1. Customer Relationship Management
CHAPTER 6
Customer Relationship Management
Opening Case:
Harnessing Customer Relationships at Fairmont Hotels & Resorts
CLASSROOM OPENER
GREAT BUSINESS DECISIONS – Harnessing Customer Relationships at Fairmont Hotels & Resorts
Fairmont was spun off from Canadian Pacific in It immediately built a central repository of information about what its customer’s personal preferences regarding things like bed size, proximity to elevators and ice machines, etc. In order to manage the data, one centralized database was created. Additionally, Internet access, provided through Superclick Networks, allows customers to experience internet access as quickly and reliably as they would at home or in the office.
Using this information wisely has allowed Fairmont to stay viable in a very competitive market, and to remain a leader in the industry through such disasters as the SARS crisis.

2. Chapter Six Overview SECTION 6.1 – CRM FUNDAMENTALS
Using Information Systems to Drive Operational CRM
Using Information Systems to Drive Analytical CRM
SECTION 6.2 – CRM BEST PRACTICES AND TRENDS
Implementing CRM
CRM Metrics
Using IT to Drive Analytical CRM
CRM Applications and Vendors
Managing Other Relationships
Future CRM Trends

3. LEARNING OUTCOMES
Understand the difference between customer relationship management and customer relationship management systems.
Describe the business benefits of customer relationship management and how customer relationship management systems can help achieve those benefits.

4. LEARNING OUTCOMES
Understand the differences between: operational analytical customer relationship management; the operational customer relationship management systems used by marketing departments, sales departments, and customer service departments and the various analytical customer relationship management systems used by organizations.

5. LEARNING OUTCOMES
Identify and explain best practices in implementing CRM in organizations, including the tracking of common customer relationship management metrics by organizations.
Describe the benefits of expanding customer relationship management to include suppliers, partners, and employees, as well as other future trends in CRM.

6. SECTION 6.1 CRM FUNDAMENTALS CLASSROOM OPENER
Disgruntled Customers – Stop Them Before It Is Too Late
When Burger King employees refused to serve a drive-thru customer, the customer got out of his car and “using his hands, fists and feet as weapons,” destroyed the drive-up window, causing more than $1,000 in damage.

7. What is CRM?
CRM involves the managing of all the aspects of a customer’s relationship with an organization to increase loyalty and retention and an organization’s profitability. CRM systems are technologies designed to assist the CRM functions or activities.
As the business world increasingly shifts from product-focus to customer-focus, most organizations recognize that treating existing customers well is the best source of profitable and sustainable revenue growth
Ask your students why, in the age of e-business, an organization is challenged more than ever before to truly satisfy its customers
1-800-Flowers.com used their customer transaction data to segment, categorize, and predict which customers to focus on and offer differentiated products to.
Business 2.0 ranked "You - the customer" as one of the 50 people who matter now for 2006. 
These Web sites show the power people have in the consumer market today

8. Fundamentals of CRM CRM as a business strategy
Business benefits of CRM
The evolution of CRM
Operational and analytical CRM
As the business world increasingly shifts from product-focus to customer-focus, most organizations recognize that treating existing customers well is the best source of profitable and sustainable revenue growth
Ask your students why, in the age of e-business, an organization is challenged more than ever before to truly satisfy its customers
1-800-Flowers.com used their customer transaction data to segment, categorize, and predict which customers to focus on and offer differentiated products to.
Business 2.0 ranked "You - the customer" as one of the 50 people who matter now for 2006. 
These Web sites show the power people have in the consumer market today

9. BUSINESS BENEFITS OF CRM
CRM enables an organization to:
Provide better customer service
Make call centres more efficient
Cross-sell products more effectively
Help sales staff close deals faster
Simplify marketing and sales processes
Discover new customers
Increase customer revenues
As the business world increasingly shifts from product-focus to customer-focus, most organizations recognize that treating existing customers well is the best source of profitable and sustainable revenue growth
Ask your students why, in the age of e-business, an organization is challenged more than ever before to truly satisfy its customers
1-800-Flowers.com used their customer transaction data to segment, categorize, and predict which customers to focus on and offer differentiated products to.
Business 2.0 ranked "You - the customer" as one of the 50 people who matter now for 2006. 
These Web sites show the power people have in the consumer market today

10. “RFM”
Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value
How recently a customer purchased items (Recency)
How frequently a customer purchased items (Frequency)
How much a customer spends on each purchase (Monetary Value)
Once a company knows this information, it can begin to strategize marketing campaigns, sales promotions, and other ways to increase business
For example: If Ms. Smith buys only at the height of the season, then the company should send her a special offer during the “off-season”
Ask your students if they have received any personalized promotions lately
How did the company gather information on the student to be able to offer the personalized promotion?

