1. McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, All Rights Reserved Business Plug-In B9 Customer Relationship Management

2. B9-2 LEARNING OUTCOMES 1.Describe the three CRM technologies used by marketing departments 2.Describe and differentiate the CRM technologies used by sales departments and customer service departments 3.Compare customer relationship management, supplier relationship management, partner relationship management, and employee relationship management 4.Summarize the future of customer relationship management

3. B9-3 INTRODUCTION Customer relationship management – involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability –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

4. B9-4 INTRODUCTION

5. B9-5 INTRODUCTION 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)

6. B9-6 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

7. B9-7 The Evolution of CRM Three phases in the evolution of CRM include reporting, analyzing, and predicting

8. B9-8 The Evolution of CRM

9. B9-9 Using IT to Drive Operational CRM

10. B9-10 MARKETING AND OPERATIONAL CRM Three marketing operational CRM technologies: 1.List generator – compiles customer information from a variety of sources and segment the information for different marketing campaigns 2.Campaign management system – guides users through marketing campaigns 3.Cross-selling and up-selling Cross-selling – selling additional products or services Up-selling – increasing the value of the sale

11. B9-11 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

12. B9-12 SALES AND OPERATIONAL CRM Three sales operational CRM technologies: 1.Sales management CRM system – automates each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts 2.Contact management CRM system – maintains customer contact information and identifies prospective customers for future sales 3.Opportunity management CRM system – targets sales opportunities by finding new customers or companies for future sales

13. B9-13 SALES AND OPERATIONAL CRM 1.Get their attention 2.Value their time 3.Overdeliver 4.Contact frequently 5.Generate a trustworthy mailing list 6.Follow up

14. B9-14 CUSTOMER SERVICE AND OPERATIONAL CRM Three customer service operational CRM technologies: 1.Contact center (call center) 2.Web-based self-service system Click-to-talk 3.Call scripting system

15. B9-15 CUSTOMER SERVICE AND OPERATIONAL CRM

16. B9-16 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

17. B9-17 Analytical CRM 1.Give customers more of what they want 2.Value their time 3.Overdeliver 4.Contact frequently 5.Generate a trustworthy mailing list 6.Follow up

18. B9-18 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

19. B9-19 Future 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

20. B9-20 Closing Case One Fighting Cancer with Information The American Cancer Society (ACS) is a nationwide voluntary health organization dedicated to eliminating cancer The ACS choose to implement a CRM solution to solve its information issues Critical to the CRM system’s success was consolidating information from various databases across the organization to provide a single view of constituents

21. B9-21 Closing Case One Questions 1.How could the ACS’s marketing department use operational CRM to strengthen its relationships with its customers? 2.How could the ACS’s customer service department use operational CRM to strengthen its relationships with its customers? 3.Review all of the operational CRM technologies and determine which one would add the greatest value to ACS’s business

22. B9-22 Closing Case One Questions 4.Describe the benefits ACS could gain from using analytical CRM 5.Summarize SRM and describe how ACS could use it to increase efficiency in its business

23. B9-23 Closing Case Two Calling All Canadians Canada has become one of the primary targets for outsourcing customer service centers by U.S. companies Not only are accent and time-zone issues nonexistent, but companies also receive a favorable exchange rate

24. B9-24 Closing Case Two Questions 1.What are the two different types of CRM and how can they be used to help an organization gain a competitive advantage? 2.Explain how a contact center (or call center) can help an organization achieve its CRM goals 3.Describe three ways an organization can perform CRM functions over the Internet

25. B9-25 Closing Case Two Questions 4.How will outsourcing contact centers (call centers) to Canada change as future CRM technologies replace current CRM technologies? 5.Do you believe that call centers in the future will be replaced by Robot technology? Why or why not.