Chapter 1 CRM Strategic Imperatives.pdf

7/27/2019 Chapter 1 CRM Strategic Imperatives.pdf

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The StrThe Str

tegic Imperatives

tegic Imperatives


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Session CoveraSession Covera

Explosion of CRM in Mark

Enablers for the Growth of

Im lementin CRM

ee

ting and IT

CRM

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Ex losion of CREx losion of CR

Conferences

Associations & Forums

IT Solutions Siebel, E.pipMicrosoft Dynamics, Sugar

M in Marketin & ITM in Marketin & IT

any, Oracle, SAP, Sage CRM,RM, Salesforce

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Relationshi Mana ementRelationshi Mana ement

Relationships

(Internal)(Internal) (Inter(Inter

EnterpriseEnterprise

ediary)ediary) (Shareholder)(Shareholder)

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Enablers for theEnablers for the

Emergence of market e

Global orientation of bu

economies

Growth of CRMGrowth of CRM

,

conomy,

inesses, and

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Acquiring, Retaining andGrowing Customers

What CRM Is About!

Acquiring, Retaining andGrowing Customers

What CRM Is About!

CustomerCustomer

Customers needs can be situati

Customers needs are dynamic a

Customers needs often correlat

The most fundamental human n

nal in nature.

d can change over time, as well.

with customer value.

eds are psychological.

.

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Acquiring, Retaining andAcquiring, Retaining and

Understand what they

Give what they want

Give them at the right

time and right place

Deliver what is

promised

Acquiring

rowing Customers.rowing Customers.

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Retaining Customers.Retaining Customers.

Keep the c

Constant

Remembe

things

Easy To D

Acquiring Re

ustomer happy

ommunication

the little

Business With

aining Acquiring

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Growing Customers.Growing Customers.

Acquiring

Keep value propositions

enuine

Establishing meaningful &

profitable relationships

Build u trust level

Treat Customer Fairly

Growing

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mergence o serv ce ec

60-80% of GDP of devel

> n n a

greater customer ori

Services early adopters o

hotels airlines bankin f

Growth of CRM ---1Growth of CRM ---1

onomy

ped nations

ntation in services due to

f CRM

nancial services telecom and retailin .

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mergence o mar e ec

Deregulation of indus

banking, telecommunic

Market oriented econom

boosted the importance o

Growth of CRM----2Growth of CRM----2

onomy

ries across the world in the

tions, broadcasting and airlines

necessitated customer focus and

f CRM.

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o a or en a on o u

National markets to

Emergence of trading

Firms need stronger

o ortunities in new m

markets.

Growth of CRM ---3Growth of CRM ---3

nesses

borderless world / regional

locks

customer orientation to tap

rkets while defendin their home

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g ng popu a on o e eco

Opportunities for wellness, fi

recreation

Slowed markets for tradition

younger population

markets

Understanding of existing cus

t roug suita e pro ucts an

Growth of CRM ----4Growth of CRM ----4

nom ca y a vance econom es

nancial well being, safety, security &

l goods & services designed for a

tomers to meet changing needs

services.

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Criticalit of CuCriticalit of Cu

on- ra ona compe

Market maturity, and

Misalignment between r

tomer Relationshi stomer Relationshi s

on,

evenue and profits.

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on- ra ona compe on

New entrants from outside t

Reliance in telecom Kin

Substitute technology

Digital Cameras, VoIP Supplier as a competitor

Customer as a competitor

,

Incumbents forced to be

customers & rotect from n

tomer Relationshi s 1tomer Relationshi s 1

e industry

isher in Airlines

relationship oriented to retain

n-traditional com etitors.

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ar e ma ur y

From capacity creation t

markets

Growth in emerging markets

Understanding customers crit erences n cus omer ne

regulatory environments.

Market maturity forcing firm

to retain their customers in t to attract customers in emer


capacity utilization in developed

ike India and China.

cal to success in these marketse s, cu ura , soc a , econom c an a so

to be more customer-oriented

eir home markets anding markets.

