1. University/Faculty Regulations
Minimum attendance in class : 75%
No plagiarism in report/academic work and writing (Merriam-Webster’s Collegiate Dictionary, Eleventh Edition, USA, 2003)
to steal and pass off (the ideas or words of another) as one’s own
to use (another’s production) without crediting the source
to commit literary theft
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No cheating in examination
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2. Introduction to Customer Relationship Management (CRM)
Semester Ganjil 2013/2014

3. Learning Objectives Understand the basic concept of CRM
Identify the four major perspectives on CRM
Define several common misunderstandings about CRM
Understand five generic models of CRM
Overview of history and development of CRM

4. Sales Cycle

5. Customer Relationship Marketing Continuous Relationship Marketing
CRM Stands for?
Customer Relationship Management OR
Customer Relationship Marketing
Continuous Relationship Marketing

6. Selected definitions of CRM [1]
CRM is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way
CRM is the process of managing all aspects of interaction a company has with its customers, including prospecting, sales, and service
CRM applications attempt to provide insight into and improve the company/customer relationship by combining all these views of customer interaction into one picture

7. Selected definitions of CRM [2]
CRM is an integrated approach to identifying, acquiring, and retaining customers
By enabling organizations to manage and coordinate customer interactions across multiple channels, departments, lines of business, and geographies, CRM helps organizations maximize the value of every customer interaction and drive superior corporate performance

8. Selected definitions of CRM [3]
CRM is an integrated information system that is used to plan, schedule and control the pre-sales and post-sales activities in an organization
CRM embraces all aspects of dealing with prospects and customers, including the call center, sales force, marketing, technical support and field service
The primary goal of CRM is to improve long-term growth and profitability through a better understanding of customer behaviour
CRM aims to provide more effective feedback and improved integration to better gauge the return on investment (ROI) in these areas

9. Selected definitions of CRM [4]
CRM is a business strategy that maximizes profitability, revenue and customer satisfaction by organizing around customer segments, fostering behaviour that satisfies customers, and implementing customer-centric processes

10. Core Definition of CRM
CRM is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit
It is grounded on high quality customer-related data and enabled by information technology

11. CRM is Founded on Four Tenets
Customers should be managed as important assets
Not all customers are equally desirable
Customers vary in their needs, preferences, and buying behavior
By better understanding their customers, companies can tailor their offerings to maximize their overall value

12. The CRM Advantages

13. Why CRM Systems are Being Used ?
Identifying prospects
Acquiring customers
Developing customers
Cross-selling and up-selling
Servicing
Retaining
Increasing loyalty
Winning back defectors

14. CRM’s Benefits for Retail Banks (Example)
Increase in average products sold per customer over one year from 4.6 to 6.2
3-5 percent decrease in administrative costs
200 percent return on technology investment through cost reduction over one year
96 percent reduction in average time for a CCC agent to refer a customer to a branch loan office
83 percent decrease in average customer info retrieval time
15 percent increase in product revenue in one year
Lowell Alcorn and Anton Wiryawan, Mortgage Banking (Feb 2004): 74-78

15. A Customer Focus Can Aid Retention
Annual Defection Rates
Newspaper subscriptions 66 percent
Residential tree and lawn care 32 percent
U.S. long distance telephone 30 percent
Clothing catalogues 25 percent
Internet service providers 22 percent
Griffen and Lowenstein 2001

16. Customer Retention and Profits
Increase retention 5 percent and improve profitability in net present value from percent
It costs five to ten times more to obtain a new customer than it does to keep an existing one

17. Which Companies Benefit Most from CRM?
Companies serving large numbers of customers through complex and frequent interactions:
Communications companies
Retail banks
Insurance companies
Healthcare organizations
Utilities
Companies with a steep skew
Companies in “lost for good” markets

18. Which Companies Benefit the Least from CRM Today?
Companies that engage in minimal interactions with each customer
Auto dealers
Government agencies
Companies with simple transaction
Movie theater
Retail stores

19. Dominant characteristic
Types of CRM
Type of CRM
Dominant characteristic
Strategic
a core customer-centric business strategy that aims at winning and keeping profitable customers
Operational
focuses on the automation of customer-facing processes such as selling, marketing and customer service
Analytical
focuses on the intelligent mining of customer-related data for strategic or tactical purposes
Collaborative
applies technology across organizational boundaries with a view to optimizing company, partner and customer value

