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.
CRM – Customer Relationship Management
Let’s jump right in and…
deepen your understanding,
show some real life complexities,
give you a scope and vision
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
Can the roles change with customers?
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
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...
What Is “CRM”
Customer Relationship Management
Becoming a common and important concept in
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
The Value of CRM
Gain more control in interaction with customers
Manage expectations better
Provide products that better serve customers
Understand what customers really want
Understand the nature of customer service
- Customers we do business with outside our organization.
- The people we work with throughout our organization.
- Characteristics that allow customers to be categorized
according to demographic, psychographic, or firmographic
Characteristics such as:
income ZIP code
marital status occupation
education household size
stage in the family life- mobility patterns
cycle ethnic background
home ownership religion
modes of living social class
needs family influences
attitudes political affiliation
reference groups etc.
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
their hours of operation
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:
The Five Needs of Every Customer
From the Customer’s Perspective
What Is Customer Service?
- Anything we do for the customer that enhances the customer
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
What is Customer Perceptions?
- The way customer’s see something based on their experience
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.
The process of identifying how a
company is perceived and establishing
an action plan to correct, maintain, or
enhance the company’s reputation.
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
Techniques for Exceeding
Become familiar with your customers.
Ask your customers what their expectations
Tell your customers what they can expect.
Live up to their expectations.
Made up of the combination of our current
knowledge, reputation, and professionalism.
Tips for Cultivating Credibility
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
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 customer service
Outsourcing of all or part of customer service
Non-traditional examples of customer service
Cost of Losing a Customer
We lose the current dollars that our business
We lose the jobs that our clients provide.
We may suffer from a loss of reputation.
We may lose the intangible variable of
The process of gathering information;
building a historical database; and
developing an understanding of current,
potential, and lapsed customers.
Method by which customers choose to
Time of day that customers have questions
Depth of their expected interactions
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
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.
Those customers with problems, questions,
fears, and personalities that require us to
work to achieve true communication.
What are some characteristics
of challenging customers?
How do avoid creating
To give someone special recognition or
The ability to understand what someone is
experiencing and to take action to assist in
resolving the situation.
Assessing a situation and determining who
should have responsibility and who really
does have the responsibility.
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.
Six Superb Ways to Cope with
2. Ask questions
3. Show empathy
4. Solve the problem
5. Follow up
6. End on a positive note
Payoffs of Coping with
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!
Cultivating a lasting and mutually beneficial
connection with customers.
The continuous attempt to satisfy and keep
current customers actively involved in
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.
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
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
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?
Guidelines for Establishing a
1. Examine who your customers are and what
specific needs they have.
2. Identify specific objectives to be realized by the
3. Create a manageable program of customer
4. Create a culture that stimulates customer interest.
5. Determine a timetable for evaluation.
Sources of Information to
Measure Customer Satisfaction
Historical data (point of sale)
Corporate generated surveys
Discussions with internal customers
Toll-free phone numbers
Customer intelligence information
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
What Today’s Customers
Availability: Services designed to meet the
Accessibility: When the customer needs to
talk, the provider can be reached.
Accountability: Customers prefer quick and
accurate answers to service questions.
Steps for Introducing New
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.”
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.
A Few Basic CRM Concepts…
Each time your company interacts with a
customer is a touch point.
Can you name a few Touch Points for hotel guest?
Guest Touch Points
First Call/Internet Visit
Post stay thank you
Newsletters, Interest Lists
All marketing materials
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
Any way to increase the number of touches?
A Few Basic CRM Concepts…
Do you treat all of your guests the same?
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.
Market Segmentation Examples
Saks Fifth Avenue
High value customers ($2000/yr) are routed to
The calls are routed such that a high value
customer is connected to a CSR in one second or
Could we coin a new acronym here:
HVG – High Value Guest?
The average business never hears from 96% of its unhappy
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
For every positive they tell 4-5 people,
For every complaint received the average business in fact has 26
customers with the similar concern,
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
40% of complaints are the result from customer mistakes or
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,
Why customers quit - how to win
customers and keep them for life
3% move away
5% develop other friendships
9% leave for competitive reasons
14% are dissatisfied
68% quit because of an attitude of
Operational CRM: effective and efficient use and
management of people, process and technology
Analytical CRM: the measurement of people, process and
People, Process and
Start with People
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
Qualifying Prospects for
Use a non Build a strong
customized and lasting
for adding value
Seek better Focus on
Low Potential profitability of customer High
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
Customer Lifetime Value
Go to www.benchmarkportal.com
to download the excel spreadsheet
to calculate Customer Life time Value
CRM is the solution that will solve a
company’s customer problems
CRM is the Internet
CRM means scoring and measuring customer
CRM is a sales person productivity tool
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
CRM focuses on strategic impact rather than
CRM is a total discipline
CRM includes all functions that directly
touch the customer throughout their entire
lifetime with a company