ECRM

From Wikipedia, the free encyclopedia

eCRM This concept is derived from E-commerce. It also uses net environment i.e., intranet, extranet and internet. Electronic CRM concerns all forms of managing relationships with customers making use of Information Technology (IT). eCRM is enterprises using IT to integrate internal organization resources and external marketing strategies to understand and fulfill their customers needs. Comparing with traditional CRM, the integrated information for eCRM intraorganizational collaboration can be more efficient to communicate with customers.[1]

[edit]From

Relationship Marketing to Customer Relationship Marketing

The concept of relationship marketing was first founded by Leonard Berry[who?] in 1983. He considered it to consist of attracting, maintaining and enhancing customer relationships withinorganizations.[2] In the years that followed, companies were engaging more and more in a meaningful dialogue with individual customers. In doing so, new organizational forms as well as technologies were used, eventually resulting in what we know as Customer Relationship Management (CRM). The main difference between RM and CRM is that the first does not acknowledge the use of technology, where the latter uses Information Technology (IT) in implementing RM strategies.[3]

[edit]The

essence of CRM

The exact meaning of CRM is still subject of heavy discussions.[4] However, the overall goal can be seen as effectively managing differentiated relationships with all customers and communicating with them on an individual basis.[5] Underlying thought is that companies realize that they can supercharge profits by acknowledging that different groups of customers vary widely in their behavior, desires, and responsiveness to marketing.[6] Loyal customers can not only give operational companies sustained revenue but also advertise for new marketers. To reinforce the reliance of customers and create additional customer sources, firms utilize CRM to maintain the relationship as the general two categories B2B(Business-to-Business) and B2C(Business-to-Customer or Business-to-Consumer). Because of the needs and behaviors are different between B2B and B2C, so that the implementation of CRM should come from respective viewpoints.[7]

[edit]Differences

between CRM and eCRM

Major differences between CRM and eCRM:[8] Customer contacts

CRM Contact with customer made through the retail store, phone, and fax.

eCRM All of the traditional methods are used in addition to Internet, email, wireless, and PDA technologies.

System interface

CRM Implements the use of ERP systems, emphasis is on the back-end. eCRM Geared more toward front end, which interacts with the back-end through use of ERP systems, data warehouses, and data marts.

System overhead (client computers)

CRM The client must download various applications to view the web-enabled applications. They would have to be rewritten for different platform.

eCRM Does not have these requirements because the client uses the browser.

Customization and personalization of information

CRM Views differ based on the audience, and personalized views are not available. Individual personalization requires program changes.

eCRM Personalized individual views based on purchase history and preferences. Individual has ability to customize view.

System focus

CRM System (created for internal use) designed based on job function and products. Web applications designed for a single department or business unit.

eCRM System (created for external use) designed based on customer needs. Web application designed for enterprise-wide use.

System maintenance and modification

CRM More time involved in implementation and maintenance is more expensive because the system exists at different locations and on various servers.

eCRM Reduction in time and cost. Implementation and maintenance can take place at one location and on one server.

[edit]eCRM
As the internet is becoming more and more important in business life, many companies consider it as an opportunity to reduce customer-service costs, tighten customer relationships and most important, further personalize marketing messages and enable mass customization.[9] ECRM is being adopted by companies because it increases customer loyalty and customer retention by improving customer satisfaction, one of the objectives of eCRM. E-loyalty results in long-term profits for online retailers because they incur less costs of recruiting new customers, plus they have an increase in customer retention.[10] Together with the

creation of Sales Force Automation (SFA), where electronic methods were used to gather data and analyze customer information, the trend of the upcoming Internet can be seen as the foundation of what we know as eCRM today. As we implement eCRM process, there are three steps life cycle:[11] 1. Data Collection: About customers preference information for actively (answer knowledge) and passively (surfing record) ways via website, email, questionnaire. 2. Data Aggregation: Filter and analysis for firms specific needs to fulfill their customers. 3. Customer Interaction: According to customers need, company provide the proper feedback them. We can define eCRM as activities to manage customer relationships by using the Internet, web browsers or other electronic touch points. The challenge hereby is to offer communication andinformation on the right topic, in the right amount, and at the right time that fits the customers specific needs. [12]

[edit]eCRM

strategy components

When enterprises integrate their customer information, there are three eCRM strategy components [1]: 1. Operational: Because of sharing information, the processes in business should make customers need as first and seamlessly implement. This avoids multiple times to bother customers and redundant process. 2. Analytical: Analysis helps company maintain a long-term relationship with customers. 3. Collaborative: Due to improved communication technology, different departments in company implement (intraorganizational) or work with business partners (interorganizational) more efficiently by sharing information.

