3_Managing Customer Relationships

8/2/2019 3_Managing Customer Relationships

1/22

MANAGINGCUSTOMER

RELATIONSHIPSDr. Vandana Khanna


2/22


3/22

3/10/2012 Dr. Vandana Khanna 3

Managing Customer RelationshipsWhat Does it Entail?

CRM data warehouses customer information andhistorical buying patterns to understand buyingbehavior to provide enhanced services that driverevenueCRM is a critical component in building customer loyaltyand customer retention strategiesCRM is a tool that can drive high-value, loyal returnsfrom customers that continue to purchase and dobusiness with the companyCRM provides opportunities for the organization tocreate a competitive differentiation with differentiatedcustomer services targeted specific to high-value, long-term customers

DE

FINITION

Why is CRM critical to customer loyalty and retention?


4/22


Managing Customer RelationshipsChallenges and Problems Solved by CRM

Lowers costs of recruiting customers throughstrengthened customer loyalty and retention strategiesCan focus attention on high-value customers andprovide preferred and customized services (e.g., high-value customers deserve high-value customer service)Reduced cost of sales (e.g., push marketing, selling toexisting customer base, inside sales/telemarketing, etc.)

Provides the foundation for long-term customerprofitabilityIncreases customer retention and loyalty through customized services

SO

LUTIONS

How does CRM Increase Shareholder Value?


5/22


Managing Customer Relationships Who are the Customers? Customer Types

Business to Business (B2B) customers whopurchase a product or service and resale a finishedproduct to other customers or businesses B2Bprocess flow

Consumer (B2C) customers who buy the finalproduct or service (e.g., individuals, families, etc.) B2C process flowChannel/Distributor a person or organization thatresells or provides a value-added service around theproduct or service for resale and distribution to theircustomers and ChannelsInternal Customer a person or business unit withinthe organization that requires your product or

service


6/22


7/22


Managing Customer Relationships Acquisition, Retention, Customer Lifetime Value

Customer

Retention

Customer

Lifetime Value

Customer Acquisition

The Value of a Customer is Based on the Amount of Revenue and Purchases that the Customer Makesover the Lifetime of the Relationship.


8/22


Acquisition Vs Retention

Retention AcquisitionNurturing Relationships Acquiring Potential

Relationships

Internal Analysis Internal Research

Demographic History Demographic Profile

Actual Needs Given Projected Needs Given

Contact Must be Personal Contact can be less personal


9/22


Acquisition Vs Retention

Retention Acquisition

Accuracy Required Inaccuracy Tolerated

Other Relationships Given Offers Can Be Event

Relatively High Response Relatively Low ResponseSupports Reactivating Supports Assimilation

Synergistic With Acquisition Synergistic with Retention


10/22


Six Stage Model of Relationship

Exit

Contact

Involvement

Intimacy

Deterioration

Repair

Dissolution Adapted from DeVito, Joseph A. (1993)


11/22


Customer Life Cycle

Customer NeedAssessment & Acquisition

Customer Retentionand referrals for newcustomers

Customer Developmentthrough personalizationand customization

Customer Equity Leveragethrough Cross Selling and

Up selling


12/22

3/10/2012 12

CRM Process Framework

Purpose Increase Effectiveness Improve Efficiency

Formation

Programs Account Management Retention Marketing Co-op Agreements Strategic Partnerships

Partners Criteria Improve Efficiency

Team Structure

Role Specification

Planning Process

Process Alignment

Monitoring Process

Communication

Employee Motivation

Employee Training

Evolution

Enhancement improvement

RelationshipPerformance Strategic Financial Marketing

Retention Satisfaction Loyalty

Management & GovernancePerformance


13/22


CRM Process Cycle

1. KNOWLEDGEDISCOVERY

2. MARKETPLANNING3. CUSTOMER

INTERACTION

4. ANALYSIS & REFINEMENT

Learning

Action

CRM Process Cycle Links Customer-Centric Data

With a Continuous Learning and Action Cycle.


14/22


CRM Process CycleKnowledge Discovery: this is the process of analyzing customer information to identify specificmarket opportunities and strategies.Market Planning: this process defines specificcustomer offers, delivery channels, schedules,dependencies. A market plan or campaign thatdrives revenue to existing customers.Customer Interaction: this process aligns thecustomer offers directly to the customer. This is

typically done from the Contact Center or whereCustomer Service is performed. Analysis & Refinement: this process conductsQ&A and analysis of customer interactions, such thatmessages and future dialogue can be refined.


15/22


Tactical Integration of CRM Process

ConnectInteract

KnowRelate


16/22



Interact: A series of transactions or interactionsthat make up a dialog between the customer and

the organization (e.g., IM Chat messages,recordings of customer service calls, e-mail dialog,etc.)

Connect: The mapping and management of interaction points between the customer and theorganization.


17/22



Know: The insight gained through capture andanalysis of detailed customer information to createa continuous learning cycle from the datawarehouse.Relate: The application of insight to createrelevant interactions or communications with

consumers, customers, channels, suppliers, andpartners that build valuerelationships.


18/22

18

Key Goals and Benefits of CRM

CustomerAcquisition

CustomerRetention Control

Cost

(Market share) (Customer share) (Scaling)

Impacts Top Line Revenue

Obtain More Cost IncreaseRetention Ratio

Lower OperationalCosts

IncreaseshareholderValue

Value

Drivers

CRM Can be Directly Linked to Measurable Revenue and LowerCosts Associated with Marketing, Sales, Customer Service, etc.


19/22



CRM Can Drive Revenue through creation andexecution of a targeted customer retention strategy

CRM Can Enhance Customer Loyalty by datamining and creating customized service deliverycapabilities for high-value customersCRM Can Lower Costs by creating, simplifying,and targeting smaller marketing plans and

campaigns based on data mining intelligence andcustomer buying analyses


20/22



CRM Can Provide Real-Time Access toCustomer Data by forcing a mapping and work

flow analysis of customer data and where it goesand where it residesCRM is a Critical Component when Deliveringa Customer Service Strategy Customer Servicewithout CRM is merely that, 1-dimensional

Real-Time Access to Customer Data Regardless of its Location must be Retrievable by the CRMApplication.


21/22


Integrating CRM

Preferred Customer Service Agents can access CRMsystem to gather specific information about thecustomer as well as to service the customers call in

real-time. Access to customer information in real-time via the CRM application is critical in order toprovide enhanced customer service and support.Use of a CRM tool or application is critical toconsolidating customer data and for providing real-time responsiveness to customer inquiries.Integration of CRM with process flow and CustomerService functions is part of the overall solution andenhancement to Customer Service.


22/22


Real-Time Access to Customer Data

Call Centre

Field

EngineeringDatabase

CustomerDatabase

CustomerAddressInformation

Manufacturing

Database

CRMSelf ServeWebsite

IVR System

Preferred

Agents

Customers

3_Managing Customer Relationships

Documents

Transcript of 3_Managing Customer Relationships