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Customer Relationship Management

Module 1

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Internal Markets

Supplier Markets

Customer Markets

Referral Markets

Recruitment Markets

Influence Markets

Stages in the development of a Customer Relationship

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The Pre-relationship Stage The event that triggers a buyer to seek a new business partner. The Early Stage Experience is accumulated between the buyer and seller although a great degree of uncertainty and distance exists. The Development Stage Increased levels of transactions lead to a higher degree of commitment and the distance is reduced to a social exchange. The Long-term Stage Characterised by the companies mutual importance to each other. The Final Stage The interaction between the companies becomes institutionalized.

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Berry (1995), defined relationship marketing as attracting, maintaining, and, in multi-service organisations enhancing customer relationships. Morgan and Hunt (1994) suggested that relationship marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relationships. Customer relationship management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.
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A process-oriented view which looks at the interactions over a period of time, Explicitly highlight the collaborative and cooperative nature of the relationship for longterm mutual benefit, and Metrics of relationship performance include enhanced value.
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Approach towards Customers

Acquisition

Usage

Retention

Sales Initiatives
Telesales, Direct and Database Marketing,

Secondary Sales, Alternate Channels

Activation and Usage programmes, Alliances and Consumer Benefits Programmes

Loyalty Programmes, Anti-switching Programmes

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Customer Relationships

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Top 10 CRM Systems in India

1. Oracle, including its Oracle Siebel, PeopleSoft and Oracle On Demand products 2. SAP CRM 3. Microsoft Dynamics CRM 4. Salesforce.com 5. Sage, including ACT!, SageCRM and SalesLogix 6. Pivotal from CDC Software 7. Talisma 8. Amdocs from Clarify 9. SugarCRM 10. Impel CRM

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The CRM System

Customer Marketing

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eC
CRM System

R M

Management

Sales

Operational CRM
Service

Analytical CRM
Shared Data Base

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Type of CRM Strategic

Dominant characteristic CRM is a core customer-centric business strategy that aims at winning and keeping protable customers CRM focuses on the automation of customer-facing processes CRM focuses on the intelligent mining of customer-related data for strategic or tactical purposes CRM applies technology across organizational boundaries with a view to optimizing company, partner and customer value

Operational Analytical

Collaborative

Strategic CRM at Boise Ofce Solutions

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In 1998 the CEO of Itasca, Illinois-based Boise Ofce Solutions, decided that the only way to escape the bruising price competition and razor-thin margins of ofce supply superstores such as Staples and Ofce Depot was to provide greater value through superior customer service, with the support of a CRM system. Three years and $20 million later, the $3.5 billion subsidiary of Boise Cascade switched on a CRM system that differentiated them from other competitors in the ofce supplies industry.

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The company can now share customer data across ve business units, 47 distribution centres and three customer service centres. This has allowed Boise to cross-sell, retain and service accounts much more effectively. One of the CRM systems many features is web collaboration which allows representatives to co-browse and chat with
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Operational CRM (SFA) at Roche

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Roche is one of the worlds leading research-based healthcare organizations, active in the discovery, development and manufacture of pharmaceuticals and diagnostic systems. The organization has traditionally been product-centric and quite poor in the area of customer management. Roches customers are medical practitioners prescribing products to patients. Customer information was previously collected through several mutually exclusive sources, ranging from personal visits to handwritten correspondence, and not integrated into a database or central ling system, giving incomplete views of the customer. Roche identied the need to adopt a more customer-centric approach to understand their customers better, improve

Roche continued..

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Roche implemented a sales-force automation system where all data and interactions with customers are stored in a central database which can be accessed throughout the organization. This has resulted in Roche being able to create customer proles, segment customers and communicate with existing and potential customers. Since implementation Roche has been more successful in identifying, winning and retaining customers.