[edit]Implementing

and integrating eCRM work

[edit]non-electronic solution
Several CRM software packages exist that can help companies in deploying CRM activities. Besides choosing one of these packages, companies can also choose to design and build their own solutions. In order to implement CRM in an effective way, one needs to consider the following factors:

Create a customer-focused culture in the organization. Adopt customer-based managers to assess satisfaction. Develop an end-to-end process to serve customers. Recommend questions to be asked to help a customer solve a problem. Track all aspects of selling to customers, as well as prospects.[13]

Furthermore, CRM solutions are more effective once they are being implemented in other information systems used by the company. Examples are Transaction Processing System (TPS) to process data realtime, which can then be sent to the sales and finance departments in order to recalculate inventory and

financial position quick and accurately. Once this information is transferred back to the CRM software and services it could prevent customers from placing an order in the belief that an item is in stock while it is not.

[edit]Cloud solution
Today, more and more enterprise CRM systems move to cloud computing solution, "up from 8 percent of the CRM market in 2005 to 20 percent of the market in 2008, according to Gartner".[14]Moving managing system into cloud, companies can cost efficiently as pay-per-use on manage, maintain, and upgrade etc. system and connect with their customers streamlined in the cloud. In cloud based CRM system, transaction can be recorded via CRM database immediately.[15] Some enterprise CRM in cloud systems are web-based customers dont need to install an additional interface and the activities with businesses can be updated real-time. People may communication on mobile devices to get the efficient services. Furthermore, customer/case experience and the interaction feedbacks are another way of CRM collaboration and integration information in corporate organization to improve businesses services.[16] There are multifarious cloud CRM services for enterprise to use and here are some hints to the your right CRMsystem:[17] 1. Assess your companys needs: some of enterprise CRM systems are featured 2. Take advantage of free trials: comparison and familiarization each of the optional. 3. Do the math: estimate the customer strategy for company budget. 4. Consider mobile options: some system like [Link] can be combined with other mobile device application. 5. Ask about security: consider whether the cloud CRM provider give enough protect as your own. 6. Make sure the sales team is on board: as the frontline of enterprise, the launched CRM system should be the help for sales. 7. Know your exit strategy: understand the exit mechanism to keep flexibility.

[edit]vCRM
Channels through which companies can communicate with its customers, are growing by the day, and as a result, getting their time and attention has turned into a major challenge.[18] One of the reasons eCRM is so popular nowadays is that digital channels can create unique and positive experiences not just transactions for customers.[19] An extreme, but ever growing in popularity, example of the creation of experiences in order to establish customer service is the use of Virtual Worlds, such as Second Life. Through this so-called vCRM, companies are able to create synergies between virtual and physical channels and reaching a very wide consumer base. However, given the newness of the technology, most companies are still struggling to identify effective entries in Virtual Worlds. [20] Its highly interactive character, which allows companies to respond directly to any customers requests or problems, is another feature of eCRM that helps companies establish and sustain long-term customer relationships.[21]

Furthermore, Information Technology has helped companies to even further differentiate between customers and address a personal message or service. Some examples of tools used in eCRM:

Personalized Web Pages where customers are recognized and their preferences are shown. Customized products or services.

CRM programs should be directed towards customer value that competitors cannot match.[22] However, in a world where almost every company is connected to the Internet, eCRM has become a requirement for survival, not just a competitive advantage.[23]

[edit]Different

levels of eCRM

In defining the scope of eCRM, three different levels can be distinguished:

Foundational services:

This includes the minimum necessary services such as web site effectiveness and responsiveness as well as order fulfillment.

Customer-centered services:

These services include order tracking, product configuration and customization as well as security/trust.

