Chapter 11> Building a Customer-Centric Organization – Customer Relationship Management

>CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

CRM enables an organization to;

 *  Provide better customer service

 *   Make call centers more effici

*   Cross sell products more effectively

*   Helps sales staff close deals faster

 *   Simplify marketing and sales processes

 *   Discover new customers

 *   Increase customer revenues

>RECENCY, FREQUENCY AND MONETARY VALUE

An organization can find its most valuable customers by using a formula that industry insiders call FRM;

* How recently a customer purchased items (recency)

* How frequently a customer purchased items (frequency)

* How much a customer speeds on each purchased (monetary value)

>THE EVALUATION OF CRM

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.

>THE UGLY SIDE OF CRM: WHY CRM MATTERS MORE NOW THAN EVER BEFORE

Recall that Business 2.0 ranked "You - the customer" as one of the 50 people who matter now for 2006. Why You Matter according to Business 2.0: They have long said the customer is always right. But they never really meant it. Now they have no choice. You - or rather, the collaborative intelligence of tens of millions of people, the networked you - continually create and filter new forms of content, anointing the useful, the relevant, and the amusing and rejecting the rest. You do it on Web sites like Amazon, Flickr, and YouTube, via podcasts and SMS polling, and on millions of self-published blogs.

In every case, you have become an integral part of the action as a member of the aggregated, interactive, self-organizing, auto-entertaining audience. But the You Revolution goes well beyond user-generated content. Companies as diverse as Delta Air Lines and T-Mobile are turning to you to create their ad slogans. Procter & Gamble and Lego are incorporating your ideas into new products. You constructed open-source and are its customer and its caretaker. None of this should be a surprise, since it was you - your crazy passions and hobbies and obsessions - that built out the Web in the first place. And somewhere out there, you are building Web 3.0. We do not yet know what that is, but one thing is for sure: It will matter.

There are numerous examples of customers having power on the Web. A few sites include www.ihatedell.com and www.donotbuydodge.ca. Customers are using YouTube, MySpace, blogs, and a number of other Web tools to slam or praise companies.

>CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH

USING ANALYTICAL CRM TO ENHANCE DECISION

-Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customer.

- Analytical CRM – supports back-office operations and strategic analysis and includes all system that do not deal directly with the customers

>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

>USING ANALYTICAL CRM TO ENHANCE DECISION

CRM applications were developed to cope with the challenge of integrating information that has been scattered throughout the entire organization or across the supply chain. Customer interactions take place anytime and anywhere. Information collected at each customer interaction point has limited value unless integrated into the total system. CRM application is added to enterprise systems to address marketing opportunities in downstream supply chains.

A comprehensive CRM system includes three major components: (1) Operational CRM, (2) Analytical CRM, and (3) Collaborative CRM. Operational CRM can resolve problems related to sales force automation, customer service and support, and enterprise marketing automation. Analytical CRM systems provide intelligence based on the data collected and accumulated from all customer interaction points over time. Collaborative CRM systems assist the communication process between customers and organizational functions. Customers can choose any channel to communicate with service representatives via their preference channels, such as face to face, Internet, telephone, fax, mobile phone, and instant messaging (Richard, 2010).

Operational CRM and analytical CRM