Customer relationship management


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For PGDM Marketing students of BK School
Nov 2011

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  • This section builds the case for why CRM is important and reviews the basic theory behind it
  • In other words, customer service expectations are very high. If you don’t meet their expectations, they can go elsewhere with their money, time, attention.
  • Most of our organizations are still operating internally as they were 20 years ago. Structures and resource allocations have not adjusted while the Internet has changed the game. People are still doing their old jobs in addition to their new jobs.
  • This is getting at the heart of CRM– it’s all about making good decisions using good information about your customers.
  • This is the CRM definition. Refer back to these bullets as necessary later in the presentation. Keep tying all of the strategies later back to the core of collecting information and using it to better the customer relationship.
  • Customer is most important in CRM. Everything should be focused on THEM not US. Importance from top to bottom, not vice-versa. Technology should not drive the marketing and marketing should not drive the product. The customer should drive the product and the marketing. Technology is the support of it all.
  • Many organizations, particularly in higher ed, offer what is convenient to their organizations (what faculty want to teach, rather than what students want to learn). College websites often focus more on themselves than on their visitors’ needs.
  • This is an illustration from a study in the automotive industry. It is applicable to any organization. Web 2.0 (social media and the democratization of the web) has accelerated this shift. This is the last slide in this section. Next slide transitions into the organization. Recap what CRM is here after discussing this chart
  • Decisions are made at the top, with little input from those with the most knowledge of customers Information flows top-down, rarely bottom up. Information is also filtered through many layers, so that those at the bottom never truly understand the big picture.
  • Customers don’t think about interacting with your website, they think they are interacting with you. Does your website interact in the same way your people do in-person? Does it reflect the culture and personality of the organization? Is it approachable, easy to use and helpful. If your customers perceive it is not, they feel the same way about your organization.
  • The ideal organization places information at the center. All units of the organization contribute to and share this body of information. This is the last slide in this section.
  • Refer back to the CRM pyramid– technology is at the bottom, the foundation. Many people refer to CRM as THE technology. There are many CRM tools and applications, but without the propoer strategy, they can be useless.
  • These are the stages customers go through in making a purchase decision. Knowing where they are in their decision making helps you know what information and experiences to provide them. For example, your general brand messages are important in generating awareness. Once they know about you, providing more detailed information about your offerings is important. You want to be on a customer’s short list (do you have what I need?) When they’re close to a decision, the 4 Cs or the 4 Ps of marketing become important. When it comes time to make a purchase, so many customers are lost because of poor service. Many websites especially make it very hard to complete the final transaction.
  • As people move through the purchasing stages, their information needs become much more specific and their search much more active.
  • Start with large numbers. Numbers get smaller as they move through the phases. Relationship becomes stronger as they move down as well. Goal is to get people through the funnel.
  • This is dependent on your business processes. You can have as many steps as appropriate. The names of each aren’t as important as understand the needs and communication strategies for each phase.
  • Conversion= converting people from the prior stage to the next stage (from prospect to shopper) It’s important to measure how well you do that at each stage to predict success on later campaigns.
  • Web Evolution – Nova Spivack
  • Source: In the Foursquare example we’ve talked about giving the relevant information to the right consumer. But who are they? A very valid question is whether the way we think about our customers and consumers in general is still relevant or are we seeing changes?
  • There is a big shift in the way we think about personas on the web. Facebook has 400 million users and has recently dropped the initial focus on geographical location as foundation for your personal network. The story “from zero to hero” can become reality now based on a certain achievement or accomplishment. People become internet celebrities (e.g Scoble, Esmee Denters) or highly reputed in their community (e.g. clouderati, twitterati, followers on Twitter) However the big difference with before is that people can have very distinct personas depending on the situation. You can be a blonde babe in second life, in real life have a boring office job and lead a clan in world of warcraft or have hundred thousands of followers on Twitter. They key here is that there is a shift from focusing on the person to focus on the online persona(s).  your facebook or hyves profile is probably different than your linkedin profile. How do you put such a person in a box to target? The information you harvest from his participation in forums, might be actually irelevant to target him when he’s on facebook. Source: Gartner “The Business Impact of Social Computing on Marketing and 'Generation Virtual‘ and Gartner “How to Determine Levels of Engagement for Generation Virtual”
  • © 2008 Capgemini. All rights reserved
  • Source: We are talking about web technologies, Web 2.0, etc. but it is very important that the web is now rapidly changing in a different kind of web that we are familiar with for years. The biggest growth of the web is not the traditional website side, but rather more under the radar. Much more ubiquiutous sipping into our lives. Goal of this section: small mindset shift. Showing some cutting examples that have not been commonly adopted yet.
