1. Types of CRM
Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers (marketing, customer service, sales, billing, etc.)
Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers (accounting, finance, human resources, data warehouses)
Operational CRM supports transaction processing for systems that deal directly with the customers. The systems that deal directly with customers are the front-office operations.
Can you list a few examples of front-office systems?
Customer service, sales, billing
Analytical CRM supports strategic analysis and all of the systems that do not directly deal with the customers. These types of systems are the back-office operations.
Can you list a few examples of back-office systems?
Accounting, finance, human resources, data warehouses
Ask your students which systems are more important to an organization – front-office or back-office
Ans: Both, one cannot function without the other
The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its customers.

2. OPERATIONAL CRM
List generator – compiles customer information from a variety of sources and then segments that information by filtering and sorting for different marketing campaigns
Cross-selling and up-selling
Cross-selling – selling additional products or services
Up-selling – increasing the value of the sale
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.
Marketing CRM allows companies to gather and analyze customer information to deploy successful marketing campaigns.
Information sources include web site visits, web site questionnaires, online and off-line surveys, toll free phone numbers and current customer lists.
After compiling a customer list, the organization can use various criteria to filter and sort the list for potential customers.
Maybe filtering criteria could be household income, education level or age
Two key sales strategies used in marketing campaigns are cross-selling and up-selling.
Cross-selling is selling additional products or services to the customers.
Would you like fries with that?
Would you like to order an appetizer?
Would you like to buy an extended warranty?
Up-selling is increasing the value of a sale.
Would you like to supersize that?
For just $1 more, you can get a bigger size.
Today’s CRM software can show an employee which products and services that you already have and it can also “guess” which additional products or services that you might want to purchase.
The sales department was one of the first to use CRMs. One of the reasons was that the sales reps had too much information to maintain and track so they needed an electronic system to make all of that easier.
Additionally, the sales reps, especially the senior reps, had a lot of information, but it was all stored in their heads. Some sort of system, an electronic system with database capabilities, was needed to get information from one person’s head into an area where that info could be used by all, including for both tracking and analysis.
If I can get this into a database, I can potentially increase customer satisfaction, build relationships and improve product sales: all because I am tracking sales information. I now have something I can act upon.

3. OPERATIONAL CRM
Sales reps can organize and coordinate accounts so that one reps lead can become a sale by the organization (even if it means someone else makes the sale)
Contact management systems can be used to “remember” a customer and all prior dealings with that customer
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 build post-sale relationships
Answer questions Provide solutions to problems
Sales leads and potential customers are the lifeblood of any organization so we need to capture your leads and make sure that someone follows up on them.
Trust and communication so all work together as one team.
Contact management software can be used to capture all points of customer contact so that the organization “remembers” prior dealings with a particular customer.
An incoming phone call results in the caller’s name being displayed, along with detailed notes regarding prior conversations regarding that customers.
The customer feels valued because you know their name and you remember details regarding prior interactions with them

4. OPERATIONAL CRM (Customer Service)
Provide consistent answers to questions (database)
Make sure customers don’t have to explain their problems AGAIN (database, avoid customer frustration)
Emotion detection software to detect when someone is distressed and upset (determine baseline during first few seconds of contact and then looks for deviations)
Web-based self-service allows customers to find their own answers.
Federal Express, UPS and other sites with shipment tracking
Click-to-talk buttons on a web site
Call scripting systems automatically generate the next item or question.
Good way to be consistent
Web-based self-service system – allow customers to use the web to find answers to their questions or solutions to their problems
Click-to-talk –customers click on a button and talk with a Customer Service Representative via the Internet

5. Types of CRM
Operational CRM supports front-office systems that deal directly with customers
Analytical CRM doesn’t directly deal with customers. It is used to support decision making and data analysis by identifying patterns to help the organization understand its customers.
The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its customers.

6. Analytical CRM
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
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 value of an individual customer
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?
Analytical CRM has the ability to provide an organization with information about their customers that was previously impossible to locate, and the resulting payback can be tremendous.
Analytical CRM solutions are designed to dig deep into a company’s historical customer information and expose patterns of behavior on which a company can capitalize. Analytical CRM is primarily used to enhance and support decision making and works by identifying patterns in customer information collected form the various operational CRM systems.
Personalization is one of the benefits of an analytical CRM system
Personalization occurs when a Web site can know enough about a person’s likes and dislikes that it can fashion offers that are more likely to appeal to that person

7. 1. Give customers more of what they want For example, you know a customer’s shoe size and preferred brand, the customer can be notified that there is a pair of size 12 shoes set aside to try on the next time the customer visits the store.
2. Find new customers similar to the best customers Analytical CRM might determine that an organization does a lot of business with women 35 to 45 years old who drive SUVs and live within 30 miles of a certain location. The company can then find a mailing list that highlights this type of customer for potential new sales.
3. Find out what the organization does best For example, if a restaurant caters more breakfasts to midsized companies than its competition does, it can purchase a specialized mailing list of midsized companies in the area and send them a mailing that features the breakfast catering specials.
4. Beat competitors to the punch allowing an organization to offer the best customers deals before the competition has a chance to. For example, a clothing store might determine its best customers for outdoor apparel and send them an offer to attend a private sale right before the competition runs its outdoor apparel sale.
5. Reactivate inactive customers Analytical CRM can highlight customers who have not done any business with the organization in a while. The organization can then send them a personalized letter along with a discount coupon. It will remind them of the company and may help spark a renewed relationship.
6. Let customers know they matter Analytical CRM can determine what customers want and need, so an organization can contact them with this information. Anything from a private sale to a reminder that the car is due for a tuneup is excellent customer service.

8. Information Technology and Customer Relationship Management
Advances in information technology are making it possible to gain a greater understanding of the customers 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 TOOL that can be used to better serve 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
Managing all aspects of a customer’s relationship with an organization with the goal of increasing customer loyalty and retention and an organization's profitability