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Customer Relationship ManagementWagner & Zubey (2007) 11Copyright (c) 2006 Prentice-Hall. All rights reserved.
Copyright 2007 Thomson Publishing: All Rights Reserved
Chapter 1: Basics of CRM
Essentials of Customer Relationship Management:
A People, Process, and Technology Approach
William Wagner and Michael Zubey
Customer Relationship ManagementWagner & Zubey (2007) 2
Objectives
Define and understand Customer Relationship Management (CRM)
Define CRM and place it in a historical context
Describe how CRM benefits organizationsOutline the major CRM processesDescribe the IT framework for CRM
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Objectives (cont.)
Identify databases involved in CRM applications
Describe CRM's relationship to ERP applications
Outline possible future directions for CRM
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CRM in Action
CRM at Huntington BankPersonal banking vs. mortgage banking2 months for long-term client to get approval for
mortgageAll of the information is already there360 degree view of customerCRM should provide better service and cut costs
at the same timeMay lead to other value-added services also
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CRM Defined
Customer Relationship Management (CRM) is the systematic combination of people, processes and technology that is designed to enable an enterprise to find, acquire, and retain customers. (Wagner & Zubey)
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Customer Relationship ManagementWagner & Zubey (2007) 7
Why firms invest in CRM…
Cost of acquiring customersEx. Of AOL giveawaysGenerally costs 5X as much to attract new
customers as it does to keep existing onesReducing customer churn rate 5% can increase
profits 25-95%Satisfied customers are great source of improved
ROI Number 1 reason for customer defections is poor
customer service
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Customer Relationship ManagementWagner & Zubey (2007) 9
Benefits of CRM
Reducing the cost of sales Identifying and targeting customers better. Decreasing cost of marketing campaigns Increasing customer loyalty Increasing customer retention Identifying customer trends and patterns of
consumption Help the right information flow to wherever it's
needed throughout the organization.
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CRM and People
Roles of ExecutivesCEO, CMO, CFO, CIO, VP of Sales
Operational level RolesMarketing manager, customer service, sales
person, IT manager, Database administrator
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CRM Processes
Marketing Sales Customer Service
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CRM and the Marketing Process
Focused on lead generation and awareness of the products and services being offered by a firm
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Customer Relationship ManagementWagner & Zubey (2007) 14
CRM and the Sales Process
sales process can be very different based upon locality and type industrysome firms may have multiple sales channels
includes web, direct sales, or distributors to sell their products and services in the market
A multi-channel sales model is a very challenging effort to coordinate from a CRM perspective.
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Customer Relationship ManagementWagner & Zubey (2007) 16
CRM and Customer Support Process
The customer support process is often overlooked customer support is not perceived as a revenue
generating activitymay not receive the same amount of investment
as a sales process because of the “cost center” perception by a firm’s management.
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Customer Relationship ManagementWagner & Zubey (2007) 18
CRM Technology Framework
One of several “enterprise” applicationsThink in terms of infrastructure necessaryAlso in terms of CRM applications
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Infrastructure for CRM
Hardware Input/Output devices, servers, cables, channels
Software Applications OS, NOS “Middleware”
Networks LAN, WAN C/S main architecture
Inet is considered to be an example of C/S
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CRM and Client/Server
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N-Tier Client/Server
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CRM and Software
Common OS and H/W configurations define an IT “platform”
Databases Database servers DBMS software Relational DBMS
Structured Query Language (SQL) “legacy” databases Text database - XML Operational and analytic databases
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Customer Relationship ManagementWagner & Zubey (2007) 24
CRM Applications
Sales Force AutomationCall or Service Center IntegrationMarket automation
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Major CRM Software Vendors
Oracle/Seibel/PeopleSoft SAP Onyx Baan/Invensys Vantive Clarify Salesforce.com
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Summary
In this chapter you learned: Basics of CRM
Using a people, process technology approach Importance for businesses today
Core processes involved in CRM Roles of people involved in CRM Key technologies that support CRM Future directions of CRM
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Questions?
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