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MGCR 331 > Chapter 11 > Flashcards

Chapter 11 Flashcards

1
Q

What recent event has made the customer relationship more impersonal?

A

rapid growth of the Internet

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2
Q

Why are customers increasingly powerful now?

A

hyper-competitive market where another option is one click away

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3
Q

def. customer relationship management

A

a customer-focused and customer-driven organizational strategy that concentrates on addressing customers’ requirements for products and services, and then providing high-quality, responsive services

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4
Q

How does customer relationship management work?

A

businesses use info about each customer (ex. previous purchases, needs and wants) to create highly individualized offers that customers are more likely to accept
–Creates customer intimacy

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5
Q

what is the CRM approach designed to achieve?

A

customer intimacy

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6
Q

T or F: CRM is a process that uses technology

A

F: CRM is not a process or a technology per se; rather, it is a customer-centric way of thinking and acting

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7
Q

the focus of modern organizations has shifted from ______ to _______

A

from conducting business transactions to managing customer relationships

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8
Q

How is CRM enabled by IT?

A

in the form of various systems and applications

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9
Q

What is sometimes the problem with managing relationships?

A

time and information

–e.g. if a process takes too long, companies have less time to spend with their customers

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10
Q

What do moidern CRM strategies and systems build?

A

sustainainle long-term customer relationships that create value for the company as well as for the customer

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11
Q

What does CRM help companies do?

A
  • acquire new customers

- retain ad expand existing relationships with profitable existing customers

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12
Q

Why is retaining customers important?

A

repeat customers are the largest generator of revenue for an enterprise
-it is also cheaper to keep an existing customer than it is to win one back or find a new one

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13
Q

Where does the CRM process begin?

A

-with marketing efforts (org solicits prospects from a target population of potential customers)

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14
Q

Describe the CRM process

A
  1. Marketing efforts solicit customers
  2. some of this target population becomes customers
  3. some of these customers continue to purchase and become repeat customers
  4. the org segments repeat customers into low-and high-value repeat customers
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15
Q

What is an Org’s goal with customers?

A

to maximize the lifetime value of a customer

ie a customers potential revenue stream over a number of years

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16
Q

what is the process of orgs losing customers over a period of time called?

A

customer churn

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17
Q

what is the optimal result of an org’s CRM efforts?

A
  • maximize number of high-value repeat customers

- minimize customer churn

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18
Q

CRM is a fundamentally simple concept: ____________

A

Treat different customers differently, because their needs differ, and their value to the company may also differ

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19
Q

A successful CRM strategy not only improves customer satisfaction but also ___________, which in turn ________________

A

makes the company’s sales and service employees more productive, which in turn generates increased profits

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20
Q

def. market capitalization

A

the number of a company’s shares outstanding multiplied by the price per share

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21
Q

What are CRM systems?

A

information systems designed to support an organization’s CRM strategy

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22
Q

For organizations to pursue excellent relationships with their customers, they need to employ CRM systems that provide ____________

A

the infrastructure needed to support those relationships.

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23
Q

T or F: Orgs can choose to focus on CRM strategy or CRM systems

A

F: they need to put emphasis on both because customer service and support are essential to a successful business

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24
Q

what are low-end CRM systems designed for?

A

enterprises with many small customers

ex. Amazon

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25
Q

what are high-end CRM systems designed for?

A

enterprises with a few large customers

ex. Boeing

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26
Q

What are the two basic elements successful CRM policies share?

A
  1. identify the many types of customer touch points

2. Consolidate data about each customer

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27
Q

def. customer touch points

A

any interaction between a customer and an organization

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28
Q

What are some traditional customer touch points?

A
  • telephone contact
  • direct mailings
  • actual physical interactions with customers in stores
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29
Q

What are some customer tough points that occur through personal tech?

A
  • email
  • websites
  • communications via smart phones
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30
Q

data consolidation and the 360° view of the customer enable the organization’s functional areas to _______________

A

readily share information about customers

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31
Q

def. collaborative CRM system

A

A CRM system where communications between the organization and its customers are integrated across all aspects of marketing, sales, and customer support processes.

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32
Q

what do collaborative CRM systems do?

A

provide effective and efficient interactive communication with the customer throughout the entire org

  • integrate communications between the org and customers
  • enable customers to provide direct feedback to the org
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33
Q

What are an org’s CRM system’s two major compenents?

A
  • operational CRM systems

- analytical CRM systems

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34
Q

def. operational CRM system

A

The component of CRM that supports the front-office business processes that directly interact with customers (i.e., sales, marketing, and service).

