MAXIMIZE VALUE ON YOUR CRM INVESTMENT - CRM SERVICES & SOLUTIONS
Chapter 2 the Crm Value Chain
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Transcript of Chapter 2 the Crm Value Chain
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CUSTOMER RELATIONSHIP MANAGEMENT:CONCEPTS AND TOOLS
Chapter 2The Customer Relationship Management Value Chain
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Definition of CRM
CRM is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high quality customer data and enabled by information technology.
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain – the basics
5 primary stages Customer portfolio analysis; Customer intimacy;
Network development; Value proposition development; Manage the customer lifecycle
4 supporting conditions Leadership and culture; Data and IT; People;
Processes The output of successful value chain
implementation is customer profitability, achieved through Removing cost from the relationship Increasing the revenue earned from the relationship
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
Primary stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
CustomerPortfolioAnalysisPrimary
stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
CustomerPortfolioAnalysis
CustomerIntimacy
Primary stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
CustomerPortfolioAnalysis
CustomerIntimacy
NetworkDevelopment (SCOPE)Primary
stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
CustomerPortfolioAnalysis
CustomerIntimacy
NetworkDevelopment (SCOPE)
ValuePropositionDevelopment
Primary stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
CustomerPortfolioAnalysis
CustomerIntimacy
NetworkDevelopment (SCOPE)
ValuePropositionDevelopment
ManageTheCustomerLifecycle
Primary stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
CustomerPortfolioAnalysis
CustomerIntimacy
NetworkDevelopment (SCOPE)
ValuePropositionDevelopment
ManageTheCustomerLifecycle
Leadership and culture
Primary stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Role of leadership in CRM strategy
Sets the level of CRM implementation: strategic, operational or analytical
Provides access to resources and funding Prioritises the CRM project amongst other
projects within the organization Provides project oversight Breaks down silo walls to ensures cross-
functional buy-in
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Features of a customer centric culture
1. identifying which customers to serve 2. understanding customers’ current and current and future
requirements 3. obtaining and sharing customer knowledge across the
company 4. measuring customer results: satisfaction, retention, future
buying intention, referral behaviours (word-of-mouth), share of wallet
5. designing products and services which meet customers’ requirements better than competitors
6. acquiring and deploying resources (information, materials, people, technology) that create the products and services that satisfy customers
7. developing the strategies, processes and structure that enable the company to meet customer requirements
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Model of a customer centric culture
Customer-centric organisational culture
leadership
formal systems
Internalrelationships
employeeexperience
employeebehaviour
customerexperience
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
CustomerPortfolioAnalysis
CustomerIntimacy
NetworkDevelopment (SCOPE)
ValuePropositionDevelopment
ManageTheCustomerLifecycle
Leadership and culture
Data and information technology
Primary stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
The role of data in CRM
Data are needed for 2 applications Business operations
Order processing; Enquiry handling; Invoicing Analysis
Customer portfolio analysis; Churn analysis
Data are used across all 5 stages of the CRM Value Chain
Data for CRM need to be of appropriately high quality, i.e higher for operational CRM applications than analytical CRM applications
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
CustomerPortfolioAnalysis
CustomerIntimacy
NetworkDevelopment (SCOPE)
ValuePropositionDevelopment
ManageTheCustomerLifecycle
Leadership and culture
Data and information technology
People
Primary stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
People are important for CRM success
People develop the CRM strategy People select the IT solution(s) People implement the IT solution People need to coordinate with each other across
functions to make CRM work People create and maintain the customer database People design the marketing, selling and service
processes People may resist changing established work practices People contribute importantly to customer satisfaction
and retention when they interact with customers
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain I
Customer
prof
itabi
lity
CustomerPortfolioAnalysis
CustomerIntimacy
NetworkDevelopment (SCOPE)
ValuePropositionDevelopment
ManageTheCustomerLifecycle
Leadership and culture
Data and information technology
People
Processes
Primary stages
Supporting conditions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Understanding business processes
Processes are ‘how things are done’ Processes can be classified as
Vertical and horizontal Front-office and back-office Primary and secondary
CRM processes include all customer-facing (front-office) processes within sales, marketing and service functions
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Typical analytical CRM processes
customer profiling process opportunity management process campaign management process
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Campaign management process
Customer phones in Check scores
Offer product to high scores
Send application form
Out bound phone follow-up
Mail follow-up
Do nothing
Open account on phone
Check account balance
(numbers are days)
No interest
Buy product
42
2
7
7
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Questions about CRM processes
What are the important processes from a CRM point of view?
