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CRM
Business Challenges
 Businesses in many industries may lose up 50% of their
  customers over a five year period.

 Studies have shown it’s 6 to 7 times more expensive to
  acquire a new customer than it is to retain a current
  customer.

 As little as a 5% increase in customer retention can
  increase profits by 25 to 95%.

 Yet many businesses are still focused only on customer
  acquisition and see customers from the fragmented view
  of individual transactions
Cost of new customer acquisition
≈7-8 times of retaining current
customers                                  Customer Relationship
(Yankee Research – global connectivity         Management
experts)

50% current customers do not
contribute to profit
(AMR Research)
Top 20% customers contribute 60%
of revenue and 70% of profit
 20 : 80 rule
Fortune 500 companies will lose
50% of customers in 5 years
(Peppers & Rogers Group)
Only 4% of unsatisfied customer
complain. 65~90% do not repurchase
(Anderson Consulting)
 82% of customers whose complaints
 resolved repurchased
                                             Customer is important
 98% coupon are scrapped.
                                         Analysis on Customers essential
Customer is
      There is only one boss. The customer!
      He can fire everybody in the company, from the
      chairman on down, simply by spending his money
      somewhere else.
                              Sam Walton,
                           founder of Wal-Mart



      When products become so similar and
      technologies are commonly available ,
      CUSTOMER EXPERIENCE is the only true
      differentiator
Today’s customer is …

•   Smarter
•   leaner
•   more price conscious
•   has lower morale
•   overwhelmed by competitors
•   more demanding
•   less forgiving
•   harder to satisfy
•   less loyal
Core Marketing Concepts
A fundamental paradigm shift is occurring
    in how company market to customers.


    What's In                What's Out
One-to-One Marketing      Mass Marketing
Customized Products       Standardized Products
Share of Wallet           Market Share
Life Time Value           Present Value
Event Driven Marketing    Program Driven Marketing
Know Your Customers       Know Your Products
Manage Your Customers     Manage Your Products
Differentiate Customers   Differentiate Products
Cross-sell / Retention    Acquisition
l0% of Market, l00% of    100% of Market, 10% of
Customer                  Customer
What CRM means?


   Customer ?
   Relationship ?

    Channels of interaction, segmentations
   Management?

    organization of customer related information
Relationships with whom?


All stakeholders including
   Customer
   Employees
   Suppliers
   Government
   Citizens
I focus on Customers here.
The Customer Relationship Management (CRM).
The Meaning of Relationships


   Continuity
   Mutuality
   Interdependence
   Understanding
   Trust
Three simple business goals of CRM



                             Acquire the „right“
                                                                                  Customer
Value of customer relation




                              customers with
                               high potential                                     Retention
                                   value
                                                      Customer
                                                     Development




                                                       Cross- and up-           Retain profitable
                               Customer                sell by offering          customers and
                               Acquisition           the right products           increase their
                                                      at the right time         long-term value

                                            Evolution of customer relation over time
The process of
 Targeting
 Acquiring
 Servicing
 Retaining
  and
 Building long-term relationships with
  customers
CRM Versus Mass Marketing


  Traditional
  Traditional
     Mass         “Shotgun” Approach
                   “Shotgun” Approach
     Mass
   Marketing
   Marketing



     CRM
     CRM            “Rifle” Approach
                     “Rifle” Approach
Define customer
relationship management
CRM is NOT…
1. …a technology.”
    • “CRM is just a new system to install, new code to write.”

2. …sales force automation (SFA).”
    • “CRM is just a business development process for our salespeople.”

3. …customer loyalty.”
    • “CRM is a synonym for customer loyalty.”

4. …database marketing.”
    • “CRM just allows us to leverage our customer data better.”

5. …call center technology.”
    • “CRM is just a way to cut costs in the call center.”

6. …a project.”
    • “We can install CRM in 30 days with this team of three!”

7. …a producer of intangible benefits.”
    • “You just can’t measure relationship management concretely.”

8. …a business panacea.”
    • “Just install the software … apparently it solves problems.”
CRM is a customer-focused
     business philosophy designed to
     effectively create experiences
     that attract, acquire and retain
     customers.

                                          To realize the benefits,
             enterprises must implement collaborative processes
and technologies that support customer interactions throughout all
                                                        channels.
CRM ?


