MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Introduction
So why does CRM impact a company’s processes? Because desired outputs are based on your
customers: their needs, expectations, and desires. About 90% of companies design their processes to
achieve desired internal outputs of efficiency and reduced costs. The customers’ continuous feedback
and needs are central to CRM. Everything must be done for the creation and delivery of value-added
products and services for the customer.
CRM starts by understanding the processes of a company. In this unit, we will look at the various
types of processes: vertical processes, horizontal or cross-functional processes, primary processes,
and secondary processes. We will also discuss front- and back-office processes. Finally, we will
gain an understanding of business process levels and review examples of processes, hierarchy of
processes, and integration of processes with the customer interaction map in a detailed example.
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Types of Processes Part 1
Let's review the different types of processes: review vertical processes, horizontal or cross-functional processes,
primary processes, and secondary processes, keeping in mind that a process can be more than one type.
Vertical Processes are located entirely within one department or business function. The process is
completely controlled within that department. No other department is involved in the process. An example is the
‘facilities maintenance’ process within a company.
Horizontal or Cross-Functional Processes are KEY to CRM! These processes cross over several departments
of the company. In other words, one department’s OUTPUT is another department’s INPUT. If you take away a
function, the whole process suffers. An example is the ‘new product development’ process – almost all
functions need to be involved in it. For example, when you buy a book over Amazon, is there only one
department involved? If your DESIRED OUTPUT is to receive your books within 2 days, what departments are
required? You need a web purchasing area, a billing area, and a delivery area, right? If the web purchasing area
makes a mistake on the order, how will that affect the delivery? Will the desired result be achieved?
Primary Processes are critical to an organization because they directly affect the customer. They are visual to
the customer. These processes have major implications for the customers and company. An example is the
‘logistics’ or distribution/shipping process in a courier company. These are normally cross-functional.
Secondary Processes have minor cost or revenue implications to the customer or the company. These are
normally behind the scenes. They can be more vertical in nature.
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Types of Processes - Part 2
Front and back-office processes are very similar to primary and secondary processes. Front-office are
always PRIMARY because they directly interact with the customer. Back-end processes are normally
secondary; however, that doesn’t mean they aren’t important. Many times, a poor secondary process can cause
much frustration for the customer in a front-end process.
For example, you went to Best Buy to purchase a new laptop. You decided to take advantage of their ‘no
interest for 3 months’ finance plan. The sales representative was very attentive and courteous. Service was
outstanding. Everything in the sales and purchase processes went smoothly – all customer-facing or front-
office processes.
Within a month, you receive your first billing statement. But guess what? It has a finance charge on it! You are
really upset and call the customer service number on the statement. They begin to bounce you around and tell
you that it’s not their responsibility…it’s accounting’s responsibility. After several calls and several hours, you
finally get a call from the accounting area stating that it was an error on their part and that your next statement
will be correct. In this example, the secondary or back-office process was the processing of the payment for the
laptop. How does this change your perception of Best Buy?
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Hierarchy of Processes
Here’s an example of one company’s core processes. When a company starts a CRM project, they first have
to define what their key high-level processes are. Then they have to take every single one of them and create
flowcharts or detailed diagrams, showing all of the steps and activities done. They then analyze these steps
to see if they can be improved or even automated through the use of technology.
On the surface, process automation makes good sense to organizations. However, there are four problems.
First, organizations need to identify the owners of each process. In most organizations, parts of a process are
owned by various departments and individuals, but no one person has control, or even visibility, across an
entire process. As a result, most organizations will focus on departmental processes, such as sales, marketing
and customer service. However, this leads to the second problem: many departmental processes cross
departmental boundaries, and attempts to address it could be hampered by political issues.
The third problem is that there is a large difference between the organization's and the customers' view of a
process. As a result, organizations need to start with the customer and work their way back into the
organization.
The fourth problem is the largest of all. Most organizations have between 600 and 1,000 processes that need
to be examined. In addition, as few organizations have process experts or one person that is responsible for a
process, the result can be a hopeless mess of process redesign, politics and lack of automation support.
Despite this, organizations need to automate processes, but they need to remember that this process is rarely
as simple as it may seem.
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Example of Order Fulfillment Process
Here’s an example of an order fulfillment process. Notice that there are steps that are handled, or performed in
the finance department; other steps are performed in the sales department and other steps are performed in the
logistics department. This is an example of one of those cross functional processes that cross over different
areas and so on.
We were talking before about defining who the process owner is. In this case, who would you define is the
process owner if three different departments have a role in the entire process? This is what we mean when
we talk about some of the difficulties that can arise when you’re trying to figure out who’s going to be
responsible or who’s going to be accountable for the results of this entire process.
