Presentation on theme: "Customer Relationship Management Systems"— Presentation transcript:
1 Customer Relationship Management Systems Management Information SystemsRobert MonroeSeptember 6, 2010
2 QuizTrue or false: according to the textbook, two categories of CRM systems are operational and analytical.__________ CRM systems are the type of CRM systems that evaluate customer data to help businesses make better decisions but do not directly interact with customersThe book describes a formula called “RFM” for identifying an organizations most important customers. Write down what either R, F, or M stand for.
3 After Today's Class You Should Be Able To: Understand some of the key challenges to building an effective IT infrastructureExplain why a company would invest in a Customer Relationship Management (CRM) system, and the primary uses for such a systemExplain the difference between Operational CRM and Analytic CRM, and the role that each playsExplain how CRM systems can be used to acquire customers, enhance the company’s relationship with its customers, and retain its customers
5 Putting It All Together: IT Infrastructure ChipsRAMDisksPCB’sOutputDevicesInputServerOperating SystemServerNetworkMgmt SysChipsRAMDisksPCB’sOutputDevicesInput…Operating SystemServerServerFirewallSANPDAPDAPCPCPCSmartCardPCComponentsIT DevicesIS Infrastructure
6 Putting It All Together: Systems Architecting Successful information system deployment and adoption requires an IT infrastructure that is:Reliable (highly available)RobustManageableCost effectiveAchieving these goals requires careful planning, management, and investmentThis is the responsibility and role of a Systems Architect
7 Systems Architecting: Building Blocks Client machinesPC’sPDA’sCell phonesEtc…ServersFile ServersWeb ServersMail ServersSoftwareOperating systemsWeb, application, serversNetwork management systemsNetworking equipmentFirewallsRoutersGatewaysLoad BalancersStorage systemsFile serversRAID arraysStorage Area Networks (SANs)Network Attached Storage (NAS)Uninteruptable power suppliesHeating, Ventilation, Cooling (HVAC)
11 Data Centers Provide Core physical infrastructure PowerHVACFire prevention and suppressionSeismic monitoring and bracingPhysical securityHardware, networking, software infrastructureRack spaceNetworking infrastructure (big pipes, lots of ‘em)ServersStorageBackupManagement services (optional)NOC
12 Managing IT Infrastructure: TCO Total Cost of Ownership is more important than purchase price.The cost to power, support, and update hardware devices over their useful lifetime often exceeds initial purchase price.Some challenges in building a hardware infrastructure include:Understanding where your true costs of ownership lieIdentifying what is essential and what is notTraining and managing qualified personnelMaintenance of machines and networkSoftware licensingSoftware and hardware obsolescence and upgrade cyclesMaintaining inventory (spares)Power and HVAC
13 TCO Exercise:Write down five recurring expenses that an organization incurs in running a large information system in a data center.
14 Backup and Disaster Recovery Provided by data centers, specialists, or in-housePut together a plan for disaster scenariosEvaluate cost of downtimeDevise plans to handle disastersPlan DR strategy based on cost/benefit analysisDisaster Recovery ServicesData backup and storage (hot-site, cold-site)Data recovery and restorationBusiness process fallback plans
15 Backup and Disaster Recovery How do you know how much to spend for backup? For disaster recovery?How do you decide how often to back up your organization’s data?
16 Network Operations Center (NOC) A NOC provides:System monitoringTech support callsOn-site techniciansNetwork securityPlatform adminApplication admin
17 User Support Center (Help Desk) Everything to this point has focused on keeping the system running smoothlyWhat about handling user problems?There are analogous processes and procedures for dealing with usersUser support center (phones, , IM)Troubleshooting guidesProcesses for common requestsEscalation proceduresetc.
19 Let’s Talk Customers… Why does a business care about its customers? What makes a “good” customer for a business?Why might customers want to spend their money at a specific business?What are some things that businesses want their customers to do?
