Introduction to CRM Anisa Zahra Putriarum | Teknik Informatika | Politeknik Negeri Jakarta introduction to crm

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Semester Ganjil 2013/2014

Introduction to Customer

Relationship Management

Learning Objectives

 _{Understand the basic concept of CRM}

 _{Identify the four major perspectives on CRM}  _{Define several common misunderstandings}

about CRM

 _{Understand five generic models of CRM}

Sales Cycle

(2) Estimate Sales Potential

(3) Manage Leads (1) Identify

Prospect

(4) Forecasting Sales

CRM Stands for?

Customer Relationship Management

OR

Customer Relationship Marketing

OR

Selected definitions of CRM [1]

 _{CRM is an information industry term for} methodologies, software, and usually

Internet capabilities that help an enterprise manage customer relationships in an

organized way

 _{CRM is the process of managing all aspects of} interaction a company has with its

customers, including prospecting, sales, and service

 _{CRM applications attempt to provide insight into and} improve the company/customer relationship by

Selected definitions of CRM [2]



_{CRM is an}

_{integrated approach to}

identifying, acquiring, and retaining

customers



_{By enabling organizations to manage and}

coordinate customer interactions across

multiple channels, departments, lines of

business, and geographies,

CRM helps

organizations maximize the value of every

customer interaction and drive superior

corporate performance

Selected definitions of CRM [3]

 _{CRM is an integrated information system that}

is used to plan, schedule and control the pre-sales and post-pre-sales activities in an

organization

 _{CRM embraces all aspects of dealing with prospects}

and customers, including the call center, sales force, marketing, technical support and field service

 _{The primary goal of CRM is to improve long-term}

growth and profitability through a better understanding of customer behaviour

 _{CRM aims to provide more effective feedback and}

Selected definitions of CRM [4]



_{CRM is a}

_{business strategy that}

maximizes profitability, revenue and

customer satisfaction by organizing

around customer segments, fostering

behaviour that satisfies customers,

Core Definition of CRM



_{CRM is the}

_{core business strategy that}

integrates internal processes and

functions, and external networks, to

create and deliver value to targeted

customers at a profit



_{It is grounded on high quality}

CRM is Founded on Four Tenets

1. Customers should be managed as important assets

2. Not all customers are equally desirable

3. Customers vary in their needs, preferences, and buying behavior

4. By better understanding their customers,

The CRM Advantages

Quicker Cash Flow

Quicker Cash Flow

Better

Creates Up and Cross-Selling

Opportunities

Creates Up and Cross-Selling

Opportunities

Increased Product Acceptance

Why CRM Systems are Being Used ?



_{Identifying prospects}



_{Acquiring customers}



_{Developing customers}



_{Cross-selling and up-selling}



_Servicing



_Retaining



_{Increasing loyalty}

CRM’s Benefits for Retail Banks (Example)

 _{Increase in average products sold per customer}

over one year from 4.6 to 6.2

 _{3-5 percent decrease in administrative costs}  _{200 percent return on technology investment}

through cost reduction over one year

 _{96 percent reduction in average time for a CCC}

agent to refer a customer to a branch loan office

 _{83 percent decrease in average customer info}

retrieval time

 _{15 percent increase in product revenue in one year}

A Customer Focus Can Aid Retention

 _{Annual Defection Rates}

 _{Newspaper subscriptions 66 percent}

 _{Residential tree and lawn care 32 percent}  _{U.S. long distance telephone 30 percent}  _{Clothing catalogues 25 percent}

 _{Internet service providers 22 percent}

Customer Retention and Profits

 _{Increase retention 5 percent and improve}

profitability in net present value from 20-85 percent

 _{It costs five to ten times more to obtain a}

Which Companies Benefit Most from CRM?



_Companies

_{serving large numbers of}

customers

through complex and frequent

interactions:

 _{Communications companies}  _{Retail banks}

 _{Insurance companies}

 _{Healthcare organizations}  _Utilities



_{Companies with a}

_{steep skew}

Which Companies Benefit the Least from CRM Today?

