CRM-Lecture-2.pptx

8/10/2019 CRM-Lecture-2.pptx

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Customer Relationship Management

Lecture 1


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Lecture 1 CRM Stands for

CRM is an abbreviation for Customer RelationshipManagement, not Customer Relationship Marketing.

Management is a broader concept than marketing

because it covers marketing manage., Manufacturingmanagement, human resource management, servicemanagement, sales management, and research anddevelopment management.

Thus, CRM requires organizational and businesslevel approaches which are customer centric todoing business rather than a simple marketingstrategy.


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CRM Stands for

Customer

Relationship Management


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History of CRM

B&S CIMS CRMRM

B&S Buying & Selling

RM Relationship MarketingCIMS Customer Information Management Systems

CRM Customer Relationship Management

e-CRM- A subset of CRM that focuses on enabling customerinteractions via e-channels (The web, email and wireless)

Time line

e-CRM

Late 80s Mid 90s 2002 - FutureEarly 90s


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Cost of Acquiring Customers

Nowadays, the competition is just a mouse-click away

Without customers product dont sell and revenue dontmaterialized.

Become smarter about selling leads to smarter about whois buying.

It costs a company six times more to sell a product tonew customers than existing ones.

The old bird in hand thus coming to roost


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Smarter Definition of CRM

the infrastructure that enables the delineation of and

increase in customer value, and the correct means bywhich to motivate valuable customers to remain

loyal-indeed to buy again.


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What is CRM

An integrated cross-functional focus on improvingcustomer retention and profitability for the

company.

Process of creating and maintaining relationshipswith business customers or consumers

A holistic process of identifying, attracting,

differentiating, and retaining customers

Integrating the firms value chain to createenhanced customer value at every step


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CRM Definition

CRM is concerned with the creation,

development and enhancement ofindividualised customer relationshipswith carefully targeted customers and

customer groups resulting inmaximizing their total customer life-

time value.


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Misunderstandings about CRM

Misunderstanding 1: CRM is database Marketing

Misunderstanding 2: CRM is a marketing Process

Misunderstanding 3: CRM is an IT issue

Misunderstanding 4: CRM is about loyalty Schemes

Misunderstanding 5: CRM can be implemented

by any company


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Paradigm Shift


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Determinants of CRM

Trust

The willingness to rely on the ability, integrity,and motivation of one company to serve the

needs of the other company as agreed uponimplicitly and explicitly.

Value

The ability of a selling organisation to satisfythe needs of the customer at a comparativelylower cost or higher benefit than that offered

by competitors and measured in monetary,temporal, functional and psychological terms.


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Principles of CRM

The overall processes and applications of CRM are basedon the following basic principles.

Treat Customer individually

Acquire and retain customer loyalty through PersonalRelationship

Select Good customer instead of Bad customer based onLifetime value.

In summary , personalization, loyalty , and lifetime valueare the main principles of CRM implementation.


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How to achieve goals of CRM

Four basic tasks are required to achieve the basic goals ofCRM. [Peppers, et al., 1999]

Customer Identification To serve or provide value to the customer ,the company must know or

identify the customer through marketing channels, transactions , andinteractions over time.

Customer Differentiation Each customer has their own lifetime value from the companys point of

view & each customer imposes unique demands and requirements forthe company.

Customer Interaction Customer demands change over time. So keeping track of customer

behavior & needs is an important task of CRM.

Customization/ Personalization Treat each customer uniquely is the motto of the entire CRM process .


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Strategically significant customers

Customer relationshipmanagement focuses onstrategically significant markets.Not all customers are equallyimportant .

Therefore, relationships should bebuilt with customers that are likelyto provide value for services

Building relationships withcustomers that will provide littlevalue could result in a loss of time,staff and financial resources


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Strategically significant customers

Strategically significant customersneed to satisfy at least one of threeconditions :

1. Customers with high life-time

values (i.e. customers that willrepeatedly use the service in thelong-term)

2. Customers who serve asbenchmarks for other customers.

3. Customers who inspire change inthe supplier


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Effective Marketer

BE RELIABLE- consistent performance is what customer wants from us

BE CREDIBLE- if the customer buys the product, he/she wants to safe and

guaranteed. BE ATTRACTIVE- body language, personality, appearance,

BE RESPONSIVE accessible, available and willing to help customer wheneverthe customer has a problem.

BE EMPATHIC- to be in customers shoes and grasp his/her point of view


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Implementing CRM

When introducing or developing CRM, a strategic review ofthe organisations current position should be undertaken

Organisations need to address four issues

1. What is our core business and how will it evolve in the future?

2. What form of CRM is appropriate for our business now and inthe future?

3. What IT infrastructure do we have and what do we need tosupport the future organisation needs?

4. What vendors and partners do we need to choose?


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Benefits of CRM

Benefits of CRM include :

reduced costs, because the right things are being done (ie.,effective and efficient operation)

increased customer satisfaction, because they are getting

exactly what they want (ie. meeting and exceedingexpectations) ensuring that the focus of the organisation is external growth in numbers of customers maximisation of opportunities (eg. increased services,

referrals, etc.) increased access to a source of market and competitor

information highlighting poor operational processes long term profitability and sustainability


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CRM-Lecture-2.pptx

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