Value-added services:

These are extra services such as online auctions and online training and education.[24] Self-services are becoming increasingly important in CRM activities. The rise of the Internet and eCRM has boosted the options for self-service activities. A critical success factor is the integration of such activities into traditional channels. An example was Fords plan to sell cars directly to customers via its Web Site, which provoked an outcry among its dealers network.[25]CRM activities are mainly of two different types. Reactive service is where the customer has a problem and contacts the company. Proactive service is where the manager has decided not to wait for the customer to contact the firm, but to be aggressive and contact the customer himself in order to establish a dialogue and solve problems. [26] Steps to eCRM Success Many factors play a part in ensuring that the implementation any level of eCRM is successful. One obvious way it could be measured is by the ability for the system to add value to the existing business. There are four suggested implementation steps that affect the viability of a project like this: 1. Developing customer-centric strategies 2. Redesigning workflow management systems 3. Re-engineering work processes 4. Supporting with the right technologies[27]

[edit]Mobile

CRM

One subset of Electronic CRM is Mobile CRM (mCRM). This is defined as "services that aim at nurturing customer relationships, acquiring or maintaining customers, support marketing, sales or services processes, and use wireless networks as the medium of delivery to the customers.[28] However, since communications is the central aspect of customer relations activities, many opt for the following definition of mCRM: "communication, either one-way or interactive, which is related to sales, marketing and customer service activities conducted through mobile medium for the purpose of building and maintaining customer relationships between a company and its customer(s).[29] eCRM allows customers to access company services from more and more places, since the Internet access points are increasing by the day. mCRM however, takes this one step further and allows customers or managers to access the systems for instance from a mobile phone or PDA with internet access, resulting in high flexibility. Since mCRM is not able to provide a complete range of customer relationship activities it should be integrated in the complete CRM system.[30] There are three main reasons that mobile CRM is becoming so popular. The first is that the devices consumers use are improving in multiple ways that allow for this advancement. Displays are larger and clearer and access times on networks are improving overall. Secondly, the users are also becoming more sophisticated. The technology to them is nothing new so it is easy to adapt. Lastly, the software being developed for these applications has become worthwhile and useful to end users.[31] There are four basic steps that a company should follow to implement a mobile CRM system. By following these and also keeping the IT department, the end users and management in agreement, the outcome can be beneficial for all. Step 1 - Needs analysis phase: This is the point to take your times and understand all the technical needs and desires for each of the users and stakeholders. It also has to be kept in mind that the mobile CRM system must be able to grow and change with the business. Step 2 Mobile design phase: This is the next critical phase that will show all the technical concerns that need to be addressed. A few main things to consider are screen size, device storage and security. Step 3 Mobile application testing phase: This step is mostly to ensure that the users and stakeholders all approve of the new system. Step 4 Rollout phase: This is when the new system is implemented but also when training on the final product is done with all users.[32] Advantages of mobile CRM: 1. The mobile channel creates a more personal direct connection with customers. 2. It is continuously active and allows necessary individuals to take action quickly using the information.

3. Typically it is an opt-in only channel which allows for high and quality responsiveness. 4. Overall it supports loyalty between the customer and company, which improves and strengthens relationships.[33]

[edit]Failures
Designing, creating and implementing IT projects has always been risky. Not only because of the amount of money that is involved, but also because of the high chances of failure. However, a positive trend can be seen, indicating that CRM failures dropped from a failure rate of 80% in 1998, to about 40% in 2003.[34] Some of the major issues relating to CRM failure are the following:

Difficulty in measuring and valuing intangible benefits. Failure to identify and focus on specific business problems. Lack of active senior management sponsorship. Poor user acceptance. Trying to automate a poorly defined process.[35]

Failure rates in CRM from 2001-2009:[36]

2001- 50% failure rate according to the Gartner group 2002- 70% failure rate according to Butler group 2003- 69.3% according to Selling Power, CSO Forum 2004- 18% according to AMR Research group 2005- 31% according to AMR Research 2006- 29% according to AMR Research 2007- 56% according to Economist Intelligence Unit 2009- 47% according to Forrester Research

Differing measurement criteria and methods of the research groups make it difficult to compare these rates. Most of these rates were based on customer response pertaining to questions on the success of CRM implementations.

