Lecture Slides 11 05 08


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Lecture Slides 11 05 08

  1. 1. ITM 309 Customer Relationship Management Dr. Frederick Rodammer Michigan State University Eli Broad College of Business [email_address] November 5, 2008
  2. 2. Today’s Learning Objectives <ul><li>Understand the definition and the basic principles of Customer Relationship Management (CRM) </li></ul><ul><li>Discuss the Mini Customer First Case </li></ul><ul><li>Understand operational and analytical customer relationship management </li></ul>
  3. 3. OPENING CASE Mini Cooper – Customer First <ul><li>How could Mini’s sales department and/or customer service department use CRM technology to improve its operations? </li></ul><ul><li>How could analytical CRM be applied to benefit companies like Mini ? </li></ul><ul><li>How might Mini’s business model change if it decreased its investments in CRM technologies? </li></ul>
  4. 4. CUSTOMER RELATIONSHIPS <ul><li>What happens if our customers are not satisfied and relationships are poor ? </li></ul><ul><li>What happens if our customers are delighted and relationships are great ? </li></ul><ul><li>What ideas do you have to establish superior relationships with customers ? </li></ul>
  5. 5. Customer Relationship Management: Definition The use of information technology to create a cross-functional enterprise system that integrates and automates many of the customer-serving processes in sales, marketing, and customer services that interact with a company’s customers
  6. 6. Customer Relationship Management <ul><li>Provides customer-facing employees with a single, complete view of every customer at every touch point </li></ul><ul><li>Provides customers with a single complete company view </li></ul><ul><li>Integrates and automates many customer processes </li></ul><ul><li>Creates an IT framework of Web-enabled software and databases that integrates front office with back office </li></ul><ul><li>Includes many software modules and tools </li></ul>
  7. 7. CRM Benefits <ul><li>CRM allows a business to identify and target their best customers so they can be retained as lifelong customers for greater and more profitable services. </li></ul><ul><li>CRM makes possible real-time customization and personalization of products and services based on customer wants, needs, buying habits, and life cycles. </li></ul><ul><li>CRM can keep track of when a customer contacts the company, regardless of the contact point . </li></ul><ul><li>CRM systems can enable a company to provide a consistent customer experience and superior service and support across all the contact points a customer chooses. </li></ul>
  8. 8. BUSINESS BENEFITS OF CRM <ul><li>CRM enables an organization to: </li></ul><ul><ul><li>Provide better customer service </li></ul></ul><ul><ul><li>Make call centers more efficient </li></ul></ul><ul><ul><li>Cross sell products more effectively </li></ul></ul><ul><ul><li>Help sales staff close deals faster </li></ul></ul><ul><ul><li>Simplify marketing and sales processes </li></ul></ul><ul><ul><li>Discover new customers </li></ul></ul><ul><ul><li>Increase customer revenues </li></ul></ul>
  9. 9. CRM BASICS <ul><li>Organizations can find their most valuable customers through “RFM” - R ecency, F requency, and M onetary value </li></ul><ul><ul><li>How recently a customer purchased items (Recency) </li></ul></ul><ul><ul><li>How frequently a customer purchased items (Frequency) </li></ul></ul><ul><ul><li>How much a customer spends on each purchase (Monetary Value) </li></ul></ul>
  10. 10. The Evolution of CRM <ul><li>Three phases in the evolution of CRM include reporting, analyzing, and predicting </li></ul>
  11. 11. The Evolution of CRM <ul><li>CRM reporting technology – help organizations identify their customers across other applications </li></ul><ul><li>CRM analysis technologies – help organization segment their customers into categories such as best and worst customers </li></ul><ul><li>CRM predicting technologies – help organizations make predictions regarding customer behavior such as which customers are at risk of leaving </li></ul>
  12. 12. The Evolution of CRM
  13. 13. Operational and Analytical CRM <ul><li>Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers </li></ul><ul><li>Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers </li></ul>
  14. 14. MINI CASE: ANALYTICAL CRM <ul><li>Personalization – when a Web site knows enough about a persons likes and dislikes that it can fashion offers that are more likely to appeal to that person </li></ul><ul><li>Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behavior </li></ul><ul><li>These systems quickly aggregate, analyze, and disseminate customer information throughout an organization </li></ul>
  15. 15. ITM 309 Homework <ul><li>Do great with your Team Projects ! </li></ul><ul><li>Check ANGEL for your grades </li></ul><ul><li>Assignment #5 due November 19-20 </li></ul>