1. Chapter 11
Building a Customer-Centric Organization – Customer Relationship Management

2. 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

3. Customer Relationship Management (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

4. Customer Relationship Management’s Explosive Growth
CRM Business Drivers

5. Customer Relationship Management’s Explosive Growth
Forecasts for CRM Spending (in billions)

6. 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

7. Using Analytical CRM to Enhance Decisions
Operational CRM and analytical CRM

8. Customer Relationship Management Success Factors
CRM success factors include:
Clearly communicate the CRM strategy
Define information needs and flows
Build an integrated view of the customer
Implement in iterations
Scalability for organizational growth

9. OPENING CASE STUDY QUESTIONS Gearing Up At REI
Explain 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

10. CHAPTER ELEVEN CASE The Ritz-Carlton-Specializing in Customers
Ritz-Carlton is the only service company to have won the prestigious Malcolm Baldrige National Quality Award twice—in 1992 and 1999
Companies worldwide strive to be “the Ritz-Carlton” of their industries
In 2000, the company launched the Ritz-Carlton Leadership Center, where anyone can study the brand’s cult of customer service for $2,000

11. Chapter Eleven Case Questions
What are the two different types of CRM and how has the Ritz-Carlton used them to become a world-class customer-service business?
Determine which of Ritz-Carlton’s six steps of customer service is the most important for its business
Rank Ritz-Carlton’s six steps of customer service in order of greatest to least importance in a CRM strategy for an online book-selling business such as Amazon.com

12. Chapter Eleven Case Questions
Describe three ways Ritz-Carlton can extend its customer reach by performing CRM functions over the Internet
The sixth step states to eschew technology— “We will not replace human service with machines.” Do you agree that customer service and satisfaction would decrease at Ritz-Carlton if it used technology such as automatic check-in kiosks? Why or why not? Do you think that Ritz-Carlton might find itself at a competitive disadvantage to hotels that are embracing technology to become more efficient and effective? Why or why not?