11. The Evolution of CRM
CRM reporting technology – help organizations identify their customers across other applications
CRM analysis technologies – help organizations segment their customers into categories such as best and worst customers
CRM predicting technologies – help organizations make predictions regarding customer behaviour such as which customers are at risk of leaving
Reporting
Help organizations identify their customers across applications
Analyzing
Help organizations segment their customers into categories such as best and worst customers
Predicting
Help organizations make predictions regarding customer behaviour such as which customers are at risk of leaving

12. The Evolution of CRM
Three phases in the evolution of CRM include reporting, analyzing, and predicting
Reporting
Help organizations identify their customers across applications
Analyzing
Help organizations segment their customers into categories such as best and worst customers
Predicting
Help organizations make predictions regarding customer behaviour such as which customers are at risk of leaving

13. The Evolution of CRM
Ask your students to define additional examples of reporting, analyzing, and predicting questions
CLASSROOM EXERCISE
Designing a Digital Dashboard for a CRM System
Digital dashboards offer an effective and efficient way to view enterprisewide information at near real-time. According to Nucleus Research, there is a direct correlation between use of digital dashboards and a company’s return on investment (ROI), hence all executives should be using or pushing the development of digital dashboards to monitor and analyze organizational operations.
Break your students into groups and ask them to develop a digital dashboard for a CRM system. Be sure your students have addressed all of the following in their digital dashboard:
Customers
Sales
Marketing
Customer service
Order entry
Billing
Collections
Credit limits
Shipping
Transportation

14. Operational and Analytical CRM
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
Can you list a few examples of front-office systems?
Customer service, sales, billing
Can you list a few examples of back-office systems?
Accounting, finance, human resources, data warehouses
Ask your students which systems are more important to an organization – front-office or back-office
Ans: Both; one cannot function without the other
CLASSROOM EXERCISE
Designing a Digital Dashboard for a CRM System
Digital dashboards offer an effective and efficient way to view enterprisewide information at near real-time. According to Nucleus Research, there is a direct correlation between use of digital dashboards and a company’s return on investment (ROI), hence all executives should be using or pushing the development of digital dashboards to monitor and analyze organizational operations.
Break your students into groups and ask them to develop a digital dashboard for a CRM system. Be sure your students have addressed all of the following in their digital dashboard:
Customers
Sales
Marketing
Customer service
Order entry
Billing
Collections
Credit limits
Shipping
Transportation

15. Operational and Analytical CRM
Walk-through the Figure with your students
Why would an organization have a separate system for each front-office system and each back-office system?
Most organizations operate functional “silos”, and each department typically has its own systems
A company might purchase an ERP and then all of the functional silos would be on one system; however, this doesn’t happen very often in the real world. Most organizations require anywhere from 10 to 100 to 1,000 different systems to run their business
Finding one system that could meet all the needs of an entire organization from billing to sales is almost impossible
For this reason, the CRM system is the integrator, gathering all of the customer information from the many different systems to obtain a single view of the customer
Personalization is one of the benefits of an analytical CRM system
Personalization occurs when a Web site can know enough about a person’s likes and dislikes that it can fashion offers that are more likely to appeal to that person

16. Using IS to Drive Operational CRM
Operational CRM technologies for sales, marketing, and customer service departments

17. Marketing and Operational CRM
Three marketing operational CRM technologies:
List generator – compiles customer information from a variety of sources and segments the information for different marketing campaigns
Campaign management system – guides users through marketing campaigns
Cross-selling and up-selling
Cross-selling – selling additional products or services
Up-selling – increasing the value of the sale
How many of you are marketing majors?
Do you anticipate using these types of technologies in the marketing department?