20 Let’s Talk CRM Systems… CRM systems can help businesses deal more effectively with their customersacquiring new customersfiguring out which ones are most profitable (and which ones are unprofitable)selling more effectively to existing customers (up-sell, cross- sell)be more responsive to customer needs and wantsmake customers feel special and cared for
21 CRM Systems Consolidate Interaction Points Provide customer-facing employees with a single, complete view of every customer at every touch point and across all channelsProvide the customer with a single, complete view of the company and its extended channelsCRMCompanyCustomers
22 CRM Systems Consolidate Applications Integrate and automate many customer serving processesCreate an IT framework of software and databases that integrates these processes with the rest of the company’s business operationsIncludes software modules that provide tools that enable a business & its employees to provide fast, convenient, dependable, consistent service.
23 CRM Examples and Scenarios Your interactions with large companies are frequently managed by CRM systemsDo you think these companies are using a CRM system?“I’m sorry Mr. Monroe but I don’t have that information. I’ll have to transfer you to another office…”“I’m sorry Mr. Monroe, the representative you spoke with previously isn’t available to help you now. Could you please explain the problem to me again from the beginning…”“Thank you for flying Qatar Airways Mr. Monroe. I see that you prefer to have a window seat and are a gold privilege club member. Could I interest you in an upgrade to first class on this flight? We are offering a Ramadan promotion for our loyal customers with first class upgrades on sale at 30% off their regular price”
24 CRM BenefitsEnables a company to provide a consistent customer service experienceAllows a business to identify its best (and worst!) customersSupports customer data mining and analyticsMakes possible real-time customization & personalization of products & services based on:customer wants and needsbuying habitslife cycles and lifestyles
25 Major CRM ModulesSource: O’Brien-Marakas, Management Information Systems, 7th ed.
26 Major CRM System Modules Contact & Account ManagementHelps capture and track relevant data about past and planned contacts with prospects & customersSalesProvides sales reps with software tools & company data needed to support & manage their sales activities.Helps optimize cross-selling & up-sellingRetention and Loyalty ProgramsIdentify, reward, and market to loyal and profitable customers
27 Major CRM System Modules (continued) Customer Service and SupportSoftware tools and real-time access to the common customer databaseCreate, assign, & manage requests for service from customersCall center softwareHelp desk softwareMarketing & FulfillmentHelps direct marketing campaigns by automating tasksHelps capture & manage prospect & customer response dataHelps in fulfillment by quickly scheduling sales contacts & providing appropriate information on products & services to them
28 Three Phases of Customer Lifecycle With CRM CRM systems provides value at three customer lifecycle stages:Shared Customer DatabaseSource: O’Brien-Marakas, Management Information Systems, 7th ed
29 Operational CRM Improving transactions and interactions with customers Lower value per-transaction but frequent transactionsSalesforce automationGenerate leads and prospectsManage contactsTrack and guide sales process and pipelineOperational CRM for marketingList generatorCampaign managementCross-selling and up-sellingContact center management
30 Analytic CRM Focus on making better decisions about customers Examples of how to do this:Give customers what they wantFind new customers similar to your best customersFind out what your organization does bestBe proactiveReactivate inactive customersLet customers know they matterSource: [HBP09] page 424.
31 Discussion: Operational vs. Analytic CRM What types of operational and analytic functionality might the following modules provide?Contact and account managementSalesRetention and loyalty programsCustomer service and supportMarketing and fulfillment
32 Customer Experience Example: KFC “I usually place food orders from the restaurants around Education City. … the first time I placed a food order through KFC, I was asked to provide my contact information, location and other relevant information. I was delivered the order and a week after I decided to order a different meal and called. The customer service person only asked for my cell phone number and as soon as he entered the cell phone number into the database, the rest of information (contact info and other) was uploaded to the system. This system is fascinating, it accelerates the process, takes less time and it is very efficient for both parties involved.” -- AbidKFC example: AbidFor each example:Is this an example of an effective, or ineffective interaction with a customer (from the business’s perspective)?- Do you think the business was using a CRM system?- Is a CRM system required to provide this level of service? Would a CRM system make it easier to provide this level of service?If they are using a CRM system:which stage of the customer lifecycle are they helping with?what functionality / module are they using?is it an analytic or operational system?
