3.09 understand the nature of customer relationship management to show its contributions to a...
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3.09 Understand the nature of customer relationship
management to show its contributions to a company
3.00 Understand product/service management, emotional intelligence, financial analysis, selling and
customer relations.
Define Customer Relationship Management (CRM) -
Strategies, processes, and policies used by businesses to build, maintain, and maximize the long-term value of customer relationships
Customer Experience Management (CEM) – Managing the customer's experience with a supplier of goods or services, over the duration of their relationship with that supplier
Customer-Centric Strategy – Focusing on the customer’s needs and wants (think marketing concept). “Creating a positive consumer experience at the point of
sale and post-sale. A customer-centric approach can add value to a company by enabling it to differentiate itself from competitors who do not offer the same experience.” http://www.businessdictionary.com/definition/customer-centric.html#ixzz20QZoF11e
Define Touch Points – is the interface with customers,
non-customers, employees and others – before, during and after a transaction. Seeing or hearing an ad, walking by the product on a shelf, hearing someone talk about it, etc.
Continuous Improvement – Focus on improving the production, sales or other process of a business with the aim to better satisfy customers
Business Process Management (BPM) – Activities undertaken by businesses to identify, evaluate, and improve business processes.http://www.businessdictionary.com/definition/business-process-management-
BPM.html#ixzz20Qc2sYbh
Define the term customer relationship management (CRM)
Strategies, processes, and policies used by businesses to build, maintain, and maximize the long-term value of customer relationships Helps businesses to understand the
respond to customers’ changing needs Emphasizes positive meaningful, and long-
term communication and interaction with customers.
Involves the collection of customer information to draw conclusions about the customer’s needs and wants as well as predict the customer’s loyalty and value in the future
Define the term customer relationship management (CRM) Cont.
CRM is a strategic tool firms can use to leverage proprietary information to identify cross-selling opportunities, new prospects, and potential conflicts of interest or independence issues. By developing a deeper understanding of your clients--their industries, markets and relationships--through CRM, your firm can gain a sustainable competitive advantage in challenging timeshttp://www.allbusiness.com/company-activities-management/operations/11477600-1.html#ixzz1c5DbnOf1
Define the term customer relationship management (CRM) Cont.
CRM is a strategic tool firms can use to leverage proprietary information to identify cross-selling opportunities, new prospects, and potential conflicts of interest or independence issues.
By developing a deeper understanding of your clients--their industries, markets and relationships--through CRM, your firm can gain a sustainable competitive advantage in challenging timeshttp://www.allbusiness.com/company-activities-management/operations/11477600-1.html#ixzz1c5DbnOf1
Describe the nature of customer relationships in today’s society Because customers now have so many
different choices in the marketplace, they have become more selective about whom they do business with.
When given the choice to do business with one of two businesses that sell nearly identical products at similar prices, customers often choose to purchase from the business that offers better customer service.
As a result, customers’ expectations for customer service are higher.
Explain goals of CRM To build better relationships with existing
customers To build customer loyalty To attract new customers CRM tracks important information about the
customer: Demographics Interests Previous orders Preferences Contact information
To increase “touch points”
CRM Goals continued To gather and track information about
customer for use in business decision-making To understand customers and their needs so
that these needs can be fulfilled in a manner satisfactory to customers and businesses
To develop products that meet or exceed customer expectations (PSM)
To increase business profit To develop a competitive advantage
The importance of formulating a CRM strategy prior to implementing CRM processes and tools
Each company should design a unique CRM strategy that directly addresses its needs, its organization, and its customers
An important step in developing a CRM strategy is identifying the objectives/goals of the CRM program (e.g., to increase customer retention, to improve product offerings, etc.)
Before implementing CRM processes and tools, each company must determine which members of its organization will be involved in CRM so that these individuals can be trained
CRM technology and tools should be selected after determining the company’s CRM strategy, objectives, and program participants
Describe Common CRM Processes Campaign management (usually conducted by the
marketing dept.) Targeting prospective customers Distributing promotional materials to targeted prospects Tracking response to promotional materials Generating leads for sales
Sales management (sometimes divided into lead management, offer management, and contract management) Recording lead information Qualifying leads Prioritizing leads Contacting leads Making sales
Common CRM Processes cont. Service management
Providing after-sales services, such as: Maintenance and repair services Warranties and guarantees
Retaining customers Complaint management
Receiving customer complaints Resolving customer problems Communicating customer complaints to the
organization Retaining customers
Describe the role of Customer Experience Management (CEM) in CRM The goal of customer experience management (CEM) is
to move customers from satisfied to loyal and then from loyal to advocate. Traditionally, managing the customer relationship has been the domain of Customer Relationship Management (CRM). However, CRM strategies and solutions are designed to focus on product, price and enterprise process, with minimal or no focus on customer need and desire.
