Customer Relations ManagementClass 6 - LO205 - Jan. 24,2001

Lecture by Judith Molka-Danielsen

References (not required to read): *“Electronic Commerce: A Manager’s Guide”, Ravi Kalkota and Andrew B. Whinston, Addison-Wesley, chapter 11, 1999. *Related power point notes from Michael Spring, U.of.Pittsburgh, 2000.*“The E-business Revolution”, Daniel Amor, Hewlitt-Packard Professional books, ch.5, 1999.

Overview Summary of Turban Chapter 3, prelude to this. Motivation of Customer Relations Management CRM Subsystems -

– Marketing Management (MM), – Sales Force Automation (SFA), – Customer Service and Support (CSS)

Web Design Rules On-Line Measurement

Turban Ch.3 Summary 1. Consumer behavior - Vendors control the

parts of Logistics, Support Technology, and Customer Service and Support Systems

2. It is important to know customer characteristics

3. It is important to understand the customer decision making process– to understand where you can influence customer

behavior– Intelligent Agents can be used in some steps

Turban Ch.3 Summary 4. Build One-to-One relationships with

customers. – Boost loyalty– boost trust– One-to-One include software to trigger special offers

• BroadVision - recognizes customers and displays products relevant to them.

• Cold Fusion - tool for rapid application development and site design.

• GroupLens - collaborative filtering, with rating services, for contents and products.

• WebObjects - serve data from legacy databases to on-line visitors.

Turban Ch.3 Summary 5. Implement Customer Service to

– retain customers - Look at Web Site Design (Content is King).

– satisfy new needs 6. Doing Market Research involves

– understanding segments of products and groups– classification of customers

Turban Ch.3 Summary 6. (cont.)Doing Market Research involves

– using Data Mining tools to • predict trends, find hidden patterns, find what is ordered

together• Algorithms use association, sequences, classification,

clusters, and forecasting techniques.

– Collect samples on the Internet • larger is better• voluntary through surveys, data accuracy limitations• involuntary through tracking movements, (ie. Cookies)

– Ernst & Young market research: on-line retailing

Turban Ch.3 Summary– Ernst & Young market research: on-line retailing

ProductSegment

Clothes Electronics Toys Food Beauty

HighestSatisfactionRating %

.33 .41 .50 .44 .50

Criteria withGood Rating

quality,ease-use

selection,price,ease-use,quality

quality,selection,cust.svc.,ease-use

quality,selection,cust.svc.,ease-use

quality,ease-use,price,selection,offers,cust.svc.

Turban Ch.3 Summary 7. Intelligent Agents - provide

– auto replys– analyze movements– learn customer behavior and needs

8. Organizationl buyer behavior model– follow organizational purchasing guidelines and

constraints– involve interpersonal influences (power, politics)

Overview Summary of Turban Chapter 3, prelude to this. Motivation of Customer Relations Management CRM Subsystems -

– Marketing Management (MM), – Sales Force Automation (SFA), – Customer Service and Support (CSS)

Web Design Rules On-Line Measurement

B2B Inputs

Manufacturing Process Management

Logistics

Management

Customer Relations

Management

SupportServices

Financial Management

Customer Relations Management

“Pull” supply chains are based on linking customer information gathering to the upstream business processes

CRM involves the integration of traditionally separate systems– Marketing Management– Sales Force Automation– Customer Service and Support

The Motivation of CRM

Marketing and sales account for 15-35% of costs

Customer input can lead to better products Current customers are a predictable source of

future sales Customer assets can be valued as a part of

acquisitions and mergers Customers increasingly expect high quality

personalized service

CRM-MMMarketing management Marketing has been based on product,

price, and promotion Marketing in a global economy across

multiple product categories using different channels requires better tools

Ultimately, customer driven marketing makes it essential to gather customer input

