2. 2
WELCOME TO EXPERIENCE MANAGEMENT
• Unit Convenor – Dr Jayce Naidoo
• This unit will consist of lectures and workshops
• The face to face class will mainly focus on the practical workshops
• The online class will focus on the lectures
• The assessments for this unit will be as follows:
• Draft Survey – 10% due Wk 2 - Session 3
• Survey report – 20% due Wk 5 - Session 10
• Theory Test (Closed Book) – Week 7 - Session 13
• Practical Test(open Book) – Week 7 - Session 13
• Literature Review – Week 8 - Session 14
3. 3
Which definition of CRM is correct?
CRM is an information industry term for methodologies, software, and usually Internet capabilities that
help an enterprise manage customer relationships in an organized way.
CRM is the process of managing all aspects of interaction a company has with its customers, including
prospecting, sales, and service. CRM applications attempt to provide insight into and improve the
company/customer relationship by combining all these views of customer interaction into one picture.
CRM is an integrated approach to identifying, acquiring, and retaining customers. By enabling
organizations to manage and coordinate customer interactions across multiple channels, departments,
lines of business, and geographies, CRM helps organizations maximize the value of every customer
interaction and drive superior corporate performance.
CRM is a business strategy that maximizes profitability, revenue and customer satisfaction by organizing
around customer segments, fostering behaviour that satisfies customers, and implementing customer-
centric processes.“
CRM is an integrated information system that is used to plan, schedule and control the pre-sales and post-
sales activities in an organization. CRM embraces all aspects of dealing with prospects and customers,
including the call center, sales force, marketing, technical support and field service. The primary goal of CRM
is to improve long-term growth and profitability through a better understanding of customer behaviour. CRM
aims to provide more effective feedback and improved integration to better gauge the return on investment
(ROI) in these areas.
CRM is the core business strategy that integrates internal processes and functions, and external
networks, to create and deliver value to targeted customers at a profit. It is grounded on high quality
customer-related data and enabled by information technology.
Session 1 Customer Relationship Management
4. 4
Customer Relationship Management
• CRM is a strategy and set of tools used by companies to manage and analyze interactions with
existing and potential customers.
• Its primary goal is to enhance customer relationships, increase customer loyalty, and drive sales.
• CRM systems typically store customer data, track interactions, and provide insights that can be
used to personalize marketing and customer service efforts.
Source: ChatGPT accessed 1/08/2023
Example
You visited your local Woolworths and purchased bread, milk and chips. You scanned your loyalty
card. The information of your name, contact details, purchase history items purchased, time etc is
recorded on the database. Your receive an email/text for feedback about your experience. Also you
receive marketing material with personalised recommendations, discounts, new brands top buys, half
price etc.
Session 1 Customer Relationship Management
5. 5
Experience Management
• XM is a broader concept that encompasses the entire set of interactions a customer has with a
brand across various touchpoints.
• It focuses on understanding and improving the overall customer experience at every stage of the
customer journey.
• This includes not just customer interactions with the company but also their feelings, emotions, and
perceptions about the brand.
Source: ChatGPT accessed 1/08/2023
Example
You bought travel insurance and made a travel claim. The company will ask for feedback about your
claim experience. They will also look at social media and reviews about what clients say about their
experience and their perception. The company will identify areas that need improvement, such as
lodging the claim, interaction with consultants, online claims simple and easy etc.
So, Experience Management focus on the broader customer journey while CRM individual customer
interactions and relationships to drive sales and loyalty
Session 1 Customer Relationship Management
6. 6
Group discussion
Form a group of 3-4 students around you:
Your lecturer will assign one of the following tasks for your group to do:
1. Identify a CRM example and discuss how a business will use this information to enhance
sales and ensure loyalty
2. Identify an experience management example and explain what is done in the customer
journey to optimize overall customer experience so that stronger and longer lasting
relationship can be attained
Session 1 Customer Relationship Management
16. 16
Type of CRM Dominant characteristic
Strategic
Strategic CRM is a core customer-centric
business strategy that aims at winning and
keeping profitable customers.
Operational
Operational CRM focuses on the automation of
customer-facing processes such as selling,
marketing and customer service.
Analytical
Analytical CRM is the process through which
organizations transform customer-related data
into actionable insight for either strategic or
tactical purposes.
