flowing information. You also have Tiers of Suppliers: a supplier may have one or more subsuppliers, a subsupplier may have its own subsupplier(s), and so on. For an automobile manufacturer, for example, Tier 3 suppliers produce basic products such as glass, plastic, and rubber; Tier 2 suppliers use these inputs to make windshields, tires, and plastic moldings; and Tier 1 suppliers produce integrated components such as dashboards and seat assemblies.

The Components of Supply Chains
Tiers of Suppliers The Flows in the Supply Chain Materials Flows Material Flows: the physical products, raw materials, supplies, and so forth that flow along the chain. Material flows also include the reverse flows. Reverse Flows (or reverse logistics): returned products that are damaged, unwanted, or in need of recycling.

Tiers of Suppliers The Flows in the Supply Chain Materials Flows Information Flows Information Flows: data related to demand, shipments, orders, returns, and schedules, as well as changes in any of these data.

Tiers of Suppliers The Flows in the Supply Chain Materials Flows Information Flows Financial Flows Financial Flows: involve money transfers, payments, credit card information and authorization, payment schedules, e-payments, and credit-related data.

Supply Chain Management
11.6 Supply Chain Management Five Basic Components of SCM Interorganizational Information Systems (IOS) The Push Model versus the Pull Model Problems along the Supply Chain Solutions to Supply Chain Problems Call on students to read bullet points. Not necessary to copy. Five Basic Components of SCM: Plan, Source, Make, Deliver, Return Supply Chain Management Systems: a type of interorganizational information system (IOS) in which information flows among two or more organizations. Push Model: In this model, also known as make-to-stock, the production process begins with a forecast, which is simply an educated guess as to customer demand. Pull Model: In this model, also known as make-to-stock, the production process begins with a forecast, which is simply an educated guess as to customer demand.

Five Basic Components of Supply Chain Management
Plan Five Basic Components of SCM: Plan: you develop a set of metrics (measurable deliverables) to monitor the organization’s supply chain. You want to make sure that it’s efficient and it delivers high quality and value to customers for the lowest cost.

Plan Source Source: you want to choose suppliers that deliver the goods and services you need them to create your product or service.

Plan Source Make Make: You have to schedule the activities necessary for production, testing, packaging, and preparation for delivery. This is the most metric-intensive part of the supply chain, where organizations measure quality levels, production output, and worker productivity.

Plan Source Make Deliver Deliver: (or logistics) you coordinate the receipt of customer orders, develop a network of warehouses, select carriers to transport your products to customers, and create an invoicing system to receive payments.

Plan Source Make Deliver Return Return: you need to set up a responsive and flexible network for receiving defective, returned, or excess products back from their customers, as well a way for supporting customers who have problems with delivered products.

Interorganizational Information Systems (IOS)
Enable the partners to perform the following: Reduce the costs of routine business transactions Improve the quality of the information flow by reducing or eliminating errors Compress the cycle time involved in fulfilling business transactions Eliminate paper processing and its associated inefficiencies and costs Make the transfer and processing of information easier for users The information systems between the suppliers and distributors enbable everybody to do these things.. Call on students to read.

The Push Model versus the Pull Model
make-to-stock, forecast Pull Model make-to-order, order Push Model: In this model, also known as make-to-stock, the production process begins with a forecast, which is simply an educated guess as to customer demand. Pull Model: In this model, also known as make-to-order, the production process begins with the customer order.

Problems along the Supply Chain
Two main sources of problems Uncertainties The need to coordinate multiple activities, internal units, and business partners. Two Primary Sources of Problems Along the Supply Chain: Uncertainties The need to coordinate multiple activities, internal units, and business partners.

Two main sources of problems Uncertainties The need to coordinate multiple activities, internal units, and business partners. Demand forecast Demand Forecast: Demand for a product can be influenced by numerous factors such as competition, price, weather conditions, technological developments, overall economic conditions, and customers’ general confidence. There are a lot of things there that you don’t have any control over.

Two main sources of problems Uncertainties The need to coordinate multiple activities, internal units, and business partners. Demand forecast Bullwhip effect Bullwhip Effect: erratic shifts in orders up and down the supply chain. If the supply of parts and the demand for them remain the same as they always were, then there’s no problem.

