CHAPTER 11: BUILDING A CUSTOMER – CENTRIC ORGANIZATION – CUSTOMER RELATIONSHIP MANAGEMENT

CHAPTER 11: BUILDING A CUSTOMER – CENTRIC ORGANIZATION – CUSTOMER RELATIONSHIP MANAGEMENT

Customer relationship management (CRM)

• CRM enables an organization to:

W      Provide better customer service

W      Make call centers more efficient

W      Cross sell products more effectively

W      Help sales staff close deals faster

W      Simplify marketing and sales processes

W      Discover new customers

W      Increase customer revenues

Recency, Frequency, and Monetary Value

• Organizations can find their most valuable customers through “RFM” –Recency, Frequency, and Monetary value

F      How recently a customer purchased items (Recency)

F      How frequently a customer purchased items (Frequency)

F      How much a customer spends on each purchase (Monetary Value)

The Evolution of CRM

• CRM reporting technology – help organizations identify their customers across other applications
• CRM analysis technologies – help organization segment their customers into categories such as best and worst customers
• CRM predicting technologies – help organizations make predictions regarding customer behavior such as which customers are at risk of leaving
• Three phases in the evolution of CRM include reporting, analyzing, and predicting

Using Analytical CRM to Enhance Decisions

• Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers
• Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers
• Operational CRM and analytical CRM

Customer Relationship Management Success Factors

• CRM success factors include:

W      Clearly communicate the CRM strategy

W      Define information needs and flows

W      Build an integrated view of the customer

W      Implement in iterations

W      Scalability for organizational growth