Professional Documents
Culture Documents
Touch Points
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Processing Transactions
Enterprise Collaboration
Reporting Dashboard Decision Support
Expert System
Identifying prospects Acquiring customers Developing customers Cross-selling and up-selling Managing migration Servicing Retaining Increasing loyalty
Interact.
Improve campaign management Increase referrals Win back lost customers Move customers up relationship
cents Decrease attrition Increase usage Increase cross usage Increase usage of more prestigious items Increase satisfaction Integrate marketing and sales throughout channels
hierarchy
STRATEGIC ISSUES
Service business orientation Process management perspective Partnership/network formation
TACTICAL ISSUES
Direct customer contacts Customer databases Customer-oriented service system
Operational CRM
Operational CRM
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Marketing Automation, Front Office Suites Includes typical business functions like customer service, order management etc. Eg. SAP CRM-On Demand, PeopleSoft
Operational CRM
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Analytical CRM
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interpretation, reporting of customer data to user. Customers data is taken from multiple sources and stored in customer data repository Algorithms are used to analyze and interpret data as needed. Uses data mining Eg. Micro Strategy
CRM Decisions
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CRM Decisions
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Business Model
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Business Model
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SG and SAM
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Choosing CRM
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Sixth Sense
Business Model
Process Design Parameter identifying
http://crm-software-review.toptenreviews.com/
before deciding to do business with an organization until he/she decides to stop being a customer. The progression of steps a customer goes through when considering, purchasing, using, and maintaining loyalty to a product or service. The goal of effective CRM is to get the customer to move through the cycle again and again.
ACQUISITION
suspect
RETENTION
Loyal advocate
WINBACK
Inactive customer
Repeat customer
Lost customer
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business with a firm in his entire lifetime as the firms customer. It may also include money spent by his referrals. CLTV in quantitative terms is defined as the net present value(NPV) of the future profits to be received from a given no. of newly acquired or existing customers during a specified time frame. Some customers have low LTV so org. may not want to reestablish relationships with those who demand too much service without corresponding amt of revenue.
his or her business and relationship with his or her customer continually.
Todays sales forces must record customer needs. The single greatest impediment to effective CRM is the lack of sales force participation.
Information Empowerment
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The foundation for these capabilities is the acquisition of better information collected from a variety of customer touch points. Sales collects and inputs the following buyer organization data:
objectives motivations purchase cycles available budgets (open to buy) purchase authority buying-committee involvement
Information Empowerment
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We evaluate the impact of CRM with the following analytics ROI Sales opportunities closed Prediction accuracy The capability to track major sales events It is easy to see how sales leaders are using CRM and gaining prominence in their organizations
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The R in CRM
A Question of Value
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satisfaction?
More timely response to needs An improved and smoother sales process Better forecasting and performance Providing the correct solutions at the right time
Unfamiliarity
Trust
PERFORMANCE
Negotiation Dialogue
TIME
Transactional Selling Relationship Selling
faced with tremendous amounts of customer information. Software vendors realized this unmet and unrecognized need. Info about customers was kept in little black books that left with the sales reps.
field sales staff. Making them responsible for it with the promise of.. Making them more productive. Synchronize information with the corporate client/server database.
Scenario One
You are on your way to a meeting with one of your best customer. 43 Jim is not only one of your best customers hes one of the companys best. His firm accounts for 2 percent of this years revenues. Soon, you hope it will be 3. You arrive early at the customers building, show your badge at the desk and take the elevator to Jims office. He is in a meeting with a member of his staff, but quickly dismisses them when he realizes you are there. He is always willing to listen to a sales pitch. However, he is not placing an order today, in fact he may never place another order again. His entire firm has been at a standstill for the past 48 hours because of your product. Your product is still on the fritz and Jim and his people have been on the phone to your customer support center for the past day and a half. Your face displays surprise. No one told me about it, Jim, you stammer as you strive to recall any voice-mail messages you might have prematurely erased. Jim stands up from behind his desk, a wordless acknowledgement that hes far too busy to hear about your communication breakdown. After all, hes got a big one all his own to worry about. You think about how to make up for the 2 percent in revenue you and your company are about to lose.