CRM for Manufacturing

In todays increasingly competitive environment manufacturing industries need more than a great, well made product to succeed. Manufacturers now need to continuously meet and exceed customer expectations, maximise opportunities and increase productivity to stay ahead. By using a Customer Relationship Management (CRM) system manufacturing companies can work more closely with their existing customer base. A CRM also helps manufacturers become more effective with their sales and marketing and enhance their management of new customers and the sales pipeline. This helps to increase customer satisfactions, increased customer retention, higher sales and a boost to bottom line profits. Simple and easy to deploy and learn, the user friendly interface of Maximizer CRM allows manufacturing organisations to maintain, access and process customer records from one centralised customer database. This gives organisations a single 360 holistic view of their customers and prospects, from first call to a closed deal, from an initial order to bulk shipment

This allows sales, marketing and customer service staff to effectively market to, sell to, and service client while automating business processes, reducing workload, and ensuring very high levels of customer satisfaction. And with Maximizers AAA access (Anywhere, Anytime, Anyway) business critical information is easily accessible to your entire organisation - On their desks, On-line via the web or On the move from mobile devices. This means Maximizer CRM delivers reliable customer and prospect insight when and where its most needed to make quick, informed decisions, identify opportunities, increase sales and boost business. Maximizer has a wealth of expertise and experience in the manufacturing industry from implementing CRM systems for manufacturers since 1986. Read about some the benefits manufacturing organisations have gained from Maximizer CRM here.

Maximizer CRM can benefit manufacturing organisations through: One holistic view from first call, to quote to order management Improved data flow through your organisation Automated workflow for best practice and improved service Increase in profits through focused sales activities Cost effective targeted marketing Customisation of Maximizer CRM to suit your business needs Project tracking Increased cross selling and up-selling potential Low Total Cost of Ownership Reducing overhead costs for better bottom line profit Enhancing lead generation, Managing customers quickly and efficiently to improve customer retention Enhanced integration across your whole organisation, Tracking your KPIs and sales activity through key dashboards, Effective management of your sales pipeline with accurate information, Build your client relationships, retain customers and meet business challenges with Maximizer CRM. For one scalable, flexible and cost-effective solution, Maximizer CRM delivers a fully featured, functionally rich system to boost your manufacturing organisation. Call Maximizer today on +44 (0)845 555 99 55 to talk about CRM in your organisation, how we can customise to your needs and deliver a flexible, scalable and robust system to you.
How does CRM Manufacturing Software help? It provides the manufacturing industry with a comprehensive 360 degree view of their customers and customer relations with them. All transactions that have been entered into will be recorded and the information provided to all concerned employees. A single holistic view of the customer goes a long way in understanding him. Complexities that normally occur with other software implementations seldom occur with CRM. Manufacturers find the easy to use, user friendly attributes of CRM conducive to their success. The upside is that they are able to track the results of their pricing market promotions and other strategies as well. Over pricing for one can be avoided. Other benefits include a decrease in distribution costs with an increase in value. They have a greater control over their customer relationships and are equipped with better insights into what their customers are really buying. Boon to sales? Definitely! The result of implementing manufacturing CRM software is increased, powerful upselling and cross selling potential. Effective and increased selling is a natural byproduct. The sales department is benefited as it is enabled to make its reports with exceeding attention to detail and customer focus. This is achieved by the customer centricity CRM offers. Manufacturers are enabled to channel the right products in accordance with customer preferences. This customer strategy is helping sales dealers to earn commissions far more easily than before. It also serves vehemently in the reduction of the cost of carrying inventory as well. Forecasting of sales data can be done more accurately and easily. The accuracy level is much higher when compared to other customer strategies or even ERP for instance. CRM facilitates web functions? It does. Manufacturers availing of the web services can expect CRM to support them as it encompasses the Web. In addition email marketing is embodied as well. CRM Manufacturing Software Benefits are:

Achieving business stability and success Suitability for small and middle-sized manufacturers Cost-effectiveness

Order Management Versatile software Improving dataflow Increase in profit margin Optimized use of resources Partner Management Increase in CRM ROI Reducing the business costs Customization Reducing overhead costs Forecasting capabilities Aiding upselling and cross selling Incentive Management Project Tracking