FIGURE 11.5 The bullwhip effect.
…But when demand changes, it takes time to correct the over-stock or under-stock situations. In the beginning, not a lot of people get hurt. As time goes on, however, more and more people get hurt. It’s like a pyramid scheme. They call it a bullwhip effect. I would call it a snowball effect. What happens when a car dealer has too many cars? Now what happens when a store doesn’t have an outfit you want to wear in the exact color that you want? As a business person, you’re going to get hurt when you either have too much inventory or not enough.

Solutions to Supply Chain Problems
Using Vertical Integration to Solve Inventory Problems One way to get around this problem is to use Vertical Integration Vertical Integration: Your company, that sells or assembles the product, buys its all its parts suppliers. Sears, for instance, used to own Kenmore. Kenmore used to make the Sears appliances. What’s the problem with that? It’s too expensive to buy your suppliers.

Using Vertical Integration to Solve Inventory Problems Just-in-time (JIT) inventory system Since it’s too expensive for me to buy my suppliers, I am going to let the miracle of modern technology manage my inventory… It’s called Just-In-Time (JIT) Inventory: my suppliers deliver the precise number of parts that need to be assembled into a finished product at precisely the right time. Toyota invented this approach.

Using Vertical Integration to Solve Inventory Problems Just-in-time (JIT) inventory system Information Sharing Using an electronic data interchange and extranets, I allow my suppliers to look at my work-in-process inventory. That's called Information Sharing

Using Vertical Integration to Solve Inventory Problems Just-in-time (JIT) inventory system Information Sharing Vendor-managed inventory (VMI) If the parts vendor sees that I’m running out of their part, they ship a new batch to me automatically. That’s called Vendor-Managed Inventory (VMI)

Information Technology Support for Supply Chain Management
11.7 Information Technology Support for Supply Chain Management Electronic Data Interchange (EDI) Electronic Data Interchange (EDI): enables business partners to exchange routine documents, such as purchasing orders, electronically. They transmit these messages over the Internet using a converter, called translator. I’m going to show you two diagrams comparing human beings to EDI

FIGURE 11.6 Comparing purchase order (PO) fulfillment without EDI.
Look at all the people involved

FIGURE 11.6 Comparing purchase order (PO) fulfillment with EDI.
Here it’s mostly done by machines

11.7 Information Technology Support for Supply Chain Management Electronic Data Interchange (EDI) Extranets Extranets: provide business partners access to certain areas of each other’s corporate intranets

Extranets Virtual Private Network (VPN)
A Company and Its Dealers, Customers, or Suppliers An Industry’s Extranet Joint Ventures and Other Business Partnerships Extranets: link business partners over the Internet by providing them access to certain areas of each other’s corporate intranets through a VPN. Sometimes, entire industries can have an extranet.

FIGURE 11.7 The structure of an extranet.
An extranet is a private internet between you and your suppliers or field employees.

11.7 Information Technology Support for Supply Chain Management Electronic Data Interchange (EDI) Extranets Portals and Exchanges EDI Benefits: Minimizes data entry errors Length of the message can be shorter Messages are secured Reduces cycle time Increases productivity Enhances customer service Minimizes paper usage and storage You also have portals and exchanges

Portal and Exchanges Two basic types of corporate portals
Procurement portals (for suppliers) Distribution portals (for customers) Then you have Portals (or Exchanges) These requires you to log in using a user name or a password. (Just like CUNY CIX) Procurement Portal: for a company’s suppliers (upstream in the supply chain) this type of portal automates the business processes involved in purchasing or procuring products between a single buyer and multiple suppliers. Distribution Portal: for a company’s customers (downstream in the supply chain) automate the business processes involved in selling or distributing products from a single supplier to multiple buyers.

Customer Relationship Management & Supply Chain Management
11 Customer Relationship Management & Supply Chain Management The End

Customer Relationship Management & Supply Chain Management

Similar presentations

Presentation on theme: "Customer Relationship Management & Supply Chain Management"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

Customer Relationship Management & Supply Chain Management

Similar presentations

Presentation on theme: "Customer Relationship Management & Supply Chain Management"— Presentation transcript:

Similar presentations

About project

Feedback