      A company-wide business strategy
        designed to optimize profitability,
   revenue, and customer satisfaction by
  focusing on highly defined and precise
                       customer groups.
Customer Relationship Management

“..an enterprise approach to understanding
and influencing communications in order
to improve customer acquisition, customer
retention, customer loyalty, and customer
profitability.”
Customer-centric


        Under this philosophy, the company
        customizes its products and service
 offering based on data generated through
interactions between the customer and the
                                   company
CRM Definitions


                                             An data-driven approach that
  An enterprise wide business
                                          enables companies to assess each
strategy designed to optimize
profitability, revenue and customer       customer’s current needs and potential
                                          profitability and tailor sales offers and
satisfaction by organizing the
enterprise around customer segments,      service. It often involves using multiple
                                          channels to improve effectiveness and
fostering customer-satisfying behaviors
                                          efficiency. (Goff et al. 1998 Mckinsey
and linking processes from customers
through supplies. (Gartner Group)         Quarterly, No3)


  A management discipline utilizing         An enterprise approach to
specialized tools, technologies, and      understanding and influencing
techniques to facilitate the operation    customer behavior through
and improvement of front-office           continuous relevant communication to
business functions with the intent of     improve customer acquisition,
optimizing the total value derived        customer retention, and customer
through customer relationship. (Pivotal   profitability. (NCR corps.,1999)
software Inc. 1999)
What is CRM?

 Organizing Around
 Organizing Around         Tracking Interactions
                           Tracking Interactions
     Segments
     Segments

Fostering Satisfaction
Fostering Satisfaction      Linking Processes
                            Linking Processes




              Special Promotions
              Special Promotions
                   Targeting
                   Targeting
             Markets and Individuals
             Markets and Individuals
People - Belief that your customers and employees are
your most important asset and that long-term survival
depends on these relationships.

Process - Structuring your organization and business
processes to support the culture.

Technology - Automating and integrating business
processes to capitalize on the culture.
CRM is a Management Tool, encompassing all
 functions, for focusing on the customer


                             Sales
             Service
                                        Marketing
       Mfg
                                          Product
                                          Planning
        Purchasing
                                     Spares
                       R&D

CRM is a set of operating business processes built around
                       the customer
CRM is the front end (customer facing) activity. It needs to be firmly
supported by all other back-end processes.

                              CRM




                     ERP                     FAST FWD
                           SCM               R&D
                                 MFG
                          PURCHASING

     All improvement initiatives under the CRM Umbrella
Makes Four Marketing Dreams Come True

1.   Dream to target and serve customers on an individual
     basis ( prefer 1 to1 marketing to mass marketing.
2.   Dream to enjoy log term relationships with them,
     especially with the profitable customers (preferring
     commitment to flirting).
3.   Dream to get rid of barriers and distortions created by
     the non-value adding intermediaries (preferring
     disintermediarization and direct marketing)
4.   Dream to reduce marketing cost progressively.
Architecture of CRM


   There are three parts of application architecture of CRM:

   operational - automation to the basic business processes
    (marketing, sales, service)

   analytical - support to analyze customer behavior, implements
    business intelligence alike technology

   co-operational - ensures the contact with customers (phone,
    email, fax, web, sms, post, in person)
Operational CRM

 Operational CRM means supporting the so-called "front office"
  business processes, which include customer contact (sales,
  marketing and service)

 Operational part of CRM typically involves three general areas of
  business:
 Sales force automation (SFA)
 Customer service and support (CSS)
 Enterprise marketing automation (EMA)
Analytical CRM

 Data gathered within operational CRM are analyzed to segment
  customers or to identify cross- and up-selling potential.



Collaborative CRM

 Collaborative CRM facilitates interactions with customers through
  all channels (personal, letter, fax, phone, web, e-mail) and
  supports co-ordination of employee teams and channel.
CRM Components


                                         Closed Loop Processing




          Operational CRM                                                     Analytical CRM
   Business Operation Management                    Planning/        Business Performance Management
                                                    Analysis
                                           Action               Marketing data   Sales Data   Customer Data
Marketing      Sales       Service
                                                                   Analysis       Analysis       Analysis

                                                Feed
                                                Back




                                         Collaborative CRM
                                   Customer Interaction Management

                               Web            Call Center   Web Sales
                          Personalization     Automation    & Service
Add Customer Attrition to the P&L Sheet
Components of 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
Value                                         Value




                         Segmentation




                                                                     Segmentation
                                        Conversion
          Member                                       Customer
Retain




         Communication                               Communication




                    Bridge the divide….
Customer is




        KING
  Understand him !!!