33 Customer Experience Example: Qatar Airways “Prior to my arrival to Qatar for the start of the semester, I went online and checked my ticket reservation by simply entering my Qatar Airways privilege card number. I was able to check my frequent flyer miles and new promotions specifically to destinations I fly to most often and they know this information through the information saved on my membership card. The QA membership card has made my life easier and has made the reservation process much more efficient and convenient. Furthermore, when I go to check-in at airports, QA staff/crew acknowledge me as a QA silver member and allow excess luggage weight, priority in waiting inqueues, and sometimes upgrades my seating depending on the situation and total number passengers on the flight. This CRM is most beneficial to Qatar Airways' business as it creates a stronger relationship with its customers and enhances and efficiency and quality of its service.” -- AliahQatar Airways example: [Aliah Dehdary]For each example:Is this an example of an effective, or ineffective interaction with a customer (from the business’s perspective)?- Do you think the business was using a CRM system?- Is a CRM system required to provide this level of service? Would a CRM system make it easier to provide this level of service?If they are using a CRM system:which stage of the customer lifecycle are they helping with?what functionality / module are they using?is it an analytic or operational system?
34 Customer Experience Example: Fitness Club I used go to Al-Thuraya fitness club. All members have different privileges depending on the facilities they like (such as the spa, swimming pool, gym, aerobics classes, and the beauty saloon). All information name, mobile number, membership number and combination of facilities chosen are all found on the membership card. This membership card has the same ID number as the Qatari ID. Whenever someone forgets the card, they can give the reception their Qatari ID to scan which will recall all the information from club system found on the membership card. Iif they have the card with them they can just scan it at the doors and it will allow them to go where they are privileged to. -- NadaFitness club example: [Nada Mohsin]For each example:Is this an example of an effective, or ineffective interaction with a customer (from the business’s perspective)?- Do you think the business was using a CRM system?- Is a CRM system required to provide this level of service? Would a CRM system make it easier to provide this level of service?If they are using a CRM system:which stage of the customer lifecycle are they helping with?what functionality / module are they using?is it an analytic or operational system?
35 Customer Experience Example: Microsoft Office “When I first used Microsoft Office 2003, I was asked if I would like to participate in the "Customer Experience Improvement Program" where the Microsoft Corporation would collect information about my activities on the Office applications periodically. Since I did not feel the need to keep my activities on MS Office hidden, I clicked "yes". I do not believe that I had anything to lose. Now that I use Office 2010, I look back at this system and I believe that the intelligence they gathered allowed their future products to be more user friendly. They gathered information about the most frequently used functions and made them more accessible, hence increasing the speed of my MS-Office dependant activities.” -- WaleedMS Office example: Waleed Ali KhanFor each example:Is this an example of an effective, or ineffective interaction with a customer (from the business’s perspective)?- Do you think the business was using a CRM system?- Is a CRM system required to provide this level of service? Would a CRM system make it easier to provide this level of service?If they are using a CRM system:which stage of the customer lifecycle are they helping with?what functionality / module are they using?is it an analytic or operational system?
36 Building CRM Capabilities Incrementally Operational CRMBaseline capabilityTrack and manage customer interactionsAnalytical CRMAnalyze customer behavior and demands to better meet needsCollaborative CRMIntegrate CRM efforts with customers, suppliers, partnersPortal-Based CRMMove customer interactions to the web and mobile devicesPortal- Based CRMCollab. CRMOperational CRMAnalytical CRM
37 Why Is Implementing CRM So Hard? They are big, complex undertakingsChanging both business processes and info systemsCRM implementations involve integrating many:Business functionsLegacy information systemsPeopleProcessesFailure to fully grasp scope of the projectWhich leads to lack of understanding and preparationCRM is not a silver bullet!
38 CRM SummaryUsed effectively, a CRM system can provide tremendous benefits to a company throughout the full customer lifecycleUnfortunately, it is very difficult to:Implement a broad enterprise-grade CRM system effectivelyUse it effectively once it is implemented and deployedAvoid harming your relationships with your customers through careless application of the systemDo the benefits outweigh the costs and risks?
39 References[HBP09] Stephen Haag, Paige Baltzan, and Amy Phillips, Business Driven Technology, 3rd Edition, McGraw-Hill Irwin, 2009, ISBN [OM05] James O’Brien, George Marakas, Management Information Systems, 7th Edition, McGraw-Hill Irwin, 2005.