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Campaign Management Process
This is an example of a departmental process which is for campaign management. This one would be
handled within the department of marketing. All of the steps here are handled by the marketing department.
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Business Process Levels
There are many levels to business process analysis. It is a ‘drill down process, where you start off with a high-
level, core process, and work your way down.
Let’s take the example above. I’ve chosen the core or primary business process to be Generate New Business.
This is very broad and really doesn’t tell us HOW it’s done. It only tells us WHAT we are focusing on.
Within the Generate New Business process, there are MANY Level 1 sub-processes. For example, one might
research a new market; another might be identifying some possible leads. Here, we have chosen Identify
Leads as our example of a Level 1 process. There are MANY activities relating to the identification of leads.
We have chosen only one here for our Level 2 example: Develop prospect profile. Notice that the further
down you drill, the more specific and detailed the processes get.
Developing a prospect profile can be done in many ways. Here, we show that a key step is to Collect
Prospect Data as our Level 3 example. One way to do that is to Contact Industry Associations for contact
information.
The goal of this course is not to make you experts in process analysis, but to guide you to gain an appreciation
for how complex this can be, especially when you begin to ask yourself at each level: what’s in it for the
customer? How do I create value for the customer with each step I go through in my company?
Let’s take a look at some models used by companies to manage their CRM processes.
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Customer Interaction Map for Dry Cleaner Part 1
Here is an example of a Customer Interaction Map for a dry cleaning service for an existing customer. It
is very simplistic. The purpose is for you to understand that this is a methodology that can be used to define
and document what's going on within a company in regards to its customer interactions. The nice thing about
this mapping is that it emphasizes customer-facing or primary processes.
This example shows that the cycle begins with the customer's recognition of the need to dry clean a
new, expensive dress that was stained with ketchup. The customer contacts the dry cleaning service to inquire
about the type of service available for stains and the effectiveness of its stain treatments. The output
from the cleaner, under ‘Generate New Business, is information about its stain treatments.
Let's assume that the customer decides to take her stained dress in for service. The input into the
cleaner's ‘Clean’ core process is the dirty or stained dress. The output of this core process is a clean
dress. If the customer is dissatisfied with the quality of the stain treatment, then an input to the cleaners is a
complaint. The dry cleaners then goes through a series of actions or steps under the ‘Respond’ core process
and provides the customer with a response. Once the customer is satisfied, the dry cleaners provides a bill to
the customer and the customer in turn makes a payment.
Let's now break this example down even further.
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Customer Interaction Map for Dry Cleaners Part 2
One of the first things we must do when analyzing customer interactions is to ask ourselves what the
customer has to go through and what the customer's needs are. This diagram shows the activities the
customer goes through at each stage of the lifecycle with the dry cleaners. For example, when
recognizing needs, the customer may::
• Perceive the need for dry cleaning services due to dirty clothes
• See an ad on social media
• Visit the store
• Compare pricing with other dry cleaners in the area
• Find a coupon online
• Inquire about pricingg
• Call about their schedule
Under customer needs, we see the requirements of the customer, such as good price, fast turnaround,
convenient location, good reputation, and the availability of delivery service.
When using a Customer Interaction Map, a company must go through this process of putting themselves
in the shoes of the customer and identifying their activities and their needs.
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Customer Interaction Map for Dry Cleaners Part 3
This example of drilling down shows some possible level of1processes associated with the primary
process ‘"Clean." Level 1 processes always have an optimum sequence. For example, you wouldn't wash/
press the clothes before receiving it, right?
In CRM, the goal is to ask ourselves how each Level 11-44 activity can be made better in order
to enhance the customer relationship. The process we use to receive clothes can make a
difference. This is a customer touch point because we are interacting with the customer when we receive
the clothes.
But how do we interact with the customer? What kind of experience does the customer have?
How efficient are we? How effective are we? Answering these questions and designing customer-
centric processes is what CRM is about.
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MAR 4860 – Customer Relationship Management MODULE 6 UNIT 2
Customer Interaction Map for Dry Cleaners Part 4
This is like peeling back an onion. Next, we take the first Level 2 step of the ‘Clean’ process,
which is ‘Receive Clothes’ and put some detail to it. In the slide you see that this analysis consists of:
• A brief description of the overall purpose of this macro block;
• The significant inputs and outputs of the process; and
• Applicable best practices and metrics associated with this macro block.
The next step would be to map this process out using one of many flowcharting techniques.
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