CRM-MMGoals Provide data for data mining and

OnLine Analytic Processing(OLAP) Provide real time accurate data Allow for better inventory management

and input into promotions and sales Provide trend analysis data across

channels to drive operation

CRM-MM

sales

operations

customer

OLTP

System

Data extraction validation integration

OLAP

Data analysisBusiness

Intelligence

Modeling

Visualization

Statistics

Profiling

LocalAccess

InternetAccess

CRM-SFASales Force Automation Two goals in sales force automation

– Support the sales person in the field– Economically integrate sales information increasing

corporate wide coordination A good system will:

– Support salesperson and telemarketing productivity– Automate selected sales processes– Maintain direct mail and email systems– Support sales and marketing management including

compensation management

CRM-SFASupport of Sales Representatives Provision of marketing materials, price

lists, business intelligence online Provision of customer leads and

information captured from all sources Prequalification of sales prospects and

classification of customers Provision of real time product availability

and order entry information

CRM-SFASome basic examples Web information requests are processed

– Through a standard set of followups– To the appropriate sales person– Automated tickler systems

Tracking of contacts – Prospects stored for future use– Datamining of prospects

Provide information– To sales people about current pricing inventory etc,– To other company support units to enhance sales

CRM-SFAMore sophisticated examples Develop intelligent-agents to acquire news

items and competitor information for distribution to the sales force and management

Develop analysis tools to detect trends in customers and sales

Develop network based push promotion and information dissemination

Provide online customer controlled input and tracking information

CRM-CSSCustomer Service and Suppport Customers are increasingly defined as

an important company asset The Web makes new forms of customer

support possible and cost-effective The Web can serve both as a way to

reach out to customers and as a way for them to reach into the company

CRM-CSSGoals Lower support costs Provide global access Create proactive services Empower customers to solve issues

independently Provide an opportunity for customers to

input into the business process

CRM-CSSBasic Processes Provide the customer with product update

information, fixes, new product information Provide a simple registration system that

gathers:– User demographics– Product satisfaction– Agreement to receive targeting notifications

CRM-CSSAdvanced Processes Link sales information and customer ID for

telephone help desk support Use a workflow system to track resolution of

customer issues through involved departments

Feed problem reports lead into research and development operations for action

Use problem tracking data feed into manage operations and field service personnel

Overview Summary of Turban Chapter 3, prelude to this. Motivation of Customer Relations Management CRM Subsystems -

– Marketing Management (MM), – Sales Force Automation (SFA), – Customer Service and Support (CSS)

Web Design Rules On-Line Measurement

Web Design Rules Content - focus first on content and then on design.

Never let users leave your site without giving them information, so they will come back.

Consistency - design your site with consistent content quality, do not bore the customer. Images should give information, not irrelevant images.

Density - break content into small pieces, that fit together. Short pages. Information over pages. No more than 10 links from a page.

Design - use few colors, color theme for pages connected with your site. If possible, give users a choice of format for document download type. Let users decide the sequence that they visit pages (escape from demos).

Size - use small graphics with large impact.

Overview Summary of Turban Chapter 3, prelude to this. Motivation of Customer Relations Management CRM Subsystems -

– Marketing Management (MM), – Sales Force Automation (SFA), – Customer Service and Support (CSS)

Web Design Rules On-Line Measurement

On-Line Measurement Counting can be done by web site owners. They

use web server log files. Can count visits to web pages too. – The counts can be inflated: visits from spiders, visits

from yourself, criteria to increase count after every refresh even within the same session.

– The counts can be under-counted: ISPs save pages in cache files, so the user might see an old copy even between sessions (opening the browser). Proxy servers relay requests from users making 1000 people appear like 1.

– Server can use cookies, but you cannot force users to accept cookies from a web server.

On-Line Measurement Counting - Continued

– Page Views - are all the pages that were viewed by on-line customers.

– Visits - are all page views by a single on-line customer.

– Automated log file analyzers - can import data into a propriatary database to analyze traffic. Can produce graphical reports, tables, charts.

– On-line rating agencies - add software on the users PC to monitor use, instead of at the server.

– Third Party Auditing - I/Pro http://www.ipro.com and MatchLogic http://www.matchlogic.com/ offer programs to address problems with firewalls and proxy servers. (Java applets must be allowed through.)