3e779 Module I
Upcoming SlideShare
Loading in...5
×
 

3e779 Module I

on

  • 4,598 views

 

Statistics

Views

Total Views
4,598
Slideshare-icon Views on SlideShare
4,598
Embed Views
0

Actions

Likes
2
Downloads
319
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • Marketing Orientation - means that the wholes organisation is focused upon the needs of customers. Customer needs are addressed by the Three Levels of a Product whereby the organisations not only supplies the actual, tangible product, but also the core product and its benefit, and also the augmented product such as a warranty and customer service. Marketing orientation will focus upon the needs of consumers for all three levels of a product. (N.B. 'market' orientation and 'marketing' orientation are not the same). Value Creation - centres on the generation of shareholder value based upon the satisfaction of customer needs (as with marketing orientation) and the delivery of a sustainable competitive advantage. Innovative IT - is exactly that - Information Technology must be up-to-date. It should be efficient, speedy and focus upon the needs of customers. Whilst IT and/or software are not the entire story for CRM, it is vital to its success. CRM software collects data on consumers and their transactions. Huge databases store data on individuals and groups of individuals. In some ways, CRM means that an organisation is dealing with a segment of one person, since every consumer displays different purchasing habits and preferences. Organisations will track individuals, and try to market products and services to them based upon similar buyer behaviour seen in other individuals (e.g. When Amazon tells you that customers that viewed/bought the same product as you, also bought another product).
  • Customer Touch Points are vital since your business has a marketing orientation and focuses upon the customer and his or her current and future needs. This is the interface between your organisation and its customers. For example you buy a new car from a dealership, and you enter a showroom. The dealership is a contact point. You meet with a salesperson whom demonstrates the car. The salesperson is a contact point. You go home and look at the car manufacturer's website, and then send the company an e-mail. Both are contact points. Other contact points include 3G telephone, video conferencing, Interactive TV, telephone, and letters. Applications are essentially the software and programmes that support the process. Incidentally, this is what some would call CRM - but we know better. Applications serve Marketing (e.g. data mining software* and permission marketing**), Sales (e.g. monitoring Customer Touch Points), and Service (e.g. customer care). Data Stores contain data on every aspect of the customer, and the Customer Life Cycle (CLC). For example, an organisation keeps data on the products you buy, when you buy them, and where they are sent. Data is also kept on the web pages that you visit and the products that you consider, but then do not buy. Leads are stored here. Data on the life time value of individual customers is stored here, as well as details of how and when the customer was recruited, how - and for how long - individuals have been retained, and details of any products that have been extended to individuals are also stored. The data is analysed using Applications. *Data Mining is where an organisation evaluates large Data Stores for patterns, or relationships between groups or individuals (or segments). Applications present 'patterns' in a format that can be used for marketing decision-making.
  • i.e. looks at the products or services that customers NEED throughout their lives. It is marketing orientated rather than product orientated, and embodies the marketing concept The problem here is that every organisation's product offering is different, which makes it impossible to draw out a single Life Cycle that is the same for every organisation.
  • Let's consider an example from the Banking sector. HSBC has a number of products that it aims at its customers throughout their lifetime relationship with the company. Here we apply a CLC. You can start young when you want to save money. 11-15 year olds are targeted with the Livecash Account, and 16-17 year olds with the Right Track Account. Then when (or if) you begin College or University there are Student Loans, and when you qualify there are Recent Graduate Accounts. When you begin work there are many types of current and savings account, and you may wish to buy property, and so take out a mortgage. You could take out a car loan, to buy a vehicle to get you to work. It would also be advisable to take out a pension. As you progress through your career you begin your own family, and save for your own children's education. You embark upon a number of savings plans and schemes, and ultimately HSBC offer you pension planning (you may want to insure yourself for funeral expenses - although HSBC may not offer this!).

