“ Process of creating and maintaining relationships with business customers or consumers”
“ A holistic process of identifying, attracting, differentiating, and retaining customers”
“ Integrating the firm’s value chain to create enhanced customer value at every step”
“ An integrated cross-functional focus on improving customer retention and profitability for the company.”
Customer Relationship Management
The use of information-enabled systems for enhancing individual customer relationships to ensure long-term customer loyalty and retention
Lifetime Value (LTV)
Refers to the net present value of the potential revenue stream for any particular customer over a # of years
Starts with current purchase activity then extrapolates to include potential additions from cross-selling, upgrades, total ownership, etc.
Attempts to “own” the lionshare of customer spending and/or “share of mind” in a particular product category
Building brand equity, maintaining vigilant customer contact, keeping current with the market trends is critical
5% points increase in customer retention=20-125% increase in profit
Is CRM New?
Simply an extension of relationship marketing
Builds on customer service and satisfaction concepts
Just the latest buzzword for creating customer orientation
Bottom-line is still the same
A shift in corporate philosophy concerning the approach to value delivery
Customer-centric approach to value chain
New and technology-enhanced processes
Focus is not just on bottom-line, but on top-line
Goal is to create satisfying experiences across all customer contact points
CRM Programs Can Potentially Improve
Activity and Time Management
Quotation and Order Processing
Delivery and Order Fulfillment
Customer Service and Support
Areas of CRM Activity
Sales Force Automation (SFA)
Customer Service and Support (CSS)
Areas of CRM Activity: Sales Force Automation
35-40% of all CRM activity
Manages lead generation, tracks movement of leads through the pipeline, allows better usage of customer data, integrates activities across sales channels, simplifies relationship management, forecasts for opportunities (SWOT)
Goldmine and SalesLogix are examples of prepackaged SFA solutions.
Ex. Staples used SFA to integrate catalog, online, in-store sales efforts directed at its best customers
Areas of CRM Activity: Customer Service and Support (CSS)
20-25% of CRM
Assign, escalate, and track trouble tickets, inquiries, solution attempts through resolution
Provides information to support customer call center activity
Gleans customer data from those interactions and records it in SFA for later use
Remedy , Siebel , Vantive, and Clarify are major vendors
Ex., 3M Adhesive Products division
Areas of CRM Activity: Help Desk
15-20% of all CRM
Allows individuals to access network database to solve their own problems or find information.
Can be internal or external
Offers many bottom-line savings
Human Click , Tivoli, LivePerson , are providers
Ex., Land’s End Live allows customers browse FAQ’s but also click a link to talk directly with live representative.
Areas of CRM Activity: Field Service CRM
3-5% of all CRM activity
Mobile service technicians can log information about work orders and service calls, as well as access information from the remote site.
Can feed information from customer problems into SFA for salesperson leads.
Market information can be gathered and logged into central database.
Ensures appropriate resource allocation by matching available resources to job requirements
Major vendors are RTS, Metrix, eDispatch
Areas of CRM Activity: Marketing Automation
3-5% of CRM, but growing 5X faster than all others
Interfaces with data warehouses and data mining activities to tailor page views, products, and promotions, so that the right offer goes to the right person at the right time.
Can interact with SFA to support field sales efforts
Provides customized customer interactions critical to segment of one marketing, mass customization, customerization, etc.
www.webgroove.com , Epiphany , Oracle, Siebel, and Personify are leaders
New Frontiers in CRM
What are people loyal to?
I.E.: Communities not Corporations
Goal is to create an environment where people get meaningful interactions with the company and other users so that they feel part of the enterprise.
Adds human component and engages customers.
Creates more stickiness and “ownership”
Ex. User Groups for software products (Oracle, Intergraph)
Ex. Dell / Sony technical support communities
Can be run internally or by an external organization such as Sift
Components of Commercial E-Communities
Ex. IKEA Stock Query, Amazon rare book finder
User product ratings, User alerts/Newswires, Dell technical support
Mass Customization – Using flexible processes and organizational structures to produce varied and individualized products and services at the price of standard mass-produced offerings.
Personalization – Customization of some features of a product or services so that the customer enjoys more convenience, lower costs, or some other benefit.
Segment-of-One Marketing – Based on the idea of the firm learning individual reactions to marketing strategies, then treating this customer differently than other customers.
Customerization – Mass customization + personalization + segment-of-one, dependent on a web-based or electronic interaction
Distinctions in Customerization Direct (online) Mix of direct and indirect Distribution Integrated, interactive Advertising and PR Communication Value based pricing; customer determined Fixed prices with discounting Price Customized based on customer interactions Marketing and R&D drive offering Product and service offering May not be articulated Researched and articulated Customer needs Customer is active co-producer, Customer is passive participant in process Relationship with customers Customerization Mass Marketing
Making CRM Happen
Evaluate products and processes customers’ terms.
Analyze the multiple channels through which the company interacts with customers.
Examine how the company understands its customers. Does it keep good data? How does it get that data? Does information flow between functional areas?
Provide fingertip access to all information.
Analyze human resources and ensure that everyone has an understanding of philosophy of CRM