1 Customer Relation Management 6th Nov

8/8/2019 1 Customer Relation Management 6th Nov

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C R M


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Business Challenges

Businesses in many industries may lose up 50% of theircustomers over a five year period.

Studies have shown its 6 to 7 times more expensive to acquire

a new customer than it is to retain a current customer.

As little as a 5% increase in customer retention can increase

profits by 25 to 95%.

Yet many businesses are still focused only on customer

acquisition and see customers from the fragmented view ofindividual transactions


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Customer Relationship

Management

Fortune 500 companies will lose

50% of customers in 5 years

(Peppers & Rogers Group)

Only 4% of unsatisfied customercomplain. 65~90% do not repurchase(Anderson Consulting)

82% of customers whose complaintsresolved repurchased

Cost of new customer acquisition 7-8 times of retaining currentcustomers(Yankee Research)

98% coupon are scrapped.

50% current customers do not

contribute to profit

(AMR Research)

Top 20% customers contribute 60%of revenue and 70% of profit

20 : 80 rule

Customer is important

Analysis on Customers essential


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Customer is

When products become so similar and technologies arecommonly available , CUSTOMER EXPIRIANCE is the

only true differentiator

There is only one boss. The customer!

He can fire everybody in the company, from the chairman

on down, simply by spending his money somewhere else.

Sam Walton, founder of Wal-Mart


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Todays customer is

Smarter

leaner

more price conscious

has lower morale overwhelmed by competitors

more demanding

less forgiving

harder to satisfy

less loyal


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Core Marketing Concepts


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What's In

A fundamental paradigm shift is occurring

in how company market to customers.

One-to-One Marketing

Customized Products

Share of WalletLife Time Value

Event Driven Marketing

Know Your Customers

Manage Your Customers

Differentiate CustomersCross-sell / Retention

l0% of Market, l00% of

Customer

Mass Marketing

Standardized Products

Market SharePresent Value

Program Driven Marketing

Know Your Products

Manage Your Products

Differentiate ProductsAcquisition

100% of Market, 10% of

Customer

What's Out


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What CRM means?What CRM means?

Customer ?

Relationship ?

Channels of interaction, segmentations

Management?

organization of customer related information


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Relationships with whom?

All stakeholders including

Customer

Employees

Suppliers

Government

Citizens

I focus on Customers here.

The Customer Relationship Management (CRM).


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The Meaning of Relationships

Continuity

Mutuality

Interdependence

Understanding

Trust


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Evolution of customer relation over time

Valueo

fcustomerrela

tion

Three simple business goals of CRM

CustomerAcquisition

Acquire the right

customers with

high potential

value

CustomerDevelopment

Cross- and up-

sell by offeringthe right products

at the right time

Customer

Retention

Retain profitable

customers andincrease their

long-term value


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The process of

Targeting

Acquiring

Servicing

Retaining

and

Building long-term relationships with customers


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CRM Versus Mass Marketing

TraditionalTraditional

MassMass

MarketingMarketing

CRMCRM

Shotgun ApproachShotgun Approach

Rifle ApproachRifle Approach


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Define customerrelationship management


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1. a technology.

CRM is just a new system to install, new code to write.

1. sales force automation (SFA). CRM is just a business development process for our salespeople.

1. customer loyalty. CRM is a synonym for customer loyalty.

1. database marketing. CRM just allows us to leverage our customer data better.

1. call center technology. CRM is just a way to cut costs in the call center.

1. a project. We can install CRM in 30 days with this team of three!

1. a producer of intangible benefits. You just cant measure relationship management concretely.

1. a business panacea. Just install the software apparently it solves problems.

CRM is NOT


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CRM is a customer-focused

business philosophy designed to

effectively create experiencesthat attract, acquire and retain

customers.

To realize the benefits,

enterprises must implement collaborative processes

and technologies that support customer interactions throughout all

channels.


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CRM ?

A company-wide business strategy

designed to optimize profitability,

revenue, and customer satisfaction by

focusing on highly defined and precise

customer groups.


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Customer Relationship Management

..an enterprise approach to understandingand influencing communications in order

to improve customer acquisition, customer

retention, customer loyalty, and customerprofitability.


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Customer-centric

Under this philosophy, the company

customizes its products and service

offering based on data generated throughinteractions between the customer and the

company


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An data-driven approach that

enables companies to assess each

customers current needs and potential

profitability and tailor sales offers and

service. It often involves using multiple

channels to improve effectiveness and

efficiency. (Goff et al. 1998 Mckinsey

Quarterly, No3)

An enterprise approach to

understanding and influencing

customer behaviorthrough

continuous relevantcommunication to

improve customer acquisition,customer retention, and customer

profitability. (NCR corps.,1999)

A management discipline utilizingspecialized tools, technologies, andtechniques to facilitate the operationand improvement of front-office

business functions with the intent ofoptimizing the total value derivedthrough customer relationship. (Pivotalsoftware Inc. 1999)

An enterprise wide businessstrategy designed to optimize

profitability, revenue and customer

satisfaction by organizing the

enterprise around customer segments,

fostering customer-satisfying behaviors

and linking processes from customers

through supplies. (Gartner Group)

CRM Definitions


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What is CRM?

