ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR

(PPAM-532)-Individual Assignment
CUSTOMER RELATIONSHIP
MANAGEMENT



O1OC LCcOCC1C 1cCc-CO JL1 1 -
COC- C CCOcCs cO OC O scCCC-
C- aO1C11 COCCCO csc aO C-cCOc
OCC1 OCO-COO O OCCc OCccO_
lO 1 CcOsOCcCO sOscC C CcO1O1
OCc-CC- scC-1 C OccOCCcC scCCC
CC-OcOCC_
L1 1 c cC1 C ccc11C- Csc1C- s
CCOOCC scC-C- sCCCs sCCcOCC1 c
Cc CCCOCCcC cCCcCs OCO- O O1
C COcO sO1OC CCCOCc- CCCOCc-
-cCc OCO- CcOCC1C cOCCCCO
cCc Cc1O cCOC- CC
-c1_ L1 1 Csc1C- C CCCCs a
scO1 O CsO11 CC sOCO O11 OC c
O 1COs C O cCOO C aO1C11
OCO cCc O a1O CCOCC C CCOC-
aO1C11 C OCsOcC O1_
E c c COa C OCCC- cCOCC1
C L1_ lC csO O COO1 L1 cO a
C O1c OC cCOO CCOCOCO1 LCcOCC1
C 1cCOC- O1OC LCcOCC1C 1cCO
C- cCc O1OC LCcOCC1C 1cCc-CO_
*cs O C1CO1 O 1c CCs11_ L
1 scC a cCc c1 c CCs11 OcO cO
O1 sO1OC OcCO OCO- CC-CC- cC
OC- csOOOO COCcc CC COcO sO1OC
CCCOCc- 1OcaC1c OCO- sCCCsOC

ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR
(PPAM-532)-Individual Assignment
C cCc-CO cCc COc- C sO1OC C
CcOCC cCc sCCOcsO 1OCO_
L1 1 caCOO CsOC- CcOCC1C1 OC
cOO c sO1OC1 OcCO CO O_
L1 1 CcO C cC OCCOOCC C sCCCcO O
CCC- OcO a-cC OO O *COC1 L
1COs -CcCCC- J*L- COcOO C O _
1_ *L- Cs1 cCC 1COs1 OOC c sC
CCcOCC OC OCC OOC CC aO1C11 1O1O
_ lC O _1 CO .I aCCCC Oc1 1C
CO CC sCOcCOC- 1OcCcccOC- cCc C
-cCOC- CCcOCC cCc 1COs1 OCO-
COO C_L_ sCCCcOCC1_ E 1OCO1 COO
cO aC Oc C O1 C CcOCOO_ C
cO 1 Cc1COOcaC 1 OcO O CCcO
CC 1O1O CCs11C- 1CCC1 csOc C
CCCOC- *L- CC-c1 CcaCc cCO C-c
COcOCC1 OC 1OCCCO L1 cCc *sCs C
C-cC- COcOO1 CCO C O1OCs O
C *L- a-cC_ L1 Oc1 cOCCCc C Cc-
CcO c1 c 1OCO C ccOc CC- C 1
-COcOCC cCc Oc-OC- 1cs cc C
C11aC C O sCOcCOcOCC C sO1OC
sCc1_ -cCOcOCC1 a-cC OC cCO
OcO OO sCOCc aOO 1O sO1OC1
1Cs OO aOO OCc1OCCc sO1OC1_
L1 c1 aCOc C ccOcCs1 C ccOc
cCc-CO cCc ccCOc CO 1COOc O
cO cCCCO1 c1CccO ccOc 1COs1 OC OC
C c1 c 1C-C CO-cOc ccOcac1_ L1 c
1 cC1C aC 1OCCCOc aO c CO -CcOCC
C CCCOCCcC OCCC1 C OcCC 1Cs

ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR
(PPAM-532)-Individual Assignment
OO aCcC- OccaC OcCOcOCC cCc CO
CCacaC1Os Oc-OC- OCCC1 1Os c1 LC
sOc_ lC O C_L_ L1 1 CCO CcsOsc aO
cCCCOcOCO C O sCCcC1 C
OcCC- cscO cCc OOCO1
C O sCCcC1 C CcCscC 1Os1 C
ccsOOscC1 cCc OcC1CCOcOCC cCc
C O sCCcC1 C OCsCOCscOCC1
cCc scO_
E cOCCCCO cCc CCCOCcOO C CsOC
Cs cCOC- c1 c OCCC c1 CCcOsc c
s 1COs C sCC1O ccOc C css11 aO
C-cCOcOCC1 C cCO CcO1O1_ CsO1C
- CC O OcC -CsO CcO1OO C O C
_L_ OCO LCCC -C-c1 JL-1 c
O1c aO -CsO OcC1 OC sCC1 CO
C O *CC CCcOO OCCO_ EO
cO CCcOsc sCC1O C1 OcO OCC a
O CO OC C CCOcaC -CsO CCC
OCC C O C O OOO_ CCcC1 C
C LcOcO C- cCc *scC 1OC1 c
cOCO CO1Oc C O1 CC-c1_
OCO 1CCC CC-c1 C O -CsO Cc
O1OO cOCCCc c1 CCOcCOO CC-c OOC1
CC1_ E1 CC-c1 c sCC1O sccac
1c CC-c1 OcO OcsC COsc11 ac1c C
C O O1 C 1scCC1 cCc Occ sO1OC
1 OO c1sCOCO1 ac1c CC acCc1 COsc1
c_ E1 CC-c1 O cOCCCc OC CCO
c sO1OC1 OO cC cccOCCcC c1CC OC
Csc1 O 1c C COsc1 C c C
cOsOCc scC C 1OC1_

In its simplest form it is an attitude, a mindset, a value that you place on your

ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR
(PPAM-532)-Individual Assignment
business and its relationship with its customers. It is a methodology, a way of
creating and evolving your organization in the marketplace and at the same time in
the mind of each Individual customer. It must look at the whole process of what
youre involved in, whether this is a product or a service driven organization and it
must involve every aspect of what you do from suppliers through to the end
application, from your
internal staff through toyour customers customer. In its simplest form it
recognizes that each customer is an individual and has a choice. It looks at ways to
treat customers more as individuals and to exercise their choice positively towards
your organisation. It also embraces many current marketing and management
methods, such as customer loyalty and marketing database management.

There are three main elements to consider when aligning your business towards a customer
relationship format. The rst is to do with retention. Imagine that you were never to gain
another new customer, this would probably be a horrifying thought for most businesses, but
when you considered it carefully you would realise that if you just kept the customers that you
have then you would probably be able to grow and prosper in much the same way as you are
now. There are of course exceptions. Most businesses only get a small percentage of the share
of each of their customers. In addition most businesses will lose customers at a rate of
somewhere between 15-50 per cent per annum. This leaky bucket effect is not only expensive; it
is also reasonably unmotivating for the staffs that have to serve these customers.




The third element of customer relationship management and perhaps the most controversial one
is the de-selection of customers. If a company or organisation were to put more of its efforts into
The second stage is to develop customer potential: turning that one off infrequent casual customer
into a higher spending, more frequent, The second stage is to develop customer potential: turning
that one off infrequent casual customer into a higher spending, more frequent, referring advocate.


ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR
(PPAM-532)-Individual Assignment
its existing customers it would make sense that it did this with customers that had the greatest
potential. This means that at some point, it has to start to lose those customers that are not ones
that offer long-term future value. This might be because of transaction spend, the value of a
customer or the cost of transacting or dealing with that customer or customer group.

By behavior we mean the buying or other behaviors of a customer, in relationship to the
organization and its products and services.
In beginning the process it is probably worth taking time to do an audit of all the systems,
information, research, marketing knowledge, attractiveness, and historical results from
promotions and any other additional sources of data that may exist in your organization


This analysis is the rst part of segmentation by behaviour and value.The second stage is to
begin an initial segmentation of a customer base. You should include the value, potential value
and historicalbehaviour of your customer. This should then be compared with theexisting buying
patterns and behaviour and then contrasted, thirdly, with the future, or target behaviour, of an
ideal or loyal customer.

Every customer is in some way unique. However, many customers are
unique in similar ways. There are practical steps that can be taken to
segment customers by value, pattern, and buying criteria.
EXAMPLE

Customer relationship management requires a holistic approach so that the information that is
held about customers across the organization is drawn together in one central source or at least
cross-accessed so that it can be compiled and collated. For example: information is probably
held at an accounting level about customer transactions and appended to that may be a
payment record. A different computer system may hold results of marketing activity for different
customers or different customer groups. Another database may actually hold information on
customer service queries or enquiries times they may have phoned or contacted you for some
question or other. This information needs to be carefully scoped and drawn together.


