UNIT 3 Flashcards
CRM
Customer Relationship Management
Who sells the most products and services –> who “owns” the customer
The customer relationship- a firms most valuable asset
CRM helps to:
- information on a specific customer might be stored and organized in terms that make it useful for the company
(contact info, shipment preferences, previously bought etc)
CRM helps companies to consolidate all of this information to provide a unified view of a customer across the company
Firms use CRM to:
- Acquire new customers
- Provide better service and support to existing customers
- Customize their offerings more precisely
- Provide ongoing value to retain profitable customers.
CRM systems
- examine customers from a multifaceted perspective
Marketing-Sales-Feedback-Support
PRM
Partner relationship management
Automation of the firm’s relationships with its selling partners using customer data and analytical tools to improve coordination and finally increase customer sales.
ERM
Employee relationship management
Software dealing with employee issues, such as setting objectives, employee performance management, performance based compensation, and employee training.
SFA
Sales Force Automotation
Sales force automation modules in CRM systems help sales staff increase their productivity by focusing sales efforts on the most profitable customers.
SFA provide
- Sales prospect
- Contact information
- Product information
- Product configuration capabilities
- Sales quote generation capabilities
- Particular customer’s past purchases
Customer service modules in CRM
This systems provide information and tools to increase the efficiency of call centers, help desks, and customer support staff. They have capabilities for assigning and managing customer service requests.
Example:
Appointment or advice telephone line: when a customer calls, the system routes the call to the correct service person, which inputs information about that customer into the system only once.
–>
Once the customer’s data are in the system, any service representative can handle the customer relationship.
Call centers and customer service groups achieve greater productivity, reduced transaction time, and higher quality of service at lower cost—–happier clients
CRM systems support direct-marketing campaigns by providing:
- Prospect and customer data
- Providing product and service information
- Qualifying leads for targeted marketing
- Scheduling and tracking direct-marketing mailings or e-mail campaigns
- Manage and execute marketing campaigns at all stages, from planning to determining the rate of success for each campaign.
Cross-selling
The marketing of complementary products to customers. (For example, in financial services, a customer with a checking account might be sold a money market account or a home improvement loan.)
Up-selling
Offer augmented products to clients after analyzing their preferences
Operational CRM
Includes customer oriented applications ( tools for sales force automation, call center and customer service support, and marketing automation)
Analytic CRM
Includes applications (like data mining) that analyze customer data generated by:
- operational CRM applications from the company.
- data from other sources (customer lists for direct-marketing campaigns purchased from other companies or demographic data).
CLTV
customer lifetime value
Analysis based on the relationship between the revenue produced by a specific customer, the expenses incurred acquiring and servicing that customer, and the expected life of the relationship between the customer and the company.
OLAP
Online Analytical Processing
An effective CRM system helps companies:
- Increase customer satisfaction
- Reduce direct-marketing costs (more efficient campaigns)
- More effective marketing
- Lower costs for customer acquisition and retention
Increases sales revenue - Apply cross-selling strategies
- Identifying the most profitable customers and segments for focusing the marketing (segmentation)
- Customer churn* is reduced as sales, service, and marketing better respond to customer needs
Components of CRM cycle
1- Understand and Differentiate.
2- Develop and Customize.
3- Interact and Deliver.
4- Acquire and Retain.
Understand and differentiate
- Organizations need to understand their customers.
- Profiling to understand demographics, purchase patterns and channel preference.
- Primary research to capture needs and attitude.
- Customer valuation to understand profitability, as well as lifetime value or long-term potential.
- The ICICI Group’s customers need to see that the firm is differentiating service and communications, based on their learning independently and on the customer expectation and the expected values expected
Develop and customize
- In a customer-focused world, product and channel development has to follow the customer’s lead, identify customer’s wants, determine the value and desire of the customer, etc.
- Organizations are increasingly developing products and services, and even new channels based on customer needs and service expectations.
- ICICI believes that the extent of customization should be based on the potential value delivered by the customer segment.
Interact and deliver
To foster relationships, organizations need to insure that:
- All areas of the organization have easy access to relevant, actionable customer information.
- All areas are trained how to use customer information to tailor interactions based on both customer needs potential customer value.
ICICI is strongly of the opinion that value is not just based on the price of the product or the discounts offered but are based on a number of factors including the quality of products and services, convenience, speed, ease of use, responsiveness, and service excellence.
Acquire and retain
- The more ICICI learns about customers, the easier it is to choose those that are producing the greatest value for the organization.
- They aim to continue to learn more about each customer segment and use it for successful customer retention.
- As ICICI moves step further in CRM they hopes to gain insight and understanding that enhance the subsequent efforts.
Implementing CRM
- five interrelated areas
Business Focus. Organizational Structure. Business Metrics. Marketing Focus. Technology.
Key drivers to customer loyalty
- Positive staff attitude
- Honesty integrity and reliability
- Proactive Advice
- Consistent delivery of superiority quality service
- After sale service
- An effective complaints resolution policy
Benefits of effective CRM
- 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
- Ensuring that the focus of the organization is external
Growth in numbers of customers - Maximization of opportunities (eg., increased services, referrals, etc.)
- Increased access to a source of market and competitor information
- Long term profitability and sustainability
- Customer’s usage pattern
- New product development
- Central data management