Where CRM is enterprise-focused and designed to manage customers for maximum efficiency, CEM is a strategy that focuses the operations and processes of a business around the needs of the individual customer.
Jeananne Rae notes, “building great consumer experiences is a complex enterprise, involving strategy, integration of technology, orchestrating business models, brand management and CEO commitment.”
http://en.wikipedia.org/wiki/Customer_experience
Discuss the use of customer information in CRM By gathering and organizing customer
information, a business can better determine and fulfill its customers’ needs and wants
Customer information is also used to identify the most profitable, loyal customers. After identifying these customers, the business may provide higher, better service to these customers to maintain their loyalty and increase their profitability
Role of Corporate culture in CRM Corporate culture is what makes one business
in an industry different from another in the same industry How has the company decided to approach its
customers? What kinds of people does it hire? What are the priorities of that company?
CRM helps the company build strong relationships aimed at making the customer happy For CRM be effective, the culture of the company
must place customer satisfaction as its top priority
Role of corporate culture in CRM Cont.
For CRM to be successful, it must be supported by the corporate culture (i.e., the values, beliefs, and encouraged behaviors in an organization)
Sr. Executives must believe and demonstrate that building and maintaining customer relationships is a corporate priority
Corporate values must be understood and embraced by all employees
Employee incentives, such as prizes and bonuses, can help ensure that employees embrace CRM strategies and processes
Also, employees must be given leeway (authority) to do what is necessary to satisfy customers
Explain the impact of organizational structure on CRM
The organization should be structured so that customers have “seamless,” easy interactions with the company.
To ensure that customer have “seamless” interactions with the company all customer information must be easily available to all employees who require it (usually using CRM technology)
Companies with superior CRM processes are much more likely to be organized according to customer segments or groups.
Employees are assigned into teams to support specific types of customers (B2B, retail, online, etc).
Describe the relationship of CRM and continuous improvement Continuous improvement: The activity of
regularly updating one’s processes for better efficiency and service
After developing a CRM strategy and implementing CRM processes, continuous improvement must occur to ensure that: Company values remain in line with the CRM
strategy CRM processes remain effective
The relationship of CRM and business process management CRM and business process management (BPM)
work together to satisfy customers BPM: A type of management that focuses on
the design and improvement of business processes to make them as efficient and effective as possible; strives to align business processes with customers’ needs and wants
BPM ensures that CRM processes meet the needs, wants, and expectations of customers, while CRM processes can gather customer information that can be used to ensure that business processes are designed with the end user – the customer-in mind
Explain ways in which CRM can benefit a business Increased customer satisfaction and loyalty More customers and customer referrals Reduced costs Fewer complaints Lower employee stress levels Increased access to customer information (for
use in business decision-making) Long-term profitability
Performance Indicator: Explain the role of ethics in CRM
Definitions Consent: (v) to be of the same mind or opinion
(n) acceptance or approval of what is planned or done by another; acquiescence
Agree Integrity: the quality of following rules, even if
no one is around to enforce them. Integrity includes treating people fairly, applying rules consistently, and being unbiased and unprejudiced.
Can be counted on to do the right thing
Describe the importance of trust in customer/business relationships
Building Trust is the Key to Avoiding Ethical Dilemmas Adapted Aesop’s Fable: two buddies (insurance
salesperson and client) are traveling together in the woods, when a bear rushes out in front of them. On instinct, the salesperson grabs a tree branch and climbs a tree, stranding the client. Ever resourceful, the client feigns death, knowing the bear won’t eat dead meat. (NOT true.)
After the bear sniffs close to the clients ear, it eventually leaves the area. As the sales person climbs down the tree, he laughingly asks the client: What did that big bad bear whisper? The client glares, then offers: He said, never trust a friend who deserts you in a pinch. http://ezinearticles.com/?Presenting-ETHICS---Elevating-Trust-Has-Inspired-Customer-Satisfaction&id=2307463
Describe the importance of trust in customer/business relationships
Customers won’t (or won’t continue to) buy from someone they don’t trust
Employees will leave a company where management can’t be trusted
Trust is the currency of adult interactions Lack of trust leads to wasted time and
decreased sales Trust is needed for businesses to work
together
Discuss loyalty issues in customer/business relationships Developing and nurturing loyalty should be the
marketer's primary, day-to-day concern. Doing so increases the likelihood their brand can withstand economic turmoil, competitive threats, and reasonable price increases. Through in-store temporary price reductions or
couponing, consumers are told "we'll reduce your risk if you give us a try." The problem is that, just like the price relief itself, the consumers' commitment to the brand is temporary.
