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By:SHIKHA SEHGALRAJESH PUNIATEJ INDER SINGH
YOGESH DUBEY
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ContentsIntroduction.
CRM fundamentals.
Howitworks?CRM systemsandtechnology.
DefiningCRM objectives.
CRM goalsdifferentiatedbydepartments.
PurposeofCRM
CRM asbusinessstrategy.
MeasuringthesuccessofCRM.
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INTRODUCTION
CRM isabusinessphilosophythatdescribesastrategy
placingtheclientinthecenterofitsprocesses,itsactivitiesanditsculture.
IT applicationsarethetoolsthatallowanorganizationtoimplementtheCRM strategy. Thenew IT developmentscanhelpanorganizationregularlyadaptitsstrategies.
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Throughoutmany years,thecompanies focusedtheireffortsprimarilyonloweringthecostsandimprovingtheirinternalefficiency. Thustheyconcentratedmoreontheinternalprocesses,oftenautomatingback-office functionselementslikemanufacturing,logisticsand finance.
Incontrast,themanagementeffortinvestedinclientservice,forexamplesellingandmarketing,wasoftenrelegatedinalastplace.
Asthemarketgetsstrongerandtheprovidersbecomemoreefficientinofferingproductsorservices,itbecomesmoredifficulttodifferentiatebetweenrivals.
Whatisthetruedifferencebetweentwotypesoftoothpaste?
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Inthemeantime,asthe qualityofservicesandproductsimproves,clientexpectationsincrease.
Aslongastheclienthasthepossibilityofchanginghis
provider,itbecomeshardertokeephimloyal.
Inconclusion,itishighlyimportant foramoderncompanytoownasystemthatwillshortenthereactiontimeto
customers'requestsandcomplaints,thusofferingsupportand quality foritsservices.
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Ithasbeenproventhatnecessarycosts forclientmaintenancearesignificantlylowerthanthoseassociatedwithnewclientacquisition.
Whilebusinesseswillcontinuetoextendtheclientsdatabase,theyshouldalsoconcentrateonkeepingandmultiplyingthebestoftheseclients.
Inotherwordsthe quantityofbusinesseachclientgenerateshasbecomeimportant. Throughagoodadministrationofrelationship
withagoodclient,theprofitabilitywillcertainlygrow.
Essentially,theaboverepresentstheconceptofCustomerRelationship Management.
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The philosophy of CRM is the recognition that a long-termrelationship with customers can be one of the mostimportant assets of an organization, providing competitiveadvantage and increased profitability.
CRM FUNDAMENTALS
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Accordingtostudies,theaveragecompanylosesbetween20 and 50 percentofitscustomersevery year,andalsofindsithardtoretainitsbestcustomers.
Deregulation,diversificationandglobalizationhavestimulatedadramaticriseincompetition.
Thesemarketplacerealitieshave forcedcompaniestoswitch fromaproduct-centricapproachtoacustomer-
centricapproach. Accordingto IDC,theCRM industrygainedmomentuminthepast yearsandtheCRMapplicationmarketincreasedby 94 percent,to $46.2billionin 2008-09.
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HOW IT WORKS?
Customer Relationship Management (CRM) isacomplexsystem,consistingofprocedures,strategies,softwareand
webapplications,thatassistsacompanyinorganizingandmanagingtherelationshipwithitsclients.
CRM facilitatestheinteractionwithclientsthroughthe
mostefficient,the fastestandthemostsophisticatedchannelofcommunication- the Internet.
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Itisasolutionthatconcentratesonthepeople,theprocessesandtheinformation fromwithinacompany,andaimstosupportitsclientsbetterandincreasetheleveloffidelity/loyalty.
Thespectaculargrowthandthecontinuousre-evaluationoftheorganizationsthatusewebsitesbroughtthe Internettotheattentionoftoday'smanagementphilosophy.
The Internetoffersanotherinfrastructurethroughwhichtheorganizationscaninteractwithclientsinthesamewaytheyinteractthroughphone, faxoremail.
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Thecomplexityofthisinteractionthroughmultiplechannelsindicatessomeareasinwhichtechnologycanreducepersonneleffortandinvestments.
Atthismoment,manycompaniesconsiderthattheadvantageofthewebisactuallythe factthatvisitorscan
findanswersontheirown,thusminimizingtheeffortofthecompanies,reducingdirectcontactwiththeagentsandimprovingtheefficiency.
Generally,thisconsistsofpagesthatcontainanswerstothe
most frequentlyasked questions (FAQs).