Analytical CRM at AXA Seguros e-Inversiones (AXA)

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Spanish insurer AXA Seguros e Inversiones (AXA) has revenues of over 1.8 billion (US$2.3 billion), two million customers and is a member of global giant The AXA Group. AXA runs marketing campaigns in Spain for its many products and services. The company wanted

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AXA used CRM vendor SASs data mining solution to build a predictive policy cancellation model. The solution creates proles and predictive models from customer data which enables more nely Targeted campaign management, call centre management, sales-force automation and other activities involved in customer relationship management. The model was applied to current and cancelled policies in Various ofces, to validate it before deploying it across Spain. Moreover, the model was used to create two control groups (subdivided into high and low probability) that were not targeted in any way, while other groups, similarly divided

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The outcome was that the auto insurance policy cancellation rate was cut by up to nine percentage points in specic targeted segments. With the customer insight obtained from the model, AXA is now able to design and execute personalized actions and customer loyalty campaigns tailored to the needs and

Strategic CRM

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Strategic CRM is focused upon the development of a customer-centric business culture. Leadership Behaviours, The design of formal systems (resources to be allocated where they would best enhance customer value, reward systems and retention, and customer information to be collected, shared and applied across the business.

Operational CRM
Sales force automationSFA.doc Account management Lead management Opportunity management Pipeline management Contact management Quotation and proposal generation Product configuration

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Account Management

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Operational CRM continues.. A B S

Marketing automation Market segmentation Campaign management Event-based (trigger) marketing (Event-based, or trigger, marketing is the term used to describe messaging and offer presentation to customers at particular points in time.

Campaign Management Amity Business School

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Service automation
Case (incident or issue) management Inbound communications management Queuing and routing Service level management http://www.crmworks.co.uk/Solutions/ Cherwell%20Service%20Management/ITIL %20Best%20Practice/Service%20Level%2 0Management

Queuing and routing

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Service Level Management

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Operational and Analytical CRM

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Operational CRM: effective and efficient use and management of people, process and technology Analytical CRM: the measurement of people, process and technology

Building Blocks of CRM Amity Business School

Data Capture
Customer Touch Point Integration Market Research External Databases

Data Warehousing

Knowledge Management

Enabling Technologies

EIS OLAP Data Cleansing MetaData

Segmentation Customer Profitability Data Mining Statistical Modeling

Call Centres Sales Process Automation e-Business

Organization People Deployment and Support The building blocks of CRM are the things that need to be in place for an effective Customer Relationship management program

Data Capture &Warehouse A B S

Derived Data
Segments Profitability Life Time Value Intentions

Customer Behaviour
Usage Profile Migration in Usage Acquisition Information Loyalty / Switching

Customer Interactions
Inbound Contact Campaign History Outbound Contact

Customer Profile
Product / Service Preferences Demographics / Firmgraphics Attitudes

External Data
Geodemographics Census

Product Portfolio

Householding Base Data

The Customer Data Model

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Enabling Technologies

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Techniques: Relationship marketing, automated packaging and pricing, knowledge-based selling Increase revenue from your customer base Customer satisfaction measure Consultative selling Responsiveness to market conditions

Sales Force Automation

Techniques: ACD, IVR, CTI
Automatic Call Distribution (ACD) Incoming Call Queuing Performance Statistics Integrated Voice Response (IVR) Automated Inquiry & Transactions Automated screen pop on agents screen Integration with company legacy platforms Billing & Meter Reading Direct Access to Customer Data

Techniques: WEB based application, e-mail processing

Electronic Business

CRM
Call Centre

Technologies

Automated product and service information WEB based sales and support through standard menus and automated help screens. WEB based training Reaching the global market

Call Centers - Definition

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Call centres are a key enabling arm of Customer Relationship Management. A well designed call centre will integrate people, process, and technology to improve operational efficiency and maximize the value of the customer relationship for both inbound and outbound contact. Call Centre Sales Force Automation

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Call Centre Technologies

People

Process
IVR ACD

External customer Internal customer Sales Force Support team Back-office Technical staff

Marketing / up-selling Technical support Product support Service support 7 x 24 support

CTI
Information

Customer data updates, purchase information Leads tracking update, customer tracking updates Call statistics, inquiries, etc.

