Chapter 11 : Building a Customer - Centric Organization - Customer Relationship Management

CUSTOMER RELATIONSHIP MANAGEMENT

• CRM enables an organization to:

-  Provide better customer service.
-  Make call centers more efficient.
-  Cross sell products more effectively.
-  Help sales staff close deals faster.
-  Simplify marketing and sales processes.
-  Discover new customers.
-  Increase customer revenues.

Recency, Frequency, and Monetary Value

• Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value.

-  How recently a customer purchased items (Recency).
-  How frequently a customer purchased items (Frequency).
-  How much a customer spends on each purchase (Monetary Value).

The Evolution of CRM

• CRM reporting technology – help organizations identify their customers across other applications.

• CRM analysis technologies – help organization segment their customers into categories such as best and worst customers.

• CRM predicting technologies – help organizations make predictions regarding customer behavior such as which customers are at risk of leaving.

Using Analytical CRM to Enhance Decisions

• Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers.

•  Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers.

Customer Relationship Management Success Factors

• CRM success factors include:

1. Clearly communicate the CRM strategy – ensuring that all departments and employees understand exactly what CRM means and how it will add value to the organization is critical to the success of the implementation.

2. Define information needs and flows – the organization must understand all of the different ways that information flows into and out of the organization to implement a successful CRM system.  If the organization misses one of the information flows, such as a customer service Web site, then none of that information from that Web site will be integrated into the CRM system and the company will not have a complete view of its customers.

3. Build an integrated view of the customer – the CRM system must support the organization's strategies and goal.

4. Implement in iterations – avoid the big-bang approach and implement in small, manageable, pieces.

5. Scalebility for organizational growth – ensure the system can support the organization's future growth.