CHAPTER 11: BUILDING A CUSTOMER – CENTRIC ORGANIZATION – CUSTOMER RELATIONSHIP MANAGEMENT

Customer relationship management (CRM)

• CRM enables an organization to:

                i.            Provide better customer service

               ii.            Make call centers more efficient

             iii.            Cross sell products more effectively

             iv.            Help sales staff close deals faster

              v.            Simplify marketing and sales processes

             vi.            Discover new customers

           vii.            Increase customer revenues

Recency, Frequency, and Monetary Value

• Organizations can find their most valuable customers through “RFM” –Recency, Frequency, and Monetary value

                  i.            How recently a customer purchased items (Recency)

                 ii.            How frequently a customer purchased items (Frequency)

               iii.            How much a customer spends on each purchase (Monetary Value)

The Evolution of CRM

• CRM reporting technology – help organizations identify their customers across other applications
• CRM analysis technologies – help organization segment their customers into categories such as best and worst customers
• CRM predicting technologies – help organizations make predictions regarding customer behavior such as which customers are at risk of leaving
• Three phases in the evolution of CRM include reporting, analyzing, and predicting

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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
• Operational CRM and analytical CRM

Customer Relationship Management Success Factors

• CRM success factors include:

         i.                Clearly communicate the CRM strategy

       ii.            Define information needs and flows

      iii.            Build an integrated view of the customer

     iv.            Implement in iterations

       v.            Scalability for organizational growth