Customer Relationship Management CRM Systems E CRM Outline

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Customer Relationship Management (CRM) Systems E CRM

Customer Relationship Management (CRM) Systems E CRM

Outline n n n CRM and CRM System Phases Applications CRM Software Capabilities Aspects

Outline n n n CRM and CRM System Phases Applications CRM Software Capabilities Aspects of CRM Market Segments Business Value Performance Metrics Success Stories Challenges CRM, ERP, and SCM Systems Integration

CRM n Used to maximize the benefits of a company’s customer assets. n Used

CRM n Used to maximize the benefits of a company’s customer assets. n Used as a technology and business discipline. n Seeks to optimize revenue, profitability, customer satisfaction, and customer retention.

CRM System n CRM system – provides integrated approach to all aspects of company-customer

CRM System n CRM system – provides integrated approach to all aspects of company-customer interaction n Marketing n Sales n Support / Service

CRM Phases 1. Technology 2. Integration 3. Process 4. Customer-driven

CRM Phases 1. Technology 2. Integration 3. Process 4. Customer-driven

CRM Applications n Partner relationship management (PRM) n Employee relationship management (ERM)

CRM Applications n Partner relationship management (PRM) n Employee relationship management (ERM)

CRM Software Capabilities n Sales force automation (SFA) n Customer service n Marketing

CRM Software Capabilities n Sales force automation (SFA) n Customer service n Marketing

CRM Software Capabilities Example (Laudon and Laudon 2006) Customer Data Sales Marketing Service Account

CRM Software Capabilities Example (Laudon and Laudon 2006) Customer Data Sales Marketing Service Account Mgmt Campaign Mgmt Service Delivery Lead Mgmt Channel Promotions Mgmt Customer Satisfaction Mgmt Order Mgmt Events Mgmt Returns Mgmt Sales Planning Market Planning Service Planning Field Sales Marketing Operations Call Center & Help Desk Sales Analytics Marketing Analytics Service Analytics

Aspects of CRM n Operational CRM n Includes customer-facing applications n Analytical CRM n

Aspects of CRM n Operational CRM n Includes customer-facing applications n Analytical CRM n Includes applications that analyze customer data generated by operational CRM applications

Operational vs. Analytical CRM Examples (Laudon and Laudon 2006) Operational CRM Analytical CRM Campaign

Operational vs. Analytical CRM Examples (Laudon and Laudon 2006) Operational CRM Analytical CRM Campaign mgmt Develop customer segmentation strategies E-marketing Develop customer profiles Account and contact mgmt Analyze customer profitability Lead mgmt Analyze product profitability Telemarketing Identify cross-selling/up-selling opportunities Teleselling Select the best marketing, service, and sales channels for each customer group E-selling Identify trends in sales cycle length, win rate, and average deal size Field sales Analyze service resolution times, service levels based on communication channel, and service activity by product line and account Field service dispatch Analyze leads generated and conversion rates Customer care and help desk Analyze sales representative and customer service representative productivity Contract mgmt Identify churn problems

Analytical CRM Data Warehouse Customer Data Channels • Call center • Web site •

Analytical CRM Data Warehouse Customer Data Channels • Call center • Web site • Wireless • Field sales • Direct mail • E-mail • Retail store • Partner Other sources • Legacy systems • Demographic data • Third-party data • Marketing campaign data Customer data warehouse • Profitable customers • Market segments • Customer profiles • Churn rates • OLAP • Data mining • Other data analysis tools (Laudon and Laudon 2006)

CRM Market Segments n Traditional out-of-the-box CRM n Traditional CRM with templates for specific

CRM Market Segments n Traditional out-of-the-box CRM n Traditional CRM with templates for specific vertical industries n Traditional out-of-the-box CRM with application development hooks n Industry-specific vertical CRM packages n Custom solutions from vertical systems integrators

CRM Systems Business Value n Increased customer satisfaction n Reduced direct marketing costs n