Bottom-line !!!!
How to build Loyalty?


                         Framework of building Loyalty

                                                           Degree of
               Drivers               Phased Elements
                                                          Relationship

                Improving
                                        Customer              Attitude,
          Core Products/Service
                                       Satisfaction          not Action
       Innovation of Channel Mgmt.



           Reward Program               Repurchase       Action, not Affinity   Customer
CRM      /Continuing Campaign         / Cross-selling    (Artificial Loyalty)
                                                                                 Loyalty

                                                           Recognition
                                           Trust/
             (CR Strategy)                                of Relationship,
                                         Intimacy
                                                              Referral
A Brand-Infused Causal Model
Loyalty-the customer-facing tip of the
                   CRM Iceberg

    Increase
   Cross-sell                                 Encourage
                         Loyalty              Multi-channel
                                              Buying

                           CRM
 Encourage                                       Identify
     WOM                                         Customers at
(word of mouth)   Customer Direct                all Touchpoints
                  Communications
Increase Email     (email, postcards, etc.)
 Click-thru and                               Increase Re-buy
    Open Rates                                Rates
Organization
Customers
Touchpoints

 Field Sales

  Website

    Email

 Call Center

     POS

 Traditional Mail


    Retail

      Fax

     PDA
Field Sales
                     Sales
 Website

   Email
                   Marketing
Call Center

    POS
                    Service
Traditional Mail


   Retail           Finance

     Fax
                   Production
    PDA
Field Sales
                     Sales
 Website

   Email
                   Marketing
Call Center

    POS
                    Service
Traditional Mail


   Retail           Finance

     Fax
                   Production
    PDA
Field Sales
                           Sales
 Website

   Email
                         Marketing
Call Center

    POS
                   CRM    Service
Traditional Mail


   Retail                 Finance

     Fax
                         Production
    PDA
Process, Technology, People

    Field Sales
                                               Sales
     Website           Selling Knowledge
                       Product Knowledge
       Email           Solutions Knowledge
                       Customer Knowledge    Marketing
    Call Center

        POS
                              CRM             Service
    Traditional Mail


       Retail                                 Finance

         Fax
                                             Production
        PDA
That’s is the introduction and familiarization with
CRM…

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Session 1 & 2 introduction & evolution