Scenario Two
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customers site, you turn on your PDA which begins to beep. Priority one alert! Customer Impacted! Flashed on the screen. You pull to the side of the road and read more, according to the message the customer you are about to see has experienced a major outage. A field service rep has been contacted and is now working on the problem. Instead of going upstairs when entering the building, you walk to the back and find the service rep repairing equipment. When you find out that hes working to repair the problem and will have it fixed in the next thirty minutes. You feel relieved and walk upstairs to meet with Jim. Upon entering his office, Jim smiles and says he knew it would be taken care of. Then he asks when the company can get an upgrade. The revenue contribution also increases to 4 percent during the conversation.
Sales Process/Activity Management Include a sequence of sales activities Guide sales reps through each discrete step in the sales process
Sales process
Lead allocated
Prospect contacted
Prospect qualified
Solution identified
Order placed
Sales activity
Sales Process/Activity Management (cont) Offer calendars to assist in the planning of key customer events
Proposal presentations Product demonstrations
Alarm Reminders
Signal important tasks Generate documents as they are needed Make decisions based on the users input Generate a mailing suggestions
Sales and Territory Management Tools that enable sales managers and executives on-demand access to sales activities
Enables managers to set up sales teams and link individual accounts, regions and industries. Allows tracing of territory assignments and monitor pipelines and leads for individual territories. Allows optimization of individual teams
Contact Management Deals with organizing and managing data across and within a companys client and prospect organizations.
Lead Management Also known as opportunity management and pipeline management Track customer account history Monitor leads Generate next steps and Refine selling efforts online Allows sales management to automatically distribute client leads to a field or telemarketing rep based on the res product knowledge or territory
50 Contacts
Figure 9.1
Wireless Networks
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Figure 9.2
Dashboards
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metrics to evaluate a salespersons performance individually, within their peer group, and across the company. Some important measurement metrics can be seen on the example of a CRM dashboard posted on salesforce.coms web site.
Sales volume, which can be expressed in units, dollars (or local currency) Open Deals- Top Five sales opportunities (for example) Sales Leads - Source of prospect by quantity Key Account A review of sales by key account Open Cases A review of customer service issues and resolutions Pipeline A forecast of upcoming sales by type, by month Sales Activity a review of sales activity by source
Pipeline
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module of CRM.
Best estimate Each sale is assigned a probability-estimated closing date. The net forecast results from committed cases Individual forecasts combine to comprise a regional forecast and then regions for national pipeline estimates.
Terminology: major account; national account; global account management; key account; strategic account; corporate account etc What is KAM?
Supplier Benefits
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Develop closer relationships: trust, align products/services closer to business requirements or strategic goals Customer base stability buyers not switching between suppliers Profit / sales volume increases Word of mouth promotion Personal relationship development Problem solving ability
Buyer Benefits
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business issues Resource reduction in transactions Single point of reference for problem solving Priority access to production/ staff services Customisation of products/ services offered Lower prices / costs of doing transactions
the buyer Degree of knowledge & experience the buyer has with KAM Position of the account within the supply portfolio Type of purchasing decision process undertaken Environmental consequences Buyer strategic decisions Open-mindedness of the customer to something new
Campaign Management
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develop, and deliver major account promotional programs and informational e-mail efforts.
Satisfied customers may not remain loyal Dissatisfied customers tell more people than
satisfied customers Only a small percent of customers ever complain Relationships based on satisfaction are, in fact, weak
offerings Novelty seeking Lack of personal attachment with brand Lack of consistency in performance New competitors offering better value or a greater variety of ancillary services Customer expectation of future use Customers may not want a relationship with your firm
Behavioral Attitudinal
loyalists.
Increased number of purchases Tendency to Trade-Up Tendency to become less price sensitive because of focus on convenience and purchase efficiencies Word-of-mouth referrals Lower cost of servicing them
Acquisition
Retention
Winback
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Acquisition Strategies
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2-40 percent of their customers every year. Mass media advertising still useful here. Capture potential user IDs and gain permission to begin dialogue. Begin with defining your target and goals for the acquisition campaign.
