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C R M
Business Challenges Businesses in many industries may lose up 50% of their
customers over a five year period.
Studies have shown it’s 6 to 7 times more expensive to acquire a new customer than it is to retain a current customer.
As little as a 5% increase in customer retention can increase profits by 25 to 95%.
Yet many businesses are still focused only on customer acquisition and see customers from the fragmented view of individual transactions
Customer Relationship Management
Fortune 500 companies will lose 50% of customers in 5 years(Peppers & Rogers Group)
Only 4% of unsatisfied customer complain. 65~90% do not repurchase(Anderson Consulting)
82% of customers whose complaints resolved repurchased
Cost of new customer acquisition 7-8 times of retaining current customers (Yankee Research – global connectivity experts)
98% coupon are scrapped.
50% current customers do not contribute to profit(AMR Research)
Top 20% customers contribute 60% of revenue and 70% of profit
20 : 80 rule
Customer is important
Analysis on Customers essential
Customer is
When products become so similar and technologies are commonly available , CUSTOMER EXPERIENCE is the only true differentiator
There is only one boss. The customer!
He can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.
Sam Walton,
founder of Wal-Mart
Today’s customer is …
• Smarter• leaner• more price conscious• has lower morale• overwhelmed by competitors• more demanding• less forgiving• harder to satisfy• less loyal
Core Marketing Concepts
What's In
A fundamental paradigm shift is occurring in how company market to customers.
One-to-One MarketingCustomized ProductsShare of WalletLife Time ValueEvent Driven MarketingKnow Your CustomersManage Your CustomersDifferentiate CustomersCross-sell / Retentionl0% of Market, l00% of Customer
Mass MarketingStandardized ProductsMarket SharePresent ValueProgram Driven MarketingKnow Your ProductsManage Your ProductsDifferentiate ProductsAcquisition100% of Market, 10% of Customer
What's Out
What CRM means? What CRM means?
Customer ?
Relationship ?
Channels of interaction, segmentations
Management?
organization of customer related information
Relationships with whom?
All stakeholders including
Customer
Employees
Suppliers
Government
Citizens
I focus on Customers here.
The Customer Relationship Management (CRM).
The Meaning of Relationships
Continuity
Mutuality
Interdependence
Understanding
Trust
Evolution of customer relation over time
Val
ue o
f cu
stom
er r
elat
ion
Three simple business goals of CRM
CustomerAcquisition
Acquire the „right“ customers with high potential
valueCustomer
Development
Cross- and up-sell by offering
the right products at the right time
CustomerRetention
Retain profitable customers and increase their
long-term value
The process of Targeting Acquiring Servicing Retaining
and Building long-term relationships with
customers
CRM Versus Mass Marketing
Traditional Traditional Mass Mass
MarketingMarketing
Traditional Traditional Mass Mass
MarketingMarketing
CRMCRMCRMCRM
““Shotgun” ApproachShotgun” Approach““Shotgun” ApproachShotgun” Approach
““Rifle” ApproachRifle” Approach““Rifle” ApproachRifle” Approach
Define customer relationship management
1. …a technology.”• “CRM is just a new system to install, new code to write.”
2. …sales force automation (SFA).”• “CRM is just a business development process for our salespeople.”
3. …customer loyalty.”• “CRM is a synonym for customer loyalty.”
4. …database marketing.”• “CRM just allows us to leverage our customer data better.”
5. …call center technology.”• “CRM is just a way to cut costs in the call center.”
6. …a project.”• “We can install CRM in 30 days with this team of three!”
7. …a producer of intangible benefits.”• “You just can’t measure relationship management concretely.”
8. …a business panacea.”• “Just install the software … apparently it solves problems.”
CRM is NOT…
CRM is a customer-focused business philosophy designed to effectively create experiences that attract, acquire and retain customers.
To realize the benefits,
enterprises must implement collaborative processes
and technologies that support customer interactions throughout all channels.
CRM ?
A company-wide business strategy
designed to optimize profitability,
revenue, and customer satisfaction by
focusing on highly defined and precise
customer groups.
Customer Relationship Management
“..an enterprise approach to understanding and influencing communications in order to improve customer acquisition, customer retention, customer loyalty, and customer profitability.”
Customer-centric
Under this philosophy, the company
customizes its products and service
offering based on data generated through
interactions between the customer and the
company
An data-driven approach that enables companies to assess each customer’s current needs and potential profitability and tailor sales offers and service. It often involves using multiple channels to improve effectiveness and efficiency. (Goff et al. 1998 Mckinsey Quarterly, No3)
An enterprise approach to understanding and influencing customer behavior through continuous relevant communication to improve customer acquisition, customer retention, and customer profitability. (NCR corps.,1999)
A management discipline utilizing specialized tools, technologies, and techniques to facilitate the operation and improvement of front-office business functions with the intent of optimizing the total value derived through customer relationship. (Pivotal software Inc. 1999)
An enterprise wide business strategy designed to optimize profitability, revenue and customer satisfaction by organizing the enterprise around customer segments, fostering customer-satisfying behaviors and linking processes from customers through supplies. (Gartner Group)
CRM Definitions
What is CRM?