 _{Companies that engage in minimal interactions}

with each customer

 _{Auto dealers}

 _{Government agencies}

 _{Companies with simple transaction}

Type of CRM Dominant characteristic

Strategic a core customer-centric business strategy that aims at winning and keeping profitable customers

Operational focuses on the automation of customer-facing processes such as selling, marketing and customer service

Analytical focuses on the intelligent mining of customer-related data for strategic or tactical purposes

Collaborative applies technology across organizational boundaries with a view to optimizing company, partner and customer value

Strategic CRM



_{Focus upon the development of a}

customer-centric business culture that is

dedicated to winning and keeping the

customers



_{Customer-centricity competes with other}

business logics



_{E.g. Philip Kotler identifies three other major}

Customer Centricity & Other Business Logics [1]

1. Product-oriented businesses believe that customers choose products with the best quality, performance, design or features

2. Production-oriented businesses believe that customers choose low-price products

3. Sales-oriented businesses make the

Customer Centricity & Other Business Logics [2]

4.

A

customer or market-oriented

company

shares a set of beliefs about putting

the customer first

 _{It collects, disseminates and uses customer and}

competitive information to develop better value propositions for customers

 _{A customer-centric firm is a learning firm that}

Operational CRM

Marketing automation

Market segmentation Campaign management

Event-based (trigger) marketing

Sales force automation

Account management Lead management

Opportunity management Pipeline management

Contact management

Quotation and proposal generation Product configuration

Service automation

Case (incident or issue) management Inbound communications management Queuing and routing

Marketing Automation

 _{Applies technology to marketing processes}

 _{Market segmentation}  _{Campaign management}

• Allow marketers to use customer-related data in order to

develop, execute and evaluate targeted communications and offers

 _{Event-based (trigger) marketing}

• Describe messaging and offer presentation to customers at particular points in time

• Event-based campaigns can be initiated by customer behaviours or contextual conditions

Sales-force Automation

 _{The original form of operational CRM}

 _{Applies technology to the management of a company’s}

selling activities

 _{Improve and standardize the selling process}

 _{Consist of:}

 _{Account management}

 _{Lead management: enable users to qualify leads and assign}

them to the appropriate salesperson

 _{Opportunity management}  _{Pipeline management}

 _{Contact management: manage their communications}

programme with customers

 _{Quotation and proposal generation: allow the salesperson to}

automate the production of prices and proposals for customers

 _{Product configuration: enable salespeople or the customer}

Service Automation



_{Allow companies to manage their service}

operations, whether deliverd through call

centre, contact centre, web or face-to-face



_{Consists of:}



_{Case (incident or issue) management}



_{Inbound communications management}



_{Queuing and routing}

Sources of Customer-related Data for Analytical CRM

 _{Internal sources}

● Sales data (purchase history), financial data (payment

history, credit score), marketing data (campaign response, loyalty scheme data) and service data.

 _{External sources}

Beneficiaries of Analytical CRM



_Customer

●

Analytical CRM can deliver timely,

customized, solutions to the customer’s

problems, thereby enhancing customer

satisfaction.



_Company

●

Analytical CRM offers the prospect of more

powerful cross-selling and up-selling

programs, and more effective customer

Misunderstandings about CRM

1.

CRM is database marketing

2.

CRM is a marketing process

3.

CRM is an IT issue

4.

CRM is about loyalty schemes

CRM Constituencies

1. Companies implementing CRM

2. Customers and partners of those companies

3. Vendors of CRM software

4. CRM application service providers (ASPs)

5. Vendors of CRM hardware and infrastructure

CRM Challenges Vary Across Context

1.

Banks

2.

Auto manufacturers

3.

High tech companies

The IDIC Model of CRM

 _{Identify who your customers are and build a}

deep understanding of them

 _{Differentiate your customers to identify which}

customers have most value now and which offer most for the future.

 _{Interact with customers to ensure that you}

understand customer expectations and their relationships with other suppliers or brands

 _{Customize the offer and communications to}

References



_{Francis Buttle, Customer Relationship}

Management: Concepts and Technologies,

2e, Elsevier Ltd., 2009



_{Baran, Galka and Strunk, Principles of}