Organizing Around

Segments

Organizing AroundSegments Tracking Interactions

Tracking Interactions

Fostering SatisfactionFostering Satisfaction Linking ProcessesLinking Processes

Special Promotions

Targeting

Markets and Individuals

Special Promotions

Targeting

Markets and Individuals


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People- Belief that your customers and employees areyour most important asset and that long-term survivaldepends on these relationships.

Process- Structuring your organization and businessprocesses to support the culture.

Technology- Automating and integrating businessprocesses to capitalize on the culture.


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CRM is a Management Tool, encompassing all

functions, for focusing on the customer

Sales

Marketing

Service

Mfg

Purchasing

R&DSpares

ProductProduct

PlanningPlanning

CRM is a set of operating business processes built around

the customer


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CRM is the front end (customer facing) activity. It needs to be firmly

supported by all other back-end processes.

ERP

SCM MFG

FAST FWD

PURCHASING

R&D

CRM

All improvement initiatives under the CRM Umbrella


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Makes Four Marketing Dreams Come True

1. Dream to target and serve customers on an individualbasis ( prefer 1 to1 marketing to mass marketing.

2. Dream to enjoy log term relationships with them,

especially with the profitable customers (preferringcommitment to flirting).

3. Dream to get rid of barriers and distortions created by

the non-value adding intermediaries (preferringdisintermediarization and direct marketing)

4. Dream to reduce marketing cost progressively.


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Architecture of CRM

There are three parts of application architecture of CRM:

operational - automation to the basic business processes

(marketing, sales, service)

analytical - support to analyze customer behavior, implements

business intelligence alike technology

co-operational - ensures the contact with customers (phone,

email, fax, web, sms, post, in person)


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Operational CRM

Operational CRM means supporting the so-called "front office"business processes, which include customer contact (sales,

marketing and service)

Operational part of CRM typically involves three general areas of

business:

Sales force automation (SFA)

Customer service and support (CSS)

Enterprise marketing automation (EMA)


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Analytical CRM

Data gathered within operational CRM are analyzed to segmentcustomers or to identify cross- and up-selling potential.

Collaborative CRM

Collaborative CRM facilitates interactions with customers through

all channels (personal, letter, fax, phone, web, e-mail) and

supports co-ordination of employee teams and channel.


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Operational CRM

Business Operation Management

Analytical CRM

Business Performance Management

Collaborative CRM

Customer Interaction Management

SalesMarketing ServiceSales Data

AnalysisMarketing data

AnalysisCustomer Data

Analysis

Feed

Back

Planning/

Analysis

Action

CRM Components

Web

Personalization

Call Center

Automation

Web Sales

& Service

Closed Loop Processing


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Add Customer Attrition to the P&L Sheet


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Components of Operational and Analytical CRM

Operational CRM:effective and efficient use and management of people, process and technology

Analytical CRM:

the measurement of people, process and technology


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Bridge the divide.

Member

Value

Seg

men

ta

tio

n

Communication

R

et

ain

Customer

Value

Con

vers

ion

Segmen

ta

tio

n

Communication


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Bottom-line !!!!

Customer is

KING

Understand him !!!


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How to build Loyalty?

Framework of building Loyalty

CRM

(CR Strategy)Trust/

Intimacy

Reward Program

/Continuing Campaign

Repurchase

/ Cross-selling

Improving

Core Products/Service

Innovation of Channel Mgmt.

Customer

Satisfaction

Customer

Loyalty

Phased ElementsDriversDegree of

Relationship

Attitude,

not Action

Action, not Affinity

(Artificial Loyalty)

Recognition

of Relationship,

Referral


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A Brand-Infused Causal Model


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Loyalty-the customer-facing tip of the

CRM Iceberg

Loyalty

CRM

Customer Direct

Communications(email, postcards, etc.)

Encourage

Multi-channel

Buying

Increase

Cross-sell

Identify

Customers at

all Touchpoints

Encourage

WOM(word of mouth)

Increase Re-buyRates

Increase Email

Click-thru and

Open Rates


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Thats All There Is To It


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Organization

Customers


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Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Touchpoints


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Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Sales

Marketing

Service

Finance

Production


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Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Sales

Marketing

Service

Finance

Production


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Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Sales

Marketing

Service

Finance

Production

CRM


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Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Sales

Marketing

Service

Finance

Production

CRM

Process, Technology, People

Selling Knowledge

Product Knowledge

Solutions Knowledge

Customer Knowledge

Date post:	10-Apr-2018
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