BUSINESS DRIVEN TECHNOLOGY Chapter Eleven: Building a Customer-Centric Organization – Customer Relationship Management

LEARNING OUTCOMES 11.1 Compare operational and analytical customer relationship management 11.2 Identify the primary forces driving the explosive growth of customer relationship management 11.3 Define the relationship between decision making and analytical customer relationship management 11.4 Summarize the best practices for implementing a successful customer relationship management system

Enterprise Minder (SAS) to 1-800-flower Enterprise Minder (SAS) to reveal trends, explain outcomes, predict results Revenue increase 7.5% $124 million

New York Time Find similarities among groups of readers How to appeal to those groups National Newspaper Reach it offers to advertiser Achieve a customer retention rate of 94% while industry rate is at 60%

National Basketball Association’s New York Knicks Better than ever communicating with their fans Which seasons ticket holders like which players Which merchandise they buy and where they buy

Brother International Corporation Skyrocket growth in its sales of multifunction centers, fax machines, printers labeling system Increase in customer service calls Failed to answer the phone fast enough, product return started to increase Upping call center capacity, return began to drop CIO realize that the company losing a world of valuable market intelligence

Brother International Corporation (2) Deploy SAP’s CRM, Reduce calls handle from 1.8 to 1.57 million calls Reduce agents from 180 to 160 agents Customer demographic info is now stored and display on the agents screen based on incoming telephone number Reduced call duration by 1 minutes Reduced cost by $600,000/year

CHAPTER ELEVEN OVERVIEW CRM is a business philosophy based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantages in the future This chapter discusses The reasons for CRM’s explosive growth Using CRM to enhance decision making CRM success factors

CHAPTER ELEVEN OVERVIEW CRM enables an organization to: Provide better customer service Make call centers more efficient Cross sell products more effectively Help sales staff close deals faster Simplify marketing and sales processes Discover new customers Increase customer revenues

CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH CRM Business Drivers

CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH Forecasts for CRM Spending (in billions)

USING ANALYTICAL CRM TO ENHANCE DECISIONS Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers

USING ANALYTICAL CRM TO ENHANCE DECISIONS (2) Operational CRM and analytical CRM

USING ANALYTICAL CRM TO ENHANCE DECISIONS (3) Operational CRM Automates call centers and sales forces with the aim of enhancing customer transactions Analytical CRM Designed to dig deep into a company’s historical customer information and expose patterns of behavior on which a company can capitalize Use to enhance and support decision making and works by identifying patterns in customer information collected from the various operational CRM

CUSTOMER RELATIONSHIP MANAGEMENT SUCCESS FACTORS CRM Success factors include: Clearly communicate the CRM strategy to both employee at all level and customers Define information needs and flows Build an integrated view of the customer Implement in iterations In pieces Scalability for organizational growth Estimate future needs is the hardest part How the organization is going to grow How technology is going to change How customers are going to evolve

OPENING CASE STUDY QUESTIONS Revving Up Sales at Harley-Davidson Assess the impact on Harley-Davidson’s business if it decided to sell accessories directly to its online customers, be sure to include a brief discussion of the ethics involved in this decision Evaluate the HOG CRM strategy and recommend an additional benefit Harley-Davidson could provide to its HOG members to increase customer satisfaction

CHAPTER ELEVEN CASE Gearing Up at REI REI deserves recognition as an industry leader for its “best practice” multichannel CRM strategy, which allows customers to seamlessly purchase products at the company’s 70 retail stores as well as by telephone, mail order, and on the Internet REI’s CRM system benefits: Minimizes maintenance costs Scales easily as company grows Provides sophisticated data warehouse for business intelligence Provides high availability

CHAPTER ELEVEN CASE QUESTIONS Summarize why it is important for REI to use CRM strategies to consolidate its customer information Determine two pieces of customer information that REI could extrapolate from its CRM system that would help it manage its business more effectively Explain how REI could use personalization to give its customers a more satisfying shopping experience