18. Sales and Operational CRM
The sales department was the first to begin developing CRM systems with sales force automation – a system that automatically tracks all of the steps in the sales process
Walk your students through the sales process displayed in the above figure

19. Sales and Operational CRM
Sales and operational CRM technologies
Sales management CRM system
automates each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts
Contact management CRM system
maintains customer contact information and identifies prospective customers for future sales
Opportunity management CRM system
targets sales opportunities by finding new customers or companies for future sales

20. Sales and Operational CRM
CRM Pointers for Gaining Prospective Customer
Get their attention
Value their time
Overdeliver
Contact frequently
Generate a trustworthy mailing list
Follow up
Ask your students to identify additional pointers for gaining prospective customers
1. Get their attention If you have a good prospect, chances are that he or she receives dozens of offers from similar companies. Be sure your first contact is professional and gets your customer’s attention.
2. Value their time When you ask for a meeting, you are asking for the most valuable thing a busy person has— time. Many companies have had great success by offering high-value gifts in exchange for a meeting with a representative. Just be careful because some organizations frown on expensive gifts. Instead, offer these prospective customers a report that can help them perform their jobs more effectively.
3. Overdeliver If your letter offered a free DVD in exchange for a meeting, bring a box of microwave popcorn along with the movie. Little gestures like these tell customers that you not only keep your word, but also can be counted on to overdeliver.
4. Contact frequently Find new and creative ways to contact your prospective customers frequently. Starting a newsletter and sending out a series of industry updates are excellent ways to keep in contact and provide value.
5. Generate a trustworthy mailing list If you are buying a mailing list from a third party be sure that the contacts are genuine prospects, especially if you are offering an expensive gift. Be sure that the people you are meeting have the power to authorize a sale.
6. Follow up One of the most powerful prospecting tools is a simple thank-you note. Letting people know that their time was appreciated may even lead to additional referrals.

21. Customer Service and Operational CRM
Three customer service operational CRM technologies:
Contact centre (call centre)
Web-based self-service system
Click-to-talk
Call scripting system
Contact centre (call centre) – where CSRs answer customer inquiries and respond to problems through different touchpoints
Web-based self-service system – allow customers to use the Web to find answers to their questions or solutions to their problems
Click-to-talk –customers click on a button and talk with a CSR via the Internet
Call scripting system – access organizational databases that track similar issues or questions and automatically generate the details to the CSR who can then relay them to the customer
Documedics is a health care consulting company that provides reimbursement information about pharmaceutical products to patients and health care professionals. The company currently supports inquiries for 12 pharmaceutical companies and receives over 30,000 customer calls per month. Originally, the company had a data file for each patient and for each pharmaceutical company. This inefficient process resulted in the potential for a single patient to have up to 12 different information files if the patient was a client of all 12 pharmaceutical companies. To answer customer questions, a CSR had to download each customer file causing tremendous inefficiencies and confusion.

22. Customer Service and Operational CRM
A contact centre is part of the customer service department and falls into the category of operational CRM
A contact centre (call centre) is where CSRs answer customer inquiries and respond to problems through different touchpoints
A contact centre is one of the best assets a customer-driven organization can have because maintaining a high level of customer support is critical to obtaining and retaining customers
Automatic call distribution, IVR, and predictive dialing are only three of many different systems available to help an organization automate its contact centres

23. USING IS TO DRIVE ANALYTICAL CRM
Personalization – when a Web site knows enough about a person’s likes and dislikes that it can fashion offers that are more likely to appeal to that person
Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behaviour
These systems quickly aggregate, analyze, and disseminate customer information throughout an organization
Analytical CRM has the ability to provide an organization with information about their customers that was previously impossible to locate, and the resulting payback can be tremendous.

24. USING IS TO DRIVE ANALYTICAL CRM
Analytical CRM information examples
Give customers more of what they want
Find new customers similar to the best customers
Find out what the organization does best
Beat competitors to the punch
Reactivate inactive customers
Let customers know they matter
Ask your students to provide additional examples of analytical CRM
1. Give customers more of what they want Analytical CRM can help an organization go beyond the typical “Dear Mr. Smith” salutation. An organization can use its analytical CRM information to make its communications more personable. For example, if it knows a customer’s shoe size and preferred brand it can notify the customer that there is a pair of size 12 shoes set aside to try on the next time the customer visits the store.
2. Find new customers similar to the best customers Analytical CRM might determine that an organization does a lot of business with women 35 to 45 years old who drive SUVs and live within 30 miles of a certain location. The company can then find a mailing list that highlights this type of customer for potential new sales.
3. Find out what the organization does best Analytical CRM can determine what an organization does better than its competitors. For example, if a restaurant caters more breakfasts to midsized companies than its competition does, it can purchase a specialized mailing list of midsized companies in the area and send them a mailing that features the breakfast catering specials.
4. Beat competitors to the punch Analytical CRM can determine sales trends allowing an organization to offer the best customers deals before the competition has a chance to. For example, a clothing store might determine its best customers for outdoor apparel and send them an offer to attend a private sale right before the competition runs its outdoor apparel sale.
5. Reactivate inactive customers Analytical CRM can highlight customers who have not done any business with the organization in a while. The organization can then send them a personalized letter along with a discount coupon. It will remind them of the company and may help spark a renewed relationship.
6. Let customers know they matter Analytical CRM can determine what customers want and need, so an organization can contact them with this information. Anything from a private sale to a reminder that the car is due for a tuneup is excellent customer service.

