Crm [ imcost] (1st class)
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ncept and Context
B2B and CRM
Co of
Ranjan SS
The Evolution of CRM►The concept of marketing has changed over the years► In sense it is a revolution►Due to ever changing taste of the customer the overall concept
of marketing has changed in terms of,
◙ Customer Identification◙ Customer Retention◙ Customer Satisfaction►The marketing concept has been evolved from the various
earlier orientations►The emphasis has been further shifted to business
realization.
Production Orientation
When a high demand for a product or service exists, coupled with a good certainty that consumer tastes do not rapidly alter
Product Orientation
It is concerned with the product quality. As long as the product is of high standard, people would buy and consume.
Selling Orientation
It focuses primarily on the selling and promotion of a particular product, and not determining new consumer desires.
Such an orientation may suit scenarios in which a firm holds dead stock, or sells a product that is in high demand, with little chance of change in consumer taste to reduce demand.
Marketing Orientation
It involves a firm essentially base its marketing plans around the marketing concept, and thus supplying products to suit new consumer tastes.
► The 1990s brought two new concepts that challengedthe business landscape : Deregulation and the Internet.
► The explosion in information allowed consumers tocompare features, and prices across multiple providers.
► Companies started trying to manage relationshipswith their customers, partners, and suppliers in apersonalized and automated manner.
What are CRM ?Customer Relationship Management
► It is the most effective corporate business mantra.
►CRM “is a business strategy that aims to understand,anticipate and manage the needs of an organization's currentand potential customers”
►In sense, the business between buyer and seller isconsidered as a platform for building relationships.
►It is a comprehensive approach which provides seamlessintegration of every area of business that touches thecustomer - namely marketing, sales, customer services and field support through the integration of people, process and technology.
► CRM is a shift from traditional marketing as it focuses on
the
retention of customers in addition to the acquisition of newcustomers
Objectives of CRM► Lifetime Value
– Refers to the net present value of the potentialrevenue stream for any particular customer overnumber of years
– Starts with current purchase activity then extrapolatesto include potential additions from cross-selling,upgrades, total ownership, etc.
► Customer Ownership– Attempts to “own” the lion share of customer
spending and/or “share of mind” in a particular product category
– Building brand equity, maintaining vigilant customercontact, keeping current with the market trends iscritical
– 5% points increase in customer retention causessome 25% increase in profit ratio
► CustomerizationMass Customization – Using flexible processes andorganizational structures to produce varied andindividualized products and services at the price of standard mass-produced offerings.
Personalization – Customization of some features ofa product or services so that the customer enjoysmore convenience, lower costs, or some other benefit. Segment-of-One Marketing – Based on the idea of the firm learning individual reactions to marketingstrategies, then treating this customer differently than other customers.
Customerization = Mass customization+ personalization + segment-of-one,dependent on a web-based electronic interaction
Distinction betweenMass Marketing & Customerization
Mass Marketing CustomerizationRelationship with thecustomers
Customer is inactiveparticipant in process
Customer is active co-producer
Customer needs Researched and expressed
May not be expressed
Product and serviceofferings
Marketing and R&Ddrive offering
Customized based oncustomer interactions
Price Fixed prices with discounting
Value based pricing;customer determined
Communication Advertising and PR Integrated andinteractive
Distribution Combination of direct and indirect
Direct and generally online
Why CRM ?♦ To built a long term relationship that enriches a
company trust, which in turn ensures steady flow of business.
♦ The focus of CRM is on creating value for the customerand the company over the longer and lasting term.
♦ Retaining existing customer is as difficult as winning andgaining new ones.
♦ CRM enables organisations to gain „competitive advantage‟
over competitors that supply similar products or services.♦ This depends on product quality and moreover the quality
of relationship maintained by them.♦ Constant changing of customer buying behaviour.♦ When customers value the customer service that they
receive from suppliers, they are less likely to look to
alternative suppliers for their needs.♦ To establish cross selling avenues.
Importance of CRM► It uses web based technologies to focus on the lifetime value
ofa customer.► It reduces costs, because the right things are being done
(i.e.,effective and efficient operation)
►The challenge is to continue attracting new and profitablecustomers even as forming ever tighter bonds with existingones and optimizing on these relationships over their lifetimes.►To analyze customer needs and serve them effectively
throughsystematic, real time information handling and timely response.► It helps in increasing customer satisfaction, because they
aregetting exactly what they want.
► It provides maximisation of opportunities (e.g. increased
services, referrals, etc.)► It increases access to a source of market and competitor
information.► It is for operational long term profitability and sustainability
ofthe organization.
What CRM can do ?• To establish an on-going dialogue with
customers by using the web to communicatewith them directly.
• To gain a better understanding of yourcustomers‟ needs and build individual customersolutions.
• To produce more efficient marketing efforts byusing readily accessible customer information.
• To link all departments, giving them access tothe same information – updated in real time.
• To speak to your customers in a consistent
voice across your organization.
Advantages of good CRM• Faster response time to the client.• Uniform talking and pattern.• Unified information without misleading.• Increased Efficiency.• Recognize your customer and their need.• Deeper knowledge about your customer.• Increase sales and marketing opportunities.• Ability to manage marketing campaign with
clear objectives.• To boost in customer satisfaction and
responsiveness.
A discussion : Is CRM a new concept?
N o !• Simply an extension
of relationshipmarketing
• Builds on customerservice andsatisfaction concepts
• Just the latestbuzzword for creatingcustomer orientation
• Bottom-line is still thesame
Yes!• A shift in corporate
philosophy concerning theapproach to value delivery
• Customer - centricapproach to value chain
• New and technology -enhanced processes
• Focus is not just onbottom-line, but on top-line
• Goal is to create satisfyingexperiences across allcustomer contact points
Market Research & CRMIt can give feedback in areas of.
● Customer satisfaction level with the organization in
generalmore specifically with its technology, quality, service,performance, time and price.
● It guides in further enhancement in customer satisfaction.
● In creating data bank of the competitors and benchmarkthem as per customer feedback.
● In knowledge of the market share and its possible trend.
● Reasons for poor profitability and necessary correctivemeasures.
● In identification of reasons for typical customerspreferences.
● In organization‟s SWOT investigation.
● Possible business solutions to various problems.
The challenges of personalizedEnterprise E-Support
► Relevant information about prospect orcustomer
► Information Updates
► Publishing of information
► Personalized Applications
► Communication
► Security
► Scalability
► Deployment
Determinants of CRM
Trust
The readiness to rely on the ability, reliability, eagerness and motivation of one company to serve the needs of the other company or the customer as per the agreement completely and clearly.
Value
The ability of a one organisation to the other organization or towards the customer to satisfy the needs at a comparatively lower cost or higher benefit than that offered by competitors and measured in money, timely, function and in psychological terms.
Determinants of CRM
In addition to t r u s t and v a lu e , the organization
must: Understand customer needs and
problems. Meet their commitments.
Provide superior after sales support.
Make sure that the customer is always told the truth(must be honest). and
Have a passionate interest in establishing and retaining a long-term relationship (e.g., have long-term perspective).
Stages in the development of aCustomer Relationship
The Pre-relationship Stage
The event that triggers an organization to seek a customer support.
The Early Stage
Experience is accumulated between the organization and the customer although a great degree of uncertainty and distance.
The Development Stage
Increased levels of transactions lead to a higher degree ofcommitment and the distance is reduced to a social exchange.
The Long-term Stage
Characterised by the organization and the customer mutualimportance to each other.
The Final Stage
The interaction between the organization and the customer becomes a bond (Loyalty).
Stages in the Development of aKey-Account Relationship
HighSynergistic KAM
Partnership
D e gr e e o f i n vo l vem e nt Mid-KAM
Early-KAM
Low Pre-KAM
Transactional Collaborative
N a ture of cust o mer re l ati o ns h ip
A Relationship Life Cycle Model
High cooperationLow competition
Low cooperationHigh competition
Pre- relationship
stage
Developmentstage
Maturitystage
Decline stage
Time
The role of salespeople / organization asRelationship Builders and Promoters
In identification of potential customers and their needs.In approach to key decision makers in the customerclass.In negotiation and advancement of dialogue and mutual trust with the prospects and the customers. In the coordination and cooperation between the customers and their influencers.In encouraging the customer learning process.In the contribution to construction of resolution of existing conflicts.ln creation of the customer relationship development team.
Functions of Customer Relationship Management
Value Creation Process
Management Decision Process
CustomerSensitivity•Diversity•Information•Differentiated
offering
Technology delivery process•R&D•Technology integration•Efficiency, effectiveness
learning
Product delivery process•Concept to launch•Manufacturing process
Customer delivery process•Supply chain•Distribution•Infomediation (distribution
of information)
Value-basedStrategies•Pricing•Communication
Types of CRM Programs Analytical CRM
– Customer Segmentation
– Trend Analysis
Operational CRM– Campaign Management
– Tele-Marketing / Tele-Sales
– Activity and Time Management
– Quotation and Order Processing
– Delivery and Order Fulfillment
– Customer Service and Support
– Remote Access
Collaborative CRM– Enterprise Portals
– Customer Access
– Supplier Access
– Personalization
Areas of CRM Activity Sales Force Automation (SFA)
Customer Service and Support (CSS)
Help Desk
Field Service
Marketing Automation
Areas of CRM ActivitySales Force Automation
It involves 35-40% of all CRMactivity
It manages lead generation forthe organization
It tracks movement of leadsthrough the pipeline
It allows better usage of customer data
It integrates activities across sales channels
It simplifies the relationship management process
It simplifies forecasting of the opportunities (SWOT)
Areas of CRM ActivityCustomer Service and Support (CSS) It involves 20-25% of CRM activities.
