1. BGS Customer Relationship Management
Chapter 2
History and Development of CRM
Thomson Publishing 2007 All Rights Reserved

2. The Origins of CRM

3. The Origins of CRM Relationship marketing Marketing research
B2B relationships
MRP, SAP, and ERP
Customer contact centers
Sales force automation
Campaign management tools
Web and channel integration
Diffusion of PCs and analytical CRM
Success of direct response marketing such as toll-free calling and direct mail
Relational databases
Industrial and services marketing

4. Relationship Marketing and Relational Databases
Database construction is easiest for firms having frequent and direct customer interaction
It is most difficult for firms having infrequent and indirect customer interaction.
It is of intermediate difficulty for firms having frequent but indirect customer interaction or direct but infrequent customer interaction.

5. Ease or Difficulty of Database Construction

6. CRM: Why Now? Advancements in computer and information technology
Substantial changes in the business environment

7. Changes in the Business Environment Leading to Adoption of CRM
Increasing number of high-quality products
Erosion of effectiveness of the traditional 4 P’s
Changes in the pace of life
The Internet and multichannel usage

8. Organizations’ Expectations Regarding CRM
Success or Failure?????

9. Quantitative Benefits of CRM Using Revenue Enhancement Metrics
Acquisition/prospect increase percent
Expense per convert decrease percent
Renewal rate increase percent
Cross-sell/up-sell increase percent
Share of wallet increase percent
Service and churn decrease percent
Campaign cycle time decrease percent
Campaign conversion increase percent
Win-back increase percent

10. Challenges in Implementing CRM
How the Many Barriers Can Be Overcome

11. Three Major Ways to Overcome Barriers in Implementing CRM
Through Communication
Adopt a CRM philosophy
Detail the benefits to all employees
Top executive support
Through Integration
Business strategy should drive CRM
IT and business managers must be integrated
Customer data must be integrated
Through foresight relating CRM tactics to success factors in the industry

12. Overcoming Barriers
The organization must adopt a relationship marketing philosophy across all functional areas.
The organization must detail and communicate the benefits of a CRM orientation to all managers and staff.
Top executive support must be obtained and maintained throughout CRM development.

13. Overcoming Barriers
Business strategies must drive CRM development rather than the other way around.
If separate “quick-results” CRM projects are being implemented as opposed to an all-encompassing CRM suite, then these separate projects must be integrated and functionally aligned.
Include both IT and business unit managers in CRM start-up teams.

14. Overcoming Barriers Customer data must be integrated and maintained.
Build a business case and conduct a business analysis before deciding on a CRM solution.
Develop success metrics to assess the effectiveness of your CRM efforts.

15. Developing CRM from a Tactical Perspective
A checklist for customer service success
The importance of the customer contact center
Put process blueprints in place
Customer analytics
Use your databases more effectively
Segment and identify the value of segments
Build customer relationships
Product selection

16. Extending the Meaning of CRM?
Should colleges only focus on students? What about alumni, donors, and legislators?
Companies do not forget suppliers, distributors, manufacturers, and facilitating agencies.
Do not forget VAPs as well as VANs.
CRM is really PRM.

17. Can CRM Create 1:1 Relationships that are Truly Viable?
Point
Consumers are faced with too many 1:1 relationships.
Companies ask for more and more info but give little in return.
Customers not in a company’s loyalty program feel like second-class citizens.
Today’s proliferation of products and catalogues is mind-boggling.
Counterpoint
Consumers can opt-in or opt-out as they see fit.
Not so -- look at supermarkets and hotels.
Consumers today are savvy enough to realize there are different levels of service for different levels of loyalty.
The former is not really due to CRM, and CRM should reduce the number of catalogues.

18. Questions?