This document provides an introduction to customer relationship management (CRM). It discusses key CRM concepts like understanding customers, touch points of interaction, and market segmentation. It emphasizes the importance of customer retention and measuring customer satisfaction. It also covers challenges like dealing with unhappy customers and adopting new technologies. The overall message is that CRM involves strategically managing all customer interactions to improve relationships and business outcomes.

1. Customer Relationship
Management (CRM)

2. Welcome!
 Everyone can can understand CRM since we are all
customers at times.
 CRM is one of the most lucrative areas with billions
of dollars spent.
 A good CRM focus is often the difference between
success and failure.
 You can use many of these ideas to improve your
life and increase your work successes.
 I’ve done it, and I believe in it.

3. Initial Vocabulary
 CRM – Customer Relationship Management
 Let’s jump right in and…
 deepen your understanding,
 show some real life complexities,
 give you a scope and vision

4. Introduce yourselves
 Turn around and introduce yourselves to
your neighbors behind you
 Ask them what other words they might use to
mean a customer?
 Ask them the difference between a customer and
a client?
 Can the roles change with customers?

5. What customer?
 Is a ‘client’ the same as ‘customer’ ?
 Different people use different words.
 Sometimes they mean the same thing, sometimes not.
 Homonyms and synonyms.
 Good starting point is to collect all the words used
for customer and build a common vocabulary.
 It improves efficiency and understanding when
people use the same words to mean the same thing.
 At a minimum, it will expand your understanding
of the customer idea
Microsoft
PowerPoint Presentation

6. Customer Differentiation

8. Tree Swing – discussion points
 of marketing - add unnecessary value, add complexity, bells and whistles, embellish, put
their own mark onto things, fanciful, impractical, untested, untried, creativity for
creativity's sake, subjective not objective, theoretical not practical, clever ideas, think they
know what's best for the customers even if the survey feedback is utterly clear, fail to
consult with engineering, production and anyone else in the organisation.
 of management - cost-conscious, process-led rather than output-aware, failure to
understand and interpret real issues and implications, failure to ask questions, committee
decisions produce impractical solutions, removed from reality, detached from customers
and front-line staff, failure to consult with users and functional departments.
 of engineering - technical interpretation rather than practical, unconcerned with aesthetics
and ergonomics, consideration stops after the 'can we build it?' stage, lack of consultation
with specifiers and user representatives, meets specification but doesn't work properly,
inappropriate materials and absence of styling.
 of manufacturing - production specification over-rides design considerations, a law unto
themselves, you get what you're given, any colour you like as long as it's black, detached
from users, specifiers, designers, and everyone else except other manufacturing staff,
unconcerned with usability or functionality, certainly unconcerned with bells and whistles
and added value, totally focused on production efficiency, cost and time, lack of liaison
with all other departments.
 of customers - if only we'd listened, understood, and checked with them once in a while...

9. What Is “CRM”
 Customer Relationship Management
 Becoming a common and important concept in
many industries
 Beyond mere ‘Contact Management’
 Knowing the customer and the Touch points
 Single undertaking view of customers
 Most industries have CRM software to help sales
process, on-going service, and even accounting

10. The Value of CRM
 Gain more control in interaction with customers
 Manage expectations better
 Increase trust
 Competitive advantage
 Provide products that better serve customers
 Understand what customers really want
 Understand the nature of customer service

11. Customer Definitions
 External Customers
- Customers we do business with outside our organization.
 Internal Customers
- The people we work with throughout our organization.
 Customer Attributes
- Characteristics that allow customers to be categorized
according to demographic, psychographic, or firmographic
information.

12. Demographic Information
 Characteristics such as:
 age  sex
 income  ZIP code
 marital status  occupation
 education  household size
 stage in the family life-  mobility patterns
cycle  ethnic background
 home ownership  religion

13. Psychographic Information
 lifestyles  culture
 modes of living  social class
 needs  family influences
 motives  hobbies
 attitudes  political affiliation
 reference groups  etc.

14. Firmographic Information
 Characteristics about a company such as:
 how many employees they have;
 the kind of business they are in;
 whether they are retail, wholesale, or a service
provider;
 their hours of operation

15. Why Is Excellent Customer
Service so Rare?
 Customer service is rare because it requires
two things that the average person and
organization are unwilling to commit to:
 Spending money
 Taking action

17. The Five Needs of Every Customer
1. Service
2. Price
3. Quality
4. Action
5. Appreciation

18. From the Customer’s Perspective
 What Is Customer Service?
- Anything we do for the customer that enhances the customer
experience.
 What is Customer Satisfaction?
- The customer’s overall feeling of contentment with an interaction.
 What is Customer Expectations?
- Customer’s personal vision of the result that is based on their
experience.
 What is Customer Perceptions?
- The way customer’s see something based on their experience

19. Levels of Expectations
 Primary expectations: the customer’s most
basic requirements of an interaction.
 Secondary expectations: expectations based
on our previous experiences that are
enhancements to our primary expectations.

20. Reputation Management
 The process of identifying how a
company is perceived and establishing
an action plan to correct, maintain, or
enhance the company’s reputation.

