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MIS 13 Customer Relationship Management

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The slides are created for 'Management Information System' subject of SEIT under University of Pune, INDIA.
Subject Teacher: Mr. Tushar B Kute,
Sandip Institute of Technology and Research Centre, Nashik.

Published in: Education, Business, Technology

MIS 13 Customer Relationship Management

  1. 1. Management information system<br />Third Year Information Technology<br />Part 13<br />Customer Relationship Management <br />Tushar B Kute,<br />Sandip Institute of Technology and Research Centre, Nashik<br />http://www.tusharkute.com<br />
  2. 2. CRM<br />Of the people, by the people, and for the people.<br />
  3. 3. Three Eras in the History of Marketing<br />Production Era <br />“A good product will sell itself.”<br />Sales Era<br />“Creative advertising and selling will overcome consumer resistance and convince them to buy.”<br />Marketing Era<br />“The consumer is king! Find a need and fill it.”<br />
  4. 4. Profitability of Long-Life Customers <br />According to a study conducted by the American Management Association, 65 percent of the average company’s business comes from its present, satisfied customers <br />Costs a company 6x’s more to sell a product to a new customer than it does to an existing one<br />
  5. 5. Profitability of Long-Life Customers<br />A business that each day for one year loses one customer who customarily spends $50/week would suffer a sales decline of $1,000,000 the next year <br />Reichheldfound that companies could boost profits by 100 percent by retaining just 5 percent more of their customers.<br />
  6. 6. Relationship Marketing<br />Relationship marketing involves long-term, value-added relationships developed over time with customers and suppliers. <br />Relationship marketing recognizes the critical importance of internal marketing to the success of external marketing plans.<br />
  7. 7. Relationship Marketing<br />Morgan and Hunt (1994) proposed the following definition of relationship marketing: <br />Relationship marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relationship exchanges <br />
  8. 8. Customer Relationship Management<br />“Process of creating and maintaining relationships with business customers or consumers”<br />“A holistic process of identifying, attracting, differentiating, and retaining customers”<br />“Integrating the firm’s value chain to create enhanced customer value at every step”<br />“An integrated cross-functional focus on improving customer retention and profitability for the company.”<br />“A view of the customer that asserts that he or she is a valuable asset to be managed.” –S. Thomas Foster.<br />Deciding that “you want lifetime clients.” -Richard Buckingham.<br />
  9. 9. Customer Relationship Management<br />Bottom-line:<br /> The use of information-enabled systems for enhancing individual customer relationships to ensure long-term customer loyalty and retention<br />
  10. 10. Crm configuration<br />Front office operations<br />Meetings, phone calls, emails, online services.<br />Back office operations<br />Billing, maintenance, planning, marketing, advertising, finance, manufacturing.<br />Business relationships<br />Interaction with companies and partners, suppliers, vendors and retail outlets, distributors.<br />
  11. 11. Complaint Resolution<br />Feedback<br />Guarantees<br />Corrective Action<br />Four tools<br />
  12. 12. Complaint resolution<br />Three types of complaints: Regulatory, Employee, Customer<br />Compensation<br />Ease of Resolution<br />
  13. 13. feedback<br />Customer Data<br />Customer Behavior<br />Data-gathering<br />Analyzing Data<br />
  14. 14. guarantees<br />Customer Rights<br />Guarantee Design:<br />Unconditional<br />Meaningful<br />Communicable<br />Painless to invoke<br />
  15. 15. The way a firm reacts to a problem so that the problem never reoccurs.<br />Corrective action<br />
  16. 16. Barne’s 4 r’s<br />
  17. 17. A low-cost way to increase revenue. Retention is cheaper than acquisition. <br />Must be voluntary.<br />Must lead to long-term relationships.<br />Customer retention<br />
  18. 18. Relationships<br />Attempting to know the customer. <br />Commitment and Communication <br />“Clients should call you only once. After that, you should proactively call them.” –Richard Buckingham.<br />
  19. 19. Powerful tool that results from customer satisfaction or dissatisfaction.<br />“Referral clients are already sold, before they even call you.” –Richard Buckingham<br />referrals<br />
  20. 20. Empower employees so that they may deal with mistakes as they occur.<br />recovery<br />
