Executive Summary – Customer Relationship Management Saleena ...

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Executive Summary – Customer Relationship Management Saleena ...

  1. 1. Executive Summary – Customer Relationship Management Saleena Frazier Nemati – ISM 611 Anita McCoy Fall 2001 Jacqueline Watakila There have been many quests made for the “technology silver bullet” in the past few years. In the mid-1990’s, it was client/server technologies with their GUI interfaces that were supposed to revolutionize all aspects of customer interaction within the firm. These were followed by ERP systems that would integrate all functions within the firm and facilitate a seamless view of the customer. Customer Relationship Management (CRM) is a process that manages the interaction a company has with its customers. CRM is one of the largest and fastest growing segments of the information technology and services marketplace, and its goal is to create long-term, profitable relationships with an organization’s customers. It is not a software package itself but a business process that requires specific software packages. Vendors are quickly beginning to label these packages as CRM systems because their main goal is to analyze customer behavior and identify patterns. This information is then used to improve goods and services provided to the customers and increase profit through relationships. CRM software is supposed to provide the functionality that allows a firm to make the customer the focal point of all departments within the firm. CRM technologies incorporate some of the best-in-class processes for features such as customer service, product configuration, field service, and customer analysis. CRM has become a critical method in the development of customer loyalty and helping businesses obtain a greater profit from low-value customers. The manner in which companies interact with their customers has changed a great deal over the past few years. Customers no longer guarantee that they will stay with companies, and as a result have led companies to make improvements in understanding them, predicting their needs, and decreasing response time in
  2. 2. which they respond to their demands. This is extremely important to retaining customers because “The cost of acquiring a new customer is typically 10 times more than what it takes to retain an existing one.” Most companies are now realizing and understanding the value of collecting customer data but are also faced with the challenges of using this knowledge to create intelligent pathways back to the customer. Most data mining technologies and techniques for recognizing patterns within data help businesses sift through the meaningless data and allow them to anticipate customers’ requirements and expectations, manage channel partnerships and other relationships more profitably. It also enables companies to maintain customer privacy and confidentiality while gaining the benefits of profiling, calculating the economic value of the CRM tool, and discovering the key factors that would make or break the CRM projects for that particular company. However, data mining tools and CRM software together allow users to analyze larger databases that will help them solve business decision problems. Data mining is simply a conservatory of statistics, with a few artificial intelligence and machine learning twists thrown in. It alone is not a business solution; it is just a technology. Customer relationship management, on the other hand, involves transforming the gathered information that is housed inside the database into useful business decisions that eventually will drive customer interactions. For example, consider a clothing catalog retailer who wants to determine to whom they should send current information about new products on the market. The information that is integrated into the data mining and CRM process is contained in a historical database of prior interactions with customers and the features associated with those customers, such as age, zip code, orders, and their responses. These pieces of information are collected each time there is any type of interaction with the customer, whether it be through sales, calls, or complaints.
  3. 3. Our goal is to explain the overall concept of CRM to the class. Most importantly we want to demonstrate the fact that CRM is designed to help businesses utilize their technology and human resources to gain insight into the behavior and value of their customers. In order for a company to be successful and obtain all of the improvements stated above, a decision must first be made on what kind of customer information the company is looking for. The organization must then study the different manners in which information about companies enters the system, where the data is stored, how the data is stored, and how it is used. In order to provide a better understanding of CRM, we have included a number of topics within our presentation such as: a working knowledge of the definition of CRM, data mining and how the two actually work together to produce results for the company, the importance of CRM and why an organization would want to implement it, as well as describing what the current market views are regarding its implementation. Other topics included are terms that are relevant to the understanding of CRM implementation and two case studies that demonstrate how CRM is currently being utilized in a service and sales industry. . Other aspects that are covered are CRM tools, myths and misconceptions, successes and failures, trends, and dos and don’ts. Several companies have been researched, and information will be presented to exemplify the importance of following the standard procedures of implementing CRM. Also covered are the differences of eCRM and CRM. By implementing CRM, a company can achieve several benefits such as providing better customer service, making their call centers more efficient, cross selling products more effectively, helping sales staff close deals faster, simplifying marketing and sales processes, discovering new customers, retaining old customers, and increasing customer revenue. The previous benefits can be achieved if, and only if, companies realize that CRM is extremely
  4. 4. important and is not a fly-by-night implementation. They must thoroughly understand their customers and closely evaluate their existing internal capabilities. Other elements that are needed for a successful implementation are the development of comprehensive CRM strategies, evaluation of required partnerships, and continuous refinement to those existing strategies.

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