CRM for Insurance

By Frank Siderio, financial services industry strategist, PeopleSoft, Inc. Insurance is a complex product where personalized serviceachieved through an intimate knowledge of customers and their histories with an insurance company is critical to making sales. As insurance options broaden and products grow more complex, customers seek superior, personalized service more than ever. With the repeal of the Glass-Steagal Act in 1999, insurance companies face increased competition from banks and brokerages. With the enactment of the Patriot Act, insurance companies need to ensure that they "know their customers." The situation grows even more urgent when one considers the bad economy that hurts investment income; as well as the extremely narrow window of time wherein an insurance call center representative, agent or broker holds a customer's attentionand a valuable opportunity to cross-sell or upsell. It is at this precise moment that these individuals have the chance to maximize these fleeting sales opportunities. To maintain competitive edge and viability, insurance companies are focusing intently on delivering superior customer service. A comprehensive customer relationship management (CRM) strategy addresses three imperatives: Sum providing a unified enterprise customer view; Sum retaining customers with great services; and Sum controlling costs as the insurance company in question expands. These three imperatives form a unique interplay that maximizes sales while reducing operational coststhe equation for improved revenue growth and profitability. Gain a Unified Enterprise View of Customers Within many insurance companies, there is a wealth of valuable information about individual customers: you know who they are and what insurance products and services they buy. You know their history of claims and the status of their accounts. You may even know about their opinions and preferences, or whether promotions have attracted their response. But can you unify all these fragments into a complete portrait of this most important asset: your customer? For insurance companies, "know thy customer" can be a challenging imperative. Customer data may be divided among product lines, or among legacy claims, policy and billing systems. If an insurance company has expanded its customer base through mergers or acquisitions, its information may be even more fragmented. CRM in insurance starts with a single, complete, real-time enterprise view, so that call center representatives, agents and brokers can understand and serve every

facet of individual customers. This level of holistic, personalized service can be the differentiating factor that retains good customers and reduces churnan important goal, given that customer retention is profitable and new customer acquisition can be expensive. Retain Customers With Great Service Most insurance companies understand the virtues of a single, complete, real-time enterprise view of individual customers, and they have made great progress towards providing this view at customer touch-points throughout the enterprise. But it's critical to note that this view should not be regarded as an end in and of itselfrather, it is a rich foundation to be used as a basis for a deeper, more advanced level of customer understanding. Consider how foolish it would be to try to sell automobile insurance to someone who doesn't own a car. Without customer analysis and behavior prediction, this is exactly the quagmire that call center representatives, agents and brokers find themselves in every day. This advanced level of understanding is needed to help insurance companies predict customer behavior and align marketing, cross-selling and upselling efforts accordingly. By making customer analysis and behavior prediction data immediately accessible at the desktop, sales efforts are optimized and customer loyalty is strengthened, as individual customers feel that their needs are understood and met in a way that is fast and convenient. Predicting customer behavior for improved sales efforts is a three-step process: Sum Profiling: Insurance companies first build a profile of information about customers who have previously exhibited a targeted behavior. Profiling requires rich customer data, including enterprise-wide transactional and behavioral data such as call center and account holdings information. Other data sources include key performance indicators and third-party demographics. An example of profiling might be building a profile for customers who bought new homeowners' insurance policies in the past two years. The goal is to determine characteristics to look for in future buyers. Sum Modeling: By using data mining on the profile information, analytics can uncover the most relevant characteristics of the customer segment being analyzed. For example, the most significant attributes of customers who bought homeowners' insurance are gleaned from the profile via the data mining application. Such characteristics comprise the model of customers most likely to purchase homeowners' insurance in the future. Sum Scoring: Insurance companies use predictive analytics to score existing customers by comparing them to the model. Those most closely matching the characteristics included in the model are most likely to exhibit the targeted behavior. Given the example above, an insurance company can rate its customers numerically to indicate how closely they match the model of the person most likely to buy homeowners' insurance. Once customers are scored and the analysis pinpoints customers most strongly correlating with the model, an insurance company can address those customers, especially the top prospects. Customers scoring a nine or above might receive a special promotion for homeowners' insurance, while a separate, incentive-based offer might entice those scoring seven and above. Customer analysis and behavior prediction can also be used to identify life events and/or extended relationships, which can be highly useful in improving profitability from individual customers. For example, life events often trigger changes in insurance coverage that can be anticipated and leveraged with targeted offerings. You might identify health insurance policyholders who have recently had new children and offer them an attractive life insurance policy. Using a single, complete, real-time enterprise view coupled with customer analysis and behavior prediction, you may be able to identify good drivers among your auto policyholders who have children turning sixteen. It's time for a targeted offer to add the family's new driver to the policy.