Morecomplexsystemsanalyzethe questionsandsearchthedatabase forpossibleanswers.
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Mostofthewebbasedsystemswillhavethis feature,thatwillallowclientstobecontactedortocontacttheagentsdirectlyoverthephone,thusrespectingtherequestofreceivingservicesthroughthe favoritechannelof
communication.
Whenthis facilityisactivatedinanintegratedsystem,thecontactcenterwillhavethepossibilitytoidentifytheclientimmediatelyandtoaccesshisinteractionhistorywiththe
organization.
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CRM SYSTEMS AND TECHNOLOGY
DatasourcesthatareusedinCRM systemsarecustomerserviceinquiries,customersurveysorsales forceinputsuch
aspurchasehistory,shippinghistory,accountdata,demographicdataand Websalesdata.
Sinceapartofthisinformationisobtainedthrough
enterpriseresourceplanningsystems, ERP databasesmustbeintegratedwithsomeaspectsoftheCRM databases.
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Furthermore,CRM technologyincludesdifferentaspectsofinformationmanagement,includingintegrationwithotherenterprise-relatedsystemsandmethodsthatconvertdatatousableinformation.
CRM usestechnology,strategicplanningandpersonalmarketingtechniquestobuildarelationshipthatincreasesprofitmarginsandproductivity.
Itusesabusinessstrategythatputsthecustomeratthecoreofacompany'sprocessesandpractices.
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TheimplementationofCRM softwareshouldcomealongwithachangeofthecompany'smindsettobecomemorecustomeroriented.
Itrequiresthiscustomer focusedbusinessphilosophytosupporteffectivesales,marketing,andcustomerserviceandorder fulfillment.
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SomeexamplesofCRM initiativesare:
Adatabasethatspecificallytrackscustomerserviceissues.
Awebpagethatallowscustomerstocheckinventoryavailability,orderstatus,andplaceorders.
Datawarehousingtobuildaninformationdatabasetobetterunderstand yourcustomers.
Capturingvisitordataincludingtheirname,e-mail,location,andpurchasingpreferences.
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DEFINING CRM OBJECTIVESThebusinessobjectives fortheimplementationofCRMsoftwareare:
Increasedcustomernumberandcustomerprofitability.
Increaseinmarketshare
Increasedcampaignresponse.
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Highercustomersatisfactionratings.
Greaternumberofreturningcustomersonthe Website.
Simplifiedinternalorganization (shrinkworkflow,shortenscycletimes,andeliminatesnon-productiveinformationflow).
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Furthermore,The Conference Boardsurveyed 96 global firmsinordertoanalyzetheCRM programs. 52 percentoftheinterviewedcompanieshaveimplementedaCRM solutionand,amongothers,thetopthreestrategicmotiveswere :
toincreasecustomerretentionandloyalty,
torespondeffectivelytocompetitivepressureandtoachieveacompetitiveadvantage,
todifferentiatecompetitivelybasedoncustomerservicesuperiority.
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CRM GOALS DIFFERENTIATED BYDEPARTMENTS Customer Support - Customerserviceobjectives
are:
obtainbasicinformationaboutcustomersandtheircomplaints,
customersatisfactionmonitoringand fastercomplaintsresolutioninordertoraisecustomerretentionrates,
toincreaseself-serviceefficiencies,and
tomitigatetheneed forin-personassistance.
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Sales - Thesalesdepartmentobjectivesare :
todeploysales forceautomationacrossregions,
totrackcontacthistory,tostreamlinethesalesprocess,andto qualifyprospectsbasedonpastexperience.
Field Service - Fieldserviceimpliestheserviceorrepairofthecustomer'sequipmentonthecustomer'spremises. Fieldserviceengineersneedtomonitorcustomercomplaintsandrepairshistories.
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PURPOSES OF CUSTOMERRELATIONSHIP MANAGEMENTCRM,initsbroadestsense,meansmanagingallthe
interactionsandbusinessactivitiesbetweenacompany
anditscustomers.
Thisincludes,butisnotlimitedto,improvingcustomerservice.
AgoodCRM programwillallowabusinesstoacquirecustomers,servicethecustomer,increasethevalueofthecustomertothecompany,retaingoodcustomers,anddeterminewhichcustomerscanberetainedorgivenahigherlevelofservice.
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AgoodCRM programcanimprovecustomerservicebyfacilitatingcommunicationinseveralways:
Increasestheefficiencyofcustomerinteractionthroughallthecommunicationchannelsavailable.
