Customer Relationship Management (CRM)

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

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

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.

Demographic Information

    

Characteristics such as:

      

age income marital status education stage in the family lifecycle home ownership

sex ZIP code occupation household size mobility patterns ethnic background religion

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

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

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

The Five Needs of Every Customer

1. Service 2. Price 3. Quality 4. Action 5. Appreciation

From the Customers Perspective

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

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

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

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

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.

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

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      

Discussion
 What are some examples of customer service?  What are some issues about customer service?

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  Nontraditional examples of customer service

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.

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

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

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. Nonverbal communication: Tone and inflection of voice, facial expressions, posture, and eye contact. Nonverbal communication can contradict the message conveyed through another method of communication.

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

Discussion Question

 What are some characteristics of challenging customers?  How do avoid creating challenging customers?

Respect
 To give someone special recognition or regard.

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

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

What to do When You Are Wrong

 Review the situation.  Observe the customers reaction.  Admit the mistake.  Apologize for your actions or error.  Find a solution and implement it.

Six Super Ways to Cope with Challenging Customers

1. 2. 3. 4. 5. 6.

Listen Ask questions Show empathy Solve the problem Follow up End on a positive note

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!

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

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

Churn (or Churn Rate)

 The number of customers who leave a business in a years time divided by the number of new customers in the same period.

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

Customer Lifetime Value

 The net present value of the profits a customer generates over the average customer life.

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 monetary 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?

Guidelines for Establishing a Customer-Relationship Program

1. 2. 3. 4. 5.

Examine who your customers are and what specific needs they have. Identify specific objectives to be realized by the program. Create a manageable program of customer retention. Create a culture that stimulates customer interest. Determine a timetable for evaluation.

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

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

What Todays Customers Expect

 Availability: Services designed to meet the customers schedule.  Accessibility: When the customer needs to talk, the provider can be reached.  Accountability: Customers prefer quick and accurate answers to service questions.

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.

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.

A Few Basic CRM Concepts

 Touch Points


Each time your company interacts with a customer is a touch point. Can we name a few Guest Touch Points?

Guest Touch Points

 First Call/Internet Visit  Pre-arrival  Check-In/Check-Out  Post stay thank you  Newsletters, Interest Lists  All marketing materials

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?

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,

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,

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

Operational and Analytical CRM

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

People, Process and Technology

Start with People

Add Customer Attrition

Customer Dissatisfaction is Expensive

Customer Disloyalty vs. Service

Customer Relationships

Thinking Outside the Box: Role Models Like Einstein

Changing the Paradigm

From

To

CRM means Dealing with the People Aspect of the Project

Customers Are People, Too! They Have Needs

Reactive vs. Proactive Thinkers

Customer Differentiation

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

Customer Lifetime Value

Process of Performance Enhancement

CRM Misconceptions
 CRM is the solution that will solve a companys customer problems  CRM is the Internet  CRM means scoring and measuring customer value  CRM is a sales person productivity tool

Thank You