Organizing Around Segments
Organizing Around Segments Tracking InteractionsTracking Interactions
Fostering SatisfactionFostering Satisfaction Linking ProcessesLinking Processes
Special Promotions Targeting
Markets and Individuals
Special Promotions Targeting
Markets and Individuals
People - Belief that your customers and employees are your most important asset and that long-term survival depends on these relationships.
Process - Structuring your organization and business processes to support the culture.
Technology - Automating and integrating business processes to capitalize on the culture.
CRM is a Management Tool, encompassing all functions, for focusing on the customer
Sales
MarketingService
Mfg
Purchasing
R&DSpares
ProductProductPlanningPlanning
CRM is a set of operating business processes built around the customer
CRM is the front end (customer facing) activity. It needs to be firmly supported by all other back-end processes.
ERPSCM MFG
FAST FWD
PURCHASING
R&D
CRM
All improvement initiatives under the CRM Umbrella
Makes Four Marketing Dreams Come True
1. Dream to target and serve customers on an individual
basis ( prefer 1 to1 marketing to mass marketing.
2. Dream to enjoy log term relationships with them,
especially with the profitable customers (preferring
commitment to flirting).
3. Dream to get rid of barriers and distortions created by
the non-value adding intermediaries (preferring
disintermediarization and direct marketing)
4. Dream to reduce marketing cost progressively.
Architecture of CRM
There are three parts of application architecture of CRM:
operational - automation to the basic business processes (marketing, sales, service)
analytical - support to analyze customer behavior, implements business intelligence alike technology
co-operational - ensures the contact with customers (phone, email, fax, web, sms, post, in person)
Operational CRM
Operational CRM means supporting the so-called "front office" business processes, which include customer contact (sales, marketing and service)
Operational part of CRM typically involves three general areas of business:
Sales force automation (SFA) Customer service and support (CSS) Enterprise marketing automation (EMA)
Analytical CRM
Data gathered within operational CRM are analyzed to segment customers or to identify cross- and up-selling potential.
Collaborative CRM
Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channel.
Operational CRMBusiness Operation Management
Analytical CRMBusiness Performance Management
Collaborative CRMCustomer Interaction Management
SalesMarketing ServiceSales Data Analysis
Marketing data Analysis
Customer Data Analysis
Feed Back
Planning/Analysis
Action
CRM Components
Web Personalization
Call Center Automation
Web Sales & Service
Closed Loop Processing
Add Customer Attrition to the P&L Sheet
Components of Operational and Analytical CRM
Operational CRM:
effective and efficient use and management of people, process and technology
Analytical CRM:
the measurement of people, process and technology
Bridge the divide….
Member
Value
Segm
enta
tion
Communication
Reta
in Customer
Value
Convers
ion
Segm
enta
tion
Communication
Bottom-line !!!!
Customer is
KING
Understand him !!!
How to build Loyalty?
Framework of building Loyalty
CRM
(CR Strategy)Trust/
Intimacy
Reward Program/Continuing Campaign
Repurchase/ Cross-selling
ImprovingCore Products/Service
Innovation of Channel Mgmt.
CustomerSatisfaction
CustomerLoyalty
Phased ElementsDriversDegree of
Relationship
Attitude,not Action
Action, not Affinity(Artificial Loyalty)
Recognition of Relationship,
Referral
A Brand-Infused Causal Model
Loyalty-the customer-facing tip of the CRM Iceberg
LoyaltyLoyalty
CRMCRM
Customer Direct CommunicationsCustomer Direct Communications
(email, postcards, etc.)(email, postcards, etc.)
Encourage Multi-channel Buying
Increase Cross-sell
Identify Customers at all Touchpoints
EncourageWOM
(word of mouth)
Increase Re-buy Rates
Increase Email Click-thru and
Open Rates
Organization
Customers
Website
Retail
Call Center
POS
Traditional Mail
Field Sales
Fax
PDA
Touchpoints
Website
Retail
Call Center
POS
Traditional Mail
Field Sales
Fax
PDA
Sales
Marketing
Service
Finance
Production
Website
Retail
Call Center
POS
Traditional Mail
Field Sales
Fax
PDA
Sales
Marketing
Service
Finance
Production
Website
Retail
Call Center
POS
Traditional Mail
Field Sales
Fax
PDA
Sales
Marketing
Service
Finance
Production
CRM
Website
Retail
Call Center
POS
Traditional Mail
Field Sales
Fax
PDA
Sales
Marketing
Service
Finance
Production
CRM
Process, Technology, People
Selling KnowledgeProduct KnowledgeSolutions KnowledgeCustomer Knowledge
That’s is the introduction and familiarization with CRM…