Facilitatesthecollaborationbetweentheclientandtheproviderusingtheweb,thusreducingthecostsofcustomerrelationsmanagement.
Providesproductinformation,productuseinformationandtechnicalassistanceonwebsitesthatareaccessible 24hoursaday, 7 daysaweek.
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Identifieshoweachindividualcustomerdefines quality,andthendesignsaservicestrategy foreachcustomer,basedontheseindividualrequirementsandexpectations.
Providesa fastmechanism formanagingandscheduling
follow-upsalescallstoassesspost-purchasecognitivedissonance,repurchaseprobabilities,repurchasetimes,andrepurchase frequencies.
Providesamechanismtotrackallpointsofcontact
betweenacustomerandthecompany,anddoesitinanintegratedway,sothatallthesourcesandthetypesofcontactsareincluded,andalltheusersofthesystemseethesameviewofthecustomer (reducesconfusion).
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Helpstoidentifypotentialproblems quickly,beforetheyoccur.
Providesanuser-friendlymechanism forregisteringcustomercomplaints (complaintsthatarenotregistered
withthecompanycannotberesolved,andareamajorsourceofcustomerdissatisfaction).
Providesa fastmechanism forhandlingproblemsand
complaints (complaintsthatareresolved quicklycanincreasecustomersatisfaction).
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Providesa fastmechanism forcorrectingservicedeficiencies (correcttheproblembeforeothercustomersexperiencethesamedissatisfaction).
Usesinternetcookiestotrackcustomerinterestsandpersonalizesproductofferingsaccordingly.
Providesa fastmechanism formanagingandscheduling
maintenance,repairsandon-goingsupport (improvesefficiencyandeffectiveness).
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CRM as business strategy
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Customer Retention Re-purchase
Ourcustomerreturnsandbuys forasecondtime
Thisismostlikelytobethepurchaseofasimilar
productorservice,orthenextlevelofproductor
service.
Growth
Marketorientation,innovative IT &valuecreation
Aimistoincreasethenumberofcustomersthat
purchase fromusREGULARLY.
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Cust er xte si Additi al,supple e tarypurchases
Ourcust ersareregularlypurchasi g
Wei t r ducepr ductsa dservicest ourloyal
customersdiffere t from origi alpurchase
Oncepurchased, ourgoalisto retain them as
customers fortheextendedproducts orservices
Growth Market orientation,innovative IT &valuecreation
Aim isto increasethe number ofcustomersthat
purchaseADDITIONAL products
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Innovative I
Updated I
Efficient,speedyand focusupon customer needs
Whilst I and/orsoftwareare nottheentirestory for
CRM,itisvitalto itssuccess
CRM softwarecollectsdata on consumersandtheir
transactions
Organizationswilltrackindividuals,andtrytomarketproductsandservicesto thembasedupon
similarbuyerbehaviorseen in otherindividuals
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MEASURING THE SUCCESS OFCRM
Asmentioned,oneofthemostdifficultpartsofaCRMprojectisdefiningsuccessparameters.
Evenifthesuccess factorsaredifferent,intheendmanycompanieschoosethe ROI (Returnon Investment) astheonlysuccess factor,althoughthischoiceiscontroversial.
Sometimes,CRM systemsmeasurethe ROI simplyastheincrementalrevenueormarginreturn fromimplementingaCRM technology.
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Thishasonlylimitedapplicability,asitdoesntgivesufficientinsighttomakeongoingdecisionsthatimprovethecustomerrelationship.
Itconsiderstheproblemonly fromthebusinesspointofview,andseesthecustomeronlyasasourceofrevenue,whileCRM ROI shouldintegrateboththemarginandthecustomersatisfaction.
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AstudyconductedbytheresearchersattheUniversity ofDayton illustrates four major measurements for CRMsuccess: -
TheCRM'sabilitytoimpactcorporatestrategy
(accordingto 25 percentofrespondents); - Successfultechnologicalintegration (accordingto 23
percentofrespondents); -
Enhancedstrategicpartnerships (accordingto 20
percentofrespondents); -AssimilationofCRM-relatedtechnologies (accordingto
18 percentofrespondents).
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30%
25%
20%
15%
10%
5%
0%
TheCRM'sabilitytoimpactcorporatestrategySuccessfultechnologyintegrationEnhancedstrategicpartnershipsAssimilationofCRM-relatedtechnologies
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THANK YOU