Three types of CRM
Session 1 Customer Relationship Management
17. 17
Strategic - Customer centricity
1. Product-oriented businesses believe that customers choose
products with the best quality, performance, design or
features.
2. Production-oriented businesses believe that customers
choose low-price products.
3. Sales-oriented businesses make the assumption that if they
invest enough in advertising, selling, public relations (PR)
and sales promotion, customers will be persuaded to buy.
Session 1 Customer Relationship Management
18. 18
Strategic – Customer or market centricity
Customer Centricity places the customer at the center of all decisions,
strategies, and processes. The entire business revolves around
delivering value to customers, rather than just focusing on products or
profits
4. A customer or market-oriented company shares a set of beliefs about
putting the customer first.
5. It collects, disseminates and uses customer and competitive information
to develop better value propositions for customers.
6. A customer-centric firm is a learning firm that constantly adapts to
customer requirements and competitive conditions.
Session 1 Customer Relationship Management
20. Sources of customer-related data for analytical CRM
◆ Internal sources
● Sales data (purchase history), financial data (payment history, credit score),
marketing data (campaign response, loyalty scheme data) and service data.
◆ External sources
● Geo-demographic and life-style data from business intelligence organisations,
for example.
● ‘Big data’ including posts to social media sites and sensor data. Includes both
structured and unstructured data.
21. Beneficiaries of analytical CRM
◆ Customer
● Analytical CRM can deliver timely, customized, solutions to the customer’s
problems, thereby enhancing customer satisfaction.
◆ Company
● Analytical CRM offers the prospect of more powerful cross-selling and up-
selling programs, and more effective customer retention and customer
acquisition programs.
22. What about social CRM?
◆ Social CRM is a term widely used by technology firms with solutions to sell.
◆ In time Social CRM will become part of a larger discussion of “big data”.
◆ Social CRM technologies essentially enable users to exploit social network
data for customer management purposes.
◆ Social media data can be used to enhance analytical CRM
◆ Where consumers use social media (e.g. Facebook) to make purchases,
social media become part of operational CRM.
23. Misunderstandings about CRM
1. CRM is database marketing
2. CRM is a marketing process
3. CRM is an IT issue
4. CRM is about loyalty schemes
5. CRM can be implemented by any company
24. Core definition of CRM
◆ CRM is the core business strategy that integrates internal processes
and functions, and external networks, to create and deliver value to
targeted customers at a profit. It is grounded on high quality
customer-related data and enabled by information technology.
25. CRM constituencies
1. Companies implementing CRM
2. Customers and partners of those companies
3. Vendors of CRM systems
4. CRM cloud solutions providers
5. Social media players
6. Vendors of CRM hardware and infrastructure
7. Management consultants
27. The IDIC model of CRM
◆ Identify who your target customers are and build a deep understanding of
them. Segmenting in specific groups with distinct needs and
characteristics and tailor products
◆ Differentiate your customers from your competitors to identify which
customers have most value now and which offer most for the future.
Create unique value propositions.
◆ Interact with customers to ensure that you understand customer
expectations and their relationships with other suppliers or brands
◆ Customize the offer and communications to ensure that the expectations
of customers are met.
29. Payne’s 5-process model of CRM
Figure 1.2
The model provides a systematic approach to
managing customer experiences by breaking
down the customer journey into five key
processes. These processes are
interconnected and must be aligned to deliver
a seamless and exceptional
Customer experience
The human experience cycle, also known as the customer experience journey or the customer lifecycle, refers to the various stages that individuals go through when interacting with a product, service, or brand.
It encompasses their emotions, perceptions, and behaviors at different touchpoints throughout their entire experience.
Understanding and optimizing this cycle is crucial for businesses to deliver exceptional experiences and build strong, loyal relationships with their customers.
The human experience cycle typically consists of the following stages:
Awareness: This is the initial stage where potential customers become aware of a product, service, or brand's existence. It can happen through various channels such as advertising, social media, word-of-mouth, or online search. At this stage, the focus is on creating a positive first impression and generating interest in the offering.
Example: A person sees an ad for a new smartphone model on TV and becomes aware of the product.
Consideration: During the consideration stage, individuals evaluate the offering against their needs, preferences, and alternatives. They research and compare different options to make an informed decision.
Example: The individual conducts online research, reads reviews, and compares the features and prices of various smartphones before making a decision.
