McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved CHAPTER 9 CUSTOMER RELATIONSHIP MANAGEMENT

9-2 BUSINESS BENEFITS OF CRM 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

9-3 CRM BASICS Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value –How recently a customer purchased items (Recency) –How frequently a customer purchased items (Frequency) –How much a customer spends on each purchase (Monetary Value)

9-4 The Evolution of CRM CRM reporting technology – help organizations identify their customers across other applications CRM analysis technologies – help organization segment their customers into categories such as best and worst customers CRM predicting technologies – help organizations make predictions regarding customer behavior such as which customers are at risk of leaving

9-5 The Evolution of CRM Three phases in the evolution of CRM include reporting, analyzing, and predicting

9-6 Operational and Analytical CRM 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

9-7 Operational and Analytical CRM

9-8 Using IT to Drive Operational CRM

9-9 Marketing and Operational CRM Three marketing operational CRM technologies: 1.List generator – compiles customer information from a variety of sources and segment the information for different marketing campaigns 2.Campaign management system – guides users through marketing campaigns 3.Cross-selling and up-selling Cross-selling – selling additional products or services Up-selling – increasing the value of the sale

9-10 Sales and Operational CRM The sales department was the first to begin developing CRM systems with sales force automation – a system that automatically tracks all of the steps in the sales process

9-11 Sales and Operational CRM Sales and operational CRM technologies 1.Sales management CRM system – automates each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts 2.Contact management CRM system – maintains customer contact information and identifies prospective customers for future sales 3.Opportunity management CRM system – targets sales opportunities by finding new customers or companies for future sales

9-12 Sales and Operational CRM CRM Pointers for Gaining Prospective Customer 1.Get their attention 2.Value their time 3.Overdeliver 4.Contact frequently 5.Generate a trustworthy mailing list 6.Follow up

9-13 Customer Service and Operational CRM Three customer service operational CRM technologies: 1.Contact center (call center) 2.Web-based self-service system Click-to-talk 3.Call scripting system

9-14 Customer Service and Operational CRM

9-15 USING IT TO DRIVE ANALYTICAL CRM Personalization – when a Web site knows enough about a persons likes and dislikes that it can fashion offers that are more likely to appeal to that person Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behavior These systems quickly aggregate, analyze, and disseminate customer information throughout an organization

9-16 USING IT TO DRIVE ANALYTICAL CRM Analytical CRM information examples 1.Give customers more of what they want 2.Value their time 3.Overdeliver 4.Contact frequently 5.Generate a trustworthy mailing list 6.Follow up

9-17 CUSTOMER RELATIONSHIP MANAGEMENT’S SUCCESS FACTORS CRM success factors include: 1.Clearly communicate the CRM strategy 2.Define information needs and flows 3.Build an integrated view of the customer 4.Implement in iterations 5.Scalability for organizational growth

9-18 CURRENT TRENDS: SRM, PRM, AND ERM Current trends include: –Supplier relationship management (SRM) – focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection –Partner relationship management (PRM) – focuses on keeping vendors satisfied by managing alliance partner and reseller relationship that provide customers with the optimal sales channel –Employee relationship management (ERM) – provides employees with a subset of CRM applications available through a Web browser