How is the present process designed? What does it contribute to the achievement of CRM
objectives? What do its customers, internal and/or external, receive
from and think about the process? What process performance measures are in place?
Cost, time, accuracy, satisfaction Can the process and its outcomes be improved?
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Order fulfillment: cross-functional process flowchart
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
Process evaluation
Process rating
Best practice (superiority) The process is substantially defect-free and contributes to CRM performance. Process is superior to comparable competitors and other benchmarks
Parity A good process which largely contributes to CRM performance
Stability An average process which meets expectations with no major problems but which has major opportunities for improvement
Recoverability The process has identified weaknesses which are being addressed
Criticality An ineffective and/or inefficient process in need of immediate remedial attention
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain II
Customer Customer Network Value Manage Portfolio Intimacy Development Proposition the Analysis (SCOPE) Development Customer Lifecycle
•Market segmentation
•Sales forecasting
•ABC
•Life-time value
•Customer analysis toolkit
-SWOT/ PESTE/ 5 forces/ BCG matrix
Customer
prof
itabi
lity
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain II
Customer Customer Network Value Manage Portfolio Intimacy Development Proposition the Analysis (SCOPE) Development Customer Lifecycle
•Market segmentation
•Sales forecasting
•ABC
•Life-time value
•Customer analysis toolkit
-SWOT/ PESTE/ 5 forces/ BCG matrix
Customer
prof
itabi
lity
•Customer database development
• Internal data
•Data enhancement
•Data warehousing
•Data mining
•Benchmarking
•Privacy
•Database technology and software
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain II
Customer Customer Network Value Manage Portfolio Intimacy Development Proposition the Analysis (SCOPE) Development Customer Lifecycle
•Market segmentation
•Sales forecasting
•ABC
•Life-time value
•Customer analysis toolkit
-SWOT/ PESTE/ 5 forces/ BCG matrix
Customer
prof
itabi
lity
•Customer database development
• Internal data
•Data enhancement
•Data warehousing
•Data mining
•Benchmarking
•Privacy
•Database technology and software
•Network management
•Internal buy-in
•External network-suppliers/ investors/ partners
•Network position
•E-commerce-EDI/Extranets/ portals
-
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain II
Customer Customer Network Value Manage Portfolio Intimacy Development Proposition the Analysis (SCOPE) Development Customer Lifecycle
•Market segmentation
•Sales forecasting
•ABC
•Life-time value
•Customer analysis toolkit
-SWOT/ PESTE/ 5 forces/ BCG matrix
Customer
prof
itabi
lity
•Customer database development
• Internal data
•Data enhancement
•Data warehousing
•Data mining
•Benchmarking
•Privacy
•Database technology and software
•Network management
•Internal buy-in
•External network-suppliers/ investors/ partners
•Network position
•E-commerce-EDI/Extranets/ portals
-
•Sources of customer value
-4Ps/7Ps -customisation
•Customer experience
•Process reengineering-self-manufacture -self-service
•People issues
•Technology enablement
Customer Relationship Management: Customer Relationship Management: Concepts and ToolsConcepts and Tools
CRM value chain II
Customer Customer Network Value Manage Portfolio Intimacy Development Proposition the Analysis (SCOPE) Development Customer Lifecycle
•Market segmentation
•Sales forecasting
•ABC
•Life-time value
•Customer analysis toolkit
-SWOT/ PESTE/ 5 forces/ BCG matrix
Customer
prof
itabi
lity
•Customer database development
• Internal data
•Data enhancement
•Data warehousing
•Data mining
•Benchmarking
•Privacy
•Database technology and software
•Network management
•Internal buy-in
•External network-suppliers/ investors/ partners
•Network position
•E-commerce-EDI/Extranets/ portals
-
•Sources of customer value
-4Ps/7Ps -customisation
•Customer experience
•Process reengineering-self-manufacture -self-service
•People issues
•Technology enablement
•Customer acquisition
-who/how/what? KPIs
•Customer retention-who/how? KPIs - exceed expectations/ add value/ social and structural bonds/ commitment
•Customer development
-who/what/how? KPIs
•Organisation design-physical/virtual? -KAM/cross- functional teams
•Metrics