25. OPENING CASE QUESTIONS Harnessing Customer Relationships at Fairmont Hotels & Resorts
Define analytical CRM. How has FHR effectively used analytical CRM? How important is analytical CRM to companies like FHR?
What is the difference between customer information and customer-intelligence, as described in the Opening Case Study? In your opinion, is there a difference between customer-intelligence and analytical CRM? If so, how?
3. Define analytical CRM. How has FHR effectively used analytical CRM? How important is analytical CRM to companies like FHR?
Analytical CRM supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its customers.
FHR uses analytical CRM to perform analyzing and predicting CRM strategies. Specifically, FHR uses analytical CRM technology to predict when to set up promotions and which guests to make these promotional offers to.
Analytical CRM is important to companies like FHR because it allows them to attain more value from their existing technology investments and it further allows them to increase revenues through targeted marketing. Maturing analytical CRM and behavioural modeling technologies are helping numerous organizations move beyond legacy benefits such as enhanced customer service and retention to systems that can truly improve business profitability. Unlike operational CRM that automates call centres and sales forces with the aim of enhancing customer transactions, analytical CRM solutions are designed to dig deep into a company’s historical customer information and expose patterns of behaviour on which a company can capitalize. Analytical CRM is primarily used to enhance and support decision making and works by identifying patterns in customer information collected from the various operational CRM systems.
4. What is the difference between customer information and customer-intelligence, as described in the Opening Case Study? In your opinion, is there a difference between customer-intelligence and analytical CRM. If so, how?
Customer information is the assembled collection of customer data that describes that individual, such as credit card number and whether they prefer a feather or synthetic pillow. Customer-intelligence is the predictive data that suggests which customers are, for example, more or less likely to return to a FHR property within the next 6 months, based on the available customer information.
Answers here will vary but should generally acknowledge that analytical CRM provides the processed information (e.g. predictions) upon which customer-intelligence is based on.

