- 1. Customer-driven processes Manuel C. Manuel III University of
the Philippines
2. Why focus on customer relationships?
- Good customer relationships are the most likely route to long
term sustainability.
- Developing strong customer relationships is the key to earning
revenue, understanding trends in the application of technology, and
sustainability.
Manuel C. Manuel III ... University of the Philippines 3.
Characteristics of sustainable organizations
- They are customer-focused and strive to create value for
them.
- They aim to satisfy present and future customer needs.
- They pursue after-sales follow-up.
- They develop long-term relationships with customers.
Manuel C. Manuel III ... University of the Philippines 4.
Elements that characterize a relationship
- A relationship impliesmutuality . This means that relationships
must inherently betwo-way in nature.
- A relationship is driven byinteraction . This means that
relationships involve exchange of information.
- A relationship isiterativein nature. This means that the
interactions in a relationship build up a history and a context
over time.
Manuel C. Manuel III ... University of the Philippines 5.
Elements that characterize a relationship
- A relationship is driven by anongoing benefitto both parties.
Precisely because of the context of the relationship and its
continuing benefit to both parties, each party has an incentive to
recover from mistakes and keep the relationship.
- A relationship requiresflexibilityin order to continue. This
means that both parties must be able to change behavior, as the
relationships historical context develops over time.
Manuel C. Manuel III ... University of the Philippines 6.
Elements that characterize a relationship
- Every relationship isunique . This means that every
relationship is different: constituted with different individuals,
different interactions, different histories, and different
behaviors.
- Every continuing relationship requirestrust . This means that
parties to the relationship must be able to reconcile their own
culture and behavior with the requirements of generating and
sustaining trust.
- Trust is the currency of all commerce .
Manuel C. Manuel III ... University of the Philippines 7. Four
implementation tasks for creating & managing customer
relationships
- These four implementation tasks are also referred to as theIDIC
model .
Manuel C. Manuel III ... University of the Philippines 8. The
IDIC process implementation model Manuel C. Manuel III ...
University of the Philippines IDENTIFY INTERACT DIFFERENTIATE
CUSTOMIZE ANALYSIS ACTION 9. The IDIC process implementation
model
- Identify customers. The company must be able to recognize a
customer when he comes back in person, by phone, online, or
wherever.
- Differentiate customers. Customers represent different levels
of value for the institute and they have different needs.
Manuel C. Manuel III ... University of the Philippines 10. The
IDIC process implementation model
- Interact with customers. A conversation with a customer should
pick up where the last one left off.
- Customize treatment. The institute should adapt some aspect of
its behavior toward a customer, based on that customers needs and
value.
Manuel C. Manuel III ... University of the Philippines 11.
Customer relationship management (CRM)
- The termCRMis also known by other labels
-
- Integrated marketing communications
-
- One-to-one relationship management
- ButCRMinvolves much more than marketing, and it cannot deliver
optimum return on investment without integrating individual
customer information intoeveryorganizational function, from
customer service, to production, logistics, and distribution
channel management.
Manuel C. Manuel III ... University of the Philippines 12.
Customer relationship management (CRM)
- CRMis both an operational and an analytical process:
- Operational CRMfocuses on the changes in process affecting the
day to day operations of an organization.
- Analytical CRMfocuses on the strategic planning needed to build
customer value, as well as the cultural, measurement, and
organizational changes required to implement that strategy
successfully.
Manuel C. Manuel III ... University of the Philippines 13.
Measuring the success of customer-based initiatives
- Any initiative to build customer relationships will affect the
company financially.
- Customer-focused projects can easily cost a lot of money, not
counting the time, human resources, and organizationalangstinvolved
in the process itself.
- Thus, it is important to define appropriate metrics that will
drive management decisions focused on increasing the value of the
institute by increasing the value of the customer base.
- We refer to these metrics ascustomer profitability metrics
.
Manuel C. Manuel III ... University of the Philippines 14.
