crm - mm session

8/2/2019 CRM - MM Session

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What is CRM?

First and foremost its a business strategy

Its a business philosophy

Its not one, but many visions.


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What is Customer Relationship Management (CRM)?

CRM is the development and maintenance ofmutually beneficiallong-term relationships with strategically significant customers

CRM is an IT enhanced value process, which identifies, develops,integrates and focuses the various competencies of the firm to thevoice of the customer in order to deliver long-term superiorcustomer value, at a profit to well identified existing andpotentialcustomers.


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Understanding Customer Relationship Management (CRM)?

CRM is a business philosophy based on upon individual customersand customised products and services supported by open linesof communication and feedback from the participating firms thatmutually benefit both buying and selling organisations.

The buying and selling firms enter into a learning relationship,with the customer being willing to collaborate with the seller andgrow as a loyal customer. In return,, the seller works to maximizethe value of the relationship for the customers benefit.

In short, CRM provides selling organisations with the platformto obtain a competitive advantage by embracing customer needsand building value-driven long-term relationships.


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Determinants of CRM

Trust

The willingness to rely on the ability, integrity, and motivation ofone company to serve the needs of the other company as agreed

upon implicitly and explicitly.

Value

The ability of a selling organisation to satisfy the needs of thecustomer at a comparatively lower cost or higher benefit than

that offered by competitors and measured in monetary,temporal, functional and psychological terms.


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Why CRM?

The surge of interest in CRM can be explained in part by thetremendous growth of the Internet and electronic commerce(e-commerce).

Internet growth and online retail revenue are projected tocontinue over the next decade.


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The Goal of CRM

If this goal is met, a business can:

Provide better customer service;

Make call centers more efficient; Cross sell products more effectively;

Help sales staff close deals faster;

Simplify marketing and sales processes;

Discover new customer and ultimately

Increase customer revenues.


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Determinants of CRM

In addition to trust and value, salespeople must:

Understand customer needs and problems;

Meet their commitments;

Provide superior after sales support;

Make sure that the customer is always told the truth(must be honest); and

Have a passionate interest in establishing and retaining a long-

term relationship (e.g., have long-term perspective).


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Stages in the development of a Customer Relationship

The Pre-relationship StageThe event that triggers a buyer to seek a new business partner.

The Early Stage

Experience is accumulated between the buyer and seller although a greatdegree of uncertainty and distance exists.

The Development StageIncreased levels of transactions lead to a higher degree of commitment andthe distance is reduced to a social exchange.

The Long-term Stage

Characterised by the companies mutual importance to each other.

The Final Stage

The interaction between the companies becomes institutionalized.


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Chapter 15: Customer Relationship Management (CRM)

Stages in the Development of a Key-Account Relationship

Degree ofinvolvement

High

Low

Nature of customer relationship

Transactional Collaborative

Pre-KAM

Early-KAM

Mid-KAM

Partnership

Synergistic KAM

(Millman and Wilson, 1995)


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A Relationship Life Cycle Model

High cooperationLow competition

Low cooperationHigh competition

Time

Pre-relationship

stage

Developmentstage

Maturitystage

Declinestage

(Wilkinson and Young, 1997)


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ManufacturerWholesaler

Retailer

Distribute Sell

Supply

Demand

Consumer

ConsumeProduce

$ $$

Purchase

Enterprise Systems

Enterprise Resources Planning

Supply Chain Management

Customer RelationshipManagement

Customer RelationshipManagement


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Why is technology necessary?

As companies grow they become separated fromthe customers and cultures they intuitivelyunderstand

Customer knowledge is maintained in both drymemory Documents, Spreadsheets, Emails

Customer cards, Reports

and wet memory, i.e. the heads of people

CRM technology captures, stores, analyses anddistributes this information for marketing, salesand service operations


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Functions of Customer Relationship Management

Direct functions (are the basic requirements of a company that arenecessary to survive in the competitive marketplace)

Profit;

Volume; andSafeguard

Indirect functions (are the actions necessary to convince thecustomer to participate in various marketing activities).

Innovation:Market;Access.


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ERP Back Office

Internet

Support

Customer

Management

Sales

Marketing

CardCard

ReportReport

Report

SpreadsheetSpreadsheet

Document

Document

Document

Document

Document

Document

Spreadsheet

Spreadsheet

email

email

email

Spreadsheet

Spreadsheet

Single view of the customer?


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Customer Relationship Management (CRM)

The role of salespeople as relationship builders and promoters

Salespeople by:

identifying potential customers and their needs;approaching key decision makers in the buying firm;negotiating and advancing dialogue and mutual trust;coordinating the cooperation between the customers andtheir company;encouraging the inter-organisational learning process;contributing to constructive resolution of existing conflicts; andleading the customer relationship development team

are the individuals in any organisation who act both as relationship

builders and as relationship promoters.


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Single View of the

Customer

Shared

Customer-Related

Knowledgebase

Sales

Marketing

ERP Back Office

Internet

Support

CRM Knowledgebase

CustomersProductsPricing

PromotionsCompetitorsConsumersComplaintsCampaigns

History

Customer

Management

Multi-channel CRM


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Courtesy: PeopleSoft

360 degree view of the customer


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CRM issues vary by industry

CRM?

Telcos and

Banks

Automotive

Manufacturers

High

Technology

Consumer Goods

Beverage

ChurnShare of walletCall centresData mining

Dealer networksService and maintenanceCustomer knowledgePortals

Complex sellingChannelsProduct configurator

Partner portal

Retail tradeTrade spend and promosStore auditsComplex customer structures


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Relationship Marketing

Relationship marketing involves long-term,value-added relationships developed overtime with customers and suppliers.

Relationship marketing recognizes the criticalimportance of internal marketing to thesuccess of external marketing plans (Boone

and Kurtz, 2001)


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The Changing Role of

Relationship Marketing

The role of technology has assisted inrelationship marketing and has grown torepresent a new form of competitiveadvantage.

Both marketing researchers and businesspractitioners have identified the

implementation of technology as an essentialcomponent of relationship marketing


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CRM Implementation Strategies

Operational CRM

Analytical CRM


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Operational CRM

Enables and streamlines communications toand from the customer

Front-Office CRM

Involves areas where direct customer contactoccurs known as touch points


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CRM applications

DataKnowledge

BaseWarehouse

CRM SystemMarketing(analysis,

promotionsactuals)

Sales

(synchronised,field information)

Service

(orders,complaints) Management(decision support,performance)

Partner

(promotions,funds, portals)

Consumer(web, clubs)

Other systems, email, telephone

Web


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Operational CRM

Touchpoints

Media

Physical

Mail

Phone

Fax

eMail

Web Personal


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Analytical CRM

Involves understanding the customeractivities that occurred in the front office.

Back-Office CRM

Requires technology to compile and processcustomer data and

New business processes to refine customer-facingpractices to increase loyalty and profitability.


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Summary

CRM is a new business philosophy based on trust and value;

The core function of CRM is the value creation process;

Customer relationships develop over time;

The role of global salespeople in the process is that of bothrelationship builders and relationship promoters; and

The basic premise of CRM is to offer superior value tocustomers in an effort to turn prospects intocustomers, customers into loyal customers, and

loyal customers into partners.


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KEEP IT SMILE STUPID

K I S S