Purchase: At this stage, the customer makes the decision to buy the product or service. The buying process may vary depending on the complexity of the offering, but the goal is to make the purchase as smooth and convenient as possible.
Example: The individual selects the smartphone they want and completes the purchase online or in a physical store.
Experience: The experience stage is where the customer actually uses the product or service. This is a critical phase as it shapes the customer's perception and satisfaction with the offering. Positive experiences can lead to customer loyalty and advocacy, while negative experiences can lead to dissatisfaction and churn.
Example: The customer uses the new smartphone and assesses its performance, usability, and overall satisfaction with the device.
Retention and Loyalty: In this stage, the goal is to retain the customer and foster loyalty. Providing ongoing support, excellent customer service, and personalized offers can help keep customers engaged and coming back for repeat purchases.
Example: The smartphone manufacturer offers regular software updates, provides customer support, and offers exclusive discounts to loyal customers.
Advocacy: Happy and satisfied customers are more likely to become brand advocates who spread positive word-of-mouth and recommend the product or service to others. This can lead to new customer acquisition through referrals.
Example: The customer recommends the smartphone to their friends and family, encouraging them to purchase the same model.
Understanding the human experience cycle allows businesses to identify pain points, address customer needs, and continuously improve their offerings. By focusing on providing exceptional experiences at each stage of the cycle, companies can build strong relationships with customers and drive long-term success.
X data provides qualitative insights into customer emotions and perceptions and O-data provides quantitative metrics and behaviour patterns
Identify: In the first step, businesses must identify and understand their target customers thoroughly. This involves segmenting the market to identify specific customer groups with distinct needs and characteristics. By understanding the different customer segments, companies can tailor their marketing efforts and product offerings to better meet the needs of each group.
Differentiate: Once customer segments are identified, the next step is to differentiate the company's offerings from competitors. This involves creating unique value propositions and positioning the products or services in a way that highlights their distinctive features and benefits. Differentiation helps the company stand out in the market and attract the attention of its target customers.
Interact: The interact stage emphasizes building strong customer relationships through effective interactions and engagement. This involves establishing clear communication channels with customers and creating touchpoints that facilitate meaningful interactions. Companies must actively listen to customer feedback, respond to inquiries promptly, and provide excellent customer service to foster trust and loyalty.
Customize: The final step of the IDIC model is to customize offerings to meet individual customer needs and preferences. Customers increasingly expect personalized experiences, and businesses that can deliver tailored solutions are likely to gain a competitive advantage. By using customer data and insights, companies can create personalized products, services, and marketing campaigns that resonate with individual customers.
Strategy Development Process: The Strategy Development Process is the foundational step in the model. It involves defining the overall customer experience strategy and objectives. Companies must identify their target customer segments, understand their needs and expectations, and establish specific experience-related goals. This process also includes aligning the customer experience strategy with the organization's overall business strategy to ensure coherence and consistency.
Value Creation Process: The Value Creation Process focuses on designing and delivering value to customers at every touchpoint. This process includes developing products, services, and experiences that address customer needs and preferences. It requires a deep understanding of customer insights and feedback to create offerings that resonate with the target audience. Companies should continuously seek ways to innovate and improve their value proposition to maintain a competitive advantage.
Multi-Channel Integration Process: The Multi-Channel Integration Process emphasizes the importance of delivering a consistent experience across various customer interaction channels. This includes both physical and digital channels, such as in-store, online, mobile, social media, call centers, etc. The goal is to ensure that customers have a seamless and cohesive experience, regardless of the channel they choose to interact with the company.
Performance Assessment Process: The Performance Assessment Process involves measuring and evaluating the effectiveness of the customer experience initiatives. Key performance indicators (KPIs) are identified to track the success of the customer experience strategy. These KPIs can include customer satisfaction, loyalty, retention rates, Net Promoter Score (NPS), and customer lifetime value, among others. Regular performance assessments allow companies to identify areas for improvement and make data-driven decisions.
Improvement Process: The Improvement Process focuses on using insights gained from performance assessments to drive continuous improvement. Companies must act on customer feedback and implement changes to enhance the customer experience continually. This process also involves analyzing customer complaints and identifying root causes to address underlying issues. By making iterative improvements, companies can enhance customer satisfaction and loyalty over time.