IT and Network Organization Ecommerce

IT and Network Organization CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRMS) IN NETWORK ORGANIZATION

IT and Network Organization Topics The Customer Relationship Management strategy CLTV and up selling/cross selling Classification of CRMS CRM Success and failure E-Customer Relationship Management Systems (CRM)

IT and Network Organization The Customer Relationship Management strategy

IT and Network Organization CRM Business Strategy Customers are the core of the business. Success depends upon company effectively managing relationships with customers. It is a business strategy to select & manage customers to optimize long-term value. Requires a customer-centric business philosophy & culture to support effective marketing, sales & services processes. Idea is simple – treat different customers differently as their needs are different & their value to the company may be different.

IT and Network Organization THE SHIFT FROM TRANSACTION-BASED MARKETING TO RELATIONSHIP MARKETING Transaction-based marketing Buyer and seller exchanges characterized by limited communications and little or no ongoing relationship between the parties. Relationship marketing Development, growth, and maintenance of long- term, cost-effective relationships with customers Encourages long-term relationships, repeat purchases, and multiple brand purchases from the firm.

IT and Network Organization –Capture and integrate customer data from all over the organization –Consolidate and analyze customer data –Distribute customer information to various systems and customer touch points across enterprise –Provide single enterprise view of customers Customer Relationship Management Systems 7

IT and Network Organization Why CRM is related to long term relationship with consumers Question 8

IT and Network Organization CLTV AND UP SELLING/CROSS SELLING

IT and Network Organization EVALUATING CUSTOMER RELATIONSHIP PROGRAMS Lifetime value of a customer Revenues and intangible benefits such as referrals and customer feedback that a customer brings to the seller over an average lifetime, less the amount the company must spend to acquire, market to, and service the customer. Company may analyze lifetime value or payback from a customer relationship. May influence the types of customers a firm tries to reach. Companies of all sizes can implement technology that helps measure and improve customer value.

IT and Network Organization Cross Selling and Up Selling Cross-selling- the act of selling a product or service to a customer as a result of another purchase. –Example- New mothers buy clothes for their babies and then themselves as well. Up-selling- motivating current customers to trade up to more profitable products. –Example- encourages the customer of a hotel to reserve a Deluxe room instead of the standard room These two forms of selling are strategic because they are related to the know how of which products will increase the customer ’ s buying and satisfaction.

IT and Network Organization What are the two logics of increasing sales based on an up selling Question 12

IT and Network Organization CLASSIFICATION OF CRMS

IT and Network Organization Operational CRM: –Customer-facing applications E.g. sales force automation, call center and customer service support, and marketing automation Analytical CRM: –Analyze customer data output from operational CRM applications –Based on data warehouses populated by operational CRM systems and customer touch points Customer lifetime value (CLTV) Customer Relationship Management Systems CHAPTER 9: ACHIEVING OPERATIONAL EXCELLENCE AND CUSTOMER INTIMACY: ENTERPRISE APPLICATIONS 14

IT and Network Organization Classification of CRM Applications Customer-facing – include all areas where customers interact with company (call centers, help desks, sales force automation). Customer-touching – customers interact with the applications (self-service, campaign management, general purpose e-business applications). Customer-centric intelligence – analyze results of operational processing & use results to improve CRM applications. Online networking – methods that provide the opportunity to build personal relationships (chat rooms & discussion lists).

IT and Network Organization –More comprehensive CRM software have modules for: Partner relationship management (PRM) –Integrating lead generation, pricing, promotions, order configurations, and availability –Tools to assess partners’ performances Employee relationship management (ERM) –E.g. Setting objectives, employee performance management, performance-based compensation, employee training Customer Relationship Management Systems 16

IT and Network Organization E-banking can be considered as operational or analytical CRM? Question 17

IT and Network Organization CRM SUCCESS AND FAILURE

IT and Network Organization Business value of CRM –Increased customer satisfaction –Reduced direct-marketing costs –More effective marketing –Lower costs for customer acquisition/retention –Increased sales revenue –Reduce churn rate Number of customers who stop using or purchasing products or services from a company. Indicator of growth or decline of firm’s customer base Customer Relationship Management Systems 19

IT and Network Organization Customer Retention Understanding why customers leave for competitors is key to find ways to retain them in the future. Churn- the customers leaving one business for its competitors. When a customer leaves there is: Loss of revenue Loss of investment in acquiring them

IT and Network Organization Issues Related to CRM Failures Difficulty in measuring intangible benefits. Failure to identify & focus on specific business problems that the CRM can solve. Lack of active senior management sponsorship. Poor user acceptance. Trying to automate poorly defined business process.

IT and Network Organization What is the churn rate and how is it related to CRMS? Question 22

IT and Network Organization E-Customer Relationship Management Systems (CRM) 23

IT and Network Organization eCRM E-CRM (electronic CRM) started in the mid-1990’s,when customers began using Web browsers, the Internet, and other electronic touch points. We can differentiate three levels of e-CRM: Foundational service. This includes the minimum necessary services such as Website responsiveness (e.g., how quickly and accurately the service is provided), site effectiveness, and order fulfillment. Customer-centered services. These services include order tracking, product configuration and customization, and security/trust. These are the services that matter the most to customers. Value-added services. These are extra services such as online auctions and online training and education.

IT and Network Organization E-CRM Activities Customer Service on the Web –Search and Comparison Capabilities –Free Products and Services –Technical and Other Information and Service –Allowing Customers to Order Products and Services Online –Letting Customers Track Accounts or Order Status –Loyalty Programs

IT and Network Organization E-CRM Activities Tools for Customer Service –Personalized Web Pages –FAQs –Chat Rooms – and Automated Response –Call Centers –Troubleshooting Tools –Wireless CRM

IT and Network Organization Risks of e-CRM Taking on more than can be delivered. Getting over budget & behind schedule. Poor user adoption. Expensive maintenance & support. Isolation. Garbage in-garbage out. Failure to measure success.

IT and Network Organization Why are we saying that there is a risk of garbage in and garbage out with e-CRM? Question 28