Customer Relationship
 Management (CRM)
Welcome!

 Everyone can can understand CRM since we are all
  customers at times.
 CRM is one of the most lucrative area...
Initial Vocabulary

 CRM – Customer Relationship Management

 Let’s jump right in and…
     deepen your understanding,
...
Introduce yourselves

 Turn around and introduce yourselves to
  your neighbors behind you
     Ask them what other word...
What customer?

   Is a ‘client’ the same as ‘customer’ ?
     Different people use different words.
     Sometimes the...
Customer Differentiation
Tree Swing – discussion points
 of marketing - add unnecessary value, add complexity, bells and whistles, embellish, put
...
What Is “CRM”

 Customer Relationship Management
 Becoming a common and important concept in
  many industries
 Beyond ...
The Value of CRM

   Gain more control in interaction with customers
   Manage expectations better
   Increase trust
 ...
Customer Definitions

 External Customers
  - Customers we do business with outside our organization.

 Internal Custome...
Demographic Information
       Characteristics such as:
   age                               sex
   income            ...
Psychographic Information

   lifestyles            culture
   modes of living       social class
   needs           ...
Firmographic Information

 Characteristics about a company such as:
     how many employees they have;
     the kind of...
Why Is Excellent Customer
             Service so Rare?
 Customer service is rare because it requires
  two things that t...
The Five Needs of Every Customer


1. Service
2. Price
3. Quality
4. Action
5. Appreciation
From the Customer’s Perspective

 What Is Customer Service?
  - Anything we do for the customer that enhances the custome...
Levels of Expectations

 Primary expectations: the customer’s most
  basic requirements of an interaction.

 Secondary e...
Reputation Management

 The process of identifying how a
  company is perceived and establishing
  an action plan to corr...
A Company with a Good Reputation

   Is very responsive to customers
   Is a company you can trust
   Delivers on its p...
Techniques for Exceeding
       Customers’ Expectations
 Become familiar with your customers.
 Ask your customers what t...
Credibility

 Made up of the combination of our current
  knowledge, reputation, and professionalism.
Tips for Cultivating Credibility

 Practice consistency
 Keep your word
 Develop your expertise
 Become a teammate wit...
Discussion
 What are some examples of customer service?
 What are some issues about customer service?
New Trends in Customer Service

 Accessibility for the customer
 Immediacy of response
 Feedback from customer to custo...
Cost of Losing a Customer

 We lose the current dollars that our business
  relationship created.
 We lose the jobs that...
Customer Intelligence

 The process of gathering information;
  building a historical database; and
  developing an under...
Sources of
          Customer Intelligence
 Method by which customers choose to
  conduct business
 Time of day that cus...
Methods of Communication

   Listening: The ability to hear and understand what the
    speaker is saying.
   Writing: C...
Challenging Customers

 Those customers with problems, questions,
  fears, and personalities that require us to
  work to...
Discussion Questions

 What are some characteristics
  of challenging customers?
 How do avoid creating
  challenging cu...
Respect

 To give someone special recognition or
  regard.
Empathy

 The ability to understand what someone is
  experiencing and to take action to assist in
  resolving the situat...
Responsibility Check

 Assessing a situation and determining who
  should have responsibility and who really
  does have ...
What To Do When You Are Wrong

 Review the situation.
 Observe the customer’s reaction.
 Admit the mistake.
 Apologize...
Six Superb Ways to Cope with
         Challenging Customers
1.   Listen
2.   Ask questions
3.   Show empathy
4.   Solve th...
Payoffs of Coping with
     Challenging Customers
 By learning to cope with challenging
  customers, we become more effec...
Relationship Marketing

 Cultivating a lasting and mutually beneficial
  connection with customers.
Customer Retention

 The continuous attempt to satisfy and keep
  current customers actively involved in
  conducting bus...
Churn (or Churn Rate)

 The number of customers who leave a
  business in a year’s time divided by the
  number of new cu...
Defection Rate

 The percentage of customers who leave a
  business in one year.
Customer Lifetime Value

 The net present value of the profits a
  customer generates over the average
  customer life.
Determining the Need for
     Customer Relationship Program
   Is customer retention your primary management objective?
...
Guidelines for Establishing a
      Customer-Relationship Program

1.   Examine who your customers are and what
     speci...
Sources of Information to
      Measure Customer Satisfaction
   Informal surveys
   Comment cards
   Verbal comments
...
What Measurement of Satisfaction
         Means to Your Business

