1. Building a Customer- Centric Organization – Customer Relationship Management CHAPTER 11 Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2. LEARNING OUTCOMES 1.Define customer relationship management and its role in supporting business operations. 2.Identify the benefits and challenges of CRM. 11-2

3. CUSTOMER RELATIONSHIP MANAGEMENT Customer Relationship Management (CRM) is a means of managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability 11-3

4. CUSTOMER RELATIONSHIP MANAGEMENT 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 11-4

5. THE BENEFITS OF CRM Firms can find their most valuable customers by using the RFM formula: recency, frequency, and monetary value Organizations MUST track: –How recently a customer purchased items –How frequently a customer purchased items –The monetary value of each customer purchase 11-5

6. EVOLUTION OF CRM There are three phases in the evolution of CRM: –Reporting –Analyzing –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 predict customer behavior, such as which customers are at risk of leaving 11-6

7. 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 11-7

8. OPERATIONAL AND ANALYTICAL CRM 11-8

9. CUSTOMER RELATIONSHIP MANAGEMENT SUCCESS FACTORS CRM success factors include: 1.Clearly communicate the CRM strategy. 2.Define information needs and flows. 3.Build an integrated view of the customer. 4.Implement in iterations. 5.Scalability for organizational growth. 11-9