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ar e ma ur y

Firms from develop


d countries rely on repeat

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sa gnmen e ween r

Inefficiencies through cu

s r u on o revenu

distributed linearly with

customers, while costs d

A small number of hi hl

large number of non-pro


evenue an pro s

stomer subsidization

s s exponen a , w e cos s

ustomer size

cline more gradually

rofitable customers subsidise a

itable customers

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COST

REVENUES

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sa gnmen e ween reve

In retail markets, profit mheavy users

AT&T in August 1998

Was losing money on ap

.

25 million customers - No lo

US $6 per month on custom

a year on eac o t e


ue an pro s

rgins higher in large accounts and

roximately 25 million of its 70 million

ng distance call or value added services.

r support.

se mn customers.

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NONTRADITIONALCOMPETITION

CUSTRELATI

CU

TRAMAN

MANAG

MERNSHIP

STOMER

SACTIONAGEMENT CUSTOMEROUTSOURCING

EMENT

MANAGEMENT

COST

REVENUES

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Wh BusinesseWh Businesse

eman s e

rising customer expectati

Supply side

Technological advancesDeclining costs of ICT

technology led CRM init

Should Ado t CRM?Should Ado t CRM?

ons

reduce barriers to adoption of

atives.

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s ng cus omer expec

increasing affluence in t

rea er awareness ue o

Increasing customer dive

Should Ado t CRM? 1Should Ado t CRM? 1

ons

e emerging economies,

me a exp os on, an

rsity.

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Large Middle Class in India a Demanding and quality consc

Markets - from a sellers to a

Professional class with greate

Can afford and are willinand services.

Nuclear families & double i

Traditional homemaking act

being outsourced to service Boosts service economy

Services force a higher custo


,

nd Chinaious.

uyers market

r global awareness and influence.

to a for better and customized roducts

come

ivities like cooking, cleaning and childcare

roviders.

mer orientation.

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rea er awareness ue

Explosion in the traditio

internet

TV homes has remainedthe last decade

It has exploded in the dev

,

Has raised customer aspir


me a exp os on

al media like the newspapers and

table at about 100 million in the US in

loping countries

~

tions as well as expectations

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Wh Businesses SWh Businesses S

ncreas ng cus omer v

Mass marketing practice

,

US

Hispanic, Afro-American

Diversit increases th

expectations.

hould Ado t CRM? 4hould Ado t CRM? 4

rs y

fail with customers who are

,

and the Asian are growing rapidly

diversit in demand and

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ec no og ca a vances


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ec no og ca a vances

Production , ,

Dell, Toyota

Distribution Computer Aided Logistic

faster response - replenish


s (CALS) & scanner technology allow

ment with fewer stock-outs.

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Facilitation -

customers

Facilitates commercial as

Consumption Personalized consumpti

producers e.g. Dell Desire for instant grati

access to products anytim


ell informational exchange

-

n by co-opting customers as co-

ication drives businesses to provideand anywhere e.g. banks

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Im lementin CIm lementin C

,

makes it possible for firms twith their key customers.

Challenges in selecting and i

intensive CRM solutions op managemen comm men change management,

developing customer centric

integrating with legacy syste identifying and establishing pe

MM

o maintain 1-to-1relationships

mplementing technology

,

processes,

s,rformance metrices, and

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Im lementin CIm lementin C

ar e -re a e capa

relationships for compet

e a ons p or en a on

and norms of the organiz

throughout the organizati

Ke rocesses must be i

aligned with the correscustomers.

M 2M 2

es o ma n a n cus omer

itive advantage

us perva e e m n se , va ues,

tion.

on.

ternall inte rated and externall

onding processes of the firms

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Success of CRM iSuccess of CRM i

3 elements of market-related

capability to maintain relationships

with most valuable customers forcompetitive advantage.

Relationship Orientation

Keep deepening knowledge of

customers and use it

Key processes must be internallyintegrated and externally alignedwith corresponding processes of

firms customers.

itiativesitiatives

approach

Link the Operational,

informational & organisational

Link the Operational,

informational & organisational

. .

Delineate the challenges

of Customer Relationship formation,

Delineate the challenges

of Customer Relationship formation,

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governance, performance evaluation

and evolution.

governance, performance evaluation

and evolution.

Documents

Chapter 1 CRM Strategic Imperatives.pdf