Customer profitability metrics
- Reduced process or transaction cost
- Reduced customer attrition
- Faster cycle times for processing transactions
- Higher customer satisfaction
Manuel C. Manuel III ... University of the Philippines 15.
Making sure you do a good job
- To achieve higher levels of success in terms of
customer-focused initiatives, the following areas must be
addressed:
- Organization.The company should track how well its people,
culture, and organizational structure are adjusting.
- Process.The company will need new and unique business processes
to meet the varied needs of different customers.
Manuel C. Manuel III ... University of the Philippines 16.
Making sure you do a good job
- Information.There will be greater information-focus as the
company strives to turn customer data into knowledge that it can
use to make it easier for the client to buy from it. This will
require new ways of storing data, analyzing information, and
ultimately disseminating the information organization-wide.
- Technology.Investment in technology is a likely result of the
greater focus on clients.
Manuel C. Manuel III ... University of the Philippines 17.
Implementing customer strategy Manuel C. Manuel III ... University
of the Philippines STRATEGY IMPLEMENTATION LEVEL CAPABILITY
IDENTIFY DIFFERENTIATE INTERACT CUSTOMIZE Consistent recognition of
the customer Privacy policy, backed up by privacy pledge &
commitment Common coding system for customer IDs Shared customer
database Understanding of customer differentiation Models for value
and research method for needs Ease in defining the right variables
Strong data analysis tools Customer skills, training & metrics
Enterprise-wide memory of customer at all touchpoints Framework for
capture of value and needs Able to capture data at all points of
interaction Accountability for each customer Cross-functional flow
of systems Adequate information to allow customization Integration
between front, back-office systems ORGANIZATION PROCESS INFORMATION
TECHNOLOGY 18. Customer service
- Customer serviceis a process consisting of intangible
activities designed to enhance the level of customer satisfaction
by taking care of customer needs before, during, and after a
purchase or delivery of service.
Manuel C. Manuel III ... University of the Philippines 19.
Logistics and customer service
- Logistics plays a vital support role in customer service
performance, since this function is so involved in moving, storing,
and distributing products in response to a customer order.
- Customer service includes order processing, after-sales
activities and services, such as delivery, which are certainly
aligned with the logistics function.
Manuel C. Manuel III ... University of the Philippines 20.
Elements of customer service
- Pre-transaction elements (before the sale)
- Transaction elements (during the sale)
- Post-transaction elements (after the sale)
Manuel C. Manuel III ... University of the Philippines 21.
Customer service failure
- When any of the customer service activities are neglected or
performed poorly,customer service failureoccurs, which can lead to
additional costs and possibly loss of goodwill, customer
defections, and reduced sales revenues.
Manuel C. Manuel III ... University of the Philippines 22.
Customer service failure: examples
- Unwillingness to honor customer service policies
- Employee indifference to customer needs
- Unsatisfactory resolution of customer complaints
Manuel C. Manuel III ... University of the Philippines 23. A
7-step approach to service recovery
- Break the silence and listen for complaints. Since many
customers just dont like to complain directly, create an
organization that can uncover service failures and customer
problems.
- Anticipate needs for recovery. Develop recovery plans and
procedures for all potential failures.
- Train employees. Develop the skills of good communication,
creative thinking, quick decision making, and customer empathy
among customer contact employees.
Manuel C. Manuel III ... University of the Philippines 24. A
7-step approach to service recovery
- Empower the front line. Allow front line employees to act
quickly and decisively to solve customer problems.
- Act fast. Act quickly and effectively once the service failure
has occurred to make the best impression and increase the
likelihood of customer retention.
Manuel C. Manuel III ... University of the Philippines 25. A
7-step approach to service recovery
- Close the loop. Permanently fix the condition that led to the
customer service failure.
- Measure the failure costs. Measure and record the costs to
recover from and to fix the problem; this can be used as a
justification for further service improvement.
Manuel C. Manuel III ... University of the Philippines 26.
Manuel C. Manuel III ... University of the Philippines