26. CRM BEST PRACTICES AND TRENDS
SECTION 6.2
CRM BEST PRACTICES AND TRENDS

27. Implementing CRM
To achieve success in implementing CRM, organizations should follow CRM best practices listed as follows:
Clearly communicate the CRM strategy
Define data needs and flows
Build an integrated view of the customer
Implement in iterations
Scalability for organizational growth
1. Summarize the evolution of CRM and provide an example of a reporting, analyzing, and predicting question Fairmont Hotel & Resorts (FHR) might ask its customers.
There are three phases in the evolution of CRM: (1) reporting, (2) analyzing, and (3) predicting. CRM reporting technologies help organizations identify their customers across other applications. CRM analysis technologies help organizations segment their customers into categories such as best and worst customers. CRM predicting technologies help organizations make predictions regarding customer behaviour such as which customers are at risk of leaving.
Reporting questions
Are you traveling for business or leisure?
How helpful was the Fairmont representatives during your stay?
What amenities of the hotel did you use during your stay?
Would you return to the Fairmont hotel?
How many people were in your party?
What kind of amenities would you like to see at the Fairmont hotel?
Analyzing questions
What is the demographic information of our customers?
What time of the year do tourists stay at our hotel?
What is the average length of stay?
Predicting questions
Why are the majority of customers staying at Fairmont?
What additional goods and services would our customers appreciate?
What demographic market should we target advertising to?
Which customers should we try to sell additional services to?
What can we do to encourage longer stays at our hotels?
2. How has FHR effectively used CRM technology to improve its operations? What other CRM technologies could FHR employ to improve its operations?
FHR has used CRM technologies in at least three primary services. FHR uses CRM technologies to capture and track customer data about individual preferences and billing information so that customers are able to do things like check into the hotels and receive their preferred accommodations quickly and accurately. CRM technologies are also used in the self-serve check in/check out kiosks so that customers are able to help themselves and access other services such as airline boarding passes. Finally, CRM technologies are used by FHR to segment and predict customer preferences for marketing tasks such as directed mailings.
FHR could use, or increase the use of, the following CRM technologies to improve their operations and profitability:
List generator. List generators compile customer information from a variety of sources and segment the information for different marketing campaigns. Information sources include Web site visits, Web site questionnaires, online and off-line surveys, flyers, toll-free numbers, current customer lists, and so on. After compiling the customer list, an organization can use criteria to filter and sort the list for potential customers. Filter and sort criteria can include such things as household income, education level, and age. List generators provide the marketing department with a solid understanding of the type of customer it needs to target for marketing campaigns.
Campaign management. Campaign management systems guide users through marketing campaigns, performing such tasks as campaign definition, planning, scheduling, segmentation, and success analysis. These advanced systems can even calculate quantifiable results for return on investment (ROI) for each campaign and track the results in order to analyze and understand how the company can fine-tune future campaigns.
Cross-selling and up-selling. Two key sales strategies a marketing campaign can deploy are cross-selling and up-selling. Cross-selling is selling additional products or services to a customer. Up-selling is increasing the value of the sale.
FHR can use any of the above to increase the efficiency and effectiveness of its marketing department.

28. Implementing CRM (Contd.)
Organizations can also improve their CRM implementation processes by aligning the previously noted 5 best practices with Gartner’s 8 building blocks of CRM:
1. Summarize the evolution of CRM and provide an example of a reporting, analyzing, and predicting question Fairmont Hotel & Resorts (FHR) might ask its customers.
There are three phases in the evolution of CRM: (1) reporting, (2) analyzing, and (3) predicting. CRM reporting technologies help organizations identify their customers across other applications. CRM analysis technologies help organizations segment their customers into categories such as best and worst customers. CRM predicting technologies help organizations make predictions regarding customer behaviour such as which customers are at risk of leaving.
Reporting questions
Are you traveling for business or leisure?
How helpful was the Fairmont representatives during your stay?
What amenities of the hotel did you use during your stay?
Would you return to the Fairmont hotel?
How many people were in your party?
What kind of amenities would you like to see at the Fairmont hotel?
Analyzing questions
What is the demographic information of our customers?
What time of the year do tourists stay at our hotel?
What is the average length of stay?
Predicting questions
Why are the majority of customers staying at Fairmont?
What additional goods and services would our customers appreciate?
What demographic market should we target advertising to?
Which customers should we try to sell additional services to?
What can we do to encourage longer stays at our hotels?
2. How has FHR effectively used CRM technology to improve its operations? What other CRM technologies could FHR employ to improve its operations?
FHR has used CRM technologies in at least three primary services. FHR uses CRM technologies to capture and track customer data about individual preferences and billing information so that customers are able to do things like check into the hotels and receive their preferred accommodations quickly and accurately. CRM technologies are also used in the self-serve check in/check out kiosks so that customers are able to help themselves and access other services such as airline boarding passes. Finally, CRM technologies are used by FHR to segment and predict customer preferences for marketing tasks such as directed mailings.
FHR could use, or increase the use of, the following CRM technologies to improve their operations and profitability:
List generator. List generators compile customer information from a variety of sources and segment the information for different marketing campaigns. Information sources include Web site visits, Web site questionnaires, online and off-line surveys, flyers, toll-free numbers, current customer lists, and so on. After compiling the customer list, an organization can use criteria to filter and sort the list for potential customers. Filter and sort criteria can include such things as household income, education level, and age. List generators provide the marketing department with a solid understanding of the type of customer it needs to target for marketing campaigns.
Campaign management. Campaign management systems guide users through marketing campaigns, performing such tasks as campaign definition, planning, scheduling, segmentation, and success analysis. These advanced systems can even calculate quantifiable results for return on investment (ROI) for each campaign and track the results in order to analyze and understand how the company can fine-tune future campaigns.
Cross-selling and up-selling. Two key sales strategies a marketing campaign can deploy are cross-selling and up-selling. Cross-selling is selling additional products or services to a customer. Up-selling is increasing the value of the sale.
FHR can use any of the above to increase the efficiency and effectiveness of its marketing department.