  • Source:
  • Drivers: Shops don’t have brochures anymore! Broadband adoption Online shopping Research online Visit stores to try and maybe buy What do my friends think Social Media sites are ever more popular Proposition - What if you could use the power of social networks in your dealings with your customers?
  • Customer relationship management

    1. 1. Customer Relationship Management
    2. 2. <ul><li>The Basics of </li></ul><ul><li>Customer Relationship Management (CRM) </li></ul>
    3. 3. <ul><li>Have more choices than ever </li></ul>Expect immediate, high quality, personalized 24-7 service
    4. 4. Are expected to do MORE… with the same or FEWER resources
    5. 5. <ul><li>Plan, program, market, sell and service </li></ul><ul><li>SMARTER </li></ul><ul><li>With faster, better, more personalized service? </li></ul>Good Information
    6. 6. <ul><li>CRM is about… </li></ul><ul><li>finding customers </li></ul><ul><li>collecting info about them along the way </li></ul><ul><li>using that info to enhance their experience and foster long-term relationships </li></ul>
    7. 8. <ul><li>What are their needs? </li></ul><ul><li>Do you offer programs/products in response to their needs? </li></ul><ul><li>… or your organization’s </li></ul><ul><li>convenience? </li></ul>
    8. 9. Source: OSAT
    9. 10. <ul><li>Positioning Your Organization for CRM </li></ul>
    10. 11. <ul><li>Information flow </li></ul>Customer contact Decision-making
    11. 12. <ul><li>Many organizations place customers in the hands of entry-level staff who are… </li></ul><ul><li>Poorly trained </li></ul><ul><li>Poorly paid </li></ul><ul><li>Lacking information to do their jobs </li></ul>
    12. 13. <ul><li>No longer just a communication channel </li></ul><ul><li>Customers interacting with your site are interacting with your business </li></ul><ul><li>Are the people creating your website’s content poorly trained, poorly paid and lacking information? </li></ul>
    13. 15. <ul><li>The Role of Technology in CRM </li></ul>
    14. 16. <ul><li>CRM is a philosophy that is </li></ul><ul><li>supported and enhanced </li></ul><ul><li>by technology </li></ul>
    15. 17. <ul><li>CRM, Marketing Strategy and Measurement </li></ul>
    16. 18. AWARENESS PURCHASE SHOPPING INFO SEEKING What do they know about you? Will you be on their short list? Consider the 4 Cs Customer, cost, convenience, communication How difficult do you make it?
    17. 20. Traditional Marketing Funnel
    18. 22. <ul><li>Goal is to move people through the funnel </li></ul><ul><li>Success measured by conversion rate </li></ul><ul><ul><li># people at one stage/ # people at the prior </li></ul></ul><ul><ul><li>Conversion rates higher as you move down </li></ul></ul><ul><ul><li>May vary by segment, program, strategy,etc. </li></ul></ul><ul><li>On avg 0.5% of strangers become customers </li></ul>
    19. 23. The new age customer is much more informed and much better connected with OTHER customers through the new age WEB 2.0 technologies (eg. Social media).. This has given rise to the concept of Social CRM..
    20. 24. Social Media – Social CRM Source: Rick Mans - Social Media Evangelist
    21. 25. A paradigm shift in internet… Publishing is complex and limited to few traditional media and online merchants Value is created by aggregating content (portals) Easy and free publication for all Value is generated by tools allowing to publish easily Mainly narrow band Mainly Broadband 2004 2005 Traditional media Alternative media Google search Flickr Wikipedia netvibes Web 1.0 Web 2.0
    22. 26. Technology and social factors have converged over the past few years to create a phenomenon called social computing <ul><li>TECHNOLOGY </li></ul><ul><li>Cheap hardware and software reach the masses. </li></ul><ul><li>Simple devices that anyone can operate. </li></ul><ul><li>SOCIAL CHANGE </li></ul><ul><li>Consumers look for cost and time efficient technologies, ways to make their voices heard. </li></ul><ul><li>Younger techno savvy generations pioneer the use of personal networks and viral communication. </li></ul>Source: Forrester (2006) – Social Computing.
