Customer Relationship Management

MIS1 L5 10 Ref. Chap.8 of text

IHOP
International Home Of Pancakes is a big chain of 1200 stores for serving pancakes to customers in USA. Each store is run by different franchise and IHOP did not have a System to collect and record of customer preferences. To serve the customers better and to introduce new products to their liking IHOP introduced a CRM system. IHOP established a centralized customer data hub at their HQ in CA for customer data , customer choices etc. for performing data mining. This enabled IHOP to collect customer data dynamically and improve service and returns.

Why CRM?
Some facts It causes six times more effort to sell a product to a new customer than sell to an existing ones A typical dissatisfied customer will tell eight to ten people about his or her bad experience 70% percentage of the complaining customers will do business with the company again if they get fast service to rectify the problem In Many sectors even 5% increase in customer retention can increase profits considerably.

Flowers.com
Flowers. Com is an E-store for selling flowers. Due to stiff competition the company decided to lead using a CRM SW for analyzing the customer data, discovering trends and anticipating customer needs and to provide response at minimum time. Flowers.com used a CRM SW with data mining tools which helped the company to identify different categories of customers and to decide how each group are to be treated. The company has 15 million customers world wide and customer retention improved by 15% using CRM.

Face-to-face CRM
CRM can be carried out in face-to-face interactions Shopkeeper without the use of IT Staff members often remember the names and favourite services/products of regular customers and use this information to create a personalised service for them. However, face-to-face CRM could prove less useful when organisations have a large number of customers as it would be more difficult to remember details about each of them.
Touch points

Customer Service and Support

A CRM system gives service reps real-time

access to the same database used by sales and marketing departments Help desk software provides FAQ for customer information and solving problems
Requests for service are managed through call center software which routes calls to the service agents or to the right assistants.

Retention and Loyalty Programs

Enhancing and optimizing customer retention and loyalty is a primary objective of CRM: Identify the most profitable customers. Provide better service to these valued customers. Respond to the enquires from these customers fast and with care. Provide incentives and rewards

Allied signal/Honeywell corporation

Allied Signal was a suppler of parts to American Airlines. Each of the 4 units of the company did sales independently , often competing. Further Allied Signals received complaints regarding supply and service In 1999 the company merged with Honeywell to form Honeywell International. They implemented Siebel CRM and a call-center to coordinated all sales / service related activities. As a result sales enhanced $45 million to $100 million in a span of one year.

Three Phases of CRM

Acquire new customers by doing a superior job of contact management, personal contact, direct marketing, and Web-based approaches Enhance relationship with customer by supporting superior service from a responsive networked team of sales and service specialists and business partners Retain and expand business with customers by proactively identifying customer needs and rewarding the most loyal and profitable customers

Lastminute.com
Lastminute.com is an online travel agency based in London. . When tickets are purchased by public online for travel, stay and entertainment via Lastminute.com, the website s data base retains the customers details and their purchase history. The website regularly send emails to valued customers to inform them of similar upcoming events with special discounts. This helps to ensure that customers will continue to purchase tickets from Lastminute.com in the future.

Benefits of CRM
IT helps to Increase customer satisfaction, because customers get exactly what they want It enables the identification of the best customers and give them best service It promotes the growth in the numbers of customers IT empowers employees to respond to customer demands more quickly In short, It supports in sustaining long term profitability and sustainability of the organisation

Continental Airlines
Continental Airlines (CA) is the fourth-largest airline in the US. Continental Airlines monitors telephone calls to the call center using intelligent SW to analyze recorded conversations. The analysis tells what the customer really wants . It helps CA to craft marketing plans and plan a CRM strategy. This allows CA to serve the customers better and solve customer s problem more efficiently. The company saves $ 1 million annually through CRM initiatives

CRM Failures
Business benefits of CRM are not guaranteed 50 percent of CRM projects did not produce promised results 20 percent damaged customer relationships Reasons for failure Lack of understanding of CRM process Not solving business process problems first Non participation on the part of employees and business stakeholders

Gevity HR
Gevity HR, Inc. is a complete human resources management solutions provider in the United States. Liza Harris, CIO of Gevity HR installed Oracle CRM SW to help solve some of the customers problems online without the help of the operator. The call center employees felt that their CRM SW threatened their jobs and discouraged the customers from using it. The CIO had a tough time to get their cooperation. Lesson: CRO systems cannot work without the cooperation of employees.

Types of CRM
Operational CRM- Supports customer interaction and collection of customer data Analytical CRM Analysis of Customer data which allows prediction of customer values Collaborative CRM- Involves E-business participants in a collaborative process with customers Portal-based CRM provides a common gateway for customer interactions.

QVC provides superb CRM

QVC is a USA based, multinational corporation, specializing in televised home shopping. The name is known for Quality, Value, Convenience, the three pillars of the vision for the company. The company offers excellent customer service : Every one in the company contribute to the Customer service. The V.P periodically checks e-mails to study customer feedbacks and complaints are fixed quickly Sales staff is well educated of the products and updated. The employees are handsomely rewarded for innovative ideas.

CRM Market Overviews

PeopleSoft and Siebel CRM works under the umbrella of Oracle

CRM Market (USA)

Unit $ Billion
45.7 39.9 35.3 34.9 36.4 58

Some Observations:
2002 2003 2004 2005 2006 2007

CRM market is getting bigger. Companies spend too much money and time to implement CRM. But, the CRM system does not guarantee higher organizational performance
Krgweb.com

Harrah s CRM Initiative

Harrah's Las Vegas is a hotel and casino located on the Las Vegas Strip in Nevada . Harrah's has over 1,200 slot machines and a hotel with more than 2500 rooms. 1997 a CRM program was initiated for which data is gathered at all points of sale 1998 they started mining and analyzing the data and the found: A Harrah s customer only spent 36% of gaming dollars with them 26% of their customers produced 82% of revenue Best customers were NOT the high rollers

Harrah s CRM success

The best customer: They are slot playing middle aged folks, retired teachers, bankers and medium scale businessmen. They often did not stay at the hotel, but visited casinos in the evenings or during weekend nights to game The reason that they visited was the anticipation and excitement Decided to consolidate strategy around these customers and changed marketing message with a focus on the excitement of gaming This Increased cross-market play from 13% in 1997 to 23% in 2000

Raymond India
One of India s oldest textile manufacturers and retailers, Raymond India operates across most cities and deals with different cultures and people.
Customer Relationship Management was implemented by Raymond to solve the problems of knowing the customers better. CRM SW also helps the company understand the colour and design preferred by a particular age group or why a particular group or individual did not buy or did buy a particular product.

Raymond India-2
A central repository of information is created about premium customers whose details are accessible at any retail outlet to provide special service to serve them better. The CRM project helped evaluate customer choices to a large extent. With the use of this software, the product lines kept changing according to the customer needs and patterns and the end result has been satisfied customers.

Integrating CRM and ERP

While CRM is the principal tool used for managing outward-facing front office sales and customer support activities, ERP is the overarching framework deployed to manage inward-facing back office business operations including order management, production and accounting. Clearly, competitive advantage can be gained when the two essential business systems are integrated eg.The ability of CRM users to follow or expedite an order as it moves from inception to production, shipment, receipt and final payment is an achievable deal that will increase customer satisfaction as order inquiries are responded to with immediate, accurate, real-time information.

Conclusion
Remember:
Consumer s requirement comes first Consumer is the KING Consumer delight is our success We are in business because of consumers

Questions?