1. Customer-driven processes Manuel C. Manuel III University of the Philippines

2. Why focus on customer relationships?

Good customer relationships are the most likely route to long term sustainability.

Developing strong customer relationships is the key to earning revenue, understanding trends in the application of technology, and sustainability.

Manuel C. Manuel III ... University of the Philippines 3. Characteristics of sustainable organizations

They are customer-focused and strive to create value for them.

They aim to satisfy present and future customer needs.

They pursue after-sales follow-up.

They develop long-term relationships with customers.

Manuel C. Manuel III ... University of the Philippines 4. Elements that characterize a relationship

A relationship impliesmutuality . This means that relationships must inherently betwo-way in nature.

A relationship is driven byinteraction . This means that relationships involve exchange of information.

A relationship isiterativein nature. This means that the interactions in a relationship build up a history and a context over time.

Manuel C. Manuel III ... University of the Philippines 5. Elements that characterize a relationship

A relationship is driven by anongoing benefitto both parties. Precisely because of the context of the relationship and its continuing benefit to both parties, each party has an incentive to recover from mistakes and keep the relationship.

A relationship requiresflexibilityin order to continue. This means that both parties must be able to change behavior, as the relationships historical context develops over time.

Manuel C. Manuel III ... University of the Philippines 6. Elements that characterize a relationship

Every relationship isunique . This means that every relationship is different: constituted with different individuals, different interactions, different histories, and different behaviors.

Every continuing relationship requirestrust . This means that parties to the relationship must be able to reconcile their own culture and behavior with the requirements of generating and sustaining trust.

Trust is the currency of all commerce .

Manuel C. Manuel III ... University of the Philippines 7. Four implementation tasks for creating & managing customer relationships

Identify customers

Differentiate customers

Interact with customers

Customize treatment

These four implementation tasks are also referred to as theIDIC model .

Manuel C. Manuel III ... University of the Philippines 8. The IDIC process implementation model Manuel C. Manuel III ... University of the Philippines IDENTIFY INTERACT DIFFERENTIATE CUSTOMIZE ANALYSIS ACTION 9. The IDIC process implementation model

Identify customers. The company must be able to recognize a customer when he comes back in person, by phone, online, or wherever.

Differentiate customers. Customers represent different levels of value for the institute and they have different needs.

Manuel C. Manuel III ... University of the Philippines 10. The IDIC process implementation model

Interact with customers. A conversation with a customer should pick up where the last one left off.

Customize treatment. The institute should adapt some aspect of its behavior toward a customer, based on that customers needs and value.

Manuel C. Manuel III ... University of the Philippines 11. Customer relationship management (CRM)

The termCRMis also known by other labels

• Integrated marketing communications

• One-to-one relationship management

• Real-time marketing

• Customer intimacy

ButCRMinvolves much more than marketing, and it cannot deliver optimum return on investment without integrating individual customer information intoeveryorganizational function, from customer service, to production, logistics, and distribution channel management.

Manuel C. Manuel III ... University of the Philippines 12. Customer relationship management (CRM)

CRMis both an operational and an analytical process:

Operational CRMfocuses on the changes in process affecting the day to day operations of an organization.

Analytical CRMfocuses on the strategic planning needed to build customer value, as well as the cultural, measurement, and organizational changes required to implement that strategy successfully.

Manuel C. Manuel III ... University of the Philippines 13. Measuring the success of customer-based initiatives

Any initiative to build customer relationships will affect the company financially.

Customer-focused projects can easily cost a lot of money, not counting the time, human resources, and organizationalangstinvolved in the process itself.

Thus, it is important to define appropriate metrics that will drive management decisions focused on increasing the value of the institute by increasing the value of the customer base.

We refer to these metrics ascustomer profitability metrics .

Manuel C. Manuel III ... University of the Philippines 14. Customer profitability metrics

Increased cross-selling

Reduced process or transaction cost

Reduced customer attrition

Faster cycle times for processing transactions

Higher customer satisfaction

Manuel C. Manuel III ... University of the Philippines 15. Making sure you do a good job

To achieve higher levels of success in terms of customer-focused initiatives, the following areas must be addressed:

Organization.The company should track how well its people, culture, and organizational structure are adjusting.

Process.The company will need new and unique business processes to meet the varied needs of different customers.

Manuel C. Manuel III ... University of the Philippines 16. Making sure you do a good job

Information.There will be greater information-focus as the company strives to turn customer data into knowledge that it can use to make it easier for the client to buy from it. This will require new ways of storing data, analyzing information, and ultimately disseminating the information organization-wide.

Technology.Investment in technology is a likely result of the greater focus on clients.

Manuel C. Manuel III ... University of the Philippines 17. Implementing customer strategy Manuel C. Manuel III ... University of the Philippines STRATEGY IMPLEMENTATION LEVEL CAPABILITY IDENTIFY DIFFERENTIATE INTERACT CUSTOMIZE Consistent recognition of the customer Privacy policy, backed up by privacy pledge & commitment Common coding system for customer IDs Shared customer database Understanding of customer differentiation Models for value and research method for needs Ease in defining the right variables Strong data analysis tools Customer skills, training & metrics Enterprise-wide memory of customer at all touchpoints Framework for capture of value and needs Able to capture data at all points of interaction Accountability for each customer Cross-functional flow of systems Adequate information to allow customization Integration between front, back-office systems ORGANIZATION PROCESS INFORMATION TECHNOLOGY 18. Customer service

Customer serviceis a process consisting of intangible activities designed to enhance the level of customer satisfaction by taking care of customer needs before, during, and after a purchase or delivery of service.

Manuel C. Manuel III ... University of the Philippines 19. Logistics and customer service

Logistics plays a vital support role in customer service performance, since this function is so involved in moving, storing, and distributing products in response to a customer order.

Customer service includes order processing, after-sales activities and services, such as delivery, which are certainly aligned with the logistics function.

Manuel C. Manuel III ... University of the Philippines 20. Elements of customer service

Pre-transaction elements (before the sale)

Transaction elements (during the sale)

Post-transaction elements (after the sale)

Manuel C. Manuel III ... University of the Philippines 21. Customer service failure

When any of the customer service activities are neglected or performed poorly,customer service failureoccurs, which can lead to additional costs and possibly loss of goodwill, customer defections, and reduced sales revenues.

Manuel C. Manuel III ... University of the Philippines 22. Customer service failure: examples

Stockouts

Unwillingness to honor customer service policies

Lost orders

Late deliveries

Employee indifference to customer needs

Unsatisfactory resolution of customer complaints

Manuel C. Manuel III ... University of the Philippines 23. A 7-step approach to service recovery

Break the silence and listen for complaints. Since many customers just dont like to complain directly, create an organization that can uncover service failures and customer problems.

Anticipate needs for recovery. Develop recovery plans and procedures for all potential failures.

Train employees. Develop the skills of good communication, creative thinking, quick decision making, and customer empathy among customer contact employees.

Manuel C. Manuel III ... University of the Philippines 24. A 7-step approach to service recovery

Empower the front line. Allow front line employees to act quickly and decisively to solve customer problems.

Act fast. Act quickly and effectively once the service failure has occurred to make the best impression and increase the likelihood of customer retention.

Manuel C. Manuel III ... University of the Philippines 25. A 7-step approach to service recovery

Close the loop. Permanently fix the condition that led to the customer service failure.

Measure the failure costs. Measure and record the costs to recover from and to fix the problem; this can be used as a justification for further service improvement.

Manuel C. Manuel III ... University of the Philippines 26.

Thank you!

Manuel C. Manuel III ... University of the Philippines