ARTIFICIAL INTELLIGENCE AND EXPERT SYSTEMS PRESENTATION CUSTOMER RELATIONS MANAGEMENT(C.R.M.) CAN EKSOZ 030262 Assoc.Prof.Dr.Hasan.H.Önder 15/05/2008
Customer Relationship Management (CRM)Learning Objectives : Define CRM; Understand the importance of CRM; Explain the determinants of CRM and the key stages in its development; Customer Relationship Management (CRM) Model; Explain the role of salespeople as relationship developers Discuss the management of customer relationships.
What is C.R.M ?CRM is the broad category of concepts, tools, and processes thatallows an organization to understand and serve everyone withwhom it comes into contact.CRM is about gathering information that is used to serve customersBasic - information, such as name, address, meeting and purchasehistory, and service andsupport contacts. In a supplier relationship it might be procurementhistory, termsand conditions, or contact information. This information is then usedto better serve the clients.
Understanding the Importance of C.R.M.CRM is a business philosophy based on upon individual customersand customised products and services supported by open linesof communication and feedback from the participating firms thatmutually benefit both buying and selling organisations.The buying and selling firms enter into a “learning relationship”,with the customer being willing to collaborate with the seller andgrow as a loyal customer. In return,, the seller works to maximizethe value of the relationship for the customer’s benefit.In short, CRM provides selling organisations with the platformto obtain a competitive advantage by embracing customer needs andbuilding value-driven long-term relationships.
Determinants of CRM Trust (Responsibility) : Customer willingnes to belive on the ability, integrity, and motivation of one company to serve the needs.(Related to salespeople) Value : The ability of a selling organisation to satisfy the needs of the customer at a comparatively lower cost or higher benefit than that offered by competitors and measured in monetary .(It’s related to solving price problems at selling .)
In addition to trust and value, salespeople must: Understand customer needs and problems ; Meet their commitments(responsibility) ; Provide superior after sales support ; Make sure that the customer is always told the truth (must be honest) ; and Have a ambitious interest in establishing and retaining a long- term relationship (e.g., have long-term perspective).
Stages in the development of a Customer RelationshipThe Pre-relationship StageThe event that triggers a buyer to seek a new business partner.The Early StageExperience is accumulated between the buyer and seller although a greatdegree of uncertainty and distance exists.The Development StageIncreased levels of transactions lead to a higher degree of commitment andthe distance is reduced to a social exchange.The Long-term StageCharacterised by the companies’ mutual importance to each other.The Final StageThe interaction between the companies becomes institutionalized.
Stages in the Development of a Key-Account Relationship
Functions of Customer Relationship ManagementDirect functions (are the basic requirements of a company that are necessary to survive in the competitive marketplace) Profit; Volume; and Safeguard (Reliable marketplace)Indirect functions (are the actions necessary to convince the customer to participate in various marketing activities). Innovation: Market; Scout(Discovery new customer area): and Access.
Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate, develop and enhance the process that is aimed at building trust and commitment with the customer.Initiating the relationship Engage in strategic prospecting and qualifying; Gather and study pre-call information; Identify buying influences; Plan the initial sales call; Demonstrate an understanding of the customer’s needs; Identify opportunities to build a relationship; and Illustrate the value of a relationship with the customer
Developing the relationship Select an appropriate offering; Customise the relationship; Link the solutions with the customer’s needs; Discuss customer concerns; Summarize the solution to confirm benefits; and Secure commitment.Enhancing the relationship Assess customer satisfaction; Take action to ensure satisfaction; Maintain open, two-way communication; and Work to add value and enhance mutual opportunities.
Customer Relationship Management (C.R.M.) Model
Summary CRM is a new business philosophy based on trust and value; The core function of CRM is the value creation process; Customer relationships develop over time; The role of global salespeople in the process is that of both relationship builders and relationship promoters; and The basic premise of CRM is to offer superior value to customers in an effort to turn prospects into customers, customers into loyal customers, and loyal customers into partners.
References 1 If all the components of the CRM system are Web-based including the company, eCRM or electronic CRM is sometimes the term that is used. 2 ICONOCAST, January 4, 2001. 3 ICONOCAST, October 12, 2000. 4 Frederick F. Reichheld, The Loyalty Effect, (Cambridge, MA: Harvard Business School Press). 5 See, for example, Rashi Glazer, “Winning in Smart Markets,” Sloan Management Review, Summer, 1999, pp.59-69. 6 Of course, this does not mean that they are using it in the way we will describe later in this paper. 7 This figure is due to Professor Florian Zettelmeyer, University of California at Berkeley. 8 Rashi Glazer, “Measuring the Knower: Towards a Theory of Knowledge Equity," California Management Review v40, n3, Spring 1998, pp.175-194 9 See, for example, Michel Wedel and Wagner A. Kamakura, Market Segmentation: