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CRM part 1
Dr.Sc. (Econ.) Carl-Johan Rosenbrijer
Department of Economy, Media and Engineering
ARBIT Applied Research in Business an IT
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Customer Relationship Management: 30.8-
1.9.2012
What is marketing
Introduction to CRM - development of marketing
Business and CRM strategy
The nature and complexity of customer relationships
The network approach
Group assignment part 1
Customer loyalty
Customer value and the value creation process
Group assignment part 2
Future of CRM
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Business and CRM strategy
Strategic dimensions to CRM
Business vs. CRM strategy
Business relationship strategy
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Strategy and organisational issues
Individual attitudes affect ability and willingness to
change and adapt
Thoughts
Feeling
Activity
Vision
Passion
Action
Adapted from: Karlf (1987)
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Strategic dimensions to CRM
What is strategic leadership?
An ability to see the totality (holistically) - complexity
An ability to identify the need for change turning
points An ability to create a strategy for change
An ability to know and use tools for the change process
An ability to firmly and consistently lead the change
process
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Strategic dimensions to CRM
Customers
business strategy:
Vision
Mission
Objectives
Our
business strategy:
VisionMission
Objectives
Transaction based non transparent
relationship
Customers
business strategy:
Vision
Mission
Objectives
Our
business strategy:
VisionMission
Objectives
&Co-operation
based
transparent
relationship&
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Strategic dimensions to CRM
Customers
position now
Suppliers
position now
Sub-suppliers
position now
Customer
Supplier
Sub-
supplier
Obstacles
Obstacles
Obstacles
Customer
Vision
Supplier
Vision
Sub-supplier
Vision
The resource base!
Value creation!
The obstacle removal business
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Business and CRM strategy
M & A operationsIndustry consolidation
Organic growth
Acquiring and exitingcustomer relationships
Gain, develop and keep
customer relationships
Turnover growth
Business Strategy CRM Strategy
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Business and CRM strategyProfitability growth
Business Strategy CRM Strategy
Increase revenue
Cut costs
Out-sourcing
Shareholder value
Offering development,
cross-sell and up-sell
Partnerships
Customer relationship profitability
Exiting relationships
Coordintation and efficiency
in customer interaction
Key supplier partnerships
Customer value
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Business and CRM strategyInvestments
Business Strategy CRM Strategy
Machinery
R&D
Personnel
M & A
Supplier and customer relationship
management
Developing customer
relationship competence
Integration and coordination of
both parties supplier and customer
relationships
Supplier relationship management
Customer oriented machine investments
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Business relationship strategy
Strategically different
customer relationships
Our
company
Growing customer
Shrinking customerShrinking business potential!
Demanding customer
Stable & easy
customer
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Business relationship strategy
Creating different interaction strategies for different customers
Growing customersShrinking customers
Demanding
customer rel.
Stable & easy
customer rel.
Managerial
effort in the rel.
CRITICAL QUESTIONS: Why is the customer skrinking or
growing?
Why is the customer rel. easy or
difficult to manage (nature of rel.)?
How should we allocate or re-
allocate our managerial resources How should we interact with
the customer? (hierarchical level, way
of interacting)
Business potential
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Business relationship strategyInteraction strategy created with the strategic objective of moving the
customer relationship to a new position in (or outside) thecustomer relationship portfolio
Growing customersShrinking customers
Demanding
customer rel.
Stable & easy
customer rel.
Managerial
effort in the rel.
Business potential
EXIT!
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The nature and complexity of
customer relationships
CRM perspectives and customer
orientation
The customer relationship as an
interaction process
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Key areas in customer oriented
relationship management example
professional services/ auditing company
ATTITUDES
I am interested in doing my own tasks,
for example auditing, tax or legal servicesas good as I can.
ORGANIZATION
We have the best possible competence
in for exampleauditing, tax and legal services
Only I am also interested
in the customers situation,i.e. their challenges and concerns
and even developing the
customers business.
OnlyWe are also organized
according to thecustomers
needs/concerns and we
manage the customer relationship
as a whole, for example over the
service areas
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What is CRM?
Customer Relationship Management:
Managing a customer relationship in which
additional value is created by developing the
interaction in the way that the customers needs
and concerns are taken care of.
Starting point:
Who is the customer?
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Who is the customer? Example:
the facility business
THE OWNER?
THE USER?
THE TENANT?
THE BUILDER?
THE SERVICE PROVIDER?
THE INVESTOR?
SOMEBODY ELSE?
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Who is the customer? Example:
the facility businessPERSON ORGANIZATION
The owner
The tenant
The user
The investor
The builder
The service provider
Somebody else
Top management
Middle management
Operative level
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Interaction process of the customer
relationship
Process aspect essential management challenges
THE LIFE CYCLE OF CUSTOMER RELATIONSHIPS
CUSTOMER RELATIONSHIP ARISES CUSTOMER RELATIONSHIP DEVELOPESCUSTOMER RELATIONSHIP FADES
How does a customer relationship arise? From where has the customer come?
How has the customer come?
Why has the customer come?
When has the customer come?CRM
TODAY!
How does the customerrelationship fade/end? Why does the customer
relationship fade/end?
Where to does the customer
move?
How does the customer move?
When does the customer move?
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Competition and offers a new world,
but why? The AuditorCase
Accounting scandals
Rotation(EU 8th directive)
Independence
(EU 8th directive)
Increased price awarenessand demand for change
(top management & owners)
Transparency of price:Annual reports and corporate governance
Other reasons?
From profession to service business!
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One customer has many service prov.
relationshipsTheAuditorCase
C
USTOME
R
Auditingservices
Taxservices
Financialadvisoryservices
PWC
ERNST & YOUNG
KPMG
DELOITTE
ETC.
Whohas
arel.andwith
whatservice?
Howis the
serviceproviderchosen
andhow/from where
is therelationshipmanaged?
Otherservices
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Interaction process of the customer
relationship
The b-to-b customer relationship is complex
Several active persons from suppliers and customers
side
Who is the decision maker (the fox)? Which incidents affect customers decision?
Suppliers offering (i.e. products and services) is often
integrated to customers activities and affects
customers own success Exchange in one customer relationship affects other
customer relationships (network effect)
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Interaction process of the customer
relationshipB-to-b customer relationship is complex
Supplier
Customer
Management
Management
Middle management
Middle management
Operative level
Operative level
CUSTOMER RELATIONSHIP
Coordination of
the interactionprocess between
organisation
levels
Coordination of the interaction process between divisions and departments
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Interaction process of the customer
relationship
Who is managing the relationship?
Supplier traditionally in production based
business (for example forest industry) Customer traditionally in purchasing based
business (for example construction industryand retailing)
Both traditionally in product developmentbased business
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Interaction process of the customer
relationship
The nature of the customer
relationship CUSTOMERDOMINATED
SUPPLIER
DOMINATED
COMPETITION COOPERATION
Source: Alajoutsijrvi (1996)
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The network approach and group
assignment part 1
A network approach
Group assignment part 1
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Markets Relationships/Partnerships Hierarchies
Transactions Supplier Acquisitions
Buyer/End User/Consumer Mergers
Institutional Divestitures
Strategic Alliances Joint Ventures
A network approach
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Supplier Customer
Isolated?
Exchange
No!
Supplier
Supplier
Sub-
supplier
Sub-
supplier
Customers
customer
Customers
customer
Customer
Customer
A network approach
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Pulp Producers
Paper
Producers
Owners
Media
Authorities
ResearchInstitutes
EnvironmentalOrganisations
Merchants Publishers
Printers
Adv.Agencies
CustomerCompany
End Users / Consumers
ForestOwnersEquipment
Manufacturers
Consultants
Banks
Capital Markets
Trade Unions
Other Suppliers
A network approach
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Group Assignment: Part 1
Create a total view of the chosen customercompanys/units business network (currentsituation), I.e. network picture:
all central companies and organisations all central supplier/buyer and other inter-
organisational relationships ofimportance
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Thank You!
mailto:[email protected]:[email protected]:[email protected]:[email protected]