Transcript of "Customer relationship management (crm)"
INFORMATION SYSTEMMANAGEMENT (IMS 552)CUSTOMER RELATIONSHIP MANAGEMENT (CRM) Prepared by: HAFSAH BINTI RAZALI 2010644048 Prepared for: En. Abdullah Abdul Rahman
DEFINITION OF CRM• Basically an information industry term for methodologies, software and usually internet capabilities that help an enterprise manager customer relationship in an organize way.• CRM extends to develop profitable company to company relationship.• The concept of CRM can be used to create strategies for interacting with each customer.• Kumar and Reinartz (2006) defined CRM as a strategic process of selecting the customers a firm can most profitably serve and of shaping the interactions between a company and these customers.
KEY COMPONENTS OF CRM1) STRATEGIC PROCESS CRM activities are initiated and managed starting from the top of the organization. CRM does not belong to any single department but needs contributions and reinforcements from all corporate functions. CRM is continuing process that cannot handle as just another software implementation project.
KEY COMPONENTS OF CRM2) SELECTION it is relevant that an organization focus on their most profitable or potential customer first. This is not about denying services to certain customers but the organization itself must first identify the valuable customers.
KEY COMPONENTS OF CRM3) INTERACTION The relationship between the customer and the organization takes the form of an interactive dialogue. Information and goods are exchanged and most importantly, the exchange evolves as a function of past exchanges.4) CUSTOMER depending on the industry and company, a customer can be an individual account, one or several within a market, or an entire market. Customer include not only end users but also intermediaries, like distributors and retailer.
KEY COMPONENTS OF CRM5) CURRENT & FUTURE VALUE OF THE CUSTOMER the organization are moving away from extracting their profit from single transaction to maximizing profits over a series of transactions. The organization is starting to maximize Customer Equity (the value of all their customer relationship to them).
CREATE DATABASE First step to a complete CRM solution. It is a foundation for any customer relationship management activity. For we-based business, constructing a database should be a accumulated as a natural part of the interaction with customers. For existing companies, which not have previously collected much customer information, they should seeking historical customer contact data from internal sources such as accounting and customer services.
Information should be contain in the database Transactions Customer contacts Descriptive information Response to marketing stimuli
ANALYZING THE DATA Life Customer Value (LCV) introduced which the purpose is that each customer of the database should be analyzed in term of current and future profitability to the organization. When a profit figure can be assigned to each customer, the marketing manager can then decide which customer to target. The past profit that a customer has produced for the organization is the sum of the margins of all the products purchased over time less the cost of reaching that customer.
Cont…Other ways that marketers can use to analyze customer information: – Market basket analysis – Click stream analysis e.g.: Acer and Apple Company sell software that enables web-based stores to customize their sites in real time.
CUSTOMER SELECTIONThe next step is to consider which customer to target with the organization’s marketing programs.From the analysis, if segmentation types is performed on purchasing or related behavior, the customers in the most desired segments would normally be selected first for retention program.
CUSTOMER TARGETINGThere are other mass marketing approaches such as television, radio or print advertising which is useful for generating awareness other communication objectives, but there are poorly suited for CRM.More conventional approaches for targeting selected customers include a portfolio of direct marketing methods such as telemarketing, direct mail and direct sales.
RELATIONSHIP MARKETING PROGRAMThe goal of relationship programs is to deliver a higher level of customers satisfaction than competing organization deliver.A comprehensive set of relationship program are such as: • Customer service • Frequently/loyalty program • Customization • Reward programs • Community building
PRIVACY ISSUESThe CRM system depend upon a database of customer information and analysis of that data for more effective targeting of marketing communications and relationship building activities.There is an obvious tradeoff between the ability of companies t better deliver customized products, services and the amount of information necessary to enable this delivery.
METRICSThere are various metrics that have been used to measure and manage customer loyalty.Some of popular metrics used are • Recently, Frequency and Monetary (RFM) • Past Customer Value (PVC) • Share of Wallet (SOW)
FUTURE OF CRMWhen implementing CRM strategies, the organization have to adopt a customer focused view that consider their needs, lifetime value, and profitability.The future of CRM therefore, lies in the ability of organization to accurately assess customer feedback and market trends through an interactive marketing approach.
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