A Chinese restaurant entrepreneur developed an informal
but effective system for differentiating his customers. It

ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR
(PPAM-532)-Individual Assignment





















How was this information used? Firstly, customers did not have to explain themselves
as much as they would normally have done, and the level of personal service they
received encouraged them to return to the restaurant even more frequently, and
increased the average spend.


ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR
(PPAM-532)-Individual Assignment
The restaurant owner also began to use the system in more sophisticated ways. He would design
banquet evenings and ask selected customers to attend, almost as if they were invited guests.
Because of the information he had gathered on each of them he was able to design and price the
menus to match the expectations of each group. He would often charge the wealthier customers
more for the same meal because he knew they would enjoy the evening better if they
were paying more for it!
E COO 1Oc- 1 OC cOCCC c 1OcO-O c
CCcC C c 11 C CCcC1 OC cOOaOO O
Oc-O acOCO OC cs 1-CO C
CcOcOcC cCc OC OC a-C OC cCCCscO c
aOc-O C cs C OC1 acOCO1_ C
OcCC OCO cc c cC Cc aO1C11
cCOC- sCCCsOaC cCOO CCsc1
OCO OCOCc cCOO O cCO sO1OC
1-CO1 C O1 C O aOOC- acO
CO1 cCc C O1 C CO Os OO cc 1C
CO C O Cc1O O OCsO O OOC1
C CCcOsO1 OcO OO cc aC CO1O
c C cCc O scC11 OcO OO cc
1CCCcc OC OO OcO1 csO cC C
C O Cc- ccOO1C- O lCOCO
Os_ l OCO O OC OOC- OC Csc1 O
OCsO C 1CCc C O OcC1csOCC
OcCO C O 1CCc O1 OCOCc asC c O
c-O acOCO OcO OCO OCOCc CsO1 CC_

The next stage is to look at the actual technology or systems that will allow you to
achieve better relationship management with your customers. This may require some
re-design or re-implementation of hardware and software to allow access to the
information at a single point.

The nal stage is a measurement in the evolution of the process. There is
always a matter of trial and error and trial and success. Before

ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR
(PPAM-532)-Individual Assignment
implementing a wide scale programme it is essential that it is carefully
tested on a small part of each segment of the customer base before being
rolled out. Indeed by using customer relationship management methods in
segmenting customers and customer groups more
accurately, test marketing and test promotions can actually be far more
accurately
gauged and
measured.






Data Mining &
Reporting
Return
Address
Rule-based
Processing
Coupons/
redemptions
Statistics 2001
2000
1999
Jan Feb Mar
sources

Data
preparation
Campaign Mgmt
Other
Mail
Communication
to consumers
Data Mining
and reporting
Survey
POS
Transactions
Operational
Data Store
Accounting/Financial
Data
Warehouse
Data
prep

e
r
a
t
I
o
Web

Reporting


Mail

Figure 1: Data Flow Environment

The Operational Data Store (ODS) icon represents a database that is designed to allow for
Quick read/write access and contains that information required to process a typical customer
request either via the Web or inbound telemarketing
The data warehouse (DW) icon represents a database that contains all relevant customer
(primary and secondary data) information including history, product information, and
product return activity, marketing promotion and campaign data.

On the right side there are a few sample Data Marts shown. A Data Mart (DM) is a smaller
data-base and is a subset of the DW. It could be as small and simple as an Excel
Spreadsheet. It is generated from data gleaned from a specific function. Marketing may be
running a campaign targeting inactive male customers for a specific promotion. They would
download all relevant data into a DM, which is accessed from software conducive to their
activity, such as Campaign Management Software. On the other hand, Legal may want to
monitor or analyze all customers who purchased a particular line of products as they
research liability issues. Therefore, the organization on the right side of the diagram uses

ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR
(PPAM-532)-Individual Assignment
























Responses
Other
Disciplines

Other
Disciplines


ADVANCED SUPPLY CHAIN MANAGEMENT AND IN THE PUBLIC SECTOR
(PPAM-532)-Individual Assignment























Coupons