    23. 27. Internet statistics <ul><li>100 billion – The number clicks per day </li></ul><ul><li>55 trillion – links on the Internet </li></ul><ul><li>5% - The percentage of global electricity used for the Internet </li></ul><ul><li>90 trillion  – The number of emails sent in 2009 </li></ul><ul><li>81%  – The percentage of emails that were spam. </li></ul><ul><li>200 billion  – The number of spam emails per day (assuming 81% are spam). </li></ul><ul><li>1 million - IM messages per second </li></ul><ul><li>8 terabytes – Traffic per seconde </li></ul><ul><li>234 million  – The number of websites as of December 2009. </li></ul><ul><li>47 million  – Added websites in 2009. </li></ul>
    24. 28. Social Media statistics <ul><li>24 – Hours of video uploaded every minute onto YouTube </li></ul><ul><li>600k - new members on Facebook per day </li></ul><ul><li>900.000 -The number of blogs posts put up every day </li></ul><ul><li>700 million – The number of photos uploaded per day on Facebook </li></ul><ul><li>400 million  – People on Facebook. </li></ul><ul><li>50%  – Percentage of Facebook users that log in every day. </li></ul><ul><li>500,000  – The number of active Facebook applications. </li></ul><ul><li>84%  – Percent of social network sites with more women than men. </li></ul><ul><li>1,73 billion  – Internet users worldwide (September 2009). </li></ul><ul><li>18%  – Increase in Internet users since the previous year. </li></ul><ul><li>126 million  – The number of blogs on the Internet (as tracked by BlogPulse). </li></ul><ul><li>27.3 million  – Number of tweets on Twitter per day (November, 2009) </li></ul><ul><li>57%  – Percentage of Twitter’s user base located in the United States. </li></ul><ul><li>4.25 million  – People following @aplusk (Ashton Kutcher, Twitter’s most followed user). </li></ul><ul><li>1800 – only this many people are following Rick Mans </li></ul>
    25. 29. The Intelligence is in the Connections Connections between people Connections between Information Email Social Networks Groupware Javascript Blogging Databases File Systems HTTP Keyword Search USENET Wikis Websites Directory Portals 2009 Web 1.0 1999 1989 PC Era 1977 RSS Widgets PC’s 2018 Office 2.0 XML RDF SPARQL AJAX FTP IRC SOAP Mashups File Servers Social Media Lightweight Collaboration ATOM Web 3.0 Web 4.0 Semantic Search Lifestreaming Natural Language Search Intelligent personal agents Java SaaS Web 2.0 Flash OWL HTML SGML SQL Gopher P2P The Web The Desktop Windows MacOS SWRL OpenID BBS VR Semantic Web The Internet Social Web Web OS Real-Time Web Intelligent Web Microblogging Memetrackers Online Services Consumer online services Multimedia CDROMs Activity streams Virtual worlds
    26. 32. HUMAN INTERACTION IN A VIRTUAL WORLD <ul><li>Social Media is </li></ul>
    27. 33. who are you? (as a customer)
    28. 34. A new generation <ul><li>Cut and paste Generation : Today’s youth create their own authentic style but combining different styles. </li></ul><ul><li>Generation Search : S=searching and sharing, E=equilibrium, A=achieving, R=rules, C=commitment, H=harmony. </li></ul><ul><li>Digitale Generatie : Todays youth … Jongeren van nu vinden het leven in de virtuele wereld even vanzelfsprekend als daarbuiten; de eerste generatie die opgroeit met digitale media. </li></ul><ul><li>My Media Generation : Today’s youth have three basic needs: community, selfexpression and personalisation; the first 'global' generation That can customize everything to its own taste and wants. </li></ul><ul><li>Generatie Einstein : Todays youth is smarter, stronger and more social: the first positive generation! </li></ul>Generation Y, The Millenials, Digital Natives… the future generations are infinately connected, born and raised digital, and favour values such as connectedness / community, environmental awareness, authenticity, freedom and friendship above all else. What does this mean for a company
    29. 35. Generation V Generation Virtual is used to describe a growing online culture in which people participate, often anonymously, through personas in a flat, virtual environment. Generation Virtual is not defined by age, gender, social demographics or geographic location . It is based on demonstrated accomplishments (merit) and an increasing preference for the use of digital media channels to discover information, build knowledge and share insights. The Business Impact of Social Computing on Marketing and 'Generation Virtual‘ – Gartner ID Number: G00158087
    30. 36. Or in a more visual way Multiple Online Personas
    32. 40. The Internet and its attendant array of consumer devices, networks and content sources have fundamentally changed how customers, employees and partners expect to interact with the enterprise (Gartner CIO survey 2008/2009).
    35. 43. The Historic Focus of CRM projects vs How Customers buy things today
    36. 44. Social CRM
    37. 45. <ul><li>Social CRM is your existing CRM plus the ability to leverage the social web and kick start, manage and ultimately automate the conversation process. Its power lies in the ability for all parts of the organisation but mostly customer services and sales/marketing teams to listen in on conversations (social voyeurism), craft compelling messages , join in on customer conversations (Twitter is being increasingly used in this context) and offer people added value information in real time . </li></ul>
    38. 46. <ul><li>Social CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics , designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. </li></ul><ul><li>It’s the company’s response to the customer’s ownership of the conversation </li></ul>
    39. 48. Building meaningful relationships <ul><li>With your friends and colleagues </li></ul><ul><li>With people you don’t know (yet) </li></ul><ul><li>Build trust </li></ul>
    40. 49. Source: Rick Mans [email_address] +31 6 512 10 144