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35
Q

def. front-office processes

A

Those processes that directly interact with customers; that is, sales, marketing, and service.

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36
Q

What are the two major components of OPERATIONAL CRM systems?

A
  1. customer-facing applications

2. customer-touching applications

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37
Q

What benefits does Operational CRM provide?

A
  • Efficient, personalized marketing, sales, and service.
  • A 360° view of each customer.
  • The ability of sales and service employees to access a complete history of customer interaction with the organization, regardless of the touch point.
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38
Q

An operational CRM system involves using CRM tools to accomplish what 5 objectives?

A
  1. Improve sales and account management by optimizing the information shared by multiple employees and by streamlining existing processes (e.g., taking orders using mobile devices).
  2. Form individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits.
  3. Identify the most profitable customers, and provide them with the highest level of service.
  4. Provide employees with the information and processes necessary to know their customers.
  5. Understand and identify customer needs, and effectively build relationships among the company, its customer base, and its distribution partners.
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39
Q

def. customer-facing CRM applications

A

Areas where customers directly interact with the organization, including customer service and support, sales force automation, marketing, and campaign management.

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40
Q

Customer service and support are the systems that automate ________, ______, _____, and ______

A

service requests, complaints, product returns, and requests for information.

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41
Q

def. customer interaction centre (CIC)

A

A CRM operation where organizational representatives use multiple communication channels to interact with customers in functions such as inbound teleservice and outbound telesales.

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42
Q

what is an example of a CIC?

A

-call centre

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43
Q

what interactions involves orgs using the CIC to create a call list for the sales team, whose members contact sales prospects? What happens next?

A

outbound telesales

customer and the sales team collaborate in discussing products and services that can satisfy customers’ needs and generate sales.

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44
Q

What kinds of interactions are referred to as inbound teleservice?

A

Customers communicate directly with the CIC to initiate a sales order, inquire about products and services before placing an order, and obtain information about a transaction they have already made

teleservice representatives then respond to these requests

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45
Q

What does the CIC Information help desk do?

A
  • assists customers with their questions concerning products or services, and it also processes customer complaints
  • Complaints generate follow-up activities such as quality control checks, delivery of replacement parts or products, service calls, generation of credit memos, and product returns.
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46
Q

def. sales force automation (SFA)

A

The component of an operational CRM system that automatically records all the aspects in a sales transaction process.

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47
Q

What kinds of systems can a SFA include?

A
  • contact management system
  • sales lead tracking system
  • sales forecasting system
  • product knowledge system
  • configurators
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48
Q

role of contact management system

A

tracks all communications between the company and the customer, the purpose of each communication, and any necessary follow-up. This system eliminates duplicated contacts and redundancy, which in turn reduces the risk of irritating customers.

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49
Q

role of sales lead tracking system

A

lists potential customers or customers who have purchased related products; that is, products similar to those that the salesperson is trying to sell to the customer.

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50
Q

role of sales forecasting system

A

mathematical technique for estimating future sales

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51
Q

role of product knowledge system

A

comprehensive source of information regarding products and services

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52
Q

role of configurators

A

online product-building features that enable customers to model the product to meet their specific needs

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53
Q

def. purchasing profile

A

snapshot of a consumer’s buying habits that may lead to additional sales through cross-selling, upselling, and bundling.

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54
Q

def. cross-selling

A

marketing of additional related products to customers based on a previous purchase
-used by banks

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55
Q

def. upselling

A

strategy in which the salesperson provides customers with the opportunity to purchase related products or services of greater value in place of, or along with, the consumer’s initial product or service selection
ex. warranties on electronics

56
Q

def. bundling

A

form of cross-selling in which a business sells a group of products or services together at a lower price than their combined individual prices

57
Q

def. campaign management applications

A

CRM applications that help organizations plan marketing campaigns that send the right messages to the right people through the right channels.
-can also personalize individual messages

58
Q

def. customer-touching CRM applications (electronic CRM applications)

A

Applications and technologies with which customers interact and typically help themselves.

59
Q

What are some of the major e-CRM applications?

A
  • search and comparison capabilities
  • technical and other informations and services (orgs offer personalized experiences to induce customers to make purchase or stay loyal)
  • customized products and services
  • personalized web pages
  • FAQs
  • email and automated response
  • loyalty programs
60
Q

def. loyalty programs

A

Program that offers rewards to customers to influence future behaviour.

61
Q

def. analytical CRM systems

A

CRM system that analyzes customer behaviour and perceptions in order to provide actionable business intelligence.

62
Q

What are some important technologies in analytical CRM systems?

A
  • data warehouses
  • data mining
  • decision support
  • other business intelligence tech
63
Q

What do analytical CRM systems do after completing their various analyses?