21. A Company with a Good Reputation
 Is very responsive to customers
 Is a company you can trust
 Delivers on its promises to customers
 Provides excellent value to customers
 Has excellent communications
 Is ethical and honest
 Conducts business in a human/caring way
 Has excellent top management
 Is able to adapt to changes in the industry
 Is a technological leader in the industry
 Is committed to the environment

22. Techniques for Exceeding
Customers’ Expectations
 Become familiar with your customers.
 Ask your customers what their expectations
are.
 Tell your customers what they can expect.
 Live up to their expectations.
 Maintain consistency.

23. Credibility
 Made up of the combination of our current
knowledge, reputation, and professionalism.

24. Tips for Cultivating Credibility
 Practice consistency
 Keep your word
 Develop your expertise
 Become a teammate with your co-workers
 Show your dedication to customers
 Treat all of your customers and co-workers with the
same high level of respect
 Apologize if you are wrong
 Remember that credibility is much harder to regain
than it is to keep

25. Discussion
 What are some examples of customer service?
 What are some issues about customer service?

28. New Trends in Customer Service
 Accessibility for the customer
 Immediacy of response
 Feedback from customer to customer service
provider
 Outsourcing of all or part of customer service
functions
 Non-traditional examples of customer service

29. Cost of Losing a Customer
 We lose the current dollars that our business
relationship created.
 We lose the jobs that our clients provide.
 We may suffer from a loss of reputation.
 We may lose the intangible variable of
future business.

30. Customer Intelligence
 The process of gathering information;
building a historical database; and
developing an understanding of current,
potential, and lapsed customers.

31. Sources of
Customer Intelligence
 Method by which customers choose to
conduct business
 Time of day that customers have questions
 Depth of their expected interactions
 Purchasing patterns
 Expectations

32. Methods of Communication
 Listening: The ability to hear and understand what the
speaker is saying.
 Writing: Communicating by using the written word so
that others can understand the intended message.
 Talking: Speaking, using words and terminology that
others can comprehend.
 Reading: The ability to look at and comprehend the
written word.
 Non-verbal communication: Tone and inflection of voice,
facial expressions, posture, and eye contact. Nonverbal
communication can contradict the message conveyed
through another method of communication.

33. Challenging Customers
 Those customers with problems, questions,
fears, and personalities that require us to
work to achieve true communication.

34. Discussion Questions
 What are some characteristics
of challenging customers?
 How do avoid creating
challenging customers?

36. Respect
 To give someone special recognition or
regard.

37. Empathy
 The ability to understand what someone is
experiencing and to take action to assist in
resolving the situation.

38. Responsibility Check
 Assessing a situation and determining who
should have responsibility and who really
does have the responsibility.

39. What To Do When You Are Wrong
 Review the situation.
 Observe the customer’s reaction.
 Admit the mistake.
 Apologize for your actions or error.
 Find a solution and implement it.

40. Six Superb Ways to Cope with
Challenging Customers
1. Listen
2. Ask questions
3. Show empathy
4. Solve the problem
5. Follow up
6. End on a positive note

41. Payoffs of Coping with
Challenging Customers
 By learning to cope with challenging
customers, we become more effective
and efficient assets to our company and
the job that we were hired to perform!

42. Relationship Marketing
 Cultivating a lasting and mutually beneficial
connection with customers.

43. Customer Retention
 The continuous attempt to satisfy and keep
current customers actively involved in
conducting business.

44. Churn (or Churn Rate)
 The number of customers who leave a
business in a year’s time divided by the
number of new customers in the same period.

45. Defection Rate
 The percentage of customers who leave a
business in one year.

46. Customer Lifetime Value
 The net present value of the profits a
customer generates over the average
customer life.

47. Determining the Need for
Customer Relationship Program
 Is customer retention your primary management objective?
 Is customer satisfaction measured and assessed regularly?
 Is there a constant effort to enhance customer satisfaction?
 Do you measure quality standards and communicate results with
your employees?
 Do you train and retrain your customer service providers?
 Do you have employee turnover problems?
 How much do you spend to keep current customers?
 What is your current cost for acquiring a customer?
 What is your average annual customer dollar value?
 What is your current customer defection rate?
 How do you get lost customers back?
 Do you constantly deliver what you promise to your customers?

48. Guidelines for Establishing a
Customer-Relationship Program
1. Examine who your customers are and what
specific needs they have.
2. Identify specific objectives to be realized by the
program.
3. Create a manageable program of customer
retention.
4. Create a culture that stimulates customer interest.
5. Determine a timetable for evaluation.

49. Sources of Information to
Measure Customer Satisfaction
 Informal surveys
 Comment cards
 Verbal comments
 Historical data (point of sale)
 Sales
 Corporate generated surveys
 Discussions with internal customers
 Focus groups
 Toll-free phone numbers
 Customer intelligence information

51. What Measurement of Satisfaction
Means to Your Business
 Customer relationships are deepened
 Customers know that we are
interested in them and their wants
 Improved product and service
offerings
 Customer retention

52. What Today’s Customers
Expect
 Availability: Services designed to meet the
customer’s schedule.
 Accessibility: When the customer needs to
talk, the provider can be reached.
 Accountability: Customers prefer quick and
accurate answers to service questions.