 Customer relationships are deepened
 Customers know t...
What Today’s Customers
              Expect
 Availability: Services designed to meet the
  customer’s schedule.
 Accessi...
Steps for Introducing New
              Technologies
 Prepare your staff.
 Train supervisors and team leaders first and ...
A Working Definition…

 “The Plan and Practice of managing the lifetime
  relationship with your customer.”
    “The Pla...
A Few Basic CRM Concepts…

 Touch Points
     Each time your company interacts with a
      customer is a touch point.
 ...
Guest Touch Points

 First Call/Internet Visit
 Pre-arrival
 Check-In/Check-Out
 Post stay thank you
 Newsletters, In...
Touch Points

 Are they planned? Managed? Documented?
 Are all “touchers” properly trained? Enroll
  your complete staff...
A Few Basic CRM Concepts…

 Market Segmentation
     Do you treat all of your guests the same?
     Are they?
     Con...
Market Segmentation Examples

 Saks Fifth Avenue
     High value customers ($2000/yr) are routed to
      special CSR’s....
General Statistics

    The average business never hears from 96% of its unhappy
    customers,
   91% never come back
 ...
General Statistics…

 Of the customers who register a complaint, as many as 70%
  will do business again with your organi...
Why customers quit - how to win
    customers and keep them for life

 1% die
 3% move away
 5% develop other friendshi...
Operational &Analytical
              CRM
 Operational CRM: effective and efficient use and
  management of people, proce...
People, Process and
         Technology
Start with People
Add Customer Attrition
Customer Dissatisfaction
     is Expensive
Customer Disloyalty
    vs. Service
Customer Relationships
Thinking Outside the Box:
   Role Models Like Einstein
Changing the Paradigm
From




               To
CRM means Dealing with the
      People Aspect of the Project




If the word “excellence” is to be applicable in the futu...
Customers Are People, Too!
     They Have Needs
Reactive vs. Proactive Thinkers
Customer Differentiation
Qualifying Prospects for
                    Relationship Building
         High
                           Use a non     ...
Customer Lifetime Value




R = annual revenue received from a loyal customer
I = the relevant interest rate or opportunit...
Customer Lifetime Value




  Go to www.benchmarkportal.com
  to download the excel spreadsheet
  to calculate Customer Li...
Process of Performance
    Enhancement
CRM Misconceptions

 CRM is the solution that will solve a
  company’s customer problems
 CRM is the Internet
 CRM mean...
CRM Summary

 CRM is the strategic use of information,
  processes, technology and people to manage
  the customer’s rela...
CRM Summary

 CRM focuses on strategic impact rather than
  operational impact
 CRM is a total discipline
 CRM includes...
Customer Relationship Management
Customer Relationship Management
Customer Relationship Management
Customer Relationship Management
Customer Relationship Management
Customer Relationship Management
Customer Relationship Management
Customer Relationship Management
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Customer Relationship Management