A

they supply information to the organization in the form of reports and digital dashboards

64
Q

Why do analytical CRM systems analyze customer data?

A
  1. Designing and executing targeted marketing campaigns.
  2. Increasing customer acquisition, cross-selling, and upselling.
  3. Providing input into decisions relating to products and services (e.g., pricing and product development).
  4. Providing financial forecasting and customer profitability analysis.
65
Q

In what two ways can customer relationship management systems be implemented?

A
  • on-premise

- on-demand

66
Q

what does on-premise CRM systems mean?

A

orgs purchased systems from a vendor and then installed them on site

-expensive, time-consuming, inflexible

67
Q

def. on-demand CRM system

A

CRM system that is hosted by an external vendor in the vendor’s data centre.

-saves money

68
Q

what is the best known on-demand CRM vendor? What is their goal

A

salesforce

goal is to provide a new business model that allows customers to rent the CRM software instead of buying it

69
Q

What helps Salesforce succeed?

A

CRM has common requirements across many customers so Salesforce can meet demands without lots of customization

70
Q

What are the on-demand CRM systems potential problems? (4)

A
  1. vendor could be unreliable, meaning the client company would have no CRM functionality at all
  2. hosted software is difficult or impossible to modify, and only the vendor can upgrade it
  3. vendor-hosted CRM software may be difficult to integrate with the organization’s existing software
  4. security and privacy risks of giving strategic customer data to vendors
71
Q

def. mobile CRM system

A

An interactive CRM system where communications related to sales, marketing, and customer service activities are conducted through a mobile medium for the purpose of building and maintaining customer relationships between an organization and its customers

-mobile CRM systems involve interacting directly with consumers through portable devices

72
Q

def. open-source CRM system

A

CRM software whose source code is available to developers and users

73
Q

T or F: open-source CRM systems provide the same features or functions as other CRM software, and can be implemented either on-premise or on-demand

A

true

74
Q

benefits of open-source CRM systems:

A
  • favourable pricing
  • wide variety of applications
  • easy to customize, therefore good for orgs with specific needs
  • updates and bug fixes are rapidly distributed, and extensive support info is available free of charge
75
Q

risks of open-source CRM

A
  • quality control (since they are create by a large community of unpaid developers, sometimes there is no central authority who oversees the quality of the product)
  • companies must have the same IT platform in place as the one on which the open-source CRM system was developed for best results
76
Q

def. social CRM

A

The use of social media technology and services to enable organizations to engage their customers in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent manner

77
Q

What do orgs do in social CRM?

A

they monitor services like Facebook, Twitter, Linkedin for relevant mentions of their products, services, and brand, then they respond accordingly

78
Q

def. supply chain

A

The coordinated movement of resources from organizations through conversion to the end consumer.

-includes the organizations and processes that create and deliver products, info, and services to the end customers

79
Q

supply chains enhance _________ to improve _____ and _____

A

enhance trust and collaboration among supply chain partners, thus improving supply chain visibility and inventory velocity.

80
Q

def. supply chain visibility

A

The ability of all organizations in a supply chain to access or view relevant data on purchased materials as these materials move through their suppliers’ production processes.

-orgs can also access or view relevant data on outbound goos as they are manufactured, assembled, or stored

81
Q

the more quickly a company can deliver products and services after receiving the materials required to make the, the __________

A

the more satisfied the company’s customers will be.

82
Q

What is inventory velocity?

A

how fast a company can deliver products and services after receiving the material required to make them

83
Q

What are some ways supply chain information is gathered now?

A

sensors, RFID tags, meters, GPS, and other devices and systems

84
Q

How does moving from manual to generated supply chain info affect supply chain managers?

A

they now have real-time information on all products moving through their supply chains. Supply chains will therefore rely less on labour-based tracking and monitoring, because the new technology will allow shipping containers, trucks, products, and parts to report on their own status. The overall result is a vast improvement in supply chain visibility.

85
Q

What is a critical component of the integration between a business and its suppliers, partners, distributors, and customers?

A

information systems as they facilitate the exchange of information among the participants in the supply chain

86
Q

What are the 3 segments of a supply chain?

A
  1. Upstream
  2. Internal
  3. Downstream
87
Q

What happens in the upstream supply chain segment?

A
  • where sourcing or procurement from external suppliers occurs
  • supply chain managers select suppliers to deliver the goods and services the company needs to produce its product or service.
  • supply chain managers develop the pricing, delivery, and payment processes between a company and its suppliers

Processes: managing inventory, transferring goods to manufacturing facilities and authorizing payments to suppliers

88
Q

What happens in the internal supply chain segment?