  21. 21. CUSTOMER RELATIONSHIP MANAGEMENT<br />Time line of CRM evolution<br />First Generation(before 1990)started with such functions like maintaining prospects data, generating leads, creating sales quotations & placing sales orders and other functions like after sales help desks, call centers etc<br />Second Generation (1990-1996) consolidation of various activities into pre-sales through SFA transactions and post sales through CSS. Not much of an integration with back office operations<br />Third Generation( After 2002) integration of the customer facing front end systems with the back end systems as well as with partners& suppliers helped by the growth of the Internet technology.<br />
  22. 22. Types of CRM<br />Operational CRM automation of Business processes involving customers. e.g. Sales Force Automation, Customer service automation, Customer Touchpoints- all sources by which the customers interact with the company<br />Analytical CRM is the synthesis & interpretation of operational Data to identify opportunities, optimize customer interactions and manage business performance. e.g. Data warehousing and Data marts<br />Collaborative CRM provide interactions between customers, staff and business partners through web technologies. e.g. interactive voice technology, computer telephony and web conferencing.<br />
  23. 23. CHANGES WITH RESPECT TO CUSTOMERS<br />Growing Customer Diversity<br />Time Scarcity<br />Value Consciousness & intolerance for Low Service Level<br />Information Availability<br />Decrease in Loyalty<br />CHANGES WITH RESPECT TO MARKETPLACE<br />Growing Competition<br />CHANGES WITH RESPECT TO DATA STORAGE TECH.<br />IT and ITES<br />CHANGES WITH RESPECT TO MARKETING FUNCTION<br />Media Dilution & Multiplication<br />Decrease in Marketing Efficiency<br />WHY IS CRM IMPORTANT TODAY?<br />
  24. 24. CRM Objectives<br />Lifetime Value (LTV)<br />Refers to the net present value of the potential revenue stream for any particular customer over a number of years.<br />Starts with current purchase activity then extrapolates to include potential additions from cross-selling, upgrades, total ownership, etc.<br />Customer Ownership<br />Attempts to “own” the lionshare of customer spending and/or “share of mind” in a particular product category<br />Building brand equity, maintaining vigilant customer contact, keeping current with the market trends is critical<br />5% points increase in customer retention=20-125% increase in profit<br />
  25. 25. Is CRM New?<br />No!<br />Simply an extension of relationship marketing<br />Builds on customer service and satisfaction concepts<br />Just the latest buzzword for creating customer orientation<br />Bottom-line is still the same<br />Yes!<br />A shift in corporate philosophy concerning the approach to value delivery<br />Customer-centric approach to value chain<br />New and technology-enhanced processes<br />Focus is not just on bottom-line, but on top-line<br />Goal is to create satisfying experiences across all customer contact points<br />
  26. 26. Approaches to crm<br />Data driven approach.<br />Process driven approach.<br />
  27. 27. Data driven approach<br />It relies on the past data and information and customer intelligence for designing CRM strategies.<br />Customer<br />intelligence<br />Customer<br />Data<br />Analysis and <br />Processing<br />Evolve CRM <br />Strategies<br />Implement<br />Strategies<br />Evaluate and <br />Modify<br />
  28. 28. process driven approach<br />The CRM solution senses the behavior of the customer and act proactively to deliver the service.<br />Initiation <br />Of<br />service<br />Transition <br />to<br />service<br />Preservice<br />Service<br />Post-<br />Service<br />Customer<br />Knowledge<br />Database<br />Evaluate<br />KMS<br />
  29. 29. CRM-Related Terms <br />eCRM<br />CRM that is Web-based<br />ECRM <br />Enterprise CRM<br />PRM<br />Partner relationship management<br />cCRM<br />Collaborative CRM<br />
  30. 30. CRM-Related Terms<br />SRM<br />Supplier relationship management<br />mCRM<br />Mobile CRM<br />xCRM<br />More hybrids to com<br />
  31. 31. “You can learn a lot about our motorcycle company by understanding our customers. By valuing and responding to our customers, we have become the leader in the heavyweight motorcycle market.” –Harley-Davidson website<br />“The customers’ first choice in casual dining.” –Chili’s Vision<br />quotes<br />
  32. 32. references<br />WamanJawadekar, "Management Information Systems” , 4th Edition, Tata McGraw-Hill Publishing Company Limited.<br />Tushar B Kute,<br />Sandip Institute of Technology and Research Centre, Nashik<br />http://www.tusharkute.com<br />

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