53. Steps for Introducing New
Technologies
 Prepare your staff.
 Train supervisors and team leaders first and get
them to buy in.
 Develop a group of “change champions.”
 Sell your vision.
 Praise successful use of the new technology.
 Resist the temptation to complain.
 Celebrate small successes.
 Avoid the “shelfware syndrome.”

54. A Working Definition…
 “The Plan and Practice of managing the lifetime
relationship with your customer.”
 “The Plan”: Every successful endeavor requires
proper planning. Successful CRM rarely happens
by chance. Many organizations jump to
implementation w/o proper planning.
 “The Practice”: Systematic implementation of
your plans. Should produce measurable results.
Should be evaluated and refined over time.

55. A Few Basic CRM Concepts…
 Touch Points
 Each time your company interacts with a
customer is a touch point.
 Can you name a few Touch Points for hotel guest?

56. Guest Touch Points
 First Call/Internet Visit
 Pre-arrival
 Check-In/Check-Out
 Post stay thank you
 Newsletters, Interest Lists
 All marketing materials

57. Touch Points
 Are they planned? Managed? Documented?
 Are all “touchers” properly trained? Enroll
your complete staff in the vision.
 Any way to increase the effectiveness of the
touch?
 Any way to increase the number of touches?

58. A Few Basic CRM Concepts…
 Market Segmentation
 Do you treat all of your guests the same?
 Are they?
 Consider the difference between a guest that stays once
ever in a 2 bedroom cottage and a guest that has stayed
each of the last 10 years in a 6 bedroom home
 We shouldn’t treat the one-timer badly, they may
come back many more times
 We should realize that the higher value guest deserves
the best that we can offer.

59. Market Segmentation Examples
 Saks Fifth Avenue
 High value customers ($2000/yr) are routed to
special CSR’s.
 The calls are routed such that a high value
customer is connected to a CSR in one second or
less.
 Could we coin a new acronym here:
 HVG – High Value Guest?

60. General Statistics
The average business never hears from 96% of its unhappy
customers,
 91% never come back
 Those people will tell a minimum of 4 other people,
 Getting a repeat customer from this group is 1 in 11,
 Dissatisfied customers may tell 9-10 people about their
experience,
 For every positive they tell 4-5 people,
 For every complaint received the average business in fact has 26
customers with the similar concern,

61. General Statistics…
 Of the customers who register a complaint, as many as 70%
will do business again with your organization if the
complaint is resolved effectively,
This figure goes up to 95% if the complaint has been
resolved quickly,
 40% of complaints are the result from customer mistakes or
incorrect expectations,
 A complaint that is handled efficiently is actually better than
no complaint at all,
Customers who complain and get satisfactory results are
8% more loyal than if no complaint at all,

62. Why customers quit - how to win
customers and keep them for life
 1% die
 3% move away
 5% develop other friendships
 9% leave for competitive reasons
 14% are dissatisfied
 68% quit because of an attitude of
indifference

63. Operational &Analytical
CRM
 Operational CRM: effective and efficient use and
management of people, process and technology
 Analytical CRM: the measurement of people, process and
technology

64. People, Process and
Technology
Start with People

65. Add Customer Attrition

66. Customer Dissatisfaction
is Expensive

67. Customer Disloyalty
vs. Service

68. Customer Relationships

69. Thinking Outside the Box:
Role Models Like Einstein

70. Changing the Paradigm
From
To

71. CRM means Dealing with the
People Aspect of the Project
If the word “excellence” is to be applicable in the future, it
requires a redefinition. Excellent companies don’t believe in
excellence – only in constant improvement and change. Excellent
companies will know how to cherish chaos and thrive on change.
-- Tom Peters, Thriving on Chaos

72. Customers Are People, Too!
They Have Needs

73. Reactive vs. Proactive Thinkers

74. Customer Differentiation

75. Qualifying Prospects for
Relationship Building
High
Use a non Build a strong
customized and lasting
approach relationship
Opportunities
for adding value
Seek better Focus on
opportunities loyalty-building
elsewhere program
Low
Low Potential profitability of customer High

76. Customer Lifetime Value
R = annual revenue received from a loyal customer
I = the relevant interest rate or opportunity cost of money per period
N = the number of periods in which a customer makes purchases

77. Customer Lifetime Value
Go to www.benchmarkportal.com
to download the excel spreadsheet
to calculate Customer Life time Value

78. Process of Performance
Enhancement

79. CRM Misconceptions
 CRM is the solution that will solve a
company’s customer problems
 CRM is the Internet
 CRM means scoring and measuring customer
value
 CRM is a sales person productivity tool

80. CRM Summary
 CRM is the strategic use of information,
processes, technology and people to manage
the customer’s relationship with a company’s
(marketing, sales, services and support)
across the entire customer cycle.
 The Plan and Practice of managing the
lifetime relationship with your customer

81. CRM Summary
 CRM focuses on strategic impact rather than
operational impact
 CRM is a total discipline
 CRM includes all functions that directly
touch the customer throughout their entire
lifetime with a company