29. IMPLEMENTING CRM Eight building blocks of CRM:
Creating a CRM vision that provides a “big picture” of what the customer-centric organization should look like.
Defining and weaving a CRM strategy that aligns with broader marketing and sales strategies, and informs operational and production strategies.
Understanding and engaging the customer.

30. IMPLEMENTING CRM Eight building blocks of CRM (continued):
Ensuring organizational collaboration between internal groups and external business partners.
Focusing on improving customer processes
Achieving data integrity across the enterprise
Leveraging information systems to implement CRM.
Defining, collecting, and analyzing CRM metrics.

31. CRM METRICS

32. MANAGING OTHER RELATIONSHIPS
Supplier Relationship Management (SRM) focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects. Partner Relationship Management (PRM) focuses on keeping vendors satisfied by managing alliance partner, dealer, retailer, and reseller relationships that provide customers with an optimal sales channel. Employee Relationship Management (ERM) is a management activity that focuses on managing an organization’s relationships with its employees.

33. FUTURE CRM TRENDS CRM future trends include:
CRM applications will continue to evolve and be used by a wide variety of partners
CRM will continue to be a major strategic focus for companies
CRM applications will continue to adapt wireless capabilities supporting mobile sales and mobile customers
CRM suites will incorporate SRM, PRM and ERM modules
Ask your students how they view the future of CRM

34. 7. Explain SRM and how FHR could use it to improve its business.
OPENING CASE QUESTIONS Harnessing Customer Relationships at Fairmont Hotels & Resorts
Describe some best practices evident in the CRM industry. Discuss to what extent Fairmont Hotels & Resorts (FHR) is following these best practices.
6. Describe the trends found in the CRM industry. Discuss to what extent FHR is following these trends. In your opinion, which trends are more important for FHR to adopt?
7. Explain SRM and how FHR could use it to improve its business.
Explain PRM and how FHR could use it to improve its business.
Explain ERM and how FHR could use it to improve its business.
Describe some of the best practices in the CRM industry. Discuss to what extent Fairmont Hotels & Resorts’ (FHR) is following these best practices.
Clearly communicate the CRM strategy – ensuring that all departments and employees understand exactly what CRM means and how it will add value to the organization is critical to the success of the implementation. Fairmont communicates with each of its customers via the Internet, marketing materials, and the insurance agent.
Define information needs and flows – the organization must understand all of the different ways that information flows into and out of the organization to implement a successful CRM system. If the organization misses one of the information flows, such as a customer service Web site, then none of that information from that Web site will be integrated into the CRM system and the company will not have a complete view of its customers. Fairmont not only defines where information flows throughout its organization, it used business process reengineering to focus on how the information can flow more efficiently and effectively throughout its organization.
Build an integrated view of the customer – the CRM system must support the organization’s strategies and goals. Fairmont has integrated their data, allowing all hotels to view and use a comprehensive view of each customer.
Implement in iterations – avoid the big-bang approach and implement in small, manageable, pieces.
Scalability for organizational growth – ensure the system can support the organization’s future growth. Progressive is on the cutting edge and using technology to gain a competitive advantage.
Describe the trends found in the CRM industry. Discuss to what extent FHR is following these trends. In your opinion, which trends are more important for FHR to adopt?
Marinating solid relationships with its customers and helping its customers through an efficient and effective business process is the core of Fairmont’s business model. If Fairmont decided to discontinue its investment in CRM it would risk losing its customers and moving in the opposite direction of its core values.
Personalization occurs when a Web site can know enough about a person’s likes and dislikes that it can fashion offers that are more likely to appeal to that person. Offering personalized and customized customer strategies is Fairmont’s strategic mission. CRM technologies enable personalization and mass customization. Without these technologies Fairmont could not continue to operate towards its strategic mission.
Explain SRM and how FHR could use it to improve its business.
Supplier relationship management (SRM) focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection. SRM applications help companies analyze vendors based on a number of key variables including strategy, business goals, prices, and markets. The company can then determine the best supplier to collaborate with and can work on developing strong relationships with that supplier. Fairmont needs to focus on building strong relationships with it suppliers to keep its supply chain strong and supplies on track. Supply problems will affect the bottom-line revenue.
Explain PRM and how Fairmont could use it to improve its business.
Partner relationship management (PRM) focuses on keeping vendors satisfied by managing alliance partner, dealer, retailer, and reseller relationships that provide customers with an optimal sales channel. As with SRM, PRM is a management activity. PRM’s business strategy is to select and manage partners to optimize their long-term value to an organization. In effect, it means picking the right partners, working with them to help them be successful in dealing with mutual customers, and ensuring that partners and the ultimate end customers are satisfied and successful. Fairmont needs to focus on building strong relationships with its partners to keep its business on track. If a partner fails to deliver, Fairmont’s customer- and bottom-line revenue- is affected.
Explain ERM and how Fairmont could use it to improve its business.
Employee relationship management (ERM) provides employees with a subset of CRM applications available through a Web browser. Many of the ERM applications assist the employee in dealing with customers by providing detailed information on products, services, and customer orders. Fairmont’s employees directly interact with its customers. Providing ERM applications will enable Fairmont’s employees to work more efficiently and effectively. Employees play a major role in Fairmont’s business processes and strategic mission.

