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Indicator 3.07 Understand the nature of customer relationship management to show its contributions to a company.

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Presentation on theme: "Indicator 3.07 Understand the nature of customer relationship management to show its contributions to a company."— Presentation transcript:

1 Indicator 3.07 Understand the nature of customer relationship management to show its contributions to a company.

2 Vocabulary Customer relationship management (CRM)
Strategies, processes, and policies used by businesses to build, maintain, and maximize the long-term value of customer relationships Helps businesses to understand and respond to customers’ changing needs Emphasizes positive, meaningful, and long-term communication and interaction with customers Involves the collection of customer information to draw conclusions about the customer’s needs and wants as well as predict the customer’s loyalty and value in the future

3 Explain goals of customer relationship management (CRM)
To maximize the value and effectiveness of all customer touch points Touch points: All the opportunities that businesses have to connect with customers and reinforce their brand value To provide outstanding service to customers To maximize customer satisfaction To attract and retain loyal customers To cultivate and maintain positive, profitable relationships with customers To develop individualized relationships with customers To gather and track information about customers for use in business decision-making To understand customers and their needs so that these needs can be fulfilled in a manner satisfactory to customers and businesses To develop products that meet or exceed customer expectations To increase business profit To develop a competitive advantage

4 Describe common CRM processes
Campaign management (usually conducted by the marketing department) Targeting prospective customers Distributing promotional materials to targeted prospects Tracking response to promotional materials Generating leads for sales Sales management (sometimes divided into lead management, offer management, and contract management) Recording lead information Qualifying leads Prioritizing leads Contacting leads Making sales

5 Describe common CRM processes
Service management Providing after-sales services, such as: Maintenance and repair services Warranties and guarantees Retaining customers Complaint management Receiving customer complaints Resolving customer problems Communicating customer complaints to the organization

6 Discuss the use of customer information in customer relationship management
By gathering and organizing customer information, a business can better determine and fulfill its customers’ needs and wants. Customer information is also used to identify the most profitable, loyal customers. After identifying these customers, the business may provide higher, better service to these customers to maintain their loyalty and increase their profitability.

7 Discuss the nature of customer relationships in today’s society
Because customers now have so many different choices in the marketplace, they have become more selective about whom they do business with. When given the choice to do business with one of two businesses that sell nearly identical products at similar prices, customers often choose to purchase from the business that offers better customer service. As a result, customers’ expectations for customer service are higher.

8 Describe the role of customer experience management (CEM) in customer relationship management (CRM).
The business world has become increasingly focused on the customer versus the product. Many businesses have adopted customer-centric attitudes and strategies. Customer-centric strategy: A plan of action used by businesses that shifts the focus from businesses and their products to customers and their needs An important component of CRM is customer experience management (CEM). Customer experience management (CEM): Strategies, processes, and policies used by businesses to meet or exceed customer expectations for service and to provide customers with outstanding experiences/interactions at every touch point throughout their business transactions

9 Explain the impact of organizational structure on customer relationship management
The organization should be structured so that customers have “seamless,” easy interactions with the company. To ensure that customers have “seamless” interactions with the company, all customer information must be available in one location to all employees who require it (usually using CRM technology). Companies with superior customer relationship management processes are much more likely to be organized according to customer segment or group.

10 Discuss the role of corporate culture in customer relationship management
For customer relationship management to be successful, it must be supported by the corporate culture (i.e., the values, beliefs, and encouraged behaviors in an organization). Senior executives must believe and demonstrate that building and maintaining customer relationships is a corporate priority.

11 Discuss the role of corporate culture in customer relationship management
Corporate values must be understood and embraced by all employees. Employee incentives, such as prizes and bonuses, can help ensure that employees embrace CRM strategies and processes. Also, employees must be given leeway to do what is necessary to satisfy customers.

12 Discuss the importance of formulating a CRM strategy prior to implementing CRM processes and tools.
Each company should design a unique CRM strategy that directly addresses its needs, organization, and customers. An important step in developing a CRM strategy is identifying the objectives/goals of the CRM program (e.g., to increase customer retention, to improve product offerings, etc.). Before implementing CRM processes and tools, each company must determine which members of its organization will be involved in CRM so that these individuals can be trained. CRM technology and tools should be selected after determining the company’s CRM strategy, objectives, and program participants.

13 Discuss the relationship of customer relationship management and business process management.
Customer relationship management and business process management work together to satisfy customers. Business process management: A type of management that focuses on the design and improvement of business processes (including CRM processes) to make them as efficient and effective as possible; strives to align business processes with customers’ needs and wants Business process management ensures that CRM processes meet the needs, wants, and expectations of customers, while CRM processes can gather customer information that can be used to ensure that business processes are designed with the end user—the customer—in mind.

14 Describe the relationship of customer relationship management and continuous improvement.
Continuous improvement: The activity of regularly updating one’s processes for better efficiency After developing a CRM strategy and implementing CRM processes, continuous improvement must occur to ensure that: Company values remain in line with the CRM strategy CRM processes remain effective

15 Explain ways in which customer relationship management can benefit a business
Increased customer satisfaction and loyalty More customers and customer referrals Reduced costs Fewer complaints Lower employee stress levels Increased access to customer information (for use in business decisionmaking) Long-term profitability

16 Vocabulary Informed consent Integrity

17 Describe the importance of trust in customer/business relationships

18 Discuss loyalty issues in customer/business relationships

19 Describe ethical issues related to the collection of customer information

20 Explain situations in which employees/departments involved in customer relationship management may be reluctant to share customer information with each other

21 Discuss ethical issues related to the sale of customer information to third parties

22 Discuss the impact of poor/unethical privacy practices on customer relationships

23 Vocabulary Client intelligence Cross-selling Up-selling
Relationship mapping Personalization Segmentation Clustering

24 Explain the difference between customer relationship management technology and customer relationship management

25 Describe types of customer relationship management tools
CRM Applications Databases Data warehouses

26 Discuss customer relationship management software approaches
Operational Analytical Collaborative Sales force automation

27 Explain types of data commonly stored in a CRM system
Contact data Demographic data Transactional data Relationship data

28 Discuss the benefits and drawbacks associated with CRM technology

29 Explain how CRM technology can be used to create a “single view” of a customer

30 Explain the importance of cleansing, standardizing, and updating data in a CRM data warehouse

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