Customer Relations Management Class 6 - LO205 - Jan. 24,2001 Lecture by Judith Molka-Danielsen References (not required to read): *“Electronic Commerce: A Manager’s Guide”, Ravi Kalkota and Andrew B. Whinston, Addison-Wesley, chapter 11, *Related power point notes from Michael Spring, U.of.Pittsburgh, *“The E-business Revolution”, Daniel Amor, Hewlitt-Packard Professional books, ch.5, 1999.

Overview n Summary of Turban Chapter 3, prelude to this. n Motivation of Customer Relations Management n CRM Subsystems - –Marketing Management (MM), –Sales Force Automation (SFA), –Customer Service and Support (CSS) n Web Design Rules n On-Line Measurement

Turban Ch.3 Summary n 1. Consumer behavior - Vendors control the parts of Logistics, Support Technology, and Customer Service and Support Systems n 2. It is important to know customer characteristics n 3. It is important to understand the customer decision making process –to understand where you can influence customer behavior –Intelligent Agents can be used in some steps

Turban Ch.3 Summary n 4. Build One-to-One relationships with customers. –Boost loyalty –boost trust –One-to-One include software to trigger special offers BroadVision - recognizes customers and displays products relevant to them.BroadVision Cold Fusion - tool for rapid application development and site design.Cold Fusion GroupLens - collaborative filtering, with rating services, for contents and products.GroupLens WebObjects - serve data from legacy databases to on- line visitors.WebObjects

Turban Ch.3 Summary n 5. Implement Customer Service to –retain customers - Look at Web Site Design (Content is King). –satisfy new needs n 6. Doing Market Research involves –understanding segments of products and groups –classification of customers

Turban Ch.3 Summary n 6. (cont.)Doing Market Research involves –using Data Mining tools to predict trends, find hidden patterns, find what is ordered together Algorithms use association, sequences, classification, clusters, and forecasting techniques. –Collect samples on the Internet larger is better voluntary through surveys, data accuracy limitations involuntary through tracking movements, (ie. Cookies) –Ernst & Young market research: on-line retailing

Turban Ch.3 Summary –Ernst & Young market research: on-line retailing

Turban Ch.3 Summary n 7. Intelligent Agents - provide –auto replys –analyze movements –learn customer behavior and needs n 8. Organizationl buyer behavior model –follow organizational purchasing guidelines and constraints –involve interpersonal influences (power, politics)

Overview n Summary of Turban Chapter 3, prelude to this. n Motivation of Customer Relations Management n CRM Subsystems - –Marketing Management (MM), –Sales Force Automation (SFA), –Customer Service and Support (CSS) n Web Design Rules n On-Line Measurement

B2B Inputs Manufacturing Process Management Logistics Management Customer Relations Management Support Services Financial Management

Customer Relations Management n “Pull” supply chains are based on linking customer information gathering to the upstream business processes n CRM involves the integration of traditionally separate systems –Marketing Management –Sales Force Automation –Customer Service and Support

The Motivation of CRM n Marketing and sales account for 15-35% of costs n Customer input can lead to better products n Current customers are a predictable source of future sales n Customer assets can be valued as a part of acquisitions and mergers n Customers increasingly expect high quality personalized service

CRM-MM Marketing management n Marketing has been based on product, price, and promotion n Marketing in a global economy across multiple product categories using different channels requires better tools n Ultimately, customer driven marketing makes it essential to gather customer input

CRM-MM Goals n Provide data for data mining and OnLine Analytic Processing(OLAP) n Provide real time accurate data n Allow for better inventory management and input into promotions and sales n Provide trend analysis data across channels to drive operation

CRM-MM sales operations customer OLTP System Data extraction validation integration OLAP Data analysis Business Intelligence Modeling Visualization Statistics Profiling Local Access Internet Access

CRM-SFA Sales Force Automation n Two goals in sales force automation –Support the sales person in the field –Economically integrate sales information increasing corporate wide coordination n A good system will: –Support salesperson and telemarketing productivity –Automate selected sales processes –Maintain direct mail and systems –Support sales and marketing management including compensation management

CRM-SFA Support of Sales Representatives n Provision of marketing materials, price lists, business intelligence online n Provision of customer leads and information captured from all sources n Prequalification of sales prospects and classification of customers n Provision of real time product availability and order entry information

CRM-SFA Some basic examples n Web information requests are processed –Through a standard set of followups –To the appropriate sales person –Automated tickler systems n Tracking of contacts –Prospects stored for future use –Datamining of prospects n Provide information –To sales people about current pricing inventory etc, –To other company support units to enhance sales

CRM-SFA More sophisticated examples n Develop intelligent-agents to acquire news items and competitor information for distribution to the sales force and management n Develop analysis tools to detect trends in customers and sales n Develop network based push promotion and information dissemination n Provide online customer controlled input and tracking information

CRM-CSS Customer Service and Suppport n Customers are increasingly defined as an important company asset n The Web makes new forms of customer support possible and cost-effective n The Web can serve both as a way to reach out to customers and as a way for them to reach into the company

CRM-CSS Goals n Lower support costs n Provide global access n Create proactive services n Empower customers to solve issues independently n Provide an opportunity for customers to input into the business process

CRM-CSS Basic Processes n Provide the customer with product update information, fixes, new product information n Provide a simple registration system that gathers: –User demographics –Product satisfaction –Agreement to receive targeting notifications

CRM-CSS Advanced Processes n Link sales information and customer ID for telephone help desk support n Use a workflow system to track resolution of customer issues through involved departments n Feed problem reports lead into research and development operations for action n Use problem tracking data feed into manage operations and field service personnel

Overview n Summary of Turban Chapter 3, prelude to this. n Motivation of Customer Relations Management n CRM Subsystems - –Marketing Management (MM), –Sales Force Automation (SFA), –Customer Service and Support (CSS) n Web Design Rules n On-Line Measurement

Web Design Rules n Content - focus first on content and then on design. Never let users leave your site without giving them information, so they will come back. n Consistency - design your site with consistent content quality, do not bore the customer. Images should give information, not irrelevant images. n Density - break content into small pieces, that fit together. Short pages. Information over pages. No more than 10 links from a page. n Design - use few colors, color theme for pages connected with your site. If possible, give users a choice of format for document download type. Let users decide the sequence that they visit pages (escape from demos). n Size - use small graphics with large impact.

Overview n Summary of Turban Chapter 3, prelude to this. n Motivation of Customer Relations Management n CRM Subsystems - –Marketing Management (MM), –Sales Force Automation (SFA), –Customer Service and Support (CSS) n Web Design Rules n On-Line Measurement

On-Line Measurement n Counting can be done by web site owners. They use web server log files. Can count visits to web pages too. –The counts can be inflated: visits from spiders, visits from yourself, criteria to increase count after every refresh even within the same session. –The counts can be under-counted: ISPs save pages in cache files, so the user might see an old copy even between sessions (opening the browser). Proxy servers relay requests from users making 1000 people appear like 1. –Server can use cookies, but you cannot force users to accept cookies from a web server.

On-Line Measurement n Counting - Continued –Page Views - are all the pages that were viewed by on-line customers. –Visits - are all page views by a single on-line customer. –Automated log file analyzers - can import data into a propriatary database to analyze traffic. Can produce graphical reports, tables, charts. –On-line rating agencies - add software on the users PC to monitor use, instead of at the server. –Third Party Auditing - I/Pro and MatchLogic offer programs to address problems with firewalls and proxy servers. (Java applets must be allowed through.)