  • 1. CRM
  • 2. Business Challenges  Businesses in many industries may lose up 50% of their customers over a five year period.  Studies have shown it’s 6 to 7 times more expensive to acquire a new customer than it is to retain a current customer.  As little as a 5% increase in customer retention can increase profits by 25 to 95%.  Yet many businesses are still focused only on customer acquisition and see customers from the fragmented view of individual transactions
  • 3. Cost of new customer acquisition ≈7-8 times of retaining current customers Customer Relationship (Yankee Research – global connectivity Management experts) 50% current customers do not contribute to profit (AMR Research) Top 20% customers contribute 60% of revenue and 70% of profit  20 : 80 rule Fortune 500 companies will lose 50% of customers in 5 years (Peppers & Rogers Group) Only 4% of unsatisfied customer complain. 65~90% do not repurchase (Anderson Consulting) 82% of customers whose complaints resolved repurchased Customer is important 98% coupon are scrapped. Analysis on Customers essential
  • 4. Customer is There is only one boss. The customer! He can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else. Sam Walton, founder of Wal-Mart When products become so similar and technologies are commonly available , CUSTOMER EXPERIENCE is the only true differentiator
  • 5. Today’s customer is … • Smarter • leaner • more price conscious • has lower morale • overwhelmed by competitors • more demanding • less forgiving • harder to satisfy • less loyal
  • 7. A fundamental paradigm shift is occurring in how company market to customers. What's In What's Out One-to-One Marketing Mass Marketing Customized Products Standardized Products Share of Wallet Market Share Life Time Value Present Value Event Driven Marketing Program Driven Marketing Know Your Customers Know Your Products Manage Your Customers Manage Your Products Differentiate Customers Differentiate Products Cross-sell / Retention Acquisition l0% of Market, l00% of 100% of Market, 10% of Customer Customer
  • 8. What CRM means?  Customer ?  Relationship ? Channels of interaction, segmentations  Management? organization of customer related information
  • 9. Relationships with whom? All stakeholders including  Customer  Employees  Suppliers  Government  Citizens I focus on Customers here. The Customer Relationship Management (CRM).
  • 10. The Meaning of Relationships  Continuity  Mutuality  Interdependence  Understanding  Trust
  • 11. Three simple business goals of CRM Acquire the „right“ Customer Value of customer relation customers with high potential Retention value Customer Development Cross- and up- Retain profitable Customer sell by offering customers and Acquisition the right products increase their at the right time long-term value Evolution of customer relation over time
  • 12. The process of  Targeting  Acquiring  Servicing  Retaining and  Building long-term relationships with customers
  • 13. CRM Versus Mass Marketing Traditional Traditional Mass “Shotgun” Approach “Shotgun” Approach Mass Marketing Marketing CRM CRM “Rifle” Approach “Rifle” Approach
  • 15. CRM is NOT… 1. …a technology.” • “CRM is just a new system to install, new code to write.” 2. …sales force automation (SFA).” • “CRM is just a business development process for our salespeople.” 3. …customer loyalty.” • “CRM is a synonym for customer loyalty.” 4. …database marketing.” • “CRM just allows us to leverage our customer data better.” 5. …call center technology.” • “CRM is just a way to cut costs in the call center.” 6. …a project.” • “We can install CRM in 30 days with this team of three!” 7. …a producer of intangible benefits.” • “You just can’t measure relationship management concretely.” 8. …a business panacea.” • “Just install the software … apparently it solves problems.”
  • 16. CRM is a customer-focused business philosophy designed to effectively create experiences that attract, acquire and retain customers. To realize the benefits, enterprises must implement collaborative processes and technologies that support customer interactions throughout all channels.
  • 17. CRM ? A company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups.
  • 18. Customer Relationship Management “..an enterprise approach to understanding and influencing communications in order to improve customer acquisition, customer retention, customer loyalty, and customer profitability.”
  • 19. Customer-centric Under this philosophy, the company customizes its products and service offering based on data generated through interactions between the customer and the company
  • 20. CRM Definitions An data-driven approach that An enterprise wide business enables companies to assess each strategy designed to optimize profitability, revenue and customer customer’s current needs and potential profitability and tailor sales offers and satisfaction by organizing the enterprise around customer segments, service. It often involves using multiple channels to improve effectiveness and fostering customer-satisfying behaviors efficiency. (Goff et al. 1998 Mckinsey and linking processes from customers through supplies. (Gartner Group) Quarterly, No3) A management discipline utilizing An enterprise approach to specialized tools, technologies, and understanding and influencing techniques to facilitate the operation customer behavior through and improvement of front-office continuous relevant communication to business functions with the intent of improve customer acquisition, optimizing the total value derived customer retention, and customer through customer relationship. (Pivotal profitability. (NCR corps.,1999) software Inc. 1999)
  • 21. What is CRM? Organizing Around Organizing Around Tracking Interactions Tracking Interactions Segments Segments Fostering Satisfaction Fostering Satisfaction Linking Processes Linking Processes Special Promotions Special Promotions Targeting Targeting Markets and Individuals Markets and Individuals
  • 22. People - Belief that your customers and employees are your most important asset and that long-term survival depends on these relationships. Process - Structuring your organization and business processes to support the culture. Technology - Automating and integrating business processes to capitalize on the culture.
  • 23. CRM is a Management Tool, encompassing all functions, for focusing on the customer Sales Service Marketing Mfg Product Planning Purchasing Spares R&D CRM is a set of operating business processes built around the customer
  • 24. CRM is the front end (customer facing) activity. It needs to be firmly supported by all other back-end processes. CRM ERP FAST FWD SCM R&D MFG PURCHASING All improvement initiatives under the CRM Umbrella
  • 25. Makes Four Marketing Dreams Come True 1. Dream to target and serve customers on an individual basis ( prefer 1 to1 marketing to mass marketing. 2. Dream to enjoy log term relationships with them, especially with the profitable customers (preferring commitment to flirting). 3. Dream to get rid of barriers and distortions created by the non-value adding intermediaries (preferring disintermediarization and direct marketing) 4. Dream to reduce marketing cost progressively.
  • 26. Architecture of CRM  There are three parts of application architecture of CRM:  operational - automation to the basic business processes (marketing, sales, service)  analytical - support to analyze customer behavior, implements business intelligence alike technology  co-operational - ensures the contact with customers (phone, email, fax, web, sms, post, in person)
  • 27. Operational CRM  Operational CRM means supporting the so-called "front office" business processes, which include customer contact (sales, marketing and service)  Operational part of CRM typically involves three general areas of business:  Sales force automation (SFA)  Customer service and support (CSS)  Enterprise marketing automation (EMA)
  • 28. Analytical CRM  Data gathered within operational CRM are analyzed to segment customers or to identify cross- and up-selling potential. Collaborative CRM  Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channel.
  • 29. CRM Components Closed Loop Processing Operational CRM Analytical CRM Business Operation Management Planning/ Business Performance Management Analysis Action Marketing data Sales Data Customer Data Marketing Sales Service Analysis Analysis Analysis Feed Back Collaborative CRM Customer Interaction Management Web Call Center Web Sales Personalization Automation & Service
  • 30. Add Customer Attrition to the P&L Sheet
  • 31. Components of 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
  • 32. Value Value Segmentation Segmentation Conversion Member Customer Retain Communication Communication Bridge the divide….
  • 33. Customer is KING Understand him !!! Bottom-line !!!!
  • 34. How to build Loyalty? Framework of building Loyalty Degree of Drivers Phased Elements Relationship Improving Customer Attitude, Core Products/Service Satisfaction not Action Innovation of Channel Mgmt. Reward Program Repurchase Action, not Affinity Customer CRM /Continuing Campaign / Cross-selling (Artificial Loyalty) Loyalty Recognition Trust/ (CR Strategy) of Relationship, Intimacy Referral
  • 36. Loyalty-the customer-facing tip of the CRM Iceberg Increase Cross-sell Encourage Loyalty Multi-channel Buying CRM Encourage Identify WOM Customers at (word of mouth) Customer Direct all Touchpoints Communications Increase Email (email, postcards, etc.) Click-thru and Increase Re-buy Open Rates Rates
  • 37.
  • 39. Touchpoints Field Sales Website Email Call Center POS Traditional Mail Retail Fax PDA
  • 40. Field Sales Sales Website Email Marketing Call Center POS Service Traditional Mail Retail Finance Fax Production PDA
  • 41. Field Sales Sales Website Email Marketing Call Center POS Service Traditional Mail Retail Finance Fax Production PDA
  • 42. Field Sales Sales Website Email Marketing Call Center POS CRM Service Traditional Mail Retail Finance Fax Production PDA
  • 43. Process, Technology, People Field Sales Sales Website Selling Knowledge Product Knowledge Email Solutions Knowledge Customer Knowledge Marketing Call Center POS CRM Service Traditional Mail Retail Finance Fax Production PDA
  • 44. That’s is the introduction and familiarization with CRM…

