Review UTS CRM

Introduction to Customer Relationship Management (CRM)

Core Definition of CRM

CRM is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit It is grounded on high quality customerrelated data and enabled by information technology

CRM is Founded on Four Tenets

1. Customers should be managed as important assets 2. Not all customers are equally desirable 3. Customers vary in their needs, preferences, and buying behavior 4. By better understanding their customers, companies can tailor their offerings to maximize their overall value

The CRM Advantages

Better Customer Knowledge

Increases Market Share

Quicker Cash Flow

Creates Up and Cross-Selling Opportunities

Increased Product Acceptance

Why CRM Systems are Being Used ?

Identifying prospects Acquiring customers Developing customers Cross-selling and up-selling Servicing Retaining Increasing loyalty

Which Companies Benefit Most from CRM?

Companies sell services Companies serving large numbers of customers through complex and frequent interactions:
Communications companies Retail banks Insurance companies Healthcare organizations Utilities

Companies with a steep skew Companies in lost for good markets

Types of CRM
Type of CRM Strategic Dominant characteristic a core customer-centric business strategy that aims at winning and keeping profitable customers

focuses on the automation of customerOperational facing processes such as selling, marketing and customer service focuses on the intelligent mining of Analytical customer-related data for strategic or tactical purposes applies technology across organizational Collaborative boundaries with a view to optimizing company, partner and customer value

CRM Models
IDIC Model QCi Model CRM Value Chain Paynes 5-process Model Gartners Competency Model

Understanding Relationships

Defining Relationship
A relationship is composed of a series of interactive episodes between parties over time. Episodes are time bound (they have a beginning and an end) and are nameable. Episodes are composed of a series of interactions. Interaction consists of action, and response to that action. Is a relationship more than interaction-overtime? What about emotional content ? Do relationships have some type of affective connection, attachment or bond.

Attributes of High Quality Relationships

Core attributes Trust Commitment Additional attributes Relationship satisfaction Mutual goals Cooperative norms

The Customer Journey

Suspect Prospect First-time customer Repeat customer Majority customer Loyal customer Advocate Does the potential customer fit your target market profile? The customer fits the target market profile and is being approached for the first time. The customer makes a first purchase. The customer makes additional purchases. Your offer plays a minor role in the customers portfolio. The customer selects your company as supplier of choice. You occupy a significant place in the customers portfolio. The customer is resistant to switching suppliers, and has a strong positive attitude to your company or offer. The customer generates additional referral dollars through positive word-of-mouth.

Planning and Implementing CRM Projects

CRM Project Design & Planning Process

1. Develop CRM strategy

5. Performance evaluation

2. Build CRM project foundations

4. Project implementation

3. Needs specification & partner selection

CRM Project Governance Structure

CEO

Exec Sponsor

CRM Consultant Sales Exec Marketing Exec Program Director External Resources Steering Committee IS Lead Systems Name Implementer Title

Key Name Users Title

Sales Lead

Key Name Users Title

Marketing Lead

Customer Advocate

Key Name Users Title

Support Lead

Program Team

CSFs for CRM projects

Critical success factor
1. 2. 3. 4. 5. Senior management commitment Creation of a multi-disciplinary team Objectives definition Interdepartmental integration Communication of the CRM strategy to staff

People
X X X X X

Process

Technology

X X

6.
7. 8. 9.

Staff commitment
Customer information management Customer service Sales automation

X
X X X X X X X X X X X X X

10. Marketing automation 11. Support for operational management 12. Customer contact management 13. Information systems integration

(more important in bold)

Developing, Managing & Using Customer-related Databases

Building a Customer-related Database

1. Define the database functions 2. Define the information requirements

3. Identify the information sources 4. Select the database technology and hardware platform 5. Populate the database 6. Maintain the database

Desirable Data Attributes: STARTS

Sharable Transportable Accurate Relevant Timely Secure

Customer Portfolio Management

Objectives of Customer Portfolio Management

The collection of mutually exclusive customer groups that comprise a businesss entire customer base Customer Portfolio Management (CPM) aims to optimise business performance whether that means sales growth, enhanced customer profitability, or something else - across the entire customer base It does this by offering differentiated value propositions to different segments of customers

Basic Disciplines for CPM

market segmentation sales forecasting activity-based costing customer life-time value estimation

data-mining

Additional CPM Tools

SWOT analysis PESTE analysis 5-forces analysis BCG matrix analysis

Creating Value for Customers

Value Equation

Value = Benefits
Sacrifices

Value from Products

product innovation additional benefits product-service bundling branding product synergies

Value from Services

SERVQUAL Model of Service Quality
Reliability
Assurance Tangibles Empathy Responsivenes s

Ability to perform the promised service dependably and accurately

Knowledge and courtesy of employees and their ability to convey trust and confidence Appearance of physical facilities, equipment, personnel and communication materials Provision of caring, individualised attention to customers Willingness to help customers and to provide prompt service

Value from Processes & Communication

Process: complaints-handling Process Communication: Disintermediation: direct communication Personalisation: tailor offers and communications to individual customer Interactivity

References
Francis Buttle, Customer Relationship Management: Concepts and Technologies, 2e, Elsevier Ltd., 2009 Baran, Galka and Strunk, Principles of Customer Relationship Management, South-Western, 2008 Adrian Payne, Handbook of CRM, Elsevier Ltd., 2008