3e779 Module I 3e779 Module I Presentation Transcript

  • Module I Conceptual Foundation of CRM Evolution of CRM Benefits of CRM Schools of thought on CRM Different Definitions of CRM
  • Product marketing Direct Marketing Target Marketing Relationship Marketing MASS MARKET RELATIONSHIP MARKETING SEGMENTATION MARKETING ONE TO ONE MARKETING CUSTOMER RELATIONSHIP MANAGEMENT
  • Customer Relationship Management (CRM)
    • CRM is the strategic use of information, processes, technology and people to manage the customer’s relationship with your company ( Marketing, Sales, Services and Support) across the whole customer life cycle.
    • CRM is the process of storing and analyzing the vast amounts of data produced by sales calls, customer-service centers and actual purchases, supposedly yielding greater insight into customer behavior. CRM also allows businesses to treat different types of customers differently in some cases, for instance, by responding more slowly to those who spend less or charging more to those who require more expensive handholding.
    • Wall Street Journal, 21 May’2006.
  • More definition of CRM “ 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.”
  • Online insurance company view on CRM: Motivating customers to initiate revenue generating contacts with us. A catalog retailer on CRM : Increasing the likelihood of the right response by a customer segment. A mid market financial institutions view on CRM: We want to attract customers both old and new through more personalized communications.
    • CRM , the term often referred to marketing. This is because CRM can be considered from a number of perspectives.
      • Information Technology (IT) perspective
      • The Customer Life Cycle (CLC) perspective
      • Business Strategy perspective
  • Business Strategy and CRM
    • Three key phases:
      • Customer Acquisition
      • Customer Retention
      • Customer Extension
    • Three contextual factors:
      • Marketing Orientation.
      • Value Creation.
      • Innovative IT.
  • Information Technology (IT) perspective
    • CRM is more than just software. For the purposes of this introduction - Information Technology (IT) and CRM have three key elements,
      • Customer Touch Points,
      • Applications, and
      • Data Stores.
  •  
  • The Customer Life Cycle (CLC) perspective
    • The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle (PLC).
    • CLC focuses upon the creation of and delivery of lifetime value to the customer.
    • CLC is a summary of the key stages in a customer's relationship with an organization.
  •  
  • Objectives of CRM
    • Identification of potential customers.
    • Understanding of customer needs, Both current and latent.
    • Differentiating profitable from unprofitable customers and segments.
    • Decreasing attrition by increasing value and satisfaction.
    • Increasing usage of current products and services.
    • Increasing referrals.
    • Winning back lost customers.
    • Moving customers up the relationship hierarchy from strangers to acquaintances to friends to partners.
    • Integrating marketing and sales efforts throughout the various channels used by the company.
  • GOALS OF CRM
    • DIFFERENTIATING CUSTOMER
    • All the customers are not equal, recognize and reward the best customer. For this the CRM needs to understand.
    • Sensitivity, tastes, preference and personalities.
    • Life style and age
    • Culture background and education
    • Physical and psychological characteristics.
    • DIFFERENTIATING OFFERING
    • A CRM solution needs to differentiate between low value customer and a high value customer.
    • High Value customer requiring high value customer offerings.
    • Low Value customer with potential to become high value in near future.
    • High Value customer requiring high value service.
    • KEEPING EXISTING CUSTOMER
    • Grading customer from satisfied to very dissatisfied shall help the organization in always improving its customer satisfaction level and scores. As satisfaction level of each improves so shall the customer retention with the organization.
      • Attempts to “own” the lion share 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
    • CUSTOMER LIFE TIME VALUE
    • By identifying life stage and life event trigger the points by customer ,marketers can maximize share of purchase potential .
      • 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.
  • Goal of CRM Increased Customer Loyalty = Increased Profits Integrated and personalized interaction that increases value to customers Data Enabled processes Integrated Customer Knowledge Customer Transaction Data Silos
    • 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.
    • Customer Ownership
      • 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
  • THE CRM VALUE CHAIN Customer data Customer information Customer Knowledge Customer wisdom
  • CRM BUSINESS CYCLE 8. Retain valuable customers . 7. Acquire customers and prospective customers. 6. Deliver increased value to the customer . 5. Interact with customers and prospective customers . 4. Customize by customer segment. 3. Develop product services Channels to meet customer’s needs. 2. Differentiate based on customer needs, characteristics and behavior . 1. Understand customer’s needs CRM
  • CRM Concepts Customer Life Cycle The total time that the customer is engaged with your company from the customer’s experience and view point. Consider Purchase Set up Use Customer Asset Loyal customers continue to buy more as they perceive value in the relationship. Customer Information: It is a tangible company asset that can be inventoried and managed. Critical element for building loyalty. Customer Value: It is calculated on the basis of purchases made by an individual.
  • Information Technology Process People Components of CRM
  • The components of CRM
    • 1.Information: Information is the raw material of CRM. These types of information are useful to CRM.
      • Identification Data
      • -Marketing Data
      • 2.Process: Customer –centered processes are the product of CRM. Some examples are:
      • -Customer Touch points