35. CLOSING CASE ONE Fighting Cancer with Information
How could the ACS’s marketing department use operational CRM to strengthen its relationships with its customers?
How could the ACS’s customer service department use operational CRM to strengthen its relationships with its customers?
Review all of the operational CRM technologies and determine which one would add the greatest value to ACS’s business
1. How could the ACS’s marketing department use operational CRM to strengthen its relationships with its customers
The ACS can use operational CRM to gain a single view of its constituents and all information required to serve them. Three marketing operational CRM technologies that the ACS could use include list generators, campaign management systems, and cross-selling and up-selling. List generators compile customer information from a variety of sources and segment the information for different marketing campaigns. Campaign management systems guide users through marketing campaigns. Cross-selling is selling additional products or services. Up-selling is increasing the value of the sale.
2. How could the ACS’s customer service department use operational CRM to strengthen its relationships with its customers?
There are three primary customer service operational CRM technologies that the ACS could use to strengthen its relationships with its customers including contact centres, web-based self-service, and call scripting. Contact centre (call centre) is where CSRs answer customer inquiries and respond to problems through different touchpoints. Web-based self-service allows customers to use the Web to find answers to their questions or solutions to their problems. Call scripting accesses organizational databases that track similar issues or questions and automatically generates the details to the CSR, who can then relay them to the customer.
3. Review all of the operational CRM technologies and determine which one would add the greatest value to ACS’s business
Student answers to this question will vary. The important factor in this decision will be the students’ justification for their answer.

36. CLOSING CASE ONE Fighting Cancer with Information
Describe the benefits ACS could gain from using analytical CRM.
Summarize SRM and describe how ACS could use it to increase efficiency in its business.
4. Describe the benefits ACS could gain from using analytical CRM
Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behaviour. These systems quickly aggregate, analyze, and disseminate customer information throughout an organization. Analytical CRM has the ability to provide the ACS with information about their customers and constituents that was previously impossible to locate, and the resulting payback can be tremendous. The business intelligence provided by an analytical CRM system can provide the ACS with facts that can help lead to innovative cancer drugs and the possible elimination of the disease.
5. Summarize SRM and describe how ACS could use it to increase efficiency in its business
Supplier relationship management (SRM) focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection. SRM applications help companies analyze vendors based on a number of key variables including strategy, business goals, prices, and markets. The company can then determine the best supplier to collaborate with and can work on developing strong supplier relationships with that supplier. The partners can then work together to streamline processes, outsource services, and provide products that they could not provide individually.

37. CLOSING CASE TWO Calling All Canadians
What advantages are there for American companies looking to establish call centres in Canada?
Given the forces threatening Canada’s ability to attract American companies to set up call centres in Canada, how secure do you think Canada is in its future in the call centre industry? What extent do you think future CRM systems will erode Canada’s advantages in attracting American business for call centres?
What advantages are there for American companies looking to establish call centres in Canada?
Favourable exchange rates (although this has changed in )
Cultural similarities
Similar languages and accents
A highly educated work force
A technological infrastructure that is state-of-the-art
Multilingual workforce
Political and economic stability
Lower payroll taxes
4. Given the forces threatening Canada’s ability to attract American companies to set up call centres in Canada, how secure do you think Canada is in its future in the call centre industry? What extent do you think future CRM technologies will erode Canada’s advantages in attracting American business for call centres?
Answers here will vary. The security of this industry in Canada will depend on the stability of the factors in Q1. Some of these advantages are entrenched, such as language, but some advantages are volatile, such as exchange rates, and some advantages are somewhere between these two points:
Cultural similarities could change in the intermediate term if immigration policies change.
Telecommunication infrastructures could deteriorate if capital investments are not maintained.

