1. Customer Relationship Management (CRM)
CHAPTER 11
Customer Relationship Management (CRM)

2. Learning Outcomes
Compare operational and analytical customer relationship management
Identify the primary forces driving the explosive growth of customer relationship management
Define the relationship between decision making and analytical customer relationship management
Summarize the best practices for implementing a successful customer relationship management system

3. Overview
CRM is a business philosophy based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantages in the future
This chapter discusses
The reasons for CRM’s explosive growth
Using CRM to enhance decision making
CRM success factors

4. Overview 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

5. Brother International experienced skyrocketing
growth in its sales of multifunction printers
A tremendous increase in customer service calls
When Brother failed to answer the phone fast enough,
product returns started to increase
After Brother deployed SAP’s CRM solution,
the 1.8 million calls in 2003, dropped to 1.57 million
The CRM system has also reduced call duration
by an average of one minute

6. CRM Business Drivers

7. Forecasts for CRM Spending (in billions)

8. Using Analytical CRM to Enhancing Decisions
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

9. Operational CRM and analytical CRM

10. CRM Success Factors Clearly communicate the CRM strategy
Define information needs and flows
Build an integrated view of the customer
Implement in iterations
Scalability for organizational growth

11. Gearing Up at REI
REI deserves recognition as an industry leader for its “best practice” multichannel CRM strategy, which allows customers to seamlessly purchase products at the company’s 70 retail stores as well as by telephone, mail order, and on the Internet
REI’s CRM system benefits:
Minimizes maintenance costs
Scales easily as company grows
Provides sophisticated data warehouse for business intelligence
Provides high availability

12. Case Questions
Summarize why it is important for REI to use CRM strategies to consolidate its customer information
Determine two pieces of customer information that REI could extrapolate from its CRM system that would help it manage its business more effectively
Explain how REI could use personalization to give its customers a more satisfying shopping experience