Another popular strategy among marketers with significant budgets is the development of catchy marketing phrases like "Just Do It" or "Oops, I could have had a V8". This approach can be effective, until budgets are cut because another brand in the division is underperforming.
See the rest of the article @ http://chiefmarketer.com/crm/0106-customer-loyalty/
Describe ethical issues related to the collection of customer information
Customer information is personal information and must be protected
The company has a moral obligation to safeguard personal information collected from the customer
The company often is legally culpable if information is mishandled or not properly protected
Some customer information could be used to steal from the customer or impersonate him/her Children’s information often has legal restrictions
concerning what can be collected and stored
Describe ethical issues related to the collection of customer information Security measures when handling credit card
payments and information Customer data is stored in a secured manner
that monitors when and who accesses the information
There are secure levels of access so those that should not be able to see certain information can’t
Data is properly deleted when a customer leaves the CRM program
Read about ethics in CRM at http://www.ehow.com/info_8384284_ethical-issues-crm.html
Situations in which employees/departments involved in CRM may be reluctant to share customer information
Information was expensive to collect
Customers are sensitive to being contacted
Data won’t be properly controlledPerson requesting the information has not been vetted and is not confirmed as being allowed access
Ethical issues related to the sale of customer information to 3rd parties Data that can be purchased or rented from third
party vendors may include names, addresses, telephone numbers, mailing addresses, social security numbers, age information, health and medical data, and other personal or proprietary information information obtained for one purpose may be lawful,
but if utilized for another purpose, may be illegal. Consumer advocates want to give consumers the
option to have to affirmatively "opt-in", i.e., sign a consent form, to permit information to be conveyed to a third party
Considered automatically to have opted-outhttp://www.mmmlaw.com/media-room/publications/articles/legal-and-ethical-issues-in-obtaining-and-sharing-
information1
FEDERAL TRADE COMMISSION FAIR INFORMATION PRACTICE (FIP) PRINCIPLES 1. Notice/awareness (core principle).Web sites must disclose
their information practices before collecting data. Includes identification of collector;
uses of data; other recipients of data; nature of collection (active/inactive); voluntary or required status; consequences of refusal; and steps taken to protect confidentiality, integrity, and quality of the data.
2. Choice/consent (core principle). There must be a choice regime in place allowing consumers to choose how their information will be used for
secondary purposes other than supporting the transaction, including internal use and transfer to third parties.
3. Access/participation. Consumers should be able to review and contest the accuracy and completeness of data collected about them in a timely, inexpensive process.
4. Security. Data collectors must take responsible steps to assure that consumer information is accurate and secure from unauthorized use.
5. Enforcement. There must be in place a mechanism to enforce FIP principles. This can involve self-regulation, legislation giving consumers legal remedies for violations, or federal statutes and regulations.
http://www.prenhall.com/behindthebook/0132304619/pdf/laudon%20MIS10_CH-04%20FINAL.pdf
The impact of poor/unethical privacy practices on customer relationships
Company reputation is ruined Customers get angry and won’t do business
anymore Customers will call and complain about the
poor control of their information Lawsuits Regulators may intervene
Have the database destroyed Levy fines
Other businesses will no longer share data
Performance Indicator: Describe the use of technology in CRM
Definitions Client intelligence – Research done during the
Pre-approach phase of selling or while working with the customer
Cross-selling – encouraging a customer who buys one product to buy a related or complementary product (i.e. tie, shirt, shoes with a suit)
Up-selling – the seller will provide opportunities for the customer to buy more products or services, often at a reduced price. BOGO
Relationship mapping - A methodology that describes a relationship between two or more objects. http://www.agiledata.org/essays/mappingObjects.html
Definitions continued Personalization – Creation of custom tailored
services(such as news pages on the web or specialized newsletters) that meet the individual customer’s particular needs or preferences (RSS feeds)
Segmentation – Subdivision of a population into segments with similar characteristics, such as age, education, income (Market segmentation)
Clustering - A group of the same or similar elements gathered or occurring closely together, helpful indata collection and in selling
Difference between CRM technology and CRM CRM is a strategy (no, not software) to transform
your business to be customer, not product, focused. The CRM software is just a tool that helps the company carry out this strategy. Depending on its implementation, it can help your business identify who your customers are, what they need and anticipate what could want. It allows businesses to tailor offers to their current customers, building closer relationships that make them feel valuable.