      • 3.Technology: Technology is the machinery that enables CRM to work.
      • -Software Products
      • -Networking
      • -Databases
      • 4.People:People are the power supply of CRM.
      • -Training and education
      • -Measurements and rewards
  • Customer Touch points
    • Touch points are the means (media) that we use to interact with our customers.
    • Mail
    • Toll-free-Number
    • Phone / fax
    • Event
    • Internet
    • Kiosks
    • Broadcast
    • E-Mail
    • Personal
  •  
  • Common myths about CRM
    • CRM is the solution that will solve all our customer problems, it’s all the software tools that make it easier for a customer to do business with us.
    • CRM is the internet.
    • CRM is just the latest name for Direct Marketing.
    • CRM means recognizing a customer wherever he interacts with our company, a 360 degree view of the customer.
    • CRM means scoring and measuring customer value.
    • CRM is sales rep productivity tools.
  •  
  • Types of CRM
    • Operational CRM
    • Analytical CRM
    • Collaborative CRM
  • CRM Architecture
  • Operational CRM
    • The operational application of CRM enables effective interaction with
    • customers. For this purpose various tools are used.
    • Operational CRM provides support to “Front Office" business processes,
    • including sales, marketing and service.
    • Each interaction with a customer is generally added to a customer's
    • Contact history, and staff can retrieve information on customers from the
    • Database when necessary.
    • These contact management tools aim to reduce costs by improved
    • Process efficiency and use of media based communication channels.
    • These are also aimed to provide customers with a consistent interface
    • Across all communication channels.
    • Banks are an exemplary implementation of CRM as customer contact
    • management.
    • Channel management tools aim to understand how customer interacts
    • with the company. It aims to deliver products and services across
    • multiple channels in effective, efficient, and consistent manner.
  • Analytical CRM
    • The data collected in operational management is analyzed to segment customers. The valuable information thus obtained is used to satisfy customers. Analytical CRM is composed of:
    • Pattern discovery component
    • Product and customer analysis component
    • Multitude component
    • Sorting and customer fractionation component
    • Customer value evaluation component
    • Analytical solutions provided for most companies are integrated view of customer across all channels and applications, campaign performance analysis, customer profitability analysis, cross-selling and up selling. The analytical solutions help answer questions like:
    • Who are their best customers?
    • Whom they are likely to loose?
    • How to retain them?
    • How to attract new customers?
    • How to improve profitability of customers?
  • Analytical CRM analyzes customer data for a variety of purposes: Design and execution of targeted marketing campaigns to optimize marketing effectiveness. Design and execution of specific customer campaigns, including customer acquisition, cross-selling, up-selling, retention. Analysis of customer behavior to aid product and service decision making (e.g. pricing, new product development etc.) Management decisions, e.g. financial forecasting and customer profitability analysis Prediction of the probability of customer defection (churn analysis) Analytical CRM generally makes heavy use of data mining..
  • Collaborative CRM
    • The various departments of company like the sales, technical support, and marketing, share the information they collect about customers. The objective is to improve the quality of customer service and increase customer loyalty.
    • It allows the company to synchronize and manage efficient, productive interaction with customers, prospects, partners, and internal associates across all communication channels. The customers' viewpoint is taken care of at every transaction level thus enabling better service to the customer. Collaborative CRM also reduces web service costs by enabling web collaboration.
    • Collaborative CRM covers the direct interaction with customers, for a variety of different purposes, including feedback and issue-reporting. Interaction can be through a variety of channels, such as web pages, email, automated phone (Automated Voice Response AVR) or SMS.
    • The objectives of collaborative CRM can be broad, including cost reduction and service improvements
  •  
  • Integrated CRM Architecture
  •  
  • TECHNOLOGICAL ARCHITECTURE
  • Case Study-Right Number The “Say Cello not Hello” promotional scheme for cello thermoware which ran in Mumbai in the week beginning 14, seems to be one of those crazy ideas that make great marketing sense. The brain child of ad agency Situations, the scheme involved trained teams of callers ringing up 33,000 randomly chosen Mumbai telephone numbers. If the person who picked up the phone at the other end side”Cello” instead of “Hello” he or she became eligible for a a free cello Thermaware water jug worth Rs.111 information about the scheme had been disseminated widely through a highly visible ad campaign using press also banners, stickers and leaflets.
  • Says anjan Chatterjee, Managing Director of situations, “the idea was born in a hotel lounge in Bangalore. We were toying around with a headline that had proved rather popular :“Say hello to Cello”.Suddenly it struck us:why not call people at random all over Bangalore and tell them to say Cello instead of Hello”?. First tried out in Bangalore the scheme was a big success, achieving its aim of creating top of mind awareness of the product. Chatterjee claims that in Mumbai the scheme took the city’ s residents by storm. According to him the message on the telephone answering machines in house had been changed for the week to cello, just in case the call came through when no one was around. Over the week the schemes leased prizes were delivered to more than 3800 winners.As the ad for these schemes says:”Idea accha Hai”.