Customer history, billing, purchases, value, profile Product & service information, packages, prices Marketing hints, reports, promotions

Data Warehouse

Call Centres Architecture

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Data Warehouse

Customized Agent Desktop Applications by Customer & Call Type Automated Scripting of Call Handling & Wrap-up Flexibility to Add New Products, Services, and Customer Service Opportunities Scripted Cross-Selling Legacy Integration Billing & Meter Reading Direct Access

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Call Centre
Old Rule
Single Singleproduct product Backroom Backroomoperation operation Stand-alone Stand-aloneoperation operation & &information information Minimal Minimaltechnology technology Reactive Reactive Low Low skilled skilledCSRs CSRs Tactical Tactical

Call Centre of the Future

Paradigm Shifts
New Rule
Multiple Multipleproducts products and andcross crossselling selling Front FrontOffice Officeoperation operation Distribution Distributionchannel channel& & information informationintegration integration Leading Leadingedge edgeand and integrated integratedtechnology technology Proactive Proactive Multi-skilled Multi-skilledCSRs CSRs Strategic Strategic
Enhanced Customer Satisfaction and Retention Revenue Growth Lower Cost Distribution

Customer Inquiries Cost of Business

Sales Process Automation

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Sales Process Automation (SPA) is the approach for helping organizations dramatically improve their sales and marketing effectiveness through the reengineering and automation of their sales and marketing processes, with the ultimate goal of increasing revenues. SPA combines a working knowledge of the markets best ideas, technologies, and vendors with a practical, relentless focus on implementation to deliver outstanding shareholder and customer value.

Basic Features
Intranet - as an alternative sales channel Electronic catalog - On-line self served service ordering Commission - Effective tracking of performances and accurate commissioning Opportunity Management - tools such as automated customer data analysis and pop-up screens will assist in up-selling Competitor Data - effective analysis of competitive data and automated access for sales force Contact Management - Effective tracking and follow-up of leads Customer Data - Sales people will have a complete analysis of the customer before their eyes when attending to a customer. No wait, no repeated questions, no frustrated customers News Service - Optional news sorting and reporting will result in informed sales people Order Entry Quoting - On the spot quoting will not give the client a chance to shop around and be hunted Proposal Development - Automated document creation based on corporate standards Pricing - Automated on-line prices based on company rules Product - On-line and easily accessed Just-in-Time Training - Automated training, WEB based training, and self training through information sharing Electronic Kiosk - WEB page shopping.

SFA- Benefits

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PERCEIVED BENEFITS OF SPA FIELD TECHNOLOGY

% of Survey Responses (N=295) Source: Insight Technology Group

Improving sales force productivity and effectiveness by implementing field technology is a key goal for many organizations

e-Business - Definition
Business Partner

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Business Processes

The Value Proposition of Electronic Business Solutions

Business Partner Extending key business applications to clients and business partners

Integrating more directly with the business processes of customers and Business Processes partners Business to Business Tailoring products and Profiles & services to Preferences customers needs and values Business to Customer

e-Business is all about integrating the internal and external processes between business partners and customers.

e-Business - Architecture
A$X,XXX B $X,XXX

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1. Adaptive Product Offer

Internet and World Wide Web

5. Product Fulfillment
Pick and pack Integration/configuration

Customer preferences Products and availability Pricing and promotions Adaptive selling Build/configure to order

of third party products

Ship products or deliver services Inventory management Order tracking

2. Order Capture and Validation

Payment

Order entry Tax calculation Validation Confirmation

3. Payment Processing

information Security Link with finance

4. Order Management
Link with third parties Create pick list Consolidate orders

For both business-to-business and business-to-consumer sales, there are five key elements to e-Business product offer, order capture and validation, payment processing, order management, and product fulfillment.

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Call Centres Customer Care Systems Sales Force Automation IVR

Customer Management Systems

Service Management Systems Enterprise Management Systems

Billing System

Conclusion
Business Management Systems Network Management Systems OSS

Data Warehouse

SAP, PeopleSoft, Oracle, etc.

Customer Relationship Management is an integral part of successful convergence

E-CRM
Customer Front end Employee touch points
Mail/ Fax

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Telephone/ Mobile Phone

Self-Service Web

Other touch points

Front Office Back office Marke ting Sales: Opportunity Management proposal generation, and pricing Front office Service: Helpdes k etc. Order Management Distribution and logistics Manufacturing, procurement Finance Accounting, HR, and billing

Leads

Data Warehouse Opportunities Customers

Interaction