Overall, CRM can make your company more efficient and customer-friendly to capture greater market share, increase customer loyalty, and attract more customers.
http://www.businessknowhow.com/marketing/crm.htm
Types of CRM tools CRM Applications –
Email focus Infusionsoft InTouch CRM
Social and collaborative focus Batchbook Kickapps Rapportive Gist
Sales focus Smartsheet Sales Pipeline SalesForce.com Sugar CRMhttp://smallbiztrends.com/2011/01/9-crm-apps-small-business.html
CRM tools continued
Databases Data Warehouses
Uses Customer information Employee information Create reports on
buying habits and trends
Track sales and create goals for the sales team
http://www.avidian.com/crm/crm-database.aspx
Data warehouse serves as the repository to collect and integrate the breadth of customer information found in operation systems as well as in external ones.
The data warehouse supports a complete view of the customers, including customer data from typical sources such as: transactional data, interaction data (solicitations, call centers), demographic and behavioral data and self-provided profile data
Types of CRM software approachesRemember when we discussed thinking about your
CRM program before buying your software? Operational CRM - provide support to front office
business processes such as sales personnel, marketing and service staff
Analytical CRM - Basically it evaluates the necessary customer data for a wide variety of reasons and purposes like:• Designing and accomplishing target marketing campaigns.• Designing and accomplish various campaigns i.e. cross selling, up selling and customer acquisition.• Identifying customer behaviors regarding products and services i.e. product development and pricing.• Management information system, i.e. financial forecasting
Types of CRM software approaches continued Collaborative CRM - Collaborative data
management tools make company information available across the webhttp://www.ehow.com/list_6707950_types-crm-tools.html#ixzz1c5lkeLYd
Sales Intelligence CRM - It is known as a direct sales tool, which is similar to Analytical CRM. Usually it has a variety of features like:• Cross-selling/Up-selling opportunities• Customer drift• Sales performance• Customer trends
Types of CRM software approaches continued Campaign Management – contains features of
both Operational and Analytical, includes tracking, storing and analyzing campaign statistics
Other tools include Customer Relationship CRM – identify the
best current customers and segments Simple CRM Social CRM – can create online ads and
Twitter updateshttp://www.crmscorecard.com/types-of-crm.htm
Data commonly stored in a CRM system Contact data – ability
to build stronger, longer lasting relationships with customers. Know what they “Like” on Facebook and who/what they’re following on Twitter in addition to their personal data
Demographic data – income, zip code, etc.
Transactional data - what, when, where, and how much a customer bought
Relationship data - allows customer facing employees in such areas as sales, customer support, and marketing to make quick yet informed decisions on everything from cross-selling and upselling opportunities to target marketing strategies to competitive positioning tactics.
CRM technology
BenefitsDrawbacks Data consolidation & analysis –
allows sales and customer services professionals comprehensive data
Customer identification & retention – providing personalized sales offerings
Cross-selling opportunities - offer personally tailored product offerings during the service transaction
Portability - resolve customer issues on site while using the information provided by CRM technology
Improved Forecasting - can identify both short- and long-term trends in customer activity
http://www.ehow.com/list_6529278_crm-technology-benefits.html
Record loss - company does not have control of the data. If there is an outage, information will be lost
Overhead – costs associated with running the software application
Training – takes away time from productivity
Increased vulnerability – if security is breached
http://www.ehow.com/list_6178037_disadvantages-crm-systems.html
How CRM technology can be used to create a “single view” of the customer Software can be programmed to collect and
display customer information in a way the works best for the employee A “dashboard” summarizes information so that a
manager or employee can get pertinent information at a glance
Employees can be taught to read standardized summary pages that give them the information needed to best approach the customer
CRM technology can present only the critical information for the particular customer and can be used to compare customers using like information
Importance of upkeep in the CRM data warehouse Cleansing – removing discrepancies and
inconsistencies in client/customer data. Helps to improve efficiency and accuracy of CRM data
Also properly removing customer information for those customers that no longer participate
Standardizing information about the customer by recognizing, comparing, matching, and reconciling customer data across disparate systems according to predefined rules
Updating data – to view customer in “real-time” and ensure correct information is stored and being used