As with many industries, the more products you can sell to a given customer, the less apt he/she is to migrate to another provider. Furthermore, as policy holders tend to stick with you, the ratio of premiums paid to the cost of claims increases in favor of the former. Lastly, statistics show that the longer a policyholder remains a customer, the less frequently he/she submits a claim. All of these factors contribute to improved profitability. Control Costs While You Expand Business expansion presents many positive opportunities to insurance companies, including increased assets and broader geographic reach to new customers. So how does an insurance company grow without sacrificing profitability? The company at hand must offer the same level of superior service that its customers have come to expectwhile minimizing operational costs that, paradoxically, have the potential to spiral out of control, as the company begins to serve an augmented and growing customer base. The first key is to enable your agents, representatives and brokers to identify and spend the right amount on each opportunity. A high-value, low-risk customer, who carries policies over a long period and makes relatively low claims, is an ideal subject for marketing and sales efforts targeted at extending his or her portfolio. Call center representatives, agents and brokers need real-time access to this business intelligence, so they will know where to concentrate their efforts in the limited amount of time they have the customer's attention. The second key is to use the most cost-effective channels without sacrificing a high level of customer service. Call center, agents, email, phone and self-service portalshow can your employees determine which channels are the most efficient and cost-effective for different target audiences and desired behaviors? Again, using customer analysis and behavior prediction, call center representatives, agents and brokers can target marketing and sales efforts through different channels depending on the target audience in question. Going one step further, new and advanced email response, Web chat and selfservice portal tools are drawing more and more customers to the Web each day, enabling a consistently high level of customer service while "pulling" customers to a communications medium which is much more cost-efficient than the phone. Particularly valuable are Web-based self-service portals, which can function as a first and last point of contact and eliminate valuable time spent assisting a customer who can just as well assist him or herself. Finally, Web-based interactions tend to deliver on the holy grail of customer servicespeed and convenience. The third key is automation of the more mundane insurance business processes. Given the myriad systems in the insurance worldclaims, billing and policy systems, not to mention automobile, home, life and health insurance subsystems for each oneCRM systems in insurance will only add another layer of complexity, labor and expense if they are not pre-built to connect with legacy systems and automate the mundane work of keeping these systems updated. Automated, multi-step workflow capabilities are critical to minimizing these and other potential bottlenecks, such as the processing of trailing documents supporting a policy applicationdocuments like expert appraisals, doctor's statements and/or proof of student status. By automating mundane processes and removing the paper trail, call center agents, representatives and brokers are freed up to focus on the more strategic activitieslike servicing customers. Today's insurance companies certainly face a daunting challenge in maintaining and increasing their competitive edge. But by focusing on three key imperatives gaining a unified enterprise view of customers, retaining customers with great service and controlling costs while expandinginsurance companies can turn challenges into strategic competitive advantage and enhance their long-term viability and profitability.

Cross-selling
From Wikipedia, the free encyclopedia

Cross-selling is the action or practice of selling among or between established clients, markets, traders, etc. or the action or practice of selling an additional product or service to an existing customer. This article deals exclusively with the latter meaning. In practice, businesses define cross-selling in many different ways. Elements that might influence the definition might include the size of the business, the industry sector it operates within and the financial motivations of those required to define the term. The objectives of cross-selling can be either to increase the income derived from the client or clients or to protect the relationship with the client or clients. The approach to the process of cross-selling can be varied. Unlike the acquiring of new business, cross-selling involves an element of risk that existing relationships with the client could be disrupted. For that reason, it is important to ensure that the additional product or service being sold to the client or clients enhances the value the client or clients get from the organization. In practice, large businesses usually combine cross-selling and up-selling techniques to enhance the value that the client or clients gets from the organization (and vice versa).

