People make buying decisions. People have loyalties. Relationships can only be developed between people. A CRM program must be centered around these facts. CRM is an approach to organizing a company’s interactions with their customers that starts with a customer centered point of view.
CRM is an entire discipline, not a single activity. This viewpoint ensures that a company’s plans, activities, and communication that directly touch the customer will be seen as an integrated ‘whole concept’ that supports the company’s promise.
What Is Relationship ManagementCustomer “CRM”Becoming a common and important concept in many industriesBeyond mere ‘Contact Management’Knowing the customer and the Touch pointsSingle undertaking view of customersMost industries have CRM software to help sales process, on-going service, and even accounting
The Value of CRMGain more control in interaction with customersManage expectations betterIncrease trustProvide products that better serve customersUnderstand what customers really wantUnderstand the nature of customer service
CRM StrategiesCustomer Acquisition Gain the greatest number of new “Best” customers as early in their “lifespan” as possible.Customer Retention Retain and expand your business and relationships with your customers through up-selling, cross-selling and servicing.Customer Loyalty Offer programs to ensure that your customers happily buy what you offer only from you.Customer Evangelism Enable loyal customers to become a volunteer sales force.Cost Reduction Reduce costs related to marketing, sales, customer service and support.Improve ProductivityEnhance your e-business strategies.
From the Customer’s Perspective What Is Customer Service? - Anything we do for the customer that enhances the customer experience. What is Customer Satisfaction? - The customer’s overall feeling of contentment with an interaction. What is Customer Expectations? - Customer’s personal vision of the result that is based on their experience. What is Customer Perceptions? - The way customer’s see something based on their experience
Levels of ExpectationsPrimary expectations: the customer’s most basic requirements of an interaction.Secondary expectations: expectations based on our previous experiences that are enhancements to our primary expectations.
A Company with a Good Reputation Is very responsive to customers Is a company you can trust Delivers on its promises to customers Provides excellent value to customers Has excellent communications Is ethical and honest Conducts business in a human/caring way Has excellent top management Is able to adapt to changes in the industry Is a technological leader in the industry Is committed to the environment
Techniques for Exceeding Customers’ExpectationsBecome familiar with your customers.Ask your customers what their expectations are.Tell your customers what they can expect.Live up to their expectations.Maintain consistency.
Cost of Losing a CustomerWe lose the current dollars that our business relationship created.We lose the jobs that our clients provide.We may suffer from a loss of reputation.We may lose the intangible variable of future business.
What to do When You Are WrongReview the situation.Observe the customer’s reaction.Admit the mistake.Apologize for your actions or error.Find a solution and implement it.
Six Super Ways to Cope withChallenging Customers1. Listen2. Ask questions3. Show empathy4. Solve the problem5. Follow up6. End on a positive note
Customer RetentionThe continuous attempt to satisfy and keep current customers actively involved in conducting business. Churn (or Churn Rate)The number of customers who leave a business in a year’s time divided by the number of new customers in the same period.
Defection RateThe percentage of customers who leave a business in one year. Customer Lifetime ValueThe net present value of the profits a customer generates over the average customer life.
Determining the Need for CustomerRelationship Program Is customer retention your primary management objective? Is customer satisfaction measured and assessed regularly? Is there a constant effort to enhance customer satisfaction? Do you measure quality standards and communicate results with your employees? Do you train and retrain your customer service providers? Do you have employee turnover problems? How much do you spend to keep current customers? What is your current cost for acquiring a customer? What is your average annual customer dollar value? What is your current customer defection rate? How do you get lost customers back? Do you constantly deliver what you promise to your customers?
Guidelines for Establishing a Customer-Relationship Program1. Examine who your customers are and what specific needs they have.2. Identify specific objectives to be realized by the program.3. Create a manageable program of customer retention.4. Create a culture that stimulates customer interest.5. Determine a timetable for evaluation.
Sources of Information to MeasureCustomer Satisfaction Informal surveys Comment cards Verbal comments Historical data (point of sale) Sales Corporate generated surveys Discussions with internal customers Focus groups Toll-free phone numbers
A Few Basic CRM Concepts…Market Segmentation Do you treat all of your guests the same? Consider the difference between a guest that stays once ever in a 2 bedroom cottage and a guest that has stayed each of the last 10 years in a 6 bedroom home We shouldn’t treat the one-timer badly, they may come back many more times We should realize that the higher value guest deserves the best that we can offer.
Market Segmentation ExamplesSaks Fifth Avenue High value customers ($2000/yr) are routed to special CSR’s. The calls are routed such that a high value customer is connected to a CSR in one second or less.Could we coin a new acronym here: HVG – High Value Guest?
