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BGSCustomer Relationship

Management

Chapter 2

History and Development of CRM

Thomson Publishing 2007 All Rights Reserved

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The Origins of CRM

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The Origins of CRM

•

Relationship marketing• Marketing research• B2B relationships• MRP, SAP, and ERP• Customer contact centers• Sales force automation• Campaign management tools• Web and channel integration• Diffusion of PCs and analytical CRM•

Success of direct response marketingsuch as toll-free calling and direct mail• Relational databases• Industrial and services marketing

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Relationship Marketingand Relational Databases

• Database construction is easiest for firmshaving frequent and direct customerinteraction

– It is most difficult for firms having infrequent andindirect customer interaction.

– It is of intermediate difficulty for firms havingfrequent but indirect customer interaction ordirect but infrequent customer interaction.

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Ease or Difficulty of DatabaseConstruction

Direct Indirect

Level Of Difficulty Easy Intermediate

Industry Banks, RetailersPackage Goods

Companies

Level Of Difficulty Intermediate Difficult

Industry PC Store

Auto, Furniture

Manufacturers

I n t e r a c t i o n

F r e q u e n c y

Customer

Interaction

H i g h

L o w

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CRM: Why Now?

• Advancements in computer and informationtechnology

• Substantial changes in the business

environment

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Changes in the BusinessEnvironment Leading to Adoption of

CRM• Increasing number of high-quality products

• Erosion of effectiveness of the traditional 4P’s

• Changes in the pace of life

• The Internet and multichannel usage

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Organizations’ Expectations

Regarding CRM

Success or Failure?????

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Three Major Ways to OvercomeBarriers in Implementing CRM

• Through Communication – Adopt a CRM philosophy – Detail the benefits to all employees

– Top executive support

• Through Integration – Business strategy should drive CRM

– IT and business managers must be integrated

– Customer data must be integrated

• Through foresight relating CRM tactics to successfactors in the industry

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Overcoming Barriers

• The organization must adopt a relationship

marketing philosophy across all functional areas.

• The organization must detail and communicatethe benefits of a CRM orientation to all managersand staff.

• Top executive support must be obtained andmaintained throughout CRM development.

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Overcoming Barriers

• Business strategies must drive CRM

development rather than the other way around.

• If separate “quick-results” CRM projects are

being implemented as opposed to an all-encompassing CRM suite, then these separateprojects must be integrated and functionallyaligned.

• Include both IT and business unit managers in

CRM start-up teams.

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Overcoming Barriers

• Customer data must be integrated and

maintained.

• Build a business case and conduct a businessanalysis before deciding on a CRM solution.

• Develop success metrics to assess theeffectiveness of your CRM efforts.

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Developing CRM from a TacticalPerspective

• A checklist for customer service success

– The importance of the customer contact center

– Put process blueprints in place

•

Customer analytics – Use your databases more effectively

– Segment and identify the value of segments

– Build customer relationships

• Product selection

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Extending the Meaning of CRM?

• Should colleges only focus on students? Whatabout alumni, donors, and legislators?

• Companies do not forget suppliers, distributors,manufacturers, and facilitating agencies.

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Can CRM Create 1:1Relationships that are Truly Viable?

Point1. Consumers are faced with

too many 1:1 relationships.

2. Companies ask for more andmore info but give little in

return.3. Customers not in a

company’s loyalty programfeel like second-classcitizens.

4. Today’s collection of

products and catalogues ismind-boggling.

Counterpoint1. Consumers can opt-in or

opt-out as they see fit.

2. Not so -- look atsupermarkets and hotels.

3. Consumers today are savvyenough to realize there aredifferent levels of service fordifferent levels of loyalty.

4. The former is not really due

to CRM, and CRM shouldreduce the number ofcatalogues.

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Thank You

0324322380_80424

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