It involves putting system in
place to maximize customer
satisfaction and thus support
It is for assigning, catering,
and tracking of trouble pockets
It inquiries and attempt solutions
through resolution
It provides information to support
customer call center activity
It accommodates the role of receptionist, sales staff and other in customer facing roles
Areas of CRM ActivityHelp Desk
It incorporates some 15-20% of all CRM activities.
It is the central area for end user support.
It involves Information Technology support functionand thus can be challenging,
frustrating, as well as exciting
It allows individuals to access
network database for problem
solving and to find customer
relevant information
It can be internal or external
It offers many bottom-line savings
Areas of CRM ActivityField Service It involves 3-5% of all CRM activities It attempt to optimize processes and information needed by
companies who send technicians or staff into the field service It incorporates mobile service techniques to log information
about work orders and service and to access information fromthe remote site.
It works on feeding information about customer problems and salesperson leads through Sales Force Automation
It requires market information and intelligence which needs to be gathered and logged into central database.
It involves a combination of CRM applications such as , work order management, dispatch, wireless technology, and
Areas of CRM Activityhistorical customer service data
Areas of CRM ActivityMarketing Automation It also involves 3-5% of organizational CRM activities. It refers to automation of that
marketing processes which Includes customer segmentation, customer data integration (CDI), and campaign management.
It interfaces with data ware-houses and data mining activitiesto tailor products and promotions sothat the right offer goes to the right person at the right time.
It must interact with SFA to support field sales efforts It needs to provide customized customer interactions
critical to segment of one marketing, mass customization,
Areas of CRM Activitycustomerization, etc.
Commercial E - Communities Goal is to create an environment where people get
meaningful interactions with the company and other users so that they feel part ofthe enterprise.
Adds human component and engages customers.
Creates more stickiness andownership
Components of Commercial E-Communities Customer-focused transactions
Community Interactions
Access to Relevant Information
Value-added Services Based on Customer Data
Models of Customer Relationship Management
The Evans and Luskin model for effectiveRelationship Marketing
Relationship marketing inputs•Understanding customer expectations•Building service partnerships•Empowering employees•Total quality management Relationship marketing outcomes
•Customer Satisfaction•Customer loyalty•Quality products•Increased profitability
Assessment state•Customer feedback•Integration
The Brock and Barcklay model of selling partner relationship effectiveness
Independence
Mutual trust
Cooperation
Selling partner relationship effectiveness
Relative influence
Managing Customer RelationshipsThe global organization must be involved in the following activities in order to initiate, develop and enhance the process that is aimed at building trust and commitment with the customer.
Ini tiating the relationshi p
Engage in strategic prospecting and qualifying;
Gather and study pre-call information;
Identify buying influences;
Plan the initial sales call;
Demonstrate an understanding of the customer‟s needs;
Identify opportunities to build a relationship; and
Illustrate the value of a relationship with the customer
Managing Customer Relationships
Deve loping the re lat ionship
Select an appropriate offering;
Customise the relationship;
Link the solutions with the customer‟s needs;
Discuss customer concerns;
Summarize the solution to confirm benefits; and
Managing Customer RelationshipsSecure commitment.
Managing Customer Relationships
Enhancing the relationship
Assess customer satisfaction;
Take action to ensure satisfaction;
Maintain open, two-way communication; and
Work to add value and enhance mutual opportunities.
Use a non customized approach
Build a strong and lasting relationship
Seek better opportunities
elsewhere
Focus on loyalty-building
program
Managing Customer RelationshipsQualifying prospects for relationship building
High
Opportunities for adding value
Low
Low HighPotential profitability of customer
Relati onship netw orks
The ultimate outcome of a successful CRM strategy is thecreation of a unique company asset known as a relationshipnetwork.
A relationship network consists of the company and its major customers with whom the company has established long and enduring business relationships.
The additional aspects of a global salesperson‟s job are to:
Manage customer value;Act as customer advocate; andEnhance customer loyalty and build a “health” and
profitable network of relationships.
SummaryCRM is a new business philosophy based on trustand value;The core function of CRM is the value creation process;Customer relationships develop over time;The role of global salespeople in the process is that of both relationship builders and relationship promoters; andThe basic premise of CRM is to offer superior value to customers in an effort to turn prospects into customers,customers into loyal customers, andloyal customers into partners.
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