research Eliminate switching cost Present your offer at the appropriate times Encourage word-of-mouth referrals
Retention Strategies
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Can be based on: Rewarding Bonding Service structure strategy With two types of bonds Programmatic Humanistic
Preferential treatment
Conversion
Rewarding
Employ idiosyncratic-fit Personalization Customization Cross-selling Up-selling Managing migration
Profit driving
Brand building Providing and attaining Intimacy Online customer
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interaction occurs
Happen daily in the sales and customer service functions of a business Happen less frequently in accounting, R&D, supply chain management, and marketing This activity is essential to record within a CRM system for the customer management purposes
planning, including
Campaign timing Audience Program delivery Program variables (promotion values) Results/program performance
an opportunity via
Customer needs
Customer convenience
Customer cost dynamics Customer communication
__________ Within the personal group, what is the ratio of male to female customers? __________ What proportion of customers purchased tickets in the most recent year? __________ What is the average number of seats per customer per game? __________ If we divided the database into customers that attended between 1-3 games, 4-6 games, 7-9 games and 10+ games, then, which group has the highest customers? __________ What proportion of customers are fan club members? __________ What proportion of personal customers have cars? __________ Create a new variable (in Column U), Price per Ticket by dividing Total Sales (K) by the product of Number of Games (I) * Average Number of Seats (J). What is the range (maximum and minimum) for Price per Ticket? __________ Most customers pay __________ per ticket.
Analysis Recency: When did the customer make their last purchase? Frequency: How often does the customer make a purchase? Monetary: How much money does the customer spend?
to give select offers and promotional items. It is a way for companies to find ways to increase customer spending. Companies can use it to target lost customers and give them incentives to purchase items RFM Analysis can help companies keep track of their customers and build a relationship that can increase sales and productivity. It also identifies minimal losses customers spend low dollar amounts in small quantities
(20% in each group) Customers are then given an R, F, & M score Using a score of 1 to 5, 20% of the most recent customers get an R score of 1. The second most recent get an R score of 2 and this continues until all 5 groups receive a score. The 5 groups are reorganized to repeat the procedure for the F & M scores.
Is this strategic?
Data Management
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Data Capture
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Touch points What is being captured? What should be captured? Availability Timing Quality
Data Transformation
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Information aging
Convert information into knowledge
Data Mining
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Data Mining
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Data Mining
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Data Mining
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Decision trees
More complex than RFM Helps turn complex data representation into a much easier structure
Data Mining
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Other data mining techniques Artificial neural network, business intelligence (BI), data stream mining, fuzzy logic, nearest neighbor algorithm, pattern recognition, relational data mining, text mining, chiSquare, t-test, regression, correlation
Contract management
Title Risk of loss Seller/Buyer Refusal Warranty Implied
Performance Measurement
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C R M U S E R S W E R E93 UNABLE TO QUANTIFY A RETURN ON THEIR CRM INVESTMENT ONLY 30 PERCENT OF COMPANIES MEASURED BENEFITS OF CRM ONLY 37 PERCENT KNEW IF THEY SHARED A CUSTOMER WITH ANOTHER DIVISION IN THEIR COMPANY ONLY 20 PERCENT KNEW IF A CUSTOMER HAD EVER VISITED THE COMPANY WEB SITE
BSC
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Process
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Top Ten Mistakes Companies Make When Measuring Their 98 CRM Effectiveness
Off in a corner Lack of leadership support Too much data No clearly defined strategy Knowing without acting Stale as seven-day old bread Death by 1,000 dashboards Failure to benchmark Culture of inertia Failure to measure outcomes
than to sell to an existing one. A typical dissatisfied customer will tell 8-10 people. By increasing the customer retention rate by 5%, profits could increase by 85%. Odds of selling to new customers = 15%, compared to the odds of selling to existing customers (50%) 70% of complaining customers will remain loyal if their problem is solved
Tenets of CRM
One-to-one relationship between a customer and a seller. Treat different customers differently. Keep profitable customers and maximize lifetime revenue from them.
Customer Service
CUSTOMER
Service Center
Sales Representative
Direct Mail
Involves managing all aspects of a customers relationship with an organization to increase customer loyalty and retention and an organization's profitability
Evolution of CRM
power (buyer power) than ever thanks to the Internet: e-business, words of mouth via social network
Future
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Differences in product pricing Improved system feature functionality Different CRM applications that support sales and marketing programs
On-demand CRM seeks to expand its penetration in small to mid-size companies to effectively serve large enterprise customers Enterprise software companies like Oracle and SAP focus on the on-demand product model
SAP introduced SAP CRM on-demand solution But old habits die hard, as SAP has hedged its bet by introducing their product as a hybrid, offering the product as both software and an on-demand service Oracle/Siebel and Microsoft offer the same hybrid form
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