The document discusses customer relationship management (CRM), describing it as a customer-centric business strategy aimed at maximizing profitability, revenue, and customer satisfaction. It contrasts traditional CRM, which is sales-focused, with modern CRM, which satisfies all customer needs. CRM is important because customers are the main source of income and provide valuable information; retaining existing customers costs less than acquiring new ones. CRM uses information technology like data mining to learn about customers and increase sales and customer loyalty.

1. CREATE THE DIFFERENCE
Customer Relationship Management
Introduction

2. CREATE THE DIFFERENCE
Customer Relationship
Management?
• A customer-centric business strategy with the
key goals of maximizing profitability, revenue,
and customer satisfaction.
• A process concerning the relationship between
an organisation and its customers.

3. CREATE THE DIFFERENCE
Traditional vs. Modern
• The traditional approach to CRM is based
on sales.
• All communication and dealings go via the
sales team and buyer even where both
organisations contain many departments
(distribution, sales, quality, finance, etc).
• traditional customer service is something
'done to' the customer

4. CREATE THE DIFFERENCE
Traditional vs. Modern
• The modern approach to CRM is based on
satisfying all of the needs - people,
systems, processes, etc - across the
customer's organisation
• modern Customer Relationship
Management is 'done with' the customer

5. CREATE THE DIFFERENCE
Why manage customers?
• Customers are the usual source of income
for an organisation.
• Customers are also an exceptional source
of information - information which is vital to
enable a business to succeed; i.e. finding
out what the customer needs!
• The cost of retaining existing customers
through CRM is a tiny fraction of the cost
of acquiring new customers.

6. CREATE THE DIFFERENCE
Business Benefits of CRM
• Customer satisfaction and good CRM will
– Increase customer loyalty
Which will
– maximise Average Revenue Per User
(customer) - ARPU
And
– Increase customer referrals
• The above will increase
– Revenue
– Profit

7. CREATE THE DIFFERENCE
Where does IT come in?
• Where there is Information – IT can help.
• Data mining technologies enable
organisations to:
– find out about customers in terms of
• purchasing habits
• preferences
– profile individuals and groups to market more
effectively and thereby increase sales

8. CREATE THE DIFFERENCE
IT helps to build relationships
by:
• Using data mining to find out about
customers
• Using database technologies to store and
make customer data widely accessible
throughout the organisation
• Using IT to facilitate communication and
to record details of communication

9. CREATE THE DIFFERENCE
Loyalty
• Research has found that a 1% increase in
customer loyalty generates a 25% increase in
profits.
• An example of a business building loyalty is
Tesco PLC who in 1995 launched a loyalty card
called ‘Tesco Clubcard’
• Within the first six months the Clubcard had
increased the businesses six monthly profits by
16% and market share increased by 2.1%

10. CREATE THE DIFFERENCE
Customer Retention
• Customer churn or defection rate is the process
in which customers move from one business to
their competitors
• A loss of a customer means loss of revenue
• The churn rate within competitive markets such
as the mobile telephone sector can be especially
high - anywhere between 20 and 30%
• Customer retention depends on reducing
customer churn.

11. CREATE THE DIFFERENCE
Identifying customers who are
likely to churn
• Use data-mining (neural modelling) to look into
behaviour of past customers who churned eg
– frequency and number of purchases
– Spending
– Range of products purchased
• Use this data to predict loss of valuable
customers well in advance
• Produce an effective retention strategy to
prevent this

12. CREATE THE DIFFERENCE
Preventing a churn
• Possible strategies to prevent a customer
from churning might be
– Special offers
– Discounts
– Enhanced credit limits

13. CREATE THE DIFFERENCE
Personalisation
• An example of personalisation could include
Amazon.com who, once a user has registered
their details and / or made their first purchase
steers its repeat book buyers to other types of
products according to interests they’ve shown in
past purchases
• Through the use of technology the Web site
recognises a user when they return and greets
them accordingly

14. CREATE THE DIFFERENCE
Cross Selling/Upselling
• Cross-selling and up-selling are techniques
used to entice customers to buy all of
their purchases from one business as
oppose to them going to multiple suppliers
• Data Mining can be used to
– explore linkages between products
– Profile or segment customers - find out what
type of customer buys which product.

15. CREATE THE DIFFERENCE
Types of Customer Relationship
Management
• Operational CRM
• Analytical CRM
• Collaborative CRM