38. CLOSING CASE TWO Calling All Canadians
Explain how a contact centre (or call centre) can help an organization achieve its CRM goals.
What are the two different types of CRM and how can they be used to help an organization gain a competitive advantage?
3. Explain how a contact centre (or call centre) can help an organization achieve its CRM goals
A contact centre is part of the customer service department and falls into the category of operational CRM. A contact centre (call centre) is where CSRs answer customer inquiries and respond to problems through different touchpoints. A contact centre is one of the best assets a customer-driven organization can have because maintaining a high level of customer support is critical to obtaining and retaining customers. There are numerous systems available to help an organization automate its contact centres including:
Automatic call distribution – a phone switch routes inbound calls to available agents
Interactive voice response (IVR) – directs customers to use touch-tone phones or keywords to navigate or provide information
Predictive dialing – automatically dials outbound calls and when someone answers, the call is forwarded to an available agent
4. What are the two different types of CRM and how can they be used to help an organization gain a competitive advantage?
Customer relationship management involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability. Operational CRM supports traditional transactional processing for day-to-day front-office operational 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. Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behaviour. These systems quickly aggregate, analyze, and disseminate customer information throughout an organization. Analytical CRM has the ability to provide an organization with information about their customers and constituents that was previously impossible to locate, and the resulting payback can be tremendous.

39. CLOSING CASE THREE Harley-Davidson
What are the two different types of CRM and how has Harley-Davidson used them to become a world-class customer-service business?
Which of Harley-Davidson’s customer-centric strategies is the most important for its business? Why?
Evaluate the Harley’s Owners Group’s CRM strategy and recommend an additional benefit Harley-Davidson could provide to its HOG members to increase customer satisfaction.
1. What are the two different types of CRM and how has Harley-Davidson used them to become a world-class customer-service business?
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. The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its customers. Harley-Davidson is a leader in creating and maintaining customer relationships. It uses CRM for customer-centric activities such as linking online customers to local bricks and mortar sales outlets and letting HOG members know about local events and rides.
2. Which of Harley-Davidson’s customer-centric strategies is the most important for its business? Why?.
Opinions here will vary. Most responses will likely involve either front-office CRM or back-office CRM.
3. Evaluate the Harley’s Owners Group’s CRM strategy and recommend an additional benefit Harley-Davidson could provide to its HOG members to increase customer satisfaction.
Student answers to this question will vary. The important part is that they compare CRM strategies from Chapter 5 with what Harley-Davidson is doing.
It would be useful for added discussion if students suggested ways to link front- and back-office strategies.

40. CLOSING CASE THREE Harley-Davidson
Describe three ways Harley-Davidson can extend its customer reach by performing CRM functions over the Internet.
What benefits could Harley-Davidson gain from using analytical CRM?
Explain ERM and describe how Harley-Davidson could use it to increase efficiency in its business.
4. Describe three ways Harley-Davidson can extend its customer reach by performing CRM functions over the Internet.
There are numerous ways that Harley-Davidson can extend its reach including personalization through a Web site that offers interactive areas where riders could indicate which motorcycle models they own and be able to see how the addition of customized Harley-Davidson parts would alter the appearance of their bikes.
5. What benefits could Harley-Davidson gain from using analytical CRM?
Analytical CRM supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its customers. It isn’t clear from the case that Harley-Davidson currently uses analytical CRM. Comparisons between this case and others in the chapter would provide a foundation for answering this question.
6. Explain ERM and describe how Harley-Davidson could use it to increase efficiency in its business.
Employee relationship management (ERM) provides employees with a subset of CRM applications available through a Web browser. Many of the ERM applications assist the employee in dealing with customers by providing detailed information on company products, services, and customer orders. Again, it isn’t clear from the case that Harley-Davidson currently uses analytical CRM. Comparisons between this case and others in the chapter would provide a foundation for answering this question.