It is the expected profit that you will realize from sales to a particular customer in the future. Although it builds on past customer history, LTV is all about the future.
Compiled by :Navita Khanna
CRM is a strategy by which companies optimise profitability through enhanced customer satisfaction. CRM is about automating and enhancing the customer- centric business processes of Sales, Marketing, and Service. CRM also focuses on added customer loyalty that directly affects the organization’s bottom line.
CRM Evolution Cost Reduction Strategy Growth StrategyBPR ERP SFA CRM eCRMBusiness Led IT Led Marketing Led 1980s 1990s 2000s
ECRM is the customer focussed management of thewhole eBusiness relationship with each customer, inorder to measure, create and increase income andreduce costs for each customer & segment and thus togenerate greater positive lifetime value.Put simply, eCRM means CRM-database access via the Web. Itmeans Intranet access forinternal users, extranet accessfor business partners andcustomers and ofcourse, Internet access for themarket at large.
e-CRM expands the traditional CRMtechniques by integrating new electronicchannels, such as Web, wireless, and voicetechnologies and combines it with e-businessapplications into the overall enterprise CRMstrategy. Traditional CRM + Internet = e-CRM
Due to the introduction of new technology Due to globalization Changing customer attitudes and expectations To gain competitive advantage To measure, create and increase income for the business To reduce costs
Technical e-CRM CapabilitiesCustomer Campaign Real Time Data Mining Business Analytic Management Decision Software SimulationSoftware Software Engine
Technical e-CRM Capabilities Customer analytic software predicts, measures, and interprets customer behaviors, allowing companies to understand the effectiveness of e-CRM efforts. Data mining software builds predictive models to identify customers most likely to perform a particular behavior. Campaign management software leverages the data warehouse to plan and execute multiple, highly targeted campaigns overtime, using triggers that respond timed events and customer behaviour. Business simulation used in conjunction with campaign management software optimises offer; messaging and channel delivery prior to the execution of campaigns, and compares planned costs and ROI projections with actual results. A real time decision engine coordinates and synchronises communications using business intelligence.
The customer-centric information store Consolidates information about millions of customers together with preferences, permissions, and information that may be useful to them. The analysis and segmentation engine Helps in leveraging this customer information to build a business campaign strategy and evaluate its success.The personalisation engineHelps in personalising the entire customerexperience, configuring unique sets of messages and offers toeach customer.
The broadcast engine Helps to proactively deliver information and offers to every customer via the media of his or her choice. The transaction engine Helps to facilitate the interactions between customer and the company, either exchanging information or driving transactions. Equipped with such infrastructure, companies can continuallycreate significant customer value at Internet speed, automating the―who, what, when, where, and how of sales and marketing‖.
An organization should plan for e-CRM if it aims on anyof the following goals – Better levels of customer service More effective customer lifecycle management A single ‗360 degree‘ customer view Higher sales (better conversion rates etc.) User-generated content Site ‗stickiness‘ Increased customer switching costs Decreased costs (through customer self service etc.) Reduce customer acquisition costs Improve customer retention
7 C‘s of effective e-CRM Context Content Community Customization Communication Connection Commerce
I. Terms of ReferenceEveryone needs to be clear on what they understand bye-CRM for the project and why they consider e-CRM isgoing to be of benefit.II. Commercial ScopeWhat is the realistic scope and likely ROI for the initiative?III. Customer InsightThe better you know your customers, or get to knowthem, the better you will be able to serve them. Who are your current and future customers? How much do you currently know about them? What are your points of contact with them? How do they perceive you etc.?
IV. Data Capture & Analysis What data you will need to support your digital strategy? How you are going to capture that data? How you will store, manage and use that data?V. Business Case & Implementation Path How do you best roll out and phase the implementation of your e-CRM initiative? How do you ensure you build a platform for future growth and yet not spend too long and too much money trying to do everything at once? What is your optimal cost / ROI development path in light of your digital strategy?VI. Do & Review
A Forrester Research study of 70 retailers found that conveniencewas the number one ranked reason (84%) for purchasing on-lineversus off-line. A study by the Boston Consulting Group found that 65% of on-linecustomers who purchase at a given web site will never make asecond purchase. A recent McKinsey & Co. study revealed that a 10% gain in repeatcustomers can add about 10% to the company‘s profits. Typically costs 5 times as much to acquire a new customer as itdoes to retain an existing one.The best way to keep existing customers happy is to deliver value tothem on their own terms.
Oracle 1India‘s Demand Products 2 Top 5e-CRMs SAP CRM 3 MS Dynamics 4 CRM Sage 5
Good integration with Microsoft Office Products Reasonable sales force automation Strong technology & architecture Strong partner delivery networkMS Dynamics CRM Heavy browser architecture - fat client Not taken seriously in the SaaS market place Titan is Microsofts first attempt at hosted CRM Weak marketing and customer support Lacks functionality depth
CRM integrates to Oracle Financials Nice dashboard Good data warehousing (lacks flexibility, but good presentation) Strong sales force automation (SFA) OracleOn-Demand Not as strong marketing automation or customer service Lacks deep functionality offered by some other hosted vendors Offline version is pretty bad Allegedly poor customer service and turnover
Backing by the largest application software vendor in the world Isolated tenancy hosted delivery model is a welcome change from most other hosted CRM vendorsSAPCRM The product is new, shallow and comparatively weak when compared to other hosted CRM vendors; however, offers much broader and powerful ERP capabilities.