  1. 1. Customer Relationship Management (CRM)
  2. 2. Welcome!  Everyone can can understand CRM since we are all customers at times.  CRM is one of the most lucrative areas with billions of dollars spent.  A good CRM focus is often the difference between success and failure.  You can use many of these ideas to improve your life and increase your work successes.  I’ve done it, and I believe in it.
  3. 3. Initial Vocabulary  CRM – Customer Relationship Management  Let’s jump right in and…  deepen your understanding,  show some real life complexities,  give you a scope and vision
  4. 4. Introduce yourselves  Turn around and introduce yourselves to your neighbors behind you  Ask them what other words they might use to mean a customer?  Ask them the difference between a customer and a client?  Can the roles change with customers?
  5. 5. What customer?  Is a ‘client’ the same as ‘customer’ ?  Different people use different words.  Sometimes they mean the same thing, sometimes not.  Homonyms and synonyms.  Good starting point is to collect all the words used for customer and build a common vocabulary.  It improves efficiency and understanding when people use the same words to mean the same thing.  At a minimum, it will expand your understanding of the customer idea Microsoft PowerPoint Presentation
  6. 6. Customer Differentiation
  7. 7. Tree Swing – discussion points  of marketing - add unnecessary value, add complexity, bells and whistles, embellish, put their own mark onto things, fanciful, impractical, untested, untried, creativity for creativity's sake, subjective not objective, theoretical not practical, clever ideas, think they know what's best for the customers even if the survey feedback is utterly clear, fail to consult with engineering, production and anyone else in the organisation.  of management - cost-conscious, process-led rather than output-aware, failure to understand and interpret real issues and implications, failure to ask questions, committee decisions produce impractical solutions, removed from reality, detached from customers and front-line staff, failure to consult with users and functional departments.  of engineering - technical interpretation rather than practical, unconcerned with aesthetics and ergonomics, consideration stops after the 'can we build it?' stage, lack of consultation with specifiers and user representatives, meets specification but doesn't work properly, inappropriate materials and absence of styling.  of manufacturing - production specification over-rides design considerations, a law unto themselves, you get what you're given, any colour you like as long as it's black, detached from users, specifiers, designers, and everyone else except other manufacturing staff, unconcerned with usability or functionality, certainly unconcerned with bells and whistles and added value, totally focused on production efficiency, cost and time, lack of liaison with all other departments.  of customers - if only we'd listened, understood, and checked with them once in a while...
  8. 8. What Is “CRM”  Customer Relationship Management  Becoming a common and important concept in many industries  Beyond mere ‘Contact Management’  Knowing the customer and the Touch points  Single undertaking view of customers  Most industries have CRM software to help sales process, on-going service, and even accounting
  9. 9. The Value of CRM  Gain more control in interaction with customers  Manage expectations better  Increase trust  Competitive advantage  Provide products that better serve customers  Understand what customers really want  Understand the nature of customer service
  10. 10. Customer Definitions  External Customers - Customers we do business with outside our organization.  Internal Customers - The people we work with throughout our organization.  Customer Attributes - Characteristics that allow customers to be categorized according to demographic, psychographic, or firmographic information.
  11. 11. Demographic Information  Characteristics such as:  age  sex  income  ZIP code  marital status  occupation  education  household size  stage in the family life-  mobility patterns cycle  ethnic background  home ownership  religion
  12. 12. Psychographic Information  lifestyles  culture  modes of living  social class  needs  family influences  motives  hobbies  attitudes  political affiliation  reference groups  etc.
  13. 13. Firmographic Information  Characteristics about a company such as:  how many employees they have;  the kind of business they are in;  whether they are retail, wholesale, or a service provider;  their hours of operation
  14. 14. Why Is Excellent Customer Service so Rare?  Customer service is rare because it requires two things that the average person and organization are unwilling to commit to:  Spending money  Taking action
  15. 15. The Five Needs of Every Customer 1. Service 2. Price 3. Quality 4. Action 5. Appreciation
  16. 16. From the Customer’s Perspective  What Is Customer Service? - Anything we do for the customer that enhances the customer experience.  What is Customer Satisfaction? - The customer’s overall feeling of contentment with an interaction.  What is Customer Expectations? - Customer’s personal vision of the result that is based on their experience.  What is Customer Perceptions? - The way customer’s see something based on their experience
  17. 17. Levels of Expectations  Primary expectations: the customer’s most basic requirements of an interaction.  Secondary expectations: expectations based on our previous experiences that are enhancements to our primary expectations.
  18. 18. Reputation Management  The process of identifying how a company is perceived and establishing an action plan to correct, maintain, or enhance the company’s reputation.
