1. INFORMATION SYSTEM
MANAGEMENT (IMS 552)
CUSTOMER RELATIONSHIP
MANAGEMENT (CRM)
Prepared by:
HAFSAH BINTI RAZALI
2010644048
Prepared for:
En. Abdullah Abdul Rahman

2. DEFINITION OF CRM
• Basically an information industry term for methodologies, software
and usually internet capabilities that help an enterprise manager
customer relationship in an organize way.
• CRM extends to develop profitable company to company
relationship.
• The concept of CRM can be used to create strategies for interacting
with each customer.
• Kumar and Reinartz (2006) defined CRM as a strategic process of
selecting the customers a firm can most profitably serve and of
shaping the interactions between a company and these customers.

3. KEY COMPONENTS OF CRM
1) STRATEGIC PROCESS
 CRM activities are initiated and managed starting
from the top of the organization.
 CRM does not belong to any single department
but needs contributions and reinforcements
from all corporate functions.
 CRM is continuing process that cannot handle as
just another software implementation project.

4. KEY COMPONENTS OF CRM
2) SELECTION
 it is relevant that an organization focus on their
most profitable or potential customer first.
This is not about denying services to certain
customers but the organization itself must first
identify the valuable customers.

5. KEY COMPONENTS OF CRM
3) INTERACTION
 The relationship between the customer and the organization
takes the form of an interactive dialogue.
 Information and goods are exchanged and most importantly, the
exchange evolves as a function of past exchanges.
4) CUSTOMER
 depending on the industry and company, a customer can be an
individual account, one or several within a market, or an entire
market.
 Customer include not only end users but also intermediaries,
like distributors and retailer.

6. KEY COMPONENTS OF CRM
5) CURRENT & FUTURE VALUE OF THE CUSTOMER
 the organization are moving away from extracting
their profit from single transaction to maximizing
profits over a series of transactions.
The organization is starting to maximize Customer
Equity (the value of all their customer relationship to
them).

7. CRM MODEL
Create database
Analysis
Customer selection
Customer targeting
Relationship marketing
Privacy issues
Metrics

8. CREATE DATABASE
 First step to a complete CRM solution.
 It is a foundation for any customer relationship management
activity.
 For we-based business, constructing a database should be a
accumulated as a natural part of the interaction with
customers.
 For existing companies, which not have previously collected
much customer information, they should seeking historical
customer contact data from internal sources such as
accounting and customer services.

9. Information should be contain in the database
Transactions
Customer contacts
Descriptive information
Response to marketing stimuli

10. ANALYZING THE DATA
 Life Customer Value (LCV) introduced which the purpose is
that each customer of the database should be analyzed in
term of current and future profitability to the organization.
 When a profit figure can be assigned to each customer, the
marketing manager can then decide which customer to
target.
 The past profit that a customer has produced for the
organization is the sum of the margins of all the products
purchased over time less the cost of reaching that customer.

11. Cont…
Other ways that marketers can use to analyze
customer information:
– Market basket analysis
– Click stream analysis
e.g.: Acer and Apple Company sell software that
enables web-based stores to customize their sites
in real time.

12. CUSTOMER SELECTION
The next step is to consider which customer to target
with the organization’s marketing programs.
From the analysis, if segmentation types is
performed on purchasing or related behavior, the
customers in the most desired segments would
normally be selected first for retention program.

13. CUSTOMER TARGETING
There are other mass marketing approaches such
as television, radio or print advertising which is
useful for generating awareness other
communication objectives, but there are poorly
suited for CRM.
More conventional approaches for targeting
selected customers include a portfolio of direct
marketing methods such as telemarketing, direct
mail and direct sales.

14. RELATIONSHIP MARKETING
PROGRAM
The goal of relationship programs is to deliver a
higher level of customers satisfaction than
competing organization deliver.
A comprehensive set of relationship program are
such as:
• Customer service
• Frequently/loyalty program
• Customization
• Reward programs
• Community building

15. PRIVACY ISSUES
The CRM system depend upon a database of
customer information and analysis of that data
for more effective targeting of marketing
communications and relationship building
activities.
There is an obvious tradeoff between the ability
of companies t better deliver customized
products, services and the amount of information
necessary to enable this delivery.

16. METRICS
There are various metrics that have been used
to measure and manage customer loyalty.
Some of popular metrics used are
• Recently, Frequency and Monetary (RFM)
• Past Customer Value (PVC)
• Share of Wallet (SOW)

17. FUTURE OF CRM
When implementing CRM strategies, the
organization have to adopt a customer
focused view that consider their needs,
lifetime value, and profitability.
The future of CRM therefore, lies in the ability
of organization to accurately assess customer
feedback and market trends through an
interactive marketing approach.