[edit]Cross-selling

of professional services

Benefits that can accrue to the customer include the efficiency and leverage that result from using a single supplier for multiple products. When buying complex professional services, likeconsulting needed to make and integrate an acquisition, the use of one firm reduces the fingerpointing that is common when a problem occurs in an area that straddles two or more services; if only one firm is responsible, fingerpointing is eliminated. For the vendor, the benefits are also substantial. The most obvious example is an increase in revenue. There are also efficiency benefits in servicing one account rather than several. Most importantly, vendors that sell more services to a client are less likely to be displaced by a competitor. The more a client buys from a vendor, the higher the switching cost. Though there are some ethical issues with most cross-selling, in some cases they can be huge. Arthur Andersen's dealings with Enron provide a highly visible example. It is commonly felt that the firm's objectivity, being an auditor, was compromised by selling internal audit services and massive amounts of consulting work to the account. Though most companies want more cross-selling, there can be substantial barriers: 1. A customer policy requiring the use of multiple vendors. 2. Different purchasing points within an account, which reduce the ability to treat the customer like a single account.

3. The fear of the incumbent business unit that its colleagues would botch their work at the client, resulting with the loss of the account for all units of the firm. Broadly speaking, cross-selling takes three forms. First, while servicing an account, the product or service provider may hear of an additional need, unrelated to the first, that the client has and offer to meet it. Thus, for example, in conducting an audit, an accountant is likely to learn about a range of needs for tax services, for valuation services and others. To the degree that regulations allow, the accounts may be able to sell services that meet these needs. This kind of cross-selling helped major accounting firms to expand their businesses considerably. Because of the potential for abuse, this kind of selling by auditors has been greatly curtailed under the Sarbanes-Oxley Act. Selling add-on services is another form of cross-selling. That happens when a supplier shows a customer that it can enhance the value of its service by buying another from a different part of the supplier's company. When one buys an appliance, the salesperson will offer to sell insurance beyond the terms of the warranty. Though common, that kind of cross-selling can leave a customer feeling poorly used.[citation
needed]

The customer might ask the appliance salesperson why he needs insurance on a brand new

refrigerator, "Is it really likely to break in just nine months?"[original research?] The third kind of cross-selling can be called selling a solution. In this case, the customer buying air conditioners is sold a package of both the air conditioners and installation services. The customer can be considered buying relief from the heat, unlike just air conditioners.

[edit]Examples

1. A Life Insurance company suggesting its customer sign up for car or health insurance. 2. A wholesale mobile retailer suggesting a customer choose a network or carrier after one purchases a mobile. 3. A television brand suggesting its customers go for a [home theater] of its or another's brand. 4. A laptop seller offering a customer a mouse, pen-drive, and or accessories.

Upselling
From Wikipedia, the free encyclopedia

Upselling (sometimes "up-selling") is a sales technique whereby a seller induces the customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale. Upselling usually involves marketing more profitable services or products but can also be simply exposing the customer to other options that were perhaps not considered previously. Upselling implies selling something that is more profitable or otherwise preferable for the seller instead of, or in addition to, [1] the original sale. A different technique is cross-selling in which a seller tries to sell something else. A recent study concluded that it is 70% easier to get an additional 3% in sales from an existing customer than it is to

get more customers in the door to equal the same dollar volume in sales. In practice, large businesses usually combine upselling and cross-selling techniques to enhance the value that the client or clients get from the organization in addition to maximizing the profit that the business gets from the client. In doing so, the organization must ensure that the relationship with the client is not disrupted. In a restaurant and other similar settings, upselling is commonplace and an accepted form of business. In other businesses, such as car sales, the customers perception of the attempted upsell can be viewed negatively and thereby affect the desired result.

[edit]Examples
Some examples of upsales include:

suggesting a premium brand of alcohol when a brand is not specified by a customer (such as if a customer simply requests a "rum and Coke").

selling an extended service contract for an appliance suggesting a customer purchase more RAM or a larger hard drive when servicing his or her computer selling luxury finishing on a vehicle suggesting a brand of watch that the customer hasn't previously heard of as an alternative to the one being considered.

suggesting a customer purchase a more extensive car wash package. Asking the customer to super size a meal or add cheese at a fast food restaurant.

[edit]Techniques
Many companies teach their employees to upsell products and services and offer incentives and bonuses to the most successful personnel. Care must be taken in this type environment to thoroughly train employees. A poorly trained employee can let slip the incentive program and thus offend a regular and loyal customer. There is a level of trust between the customer and employee and once broken it may never be reestablished. A common technique for successful upsellers is becoming aware of a customer's background and budget, allowing the upsellers to understand better what that particular purchaser might need. Another way of upselling is creating fear over the durability of the purchase, particularly effective on expensive items such as electronics, where an extended warranty can offer peace of mind. Upselling also works with things like expensive leather shoes, where the seller suggests to buy the waterproofing spray as well "to make the shoes last."