  19. 19. A Company with a Good Reputation  Is very responsive to customers  Is a company you can trust  Delivers on its promises to customers  Provides excellent value to customers  Has excellent communications  Is ethical and honest  Conducts business in a human/caring way  Has excellent top management  Is able to adapt to changes in the industry  Is a technological leader in the industry  Is committed to the environment
  20. 20. Techniques for Exceeding Customers’ Expectations  Become familiar with your customers.  Ask your customers what their expectations are.  Tell your customers what they can expect.  Live up to their expectations.  Maintain consistency.
  21. 21. Credibility  Made up of the combination of our current knowledge, reputation, and professionalism.
  22. 22. Tips for Cultivating Credibility  Practice consistency  Keep your word  Develop your expertise  Become a teammate with your co-workers  Show your dedication to customers  Treat all of your customers and co-workers with the same high level of respect  Apologize if you are wrong  Remember that credibility is much harder to regain than it is to keep
  23. 23. Discussion  What are some examples of customer service?  What are some issues about customer service?
  24. 24. New Trends in Customer Service  Accessibility for the customer  Immediacy of response  Feedback from customer to customer service provider  Outsourcing of all or part of customer service functions  Non-traditional examples of customer service
  25. 25. Cost of Losing a Customer  We lose the current dollars that our business relationship created.  We lose the jobs that our clients provide.  We may suffer from a loss of reputation.  We may lose the intangible variable of future business.
  26. 26. Customer Intelligence  The process of gathering information; building a historical database; and developing an understanding of current, potential, and lapsed customers.
  27. 27. Sources of Customer Intelligence  Method by which customers choose to conduct business  Time of day that customers have questions  Depth of their expected interactions  Purchasing patterns  Expectations
  28. 28. Methods of Communication  Listening: The ability to hear and understand what the speaker is saying.  Writing: Communicating by using the written word so that others can understand the intended message.  Talking: Speaking, using words and terminology that others can comprehend.  Reading: The ability to look at and comprehend the written word.  Non-verbal communication: Tone and inflection of voice, facial expressions, posture, and eye contact. Nonverbal communication can contradict the message conveyed through another method of communication.
  29. 29. Challenging Customers  Those customers with problems, questions, fears, and personalities that require us to work to achieve true communication.
  30. 30. Discussion Questions  What are some characteristics of challenging customers?  How do avoid creating challenging customers?
  31. 31. Respect  To give someone special recognition or regard.
  32. 32. Empathy  The ability to understand what someone is experiencing and to take action to assist in resolving the situation.
  33. 33. Responsibility Check  Assessing a situation and determining who should have responsibility and who really does have the responsibility.
  34. 34. What To Do When You Are Wrong  Review the situation.  Observe the customer’s reaction.  Admit the mistake.  Apologize for your actions or error.  Find a solution and implement it.
  35. 35. Six Superb Ways to Cope with Challenging Customers 1. Listen 2. Ask questions 3. Show empathy 4. Solve the problem 5. Follow up 6. End on a positive note
  36. 36. Payoffs of Coping with Challenging Customers  By learning to cope with challenging customers, we become more effective and efficient assets to our company and the job that we were hired to perform!
  37. 37. Relationship Marketing  Cultivating a lasting and mutually beneficial connection with customers.
  38. 38. Customer Retention  The continuous attempt to satisfy and keep current customers actively involved in conducting business.
  39. 39. Churn (or Churn Rate)  The number of customers who leave a business in a year’s time divided by the number of new customers in the same period.
  40. 40. Defection Rate  The percentage of customers who leave a business in one year.
  41. 41. Customer Lifetime Value  The net present value of the profits a customer generates over the average customer life.
  42. 42. Determining the Need for Customer Relationship Program  Is customer retention your primary management objective?  Is customer satisfaction measured and assessed regularly?  Is there a constant effort to enhance customer satisfaction?  Do you measure quality standards and communicate results with your employees?  Do you train and retrain your customer service providers?  Do you have employee turnover problems?  How much do you spend to keep current customers?  What is your current cost for acquiring a customer?  What is your average annual customer dollar value?  What is your current customer defection rate?  How do you get lost customers back?  Do you constantly deliver what you promise to your customers?
  43. 43. Guidelines for Establishing a Customer-Relationship Program 1. Examine who your customers are and what specific needs they have. 2. Identify specific objectives to be realized by the program. 3. Create a manageable program of customer retention. 4. Create a culture that stimulates customer interest. 5. Determine a timetable for evaluation.
  44. 44. Sources of Information to Measure Customer Satisfaction  Informal surveys  Comment cards  Verbal comments  Historical data (point of sale)  Sales  Corporate generated surveys  Discussions with internal customers  Focus groups  Toll-free phone numbers  Customer intelligence information
  45. 45. What Measurement of Satisfaction Means to Your Business  Customer relationships are deepened  Customers know that we are interested in them and their wants  Improved product and service offerings  Customer retention