General StatisticsThe average business never hears from 96% of its unhappy customers, 91% never come back Those people will tell a minimum of 4 other people, Getting a repeat customer from this group is 1 in 11, Dissatisfied customers may tell 9-10 people about their experience, For every positive they tell 4-5 people, For every complaint received the average business in fact has 26 customers with the similar concern,
General Statistics… Of the customers who register a complaint, as many as 70% will do business again with your organization if the complaint is resolved effectively, This figure goes up to 95% if the complaint has been resolved quickly, 40% of complaints are the result from customer mistakes or incorrect expectations, A complaint that is handled efficiently is actually better than no complaint at all, Customers who complain and get satisfactory results are 8% more loyal than if no complaint at all,
Operational and Analytical CRM Operational CRM: effective and efficient use and management of people, process and technology Analytical CRM: the measurement of people, process and technology
People, Process and Technology Start with People
Customer Lifetime ValueR = annual revenue received from a loyal customeri = the relevant interest rate or opportunity cost of money per periodN = the number of periods in which a customer makes purchases
Customer Lifetime Value Go www.benchmarkportal.com to download the excel spreadsheet to calculate Customer Life time Value
SummaryCRM is the strategic use of information, processes, technology and people to manage the customer’s relationship with a company’s (marketing, sales, services and support) across the entire customer cycle.The Plan and Practice of managing the lifetime relationship with your customer
eCRM is the application of CRM to an e-business’ strategy Includes the personalization and customization of customers’ experiences and interactions with the e-businessRelationship between merchant and customers is distantLess expensive to keep customers than to acquire new onesRepeat customers have higher lifetime value than one-time buyers A customer’s lifetime value is the expected amount of profit derived from a customer over a designated length of timeEvaluate the potential to profit from a customer
Tracking and Analyzing Data Employ tracking devices Personalize each visitor’s experience Find trends in customer use Measure the effectiveness of a Web site over time Click-through banner advertisements Click-through advertisements enable visitors to view a service or product by clicking the advertisement Advertisers can learn what sites generate sales
Log-File AnalysisWhen visiting a site, you are submitting a request for information from the site’s server and the request is recorded in a log file Log files consist of data generated by site visits, including each visitor’s location, IP address, time of visit, frequency of visits and other information Log-file analysis organizes and summarizes the information contained in the log files Can be used to determine the number of unique visitors Can show the Web-site traffic effects of changing a Web site or advertising campaign
WebTrends Feature WebTrends provides solutions for tracking visitors User specifies source of log files, types of reports and location where data is stored The analysis is conducted automatically Collected information can be used to evaluate e-commerce methods, customer service and Web-site design Graphical interpretation of the log files can be presented Can view demographic and geographic data, technical analysis of a Web site’s effectiveness and top-referring sites—sites that most frequently refer visitors to your site
Customer RegistrationCustomer registration Requiring visitors to fill out a form with personal information that is then used to create a profile Recommended when it will provide a benefit to the customer When customers log on using usernames and passwords, their actions can be tracked and stored in a database Require only minimum information Give customers an incentive to register Free-trial run or a free demonstration to familiarize the user After customer registration, send an e-mail including customer usernames and welcoming them to your Web site
Intelligent AgentsIntelligent agent A program that can be used on the Web to assist a user in the completion of a specified task, including searching for information and automating tasksCan be used as personalization mechanisms by providing content related to the user’s interestsCan observe Web-surfing habits and purchasing behavior to recommend new products to buy or sites to visitCan help e-businesses offer a level of customer service similar to person-to-person interaction
Contact CentersTraditional call centers house customer-service representatives who can be reached by an 800 numberCall center, e-contact center or multimedia contact center Purpose is the same—to provide a personal customer service experience that is individualized to each customer’s needs and questions Allow customers with Internet access to contact customer service representatives through e-mail, online text chatting or real-time voice communicationsIntegration of all customer service functions
Frequently Asked Questions (FAQs)A Frequently Asked Questions (FAQ) section on the site Will help customers find answers to some of their questions Frees up time for CSRs to handle questions that can not be answered without human interactionSelf-service FAQ software and Web FAQ softwarePlace phone numbers and e-mail addresses nearby FAQInclude a search engine on your site Allowing users to type in a word or phrase to find information on your site relevant to their particular question
e-MailE-mail can provide a less expensive customer service solution Customers can use e-mail to ask questions or comment on your company’s services or productsOnly appropriate if you have resources to handle demandsCustomers may be not be willing to wait long for an e- mail replyIdeally, a response to a customer’s e-mail inquiry should be completed within forty-eight hours
Online Text Chatting Online text chatting Provides a real-time form of communication between customers and service representatives Service representatives may be able to handle more than one text chat at a time Customers can continue to view the Web site as they chat with a service representative Allows the service representative to see what the customers are looking at as they pose their questions
Online Text Chatting“Instantaneous” If representatives are busy with many chat sessions, customer may experience delay in responsesCan lose the dynamics of human communicationthe meaning of a message may be misinterpretedFaceTime Communications, CLICKiCHAT and LivePersonSM
Voice CommunicationsInternet provides another channel for human-to-human voice communicationVoice over Internet Protocol (VoIP) VoIP products and applications allow people to communicate with speech over the InternetInternet telephony allows people to make phone calls over the Internet Quality of transmission yet to match regular telephone Many companies are using PC-to-phone communication because it is of higher quality than PC-to-PC A person speaks from a computer to another person who responds through another computer
Voice Communications PC-to-phone (computer-to-phone) voice communication Allows a visitor to a Web site to continue browsing while talking to a customer-service representative over the Internet Allows dial-up Internet users who have only one phone line to chat with a CSR without having to disconnect from the Internet HearMe, RealCall, Web Call Back and ITXCWizard Software program that walks you through the steps needed to complete a task on your computer
Business-to-Business e-CRM Key to (B2B) e-commerce is effective (CRM) When selling to another business, you may be selling to someone who is not the direct user of your product Ask your contact to speak with the end users Developing good partner relationship management (PRM) includes increasing efficiency in operations and processes between a business and its partners Partners can include resellers, distributors and businesses that improve your product or service Integrating systems to combine selling, buying and marketing operations of partners will streamline processes and provide technical conformity ChannelWave Software, Inc., Allegis and Partnerware
An example The Elements of CRM Sales Customer service/call Marketing force center management automation automation Call center telephone sales Call Centers Campaign Managing aspects management E-commerce Of customer contact Field sales Web-based Content Retail self service management Data analysis Third-party brokers, Field services And business Distributors, agents and dispatch Intelligence tools Data warehouse and data cleaning tools*Source: Computerworld