Editor's Notes

  1. So what exactly in the customer will guide us?
  2. THIS IS THE SCARY PART! So how do you make this guy more loyal? Through a relationship!
  3. This is our official definition of CRM, To fully realize the benefits of CRM an organization must become truly customer focused.
  4. 주제 : CRM 의 정의 및 CRM 에 포함된 업무 내용 , 무엇을 하는 일이다 . 1. CRM 의 정의는 한마디로 - 회사의 수입원이라 할 수 있는 우수 고객을 파악하고 유지하는 활동 . 이며 , 이 활동에는 영업 , 서비스 , 마케팅 업무프로세스가 포함되어 있습니다 . 2. 그러므로 CRM 은 고객관련 조직 , 활동에 대한 업무프로세스 및 IT 사항을 고객 위주로 재편성 하는 것 임 .
  5. It is a combination of People (Culture), Process and then Technology. I have seen many companies attempt to apply new CRM technology to solve a customer service problem where the problem was not with the existing technology, but with the customer service processes. I have seen great sales force automation software placed on salespeople’s laptops in an attempt to help them become more efficient. Only to have them reject the software because it was perceived as a ‘Big Brother’ system. (they actually nicknamed it that!) “ If departments in your company do not believe that sharing information with other departments is going to improve customer service then NO technology solution will solve the problem.” HOW IS TECHNOLOGY VIEWED IN YOUR ORGANIZATION – IS IT VIEWED AS AN ENABLER?
  6. How Are We Doing? Please let us know if this meets your needs, how you use it, what you would add, delete, or change, and other “training nugget” subjects you would like to have. Thanks! Suggestions and requests to: Commander, Navy Installations Command F&FR Training Branch, N947 5720 Integrity Drive Millington, TN 38055-6540 Com: (901) 874-6727 DSN: 882-6727 [email_address]