  46. 46. What Today’s Customers Expect  Availability: Services designed to meet the customer’s schedule.  Accessibility: When the customer needs to talk, the provider can be reached.  Accountability: Customers prefer quick and accurate answers to service questions.
  47. 47. Steps for Introducing New Technologies  Prepare your staff.  Train supervisors and team leaders first and get them to buy in.  Develop a group of “change champions.”  Sell your vision.  Praise successful use of the new technology.  Resist the temptation to complain.  Celebrate small successes.  Avoid the “shelfware syndrome.”
  48. 48. A Working Definition…  “The Plan and Practice of managing the lifetime relationship with your customer.”  “The Plan”: Every successful endeavor requires proper planning. Successful CRM rarely happens by chance. Many organizations jump to implementation w/o proper planning.  “The Practice”: Systematic implementation of your plans. Should produce measurable results. Should be evaluated and refined over time.
  49. 49. A Few Basic CRM Concepts…  Touch Points  Each time your company interacts with a customer is a touch point.  Can you name a few Touch Points for hotel guest?
  50. 50. Guest Touch Points  First Call/Internet Visit  Pre-arrival  Check-In/Check-Out  Post stay thank you  Newsletters, Interest Lists  All marketing materials
  51. 51. Touch Points  Are they planned? Managed? Documented?  Are all “touchers” properly trained? Enroll your complete staff in the vision.  Any way to increase the effectiveness of the touch?  Any way to increase the number of touches?
  52. 52. A Few Basic CRM Concepts…  Market Segmentation  Do you treat all of your guests the same?  Are they?  Consider the difference between a guest that stays once ever in a 2 bedroom cottage and a guest that has stayed each of the last 10 years in a 6 bedroom home  We shouldn’t treat the one-timer badly, they may come back many more times  We should realize that the higher value guest deserves the best that we can offer.
  53. 53. Market Segmentation Examples  Saks Fifth Avenue  High value customers ($2000/yr) are routed to special CSR’s.  The calls are routed such that a high value customer is connected to a CSR in one second or less.  Could we coin a new acronym here:  HVG – High Value Guest?
  54. 54. General Statistics The average business never hears from 96% of its unhappy customers,  91% never come back  Those people will tell a minimum of 4 other people,  Getting a repeat customer from this group is 1 in 11,  Dissatisfied customers may tell 9-10 people about their experience,  For every positive they tell 4-5 people,  For every complaint received the average business in fact has 26 customers with the similar concern,
  55. 55. General Statistics…  Of the customers who register a complaint, as many as 70% will do business again with your organization if the complaint is resolved effectively, This figure goes up to 95% if the complaint has been resolved quickly,  40% of complaints are the result from customer mistakes or incorrect expectations,  A complaint that is handled efficiently is actually better than no complaint at all, Customers who complain and get satisfactory results are 8% more loyal than if no complaint at all,
  56. 56. Why customers quit - how to win customers and keep them for life  1% die  3% move away  5% develop other friendships  9% leave for competitive reasons  14% are dissatisfied  68% quit because of an attitude of indifference
  57. 57. Operational &Analytical CRM  Operational CRM: effective and efficient use and management of people, process and technology  Analytical CRM: the measurement of people, process and technology
  58. 58. People, Process and Technology Start with People
  59. 59. Add Customer Attrition
  60. 60. Customer Dissatisfaction is Expensive
  61. 61. Customer Disloyalty vs. Service
  62. 62. Customer Relationships
  63. 63. Thinking Outside the Box: Role Models Like Einstein
  64. 64. Changing the Paradigm From To
  65. 65. CRM means Dealing with the People Aspect of the Project If the word “excellence” is to be applicable in the future, it requires a redefinition. Excellent companies don’t believe in excellence – only in constant improvement and change. Excellent companies will know how to cherish chaos and thrive on change. -- Tom Peters, Thriving on Chaos
  66. 66. Customers Are People, Too! They Have Needs
  67. 67. Reactive vs. Proactive Thinkers
  68. 68. Customer Differentiation
  69. 69. Qualifying Prospects for Relationship Building High Use a non Build a strong customized and lasting approach relationship Opportunities for adding value Seek better Focus on opportunities loyalty-building elsewhere program Low Low Potential profitability of customer High
  70. 70. Customer Lifetime Value R = annual revenue received from a loyal customer I = the relevant interest rate or opportunity cost of money per period N = the number of periods in which a customer makes purchases
  71. 71. Customer Lifetime Value Go to www.benchmarkportal.com to download the excel spreadsheet to calculate Customer Life time Value
  72. 72. Process of Performance Enhancement
  73. 73. CRM Misconceptions  CRM is the solution that will solve a company’s customer problems  CRM is the Internet  CRM means scoring and measuring customer value  CRM is a sales person productivity tool
  74. 74. CRM Summary  CRM is the strategic use of information, processes, technology and people to manage the customer’s relationship with a company’s (marketing, sales, services and support) across the entire customer cycle.  The Plan and Practice of managing the lifetime relationship with your customer
  75. 75. CRM Summary  CRM focuses on strategic impact rather than operational impact  CRM is a total discipline  CRM includes all functions that directly touch the customer throughout their entire lifetime with a company

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