This document discusses customer relationship management (CRM) and its benefits. It defines CRM as integrating all customer interactions through various channels to provide end-to-end customer management. CRM requires organizational change and information/application support. It should have consistent, repeatable processes. Customers want more value, responsiveness and flexibility for less aggravation. CRM helps increase customer retention and profitability by understanding customers. Technology like data warehousing enables CRM by providing customer insights.
2. What is CRM? End-to-end customer management Process enabled by set of technologies Process designed to integrate all customer interactions through all channels Like all processes organisational change is needed CRM systems need information and applications support CRM processes should be consistent and repeatable
3. Illusion of Customer Relationship Management Customers are not outsiders. We are all customers – of utilities, service providers, financial institutions, government agencies. CRM is about how WE want to be treated by our service providers. When we talk about customers (THEM), we mean us How do you want to be treated by your service providers? That is exactly how your customers want to be treated by you.
4.
5. What Organisations Try to Do – More With Less More Of Work Customers Sales Revenue Margin Less Of Personnel Facilities Cost
6. Balance Between Internal and External Need to balance management focus between “more with less” and “most for less” More with less focuses on internal reductions: cost, staff More for less focuses on external improvements Only a cross-functional customer-oriented view of business processes can achieve this balance Internal processes focus on operational functions Cross-functional view links internal processes to get end-to-end customer view of organisation Cross-functional processes are those that really affect customers – from start to end
9. Why CRM Greater competition Economics of customer retention Available technology Options to increase customer profitability: Get more customers Optimise value of existing customers Retain right customers longer Implement at lower cost Costs of options: Customer acquisition 5-10 greater than retention Loyal customers spend more and pay premium Loyal customers must like and trust companies
10. CRM Process CRM is about: Integration of customer contact points Synchronisation of customer information and management assets Identification highest (and lowest) value customers Servicing those with greatest actual or potential value CRM enables: Reduction of marketing costs through effective targeted campaigns Increase in customer satisfaction and retention Increase in sales Improvement in profitability by customer and sale
11. Which Customers? 20% of customers generate 80% of profit 5% increase in customer retention means 25%-95% increase in profitability New customers take 8-10 contacts before sale Existing customers take 2-3 contacts before sale
12. Customer Service 95% of customers who have had problems will continue to do business if problems are resolved For every complaint you receive there are another 20 potential complaints that have not been articulated but still represent Good customers tell about 3 others of their experience Bad customers tell about 8 of their experience 68% of former customers left because of poor customer service
14. Role of Data Warehouse in CRM Technology/infrastructure core of architecture Allow marketers to make decisions on customer segmentations and profiles and match products/offers Data Warehouse enables CRM processes CRM elements depend on quality of information in Data Warehouse and accuracy of derived results Central common repository or all relevant allows effective data sharing and reduces latency CRM assumes good information
15. Data Mining Exploration and analysis, by automatic or semi-automatic means, of large quantities of data in order to discover meaningful patterns and rules In order to develop new products and services that are demanded by the customer, that can be delivered profitably by the organisation and to remove unwanted customers and/or products
16. How To Create Customer Loyalty Bond with the customer early All customers are not created equal Convey your company's value proposition in everything you do Do more than make your point Know why customers leave Measure everything Build opportunities for repeat business
17. How To Create Customer Loyalty Always ask for referrals Make loyalty-building a team effort Meet customers' expectations Go beyond rewards programs Turn complaints into opportunities as quickly as possible Engage customers in a two-way dialogue Survey customers, and pay attention to the responses Create a system for collecting, analyzing and acting upon all customer feedback
21. Four problem that prevent a firm effectively using CRM Large Investment Difficulty in getting every one customer oriented Not all customers want an ongoing relationship Assumption behind CRM may not always hold true
46. Track customer service satisfaction levelsSource: Darrel K., Reichheld F., and Schefter P., “Avoid the Four Perils of CRM” Harvard Business Review (Feb, 2002) pg. 106
47. Top 8 CRM Organisation Direct line Amazon.com HSBC Hewlett Packard Lloyds TSB Dell BBC British Airways
48. Amazon.com Site easy to navigate Database remembers your previous sales choice Remembers credit card number Such small details helps in building customer relationship.