Customer Relationship Management (CRM) Introduction

Contents
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

A definition of marketing
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organization goals.
American Marketing Association

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

How to define Customers?

CONSUMER

BUSINESS TO BUSINESS

CHANNEL DISTRIBUTOR FRANCHISEE

INTERNAL CUSTOMER

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Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

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5. 6.

It costs 6x more to sell to a new customer than to sell to an existing One dissatisfied customer will tell 8-10 others on his experience By increasing the customer retention rate by 5%, profits could increase by by 85% There is 50% chance of making a sale to an existing customer while only a 15% chance of selling to a new customer 70% of customers will do business with the company again if their complaint is successfully resolved 90% of companies (in 2000) didnt have the necessary sales and service integration to support e-commerce

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

Customer Loyalty: Customer Loyalty is a deeply held commitment to rebuy or repatronize a preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior.
Source : Satisfaction: A Behavioral Perspective On The Consumer Richard L. Oliver Mc Graw-Hill Editions

CRM Definition:
An integrated sales, marketing & service strategy
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

An approach which effectively manages customer relationships A business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes IT definition Methodologies, software and usually internet capabilities that help an organisation manage customer relationships in an organised manner
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Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

Customer Relationship Management is an enterprise approach to understanding and influencing customer behavior through meaningful communications in order to improve customer acquisition, customer retention, customer loyalty and customer profitability
Source Accelerating Customer Relationships, Ronald S. Swift Prentice Hall - 2001

CRM Functions
The concept of CRM in theory is simple:
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

Listen to your customers and act on what they are saying to create a mutually beneficial relationship. Companies with current implementations of CRM technology can usually hear their customers; however, because they are only focusing on the operational and collaborative component of CRM, they cannot really understand them. They must also consider analytical CRM to optimize their customer relationships.

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

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Operational CRM
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

MARKETING AUTOMATION

designed to get the right mix of the companys products and services in front of each customer at the right time

SALES FORCE AUTOMATION

Collaborative tools that enable all parties to the transaction to interact with one another

CUSTOMER SERVICE AND SELF-SERVICE

Serving existing customer base through problem resolution systems, workflow automation and field service dispatch systems Capabilities that can be directly invoked by the customer on the internet via PC and wireless devices

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Analytical CRM
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

DATA WAREHOUSE

A process of assembling disparate data from all over the company transforming it to a consistent state for business decision making and empowering users by providing them with access to this information from multiple applications

DATA MINING

The process of extracting and presenting new Knowledge, previously unpredictable, selected from databases for actionable decisions. The process of analyzing detailed data, to extract and present actionable, implicit and novel information to solve a business problem

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CRM - Stages

1.
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

Customer Acquisition: Promotion of products build a relationship first date 2. Customer Extension: An established relationship cross-selling & up-selling 3. Customer Retention: Adapt to customer requirements requires a complex understanding of customer needs. Can an organisation pursue all 3 objectives ? extremely difficult

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CRM Business Process with a Customer Focus

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

Need to have consistent dependable and convenient interactions with customers in every interaction Need to efficiently create new delivery channels Need to capture & analyse large amounts of customer data Overall attempt to produce a unique/different business experience for the customer. CRM is all about changing processes and therefore change management What is the companys experience in change? Does it have a successful track record?

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CRM Technology
CRM and e-CRM
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

e-CRM : extending CRM through the Web e-CRM is the customer-facing internet portion of CRM e-CRM is a real designation, but it is not a revolutionary new system or set of processes.

e-CRM is CRM online

CRM is a strategy, the web is a channel CRM is inherently a multi-channel strategy.

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Traditional CRM
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

eCRM
E-Mail Blasts Web Registration Online Reply Instant Messaging Online Customer Service Web Demos Video Conference Online Prospect Database

Telemarketing Direct Mail B.R.C. Responses Trade Shows Inbound Calls Press releases Meetings Product Demos Referrals

eCRM

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CRM Challenges
Integrating customer content
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

All interactions and knowledge about customers must be synthesised and stored in a way that anyone in the organization with a need to know can access that information in real-time and in a way that supports that current problem. Currently most organizations cannot do this or are even close to this Contact management The channels that customers use to contact an organization are increasing Web, call centre, fax, email, voice message etc. These technologies must be integrated so that staff can access the details regardless of channel. Consistent business rules need to be applied across all channels of contact

End-to end business processes

Business processes must be integrated and consistent eg. sales and service. The service staff must have access to sales details and commitments and apply consistent rules of dealing with the customers. This requires much more integration between processes than is current.

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CRM Difficulties
Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

CRM requires major integration of systems which

few companies have

CRM requires turning round existing systems to store, record and retrieve on a customer-centric basis

CRM requires people to stop thinking about

departmental boundaries and to start thinking about how as a team the company can help the customer

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CRM Architecture

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

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Step 1 Determining current abilities

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

- Do we have a call/contact center? - What are the capacities of the call/contact center? - Are customers questions being answered? -- Why do we have customer complaints? How can - they be minimized? - What additional infrastructure do we need? - What are current costs?

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Step 2 Building capabilities

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

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What technologies are in the call/contact centers and is more technology needed

- Calls are routed based on incoming call information (e.g. incoming call phone number)
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Employees are empowered to make and keep promises to customer

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Step 3 Information utilization

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

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Customer information and contact history is tracked in a knowledge base and used in future contacts Customer information can be linked to contact history from all channels

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- Customer patterns (e.g. seasonal patterns) are discovered and used for marketing purposes

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Step 4 Determination of what we do

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

- Shift from data collection and analysis to strategy - Enterprise goals revolve around customer relationships - Customers receive support based on their value to the company - All corporate divisions share the same information on the customer and focus on customers relationship with the company

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Step 5 CRM becomes a core competency

Customer focus issues CRM Definitions CRM Functions CRM Stages CRM Business Process & Technology CRM challenges & Difficulties Building a CRM Solution

- Maintaining customer relationships is a core competency of the business, ensuring a greater retention rate - The focus centers around redefining markets to position the company as the best of breed in the industry

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The End

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