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Customer Relationship Management

Further CRM

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Types of Customer Relationship Management

• Operational CRM

• Analytical CRM

• Collaborative CRM

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Operational CRM

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Goal of Operational CRM

• The goal of Operational CRM is to provide electronic support for the "front office" business processes, which include all customer contact (eg. sales, marketing and service).

• it aims to deliver customer-centric business processes and operations.

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Business Benefits

• Operational CRM provides the following benefits: – Enables a 360-degree view of each customer – Each employee from sales people to service

engineers can access complete history of all customer interaction with the organisation regardless of the initial point of contact

– Delivers personalised and efficient marketing, sales, and service

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Components of Operational CRM

• Sales force automation (SFA)  

• Enterprise marketing automation (EMA) 

• Customer service and support (CSS)

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Sales force automation (SFA)  

• SFA automates critical sales and sales force management functions eg– lead/account management– contact management– quote management– Forecasting– customer preference tracking

• SFA requires a well designed database in order to store and retrieve customer details.

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Enterprise marketing automation (EMA) 

• EMA provides information about the business including – Competitors– industry trends

• EMA utilises Data Mining and OLAP Technologies which have been covered earlier in this module.

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Customer service and support (CSS)• CSS automates

– service requests– Complaints– product returns– information requests.

• call-centre support for customer inquiries has evolved into the customer interaction centre (CIC) - uses multiple channels (Web, phone/fax, face-to-face, kiosk, etc).

• CSS technology is database oriented and is underpinned by Service Level Agreements (SLAs)

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Service Level Agreements

A Service Level agreement:Is a contract with a customer which• Defines the Level of service to be

provided thereby eliminating unrealistic expectations.

• Enables the management of complaints /comments

• Facilitates performance monitoring

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Example

• Help Desk• Accident and emergency units

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Setting expectations:

• Customers are happy when – a supplier under-promises and over-delivers– a supplier delivers the correct order on time– a supplier routinely exceeds expectations

• Service level agreements mean that the customer knows what to expect and this sets a benchmark for their judgement of the service.

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Complaints

• A complaint can be viewed as- a useful measure of performance- guidance for improving quality- an opportunity to increase customer loyalty

• A complaint may be categorised based on how far outside of the service level agreement the service received was.

• Expert handling of complaints can increase customer loyalty and referrals.

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Handling complaints

• Once categorised, complaints can be handled electronically in a uniform way by a good CRM system.

• They are viewed positively by organisations and MUST be responded to positively.

• Usually response includes– An apology (for inconvenience caused)– An assurance that the complaint has been taken

seriously and quality is being improved– A marketing gesture eg. Discount voucher.

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Performance monitoring

• Ability to produce performance exception reports leading to the possibility of targeted marketing to reduce churn

• Identification of problem areas leading to the possibility of quality improvement

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Analytical CRM

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Goal of Analytical CRM

• To develop insight into customers’ needs.

• To determine what other products and services you can sell to your customers in order to increase the Average Revenue Per User (customer) ARPU.

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Benefits to Business

• Segmentation of customers to feed into enterprise marketing (EMA) systems

• Identifies customers in danger of churning

• Aids Decision Making

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Customer segmentation

It is useful to segment customers for targeted marketing campaigns:– Customers most and least likely to repurchase

product)– Profitability analysis (which customers lead to

the most profit over time)– Personalisation (the ability to market to

individual customers based on requirements)

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Other Analyses

• Design and execution of specific customer campaigns, including cross-selling, up-selling

• Analysis of customer behavior to aid product and service decision making (e.g. pricing, new product development etc.)

• Management decisions, e.g. financial forecasting and customer profitability analysis

• Prediction of the probability of customer defection (churn analysis)

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Collaborative CRM

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Goal of Collaborative CRM

• Collaborative CRM's ultimate goal is to use information collected from all departments to improve the quality of customer service

• This requires a clear contact management strategy which enables everyone in an organisation to see who is talking to who.

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Business Benefits

• Enables efficient productive customer interactions across all communications channels

• Enables web collaboration to reduce customer service costs

• Integrates call centres enabling multi-channel personal customer interaction

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Aim

• Collaborative CRM aims to get various departments within a business, such as sales, services and marketing, to share the useful information that they collect from interactions with customers.

• Feedback from a technical support center, for example, could be used to inform marketing about specific services and features requested by customers.

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Aims continued

• Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. It is a solution that brings people, processes and data together so companies can better serve and retain their customers.

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E-CRM and M-CRM

• E-CRM allows customers to access company services electronically

• M-CRM allows customers or managers to access the systems for instance from a mobile phone or PDA with internet access, resulting in high flexibility.

• An example of a company that implemented M-CRM is Finnair, who made it possible for their customers to check in for their flights by SMS.

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CRM Strategy

• CRM is a broad area which can be applied on an enterprise-wide basis. It could be introduced to parts of an organisation but is more effectively introduced as a strategy.

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What makes CRM fail?

• The main risk factors of implementing a CRM strategy may be:– Lack of CRM planning – no strategy– Underestimating implementation costs,

timeframes and organizational commitment – Poor front and back-end integration– Not being customer focused or customer centric– Political friction within the organization stifles the

sharing of customer information – Initiatives are driven by technology rather than

by customer strategy and service process design