20. Strategic CRM
Focus upon the development of a customer-centric business culture that is dedicated to winning and keeping the customers
Customer-centricity competes with other business logics
E.g. Philip Kotler identifies three other major business orientations: product, production and selling

21. Customer Centricity & Other Business Logics [1]
Product-oriented businesses believe that customers choose products with the best quality, performance, design or features
Production-oriented businesses believe that customers choose low-price products
Sales-oriented businesses make the assumption that if they invest enough in advertising, selling, public relations (PR) and sales promotion, customers will be persuaded to buy

22. Customer Centricity & Other Business Logics [2]
A customer or market-oriented company shares a set of beliefs about putting the customer first
It collects, disseminates and uses customer and competitive information to develop better value propositions for customers
A customer-centric firm is a learning firm that constantly adapts to customer requirements and competitive conditions

23. Operational CRM Marketing automation Market segmentation
Campaign management
Event-based (trigger) marketing
Sales force automation
Account management
Lead management
Opportunity management
Pipeline management
Contact management
Quotation and proposal generation
Product configuration
Service automation
Case (incident or issue) management
Inbound communications management
Queuing and routing
Service level management

24. Marketing Automation Applies technology to marketing processes
Market segmentation
Campaign management
Allow marketers to use customer-related data in order to develop, execute and evaluate targeted communications and offers
Event-based (trigger) marketing
Describe messaging and offer presentation to customers at particular points in time
Event-based campaigns can be initiated by customer behaviours or contextual conditions
Ex. A call to contact center is an example of a customer

25. Sales-force Automation
The original form of operational CRM
Applies technology to the management of a company’s selling activities
Improve and standardize the selling process
Consist of:
Account management
Lead management: enable users to qualify leads and assign them to the appropriate salesperson
Opportunity management
Pipeline management
Contact management: manage their communications programme with customers
Quotation and proposal generation: allow the salesperson to automate the production of prices and proposals for customers
Product configuration: enable salespeople or the customer themselves, automatically to design and price customized products, services or solutions to problems

26. Service Automation
Allow companies to manage their service operations, whether deliverd through call centre, contact centre, web or face-to-face
Consists of:
Case (incident or issue) management
Inbound communications management
Queuing and routing
Service level management

27. Sources of Customer-related Data for Analytical CRM
Internal sources
Sales data (purchase history), financial data (payment history, credit score), marketing data (campaign response, loyalty scheme data) and service data.
External sources
Geo-demographic and life-style data from business intelligence organisations, for example.

28. Beneficiaries of Analytical CRM
Customer
Analytical CRM can deliver timely, customized, solutions to the customer’s problems, thereby enhancing customer satisfaction.
Company
Analytical CRM offers the prospect of more powerful cross-selling and up-selling programs, and more effective customer retention and customer acquisition programs.

29. Misunderstandings about CRM
CRM is database marketing
CRM is a marketing process
CRM is an IT issue
CRM is about loyalty schemes
CRM can be implemented by any company

30. CRM Constituencies Companies implementing CRM
Customers and partners of those companies
Vendors of CRM software
CRM application service providers (ASPs)
Vendors of CRM hardware and infrastructure
Management consultants

31. CRM Challenges Vary Across Context
Banks
Auto manufacturers
High tech companies
Consumer goods manufacturers
Not-for-profits

32. The IDIC Model of CRM
Identify who your customers are and build a deep understanding of them
Differentiate your customers to identify which customers have most value now and which offer most for the future.
Interact with customers to ensure that you understand customer expectations and their relationships with other suppliers or brands
Customize the offer and communications to ensure that the expectations of customers are met.

33. The QCi Model of CRM

34. The CRM Value Chain

35. Payne’s 5-process Model of CRM

36. Gartner’s Competency Model of CRM

37. References
Francis Buttle, Customer Relationship Management: Concepts and Technologies, 2e, Elsevier Ltd., 2009
Baran, Galka and Strunk, Principles of Customer Relationship Management, South-Western, 2008