A
  • where packaging, assembly, or manufacturing takes place.
  • Supply chain managers schedule the activities necessary for production, testing, packaging, and preparing goods for delivery.
  • monitor quality levels, production output, and worker productivity.
89
Q

What happens in the downstream supply chain segment?

A
  • where distribution takes place, frequently by external distributors
  • supply chain managers coordinate the receipt of orders from customers, develop a network of warehouses, select carriers to deliver products to customers, and implement invoicing systems to receive payments from customers.
90
Q

What is the process for returning damaged or unwanted products called?

A

reverse flows or reverse logistics

91
Q

Describe the tiers of suppliers for an automobile manufacturer

A

Tier 3: suppliers produce basic products such as glass, plastic, and rubber;

Tier 2: suppliers use these inputs to make windshields, tires, and plastic mouldings

Tier 1: suppliers produce integrated components such as dashboards and seat assemblies

92
Q

What are the 3 typical flows in the supply chain?

A

Material, information, financial

93
Q

What are material flows?

A

the physical products, raw materials, supplies, and so forth that flow along the chain.
-also include the reverse flows

94
Q

What are information flows?

A

consist of data related to demand, shipments, orders, returns, and schedules, as well as changes in any of these data

95
Q

What are financial flows?

A

involve money transfers, payments, credit card information and authorization, payment schedules, e-payments, and credit-related data

96
Q

def. supply chain mangement (SCM)

A

An activity in which the leadership of an organization provides extensive oversight for the partnerships and processes that compose the supply chain and leverages these relationships to provide an operational advantage

97
Q

What are the five basic components of SCM?

A
  1. Plan
  2. Source
  3. Make
  4. Deliver
  5. Return
98
Q

What is the Plan component of SCM?

A
  • strategic component
  • invovles developing a set of metrics (measurable deliverables) to monitor the organization’s supply chain to ensure that it is efficient and it delivers high quality and value to customers for the lowest cost
99
Q

What is the Source component of SCM?

A
  • organizations choose suppliers to deliver the goods and services they need to create their product or service
  • Supply chain managers develop pricing, delivery, and payment processes with suppliers, and they create metrics to monitor and improve their relationships with their suppliers
  • also develop processes for managing their goods and services inventory, including receiving and verifying shipments, transferring the shipped materials to manufacturing facilities, and authorizing supplier payments.
100
Q

What happens in the make component of SCM?

A
  • manufacturing component
  • Supply chain managers schedule the activities necessary for production, testing, packaging, and preparation for delivery
  • *most metric-intensive of part of the supply chain, orgs measure quality levels, production output, and worker productivity
101
Q

What happens in the deliver component of SCM?

A
  • often referred to as logistics
  • organizations coordinate the receipt of customer orders, develop a network of warehouses, select carriers to transport their products to their customers, and create an invoicing system to receive payments.
102
Q

What happens in the return component of SCM?

A

Supply chain managers must create a responsive and flexible network for receiving defective, returned, or excess products back from their customers, as well as for supporting customers who have problems with delivered products.

103
Q

What is the goal of SCM information systems?

A

to reduce the problems, or friction, along the supply chain, because friction can increase time, costs, and inventories and decrease customer satisfaction

104
Q

What do SCM systems do?

A

reduce uncertainty and risks by decreasing inventory levels and cycle time while improving business processes and customer service, making the organization more profitable and competitive.

105
Q

SCM systems are a type of ________ information system

A

interorganizational

106
Q

def. interorganizational information system (IOS)

A

An information system that supports information flow among two or more organizations.

107
Q

What do IOSs enable by connecting business partners?

A
  • Reduce the costs of routine business transactions.
  • Improve the quality of the information flow by reducing or eliminating errors.
  • Compress the cycle time involved in fulfilling business transactions.
  • Eliminate paper processing and its associated inefficiencies and costs.
  • Make the transfer and processing of information easier for users.
108
Q

What is one of the most important goals of SCM systems?

A

give organizational visibility into its supply chain

109
Q

What is one of the most important goals of SCM systems?

A

is to give an organization visibility into its supply chain

110
Q

What is the goal of supply chain visibility?

A

to improve the supply chain by making data readily available to all parties in the supply chain.

-it promotes quick responses to problems or changes along the supply chain by enabling companies to shift products where they are needed

111
Q

def. push model (make-to-stock)

A

A business model in which the production process begins with a forecast, which predicts the products that customers will want as well as the quantity of each product. The company then produces the amount of products in the forecast, typically by using mass production, and sells, or “pushes,” those products to consumers

112
Q

What is the problem with the push model?