CRM Systems Business Value n Increased customer satisfaction n Reduced direct marketing costs n More effective marketing n Lower costs for customer acquisition and retention n Increased sales revenue n Reduced churn rate

CRM Performance Metrics n Cost per lead n Cost per sale n Number of

CRM Performance Metrics n Cost per lead n Cost per sale n Number of repeat customers n Reduction of churn n Sales closing rate n Customer lifetime value (CLTV)

Cost Cutters and Revenue Enhancers from a CRM System n Cost Cutters Decrease cost

Cost Cutters and Revenue Enhancers from a CRM System n Cost Cutters Decrease cost of sales n More time to sell; less time on administration n Decrease cost of service n Cost per service interaction n Transition to more selfservice n n Revenue Enhancers n n n n Increase sales effectiveness Add new customers at a higher rate Offer new products/services Provide a better customer experience Increase revenue per customer Sell more of current products/services Improve customer retention Haag et al. 2005

CRM Success Stories n Best Buy n Launched a “customer-centricity” effort n Trained store-level

CRM Success Stories n Best Buy n Launched a “customer-centricity” effort n Trained store-level employees to recognize five types of highly valued customers n American Cancer Society n Used CRM system to better target members in its donor base

CRM System Challenges n Broad company goals n Generic strategies n Software-centric implementations

CRM System Challenges n Broad company goals n Generic strategies n Software-centric implementations

Integrating CRM with ERP and SCM Systems n CRM’s goal: to find the best

Integrating CRM with ERP and SCM Systems n CRM’s goal: to find the best customers and concentrate efforts on serving them better n CRM and ERP integration n CRM and SCM integration

References n Greenberg, P. (2002). CRM: Capturing and Keeping Customers in n n Internet

References n Greenberg, P. (2002). CRM: Capturing and Keeping Customers in n n Internet Real Time at the Speed of Light, 2 nd edition, Mc. Graw-Hill Companies, Berkeley, California. Haag, S. , Cummings, M. and Mc. Cubbrey, D. J. (2005). Management Information Systems for the Information Age, 5 th edition, Mc. Graw-Hill Companies, Inc. , New York. Harris, R. (2003). “What is a Customer Relationship Management (CRM) System, ” Darwinmag, http: //www. darwinmag. com/read/120103/question 65. html [accessed: 19 October 2005]. Huang, A. , Yen, D. C. , Chou, D. C. and Xu, Y. (2003). “Corporate applications integration: challenges, opportunities, and implementation strategies, ” Journal of Business and Management (9: 2), Spring, pp. 137 -150. Laudon, K. C. and Laudon, J. P. (2006). Management Information Systems: Managing the Digital Firm, Pearson Education, Inc. , Upper Saddle River, New Jersey. Martin, E. W. , Brown, C. V. , De. Hayes, D. W. , Hoffer, J. A. and Perkins, W. C. (2005). Managing Information Technology, 5 th edition, Pearson Education, Inc. , Upper Saddle River, New Jersey.

References n Mc. Nurlin, B. C. and Sprague, Jr. , R. H. (2006). Information

References n Mc. Nurlin, B. C. and Sprague, Jr. , R. H. (2006). Information Systems n n n Management in Practice, 7 th edition, Pearson Education, Inc. , Upper Saddle River, New Jersey. Motiwalla, L. F. and Thompson, J. (2009). Enterprise Systems for Management, Pearson Education, Inc. , Upper Saddle River, New Jersey. Peppers, D. and Rogers, M. (2005). “Best Buy Counts Customers, ” CIO Magazine, July, http: //www. cio. com/archive/070105/circuit_sidebar_three. html [accessed: 19 October 2005]. Rigby, D. K. and Ledingham, D. (2004). “CRM done right, ” Harvard Business Review, pp. 118 -129. Ross, D. F. (2005). “E-CRM from a supply chain management perspective, ” Information Systems Management, Winter, pp. 37 -44. Wailgum, T. (2007). “CRM Definition and Solutions, ” http: //www. cio. com/article/print/40295 [accessed: 13 September 2010].