What Is “CRM”Customer Relationship ManagementBecoming a common and important

concept in many industriesBeyond mere ‘Contact Management’Knowing the customer and the Touch

pointsSingle undertaking view of customersMost industries have CRM software to

help sales process, on-going service, and even accounting

The Value of CRMGain more control in interaction with

customersManage expectations better Increase trustProvide products that better serve

customersUnderstand what customers really wantUnderstand the nature of customer

service

CRM StrategiesCustomer Acquisition Gain the greatest number of new “Best” customers as

early in their “lifespan” as possible.Customer Retention Retain and expand your business and relationships with

your customers through up-selling, cross-selling and servicing.

Customer Loyalty Offer programs to ensure that your customers happily buy

what you offer only from you.Customer Evangelism

Enable loyal customers to become a volunteer sales force.Cost Reduction Reduce costs related to marketing, sales, customer service

and support.Improve ProductivityEnhance your e-business strategies.

From the Customer’s Perspective

What Is Customer Service?- Anything we do for the customer that enhances the customer experience.

What is Customer Satisfaction?- The customer’s overall feeling of contentment with an interaction.

What is Customer Expectations?- Customer’s personal vision of the result that is based on their experience.

What is Customer Perceptions?- The way customer’s see something based on their experience

Levels of ExpectationsPrimary expectations: the customer’s most

basic requirements of an interaction.Secondary expectations: expectations

based on our previous experiences that are enhancements to our primary expectations.

A Company with a Good Reputation

Is very responsive to customersIs a company you can trustDelivers on its promises to customersProvides excellent value to customersHas excellent communicationsIs ethical and honestConducts business in a human/caring wayHas excellent top managementIs able to adapt to changes in the industryIs a technological leader in the industryIs committed to the environment

Techniques for Exceeding Customers’ ExpectationsBecome familiar with your customers.Ask your customers what their expectations

are.Tell your customers what they can expect.Live up to their expectations.Maintain consistency.

Cost of Losing a CustomerWe lose the current dollars that our

business relationship created.We lose the jobs that our clients provide.We may suffer from a loss of reputation.We may lose the intangible variable of

future business.

What to do When You Are WrongReview the situation.Observe the customer’s reaction.Admit the mistake.Apologize for your actions or error.Find a solution and implement it.

Six Super Ways to Cope with Challenging Customers1. Listen2. Ask questions3. Show empathy4. Solve the problem5. Follow up6. End on a positive note

Customer RetentionThe continuous attempt to satisfy and keep

current customers actively involved in conducting business.

Churn (or Churn Rate)The number of customers who leave a

business in a year’s time divided by the number of new customers in the same period.

Defection RateThe percentage of customers who leave a

business in one year.

Customer Lifetime Value

The net present value of the profits a customer generates over the average customer life.

Determining the Need for Customer Relationship Program

Is customer retention your primary management objective? Is customer satisfaction measured and assessed regularly? Is there a constant effort to enhance customer satisfaction? Do you measure quality standards and communicate results

with your employees? Do you train and retrain your customer service providers? Do you have employee turnover problems? How much do you spend to keep current customers? What is your current cost for acquiring a customer? What is your average annual customer dollar value? What is your current customer defection rate? How do you get lost customers back? Do you constantly deliver what you promise to your

customers?

Guidelines for Establishing a Customer-Relationship Program

1. Examine who your customers are and what specific needs they have.

2. Identify specific objectives to be realized by the program.

3. Create a manageable program of customer retention.

4. Create a culture that stimulates customer interest.

5. Determine a timetable for evaluation.

Sources of Information to Measure Customer SatisfactionInformal surveysComment cardsVerbal commentsHistorical data (point of sale)SalesCorporate generated surveysDiscussions with internal customersFocus groupsToll-free phone numbers

A Few Basic CRM Concepts…Market Segmentation

Do you treat all of your guests the same?Consider the difference between a guest that

stays once ever in a 2 bedroom cottage and a guest that has stayed each of the last 10 years in a 6 bedroom homeWe shouldn’t treat the one-timer badly, they may

come back many more timesWe should realize that the higher value guest

deserves the best that we can offer.

Market Segmentation ExamplesSaks Fifth Avenue

High value customers ($2000/yr) are routed to special CSR’s.

The calls are routed such that a high value customer is connected to a CSR in one second or less.

Could we coin a new acronym here:HVG – High Value Guest?

General Statistics

The average business never hears from 96% of its unhappy customers,

91% never come back Those people will tell a minimum of 4 other people, Getting a repeat customer from this group is 1 in 11, Dissatisfied customers may tell 9-10 people about their

experience, For every positive they tell 4-5 people, For every complaint received the average business in fact has

26 customers with the similar concern,

General Statistics… Of the customers who register a complaint, as many as

70% will do business again with your organization if the complaint is resolved effectively,

This figure goes up to 95% if the complaint has been resolved quickly,

40% of complaints are the result from customer mistakes or incorrect expectations,

A complaint that is handled efficiently is actually better than no complaint at all,

Customers who complain and get satisfactory results are 8% more loyal than if no complaint at all,

Operational and Analytical CRMOperational CRM: effective and efficient use

and management of people, process and technology

Analytical CRM: the measurement of people, process and technology

People, Process and Technology

Start with People

Add Customer Attrition

Customer Disloyalty vs. Service

Customer’s Are People, Too!They Have Needs

Customer Lifetime Value

R = annual revenue received from a loyal customer i = the relevant interest rate or opportunity cost of money per periodN = the number of periods in which a customer makes purchases

Customer Lifetime Value

Go www.benchmarkportal.com to download the excel spreadsheetto calculate Customer Life time Value

SummaryCRM is the strategic use of information,

processes, technology and people to manage the customer’s relationship with a company’s (marketing, sales, services and support) across the entire customer cycle.