Five Steps to a Successful CRM Implementation

By David Cowgill March 22, 2006 Leave a Comment
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For the professional services person, some iterations of CRM may be confusing many are slanted toward automating customer service operations. But never fear, there is a whole lot more to CRM than fielding service calls. In fact, a new breed of CRM is quickly becoming a powerful solution for professional services firms, especially those with management teams that want to leverage firm-wide intellectual property to grow their client base, improve productivity and maximize profitability. Unlike accounting or HR solutions that are primarily used by highly trained and skilled personnel within a single department, CRM is an enterprise application that is used by virtually everyone across the firm. When deployed in an organization, CRM solutions aggregate vast amounts of information to create a pool of knowledge that can be used to prospect new business, validate leads, analyze processes and more. Sounds great. But the question remains: how can a firm ensure success? Following are five simple steps that can help put your organization on the path to CRM success. 1. Remember that Culture is King A CRM solution is more than a new software package. It also encompasses a mindset, a way of doing business and a way of interacting with others in the firm. The success of a CRM implementation rests on the shoulders of a workforce that is willing to share information about clients and contacts. However, this collaborative mentality flies in the face of the culture within some professional services firms. For better or worse, many professional services practitioners are skeptical of sharing contact information for fear of losing opportunities to generate work that they can produce themselves. However, if a CRM implementation is introduced to the workforce as an opportunity to create new opportunities for all, success rates will improve significantly. Consequently, it is especially important to publicize instances when shared information benefits the firm-at-large. Management must work toward creating a culture that is based upon the greater good rather than individual gain. To reach this goal, users must see proof that the

information they share will be used to improve operations and add new business that will benefit all members of the firm. It may take some time, but such a culture shift is worth the effort. 2. Set Realistic Goals One of the greatest mistakes a management team can make is to force-feed new technology across the organization. This is particularly true with a CRM implementation. As firm management prepares for a CRM rollout, planning and patience are critical. Working with the implementation team from the software developer, management should agree upon a plan of phasing software use across the firm. Some organizations orchestrate a CRM rollout by location, others by practice group or department. Regardless, this type of phased approach gives both the firm and the implementation team an opportunity to make adjustments, manage expectations, achieve milestones and promote successes. 3. Obtain and Maintain Senior Management Support - Successful CRM implementations start and end at the top. Firms simply cannot achieve success without full management buy-in, nor can management set the process in motion and walk away. As a rule, successful CRM implementations are characterized as those in which management leads by example. Rolling-out a CRM solution takes hard work, but the benefits are substantial. Management should not sugar coat the process or minimize the effort involved. Similarly, as milestones are achieved, those same managers should be the first to strongly promote the benefits being realized by the firm. 4. Analyze Working Processes The process of fitting a CRM solution into a professional services organization provides a wonderful opportunity to evaluate processes and procedures across the firm. Working with the implementation team from the software provider, firm management should review, analyze and evaluate the firms procedures as well as all of the data sources that will be migrated into the CRM solution. This is the perfect time to discuss and develop new procedures that will increase the firms success. 5. Select the Right Software Partner - While teaming with the right solution provider is important to every software implementation, it is absolutely critical when dealing with a CRM solution. The way CRM is utilized by a professional services firm differs greatly from the way CRM is used by a product-oriented organization. Therefore, it is critical for services-based organizations to choose a software provider that specializes in professional services solutions. Equally important is the software solutions ability to seamlessly integrate with other business processes across the firm, including the firms financial and practice management systems. The ability to correlate client relationship management and new business development activities with firm financial performance greatly enhances the ROI generated by CRM. Finally, firms should closely review the depth and breadth of consulting services provided by CRM vendors being considered. A CRM solution is only as good as the implementation methodology used to integrate it with a firms business processes. Make sure that the vendor you select can provide experienced and dedicated consulting staff members that will work with your team to ensure success.

A successful CRM implementation can help a professional services firm stay head and shoulders above the competition. Keep these five steps in mind, and you and your firm will be well on your way to CRM success.