A
  • the forecasts are often incorrect
  • if they overestimate, they have large costs of having unused inventory
  • if they underestimate, they risk losing business if a product is unavailable or they an incur substantial overtime costs
113
Q

def. pull-model (make-to-order)

A

A business model in which the production process begins with a customer order and companies make only what customers want, a process closely aligned with mass customization

114
Q

What are the two sources where supply chain problems primarily arise?

A

(1) uncertainties

(2) the need to coordinate multiple activities, internal units, and business partners

115
Q

what is a major source of supply chain uncertainties?

A

demand forecast

116
Q

What can demand be affected by?

A

competition, price, weather conditions, technological developments, overall economic conditions, and customers’ general confidence.

(among others)

117
Q

What is another big uncertainty for supply chains?

A

delivery times, which can be affected by numerous factors ranging from production machine failures to road construction and traffic jams.

In addition, quality problems in materials and parts can create production delays, which also generate supply chain problems

118
Q

def. bullwhip effect

A

Erratic shifts in orders up and down the supply chain.
-variables that affect customer demand can become magnified when they are viewed through the yes of managers at each link in the supply chain(i.e each entity makes decisions that place its interests above those of the chain, causing stockpiling)

119
Q

def. vertical integration

A

Strategy of integrating the upstream part of the supply chain with the internal part, typically by purchasing upstream suppliers, in order to ensure timely availability of supplies

120
Q

what are some solutions to supply chain problems?

A

vertical integration, just-in-time inventory system, information sharing

121
Q

What is the most common solution to supply chain problems? Is it a good solution?

A

building inventories as insurance against supply chain uncertainties

-it can be costly

122
Q

def. just-in-time (JIT) inventory system

A

A system in which a supplier delivers the precise number of parts (work-in-progress inventory) to be assembled into a finished product at precisely the right time.

123
Q

What are the drawbacks of JIT?

A
  • suppliers are expected to respond instantaneously to requests. As a result, they have to carry more inventory than they otherwise would. In this sense, JIT does not eliminate excess inventory; rather it simply shifts it from the customer to the supplier
  • not always possible to reduce the overall inventory size
  • JIT replaces a few large supply shipments with a large number of smaller ones. In terms of transportation, then, the process is less efficient.
124
Q

def. vendor-managed inventory

A

An inventory strategy where the supplier monitors a vendor’s inventory for a product or group of products and replenishes products when needed.

125
Q

def. electronic data interchange (EDI)

A

A communication standard that enables the electronic transfer of routine documents between business partners.

126
Q

How does EDI work?

A

EDI format the documents to be transferred according to agreed-upon standards (e.g., data formats). It then transmits messages over the Internet using a converter, called translator.

127
Q

What are the benefits of EDI?

A
  • minimizes data entry errors, because each entry is checked by the computer
  • length of the message can be shorter,
  • the messages are secured
  • reduces cycle time,
  • increases productivity,
  • enhances customer service,
  • minimizes paper usage and storage
128
Q

What are some disadvantages of EDI?

A
  • Business processes sometimes must be restructured to fit EDI requirements
  • here are many EDI standards in use today, so one company might have to use several standards in order to communicate with multiple business partners.
129
Q

def. extranets

A

Networks that link business partners over the Internet by providing them access to certain areas of each other’s corporate intranets

130
Q

What is the primary goal of extranets?

A

foster collaboration between and among business partners

131
Q

extranets use _____ to make communication over the internet more secure

A

virtual private network (VPN) technology

132
Q

What are the major benefits of extranets?

A

faster processes and information flow,

  • improved order entry and customer service
  • lower costs (e.g., for communications, travel, and administrative overhead),
  • overall improved business effectiveness.
133
Q

What are the 3 major types of extranets?

A
  1. A Company and Its Dealers, Customers, or Suppliers
    - centres on a single company
  2. An Industry’s Extranet
    - major players in an industry team up to create an extranet that will benefit all of them
  3. Joint Ventures and Other Business Partnerships
    - the partners in a joint venture use the extranet as a vehicle for communication and collaboration
134
Q

What are the two basic types of corporate portals?

A
  1. procurement (sourcing) portals for a company’s suppliers (upstream in the supply chain)
  2. distribution portals for a company’s customers (downstream in the supply chain)
135
Q

def. procurement portals

A

Corporate portals that automate the business processes involved in purchasing or procuring products between a single buyer and multiple suppliers.

136
Q

def. distribution portals

A

Corporate portals that automate the business processes involved in selling or distributing products from a single supplier to multiple buyers.

MGCR 331 (9 decks)

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