The Plan and Practice of managing the lifetime relationship with your customer

eCRM is the application of CRM to an e-business’ strategyIncludes the personalization and customization of

customers’ experiences and interactions with the e-businessRelationship between merchant and customers is

distantLess expensive to keep customers than to acquire

new onesRepeat customers have higher lifetime value than

one-time buyersA customer’s lifetime value is the expected amount of profit

derived from a customer over a designated length of time Evaluate the potential to profit from a customer

Tracking and Analyzing Data

Employ tracking devicesPersonalize each visitor’s experienceFind trends in customer use Measure the effectiveness of a Web site over

time

Click-through banner advertisementsClick-through advertisements enable visitors to view

a service or product by clicking the advertisementAdvertisers can learn what sites generate sales

Log-File AnalysisWhen visiting a site, you are submitting a

request for information from the site’s server and the request is recorded in a log fileLog files consist of data generated by site visits,

including each visitor’s location, IP address, time of visit, frequency of visits and other information

Log-file analysis organizes and summarizes the information contained in the log filesCan be used to determine the number of unique visitors Can show the Web-site traffic effects of changing a Web

site or advertising campaign

WebTrends FeatureWebTrends provides solutions for tracking visitors

User specifies source of log files, types of reports and location where data is stored

The analysis is conducted automatically Collected information can be used to evaluate e-

commerce methods, customer service and Web-site design

Graphical interpretation of the log files can be presented

Can view demographic and geographic data, technical analysis of a Web site’s effectiveness and top-referring sites—sites that most frequently refer visitors to your site

Customer RegistrationCustomer registration

Requiring visitors to fill out a form with personal information that is then used to create a profile

Recommended when it will provide a benefit to the customer

When customers log on using usernames and passwords, their actions can be tracked and stored in a database

Require only minimum informationGive customers an incentive to register

Free-trial run or a free demonstration to familiarize the user

After customer registration, send an e-mail including customer usernames and welcoming them to your Web site

Intelligent AgentsIntelligent agent

A program that can be used on the Web to assist a user in the completion of a specified task, including searching for information and automating tasks

Can be used as personalization mechanisms by providing content related to the user’s interests

Can observe Web-surfing habits and purchasing behavior to recommend new products to buy or sites to visit

Can help e-businesses offer a level of customer service similar to person-to-person interaction

Contact CentersTraditional call centers house customer-service

representatives who can be reached by an 800 number

Call center, e-contact center or multimedia contact centerPurpose is the same—to provide a personal customer

service experience that is individualized to each customer’s needs and questions

Allow customers with Internet access to contact customer service representatives through e-mail, online text chatting or real-time voice communications

Integration of all customer service functions

Frequently Asked Questions (FAQs)A Frequently Asked Questions (FAQ) section on

the siteWill help customers find answers to some of their

questionsFrees up time for CSRs to handle questions that can

not be answered without human interactionSelf-service FAQ software and Web FAQ

software Place phone numbers and e-mail addresses

nearby FAQInclude a search engine on your site

Allowing users to type in a word or phrase to find information on your site relevant to their particular question

e-MailE-mail can provide a less expensive

customer service solutionCustomers can use e-mail to ask questions or

comment on your company’s services or products

Only appropriate if you have resources to handle demands

Customers may be not be willing to wait long for an e-mail reply

Ideally, a response to a customer’s e-mail inquiry should be completed within forty-eight hours

Online Text ChattingOnline text chatting

Provides a real-time form of communication between customers and service representatives

Service representatives may be able to handle more than one text chat at a time

Customers can continue to view the Web site as they chat with a service representativeAllows the service representative to see what

the customers are looking at as they pose their questions

Online Text Chatting“Instantaneous”

If representatives are busy with many chat sessions, customer may experience delay in responses

Can lose the dynamics of human communication

the meaning of a message may be misinterpreted

FaceTime Communications, CLICKiCHAT and LivePersonSM

Voice CommunicationsInternet provides another channel for

human-to-human voice communicationVoice over Internet Protocol (VoIP)

VoIP products and applications allow people to communicate with speech over the Internet

Internet telephony allows people to make phone calls over the Internet Quality of transmission yet to match regular

telephone Many companies are using PC-to-phone

communication because it is of higher quality than PC-to-PC A person speaks from a computer to another person who

responds through another computer

Voice Communications PC-to-phone (computer-to-phone) voice

communicationAllows a visitor to a Web site to continue browsing

while talking to a customer-service representative over the Internet

Allows dial-up Internet users who have only one phone line to chat with a CSR without having to disconnect from the Internet

HearMe, RealCall, Web Call Back and ITXCWizard

Software program that walks you through the steps needed to complete a task on your computer

Business-to-Business e-CRMKey to (B2B) e-commerce is effective (CRM) When selling to another business, you may be

selling to someone who is not the direct user of your productAsk your contact to speak with the end users

Developing good partner relationship management (PRM) includes increasing efficiency in operations and processes between a business and its partnersPartners can include resellers, distributors and businesses

that improve your product or serviceIntegrating systems to combine selling, buying and

marketing operations of partners will streamline processes and provide technical conformity

ChannelWave Software, Inc., Allegis and Partnerware

An example

Call center telephone sales

E-commerce

Field sales

Retail

Web-basedself service

Field servicesand dispatch

Third-party brokers,Distributors, agents

Call CentersManaging aspects

Of customer contact

Data analysisAnd business

Intelligence tools

Contentmanagement

Campaignmanagement

Data warehouse and data cleaning tools

The Elements of CRMSales

force automatio

n

Customer service/call center management

Marketing automatio

n

*Source: Computerworld