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Customer Customer RelationshipRelationshipMaManagementnagement
(CRM)(CRM)ATTF LuxemburgATTF Luxemburg
Helping you through the learning curve
R.J.ClaessensR.J.Claessens&&PartnersPartners
Key Sources of the Key Sources of the course:course:
Harvard Business Harvard Business ReviewReview
CRM by Ed Peelen CRM by Ed Peelen Snezana DraSnezana Draggicevic icevic
Geraldine Geraldine ClaessensClaessens
E mail: [email protected] - Internet: www.rogerclaessens.be
R.J.ClaessensR.J.Claessens&&PartnersPartners
The key message of the The key message of the coursecourse
The key message of the The key message of the coursecourse
We are in it, together!
The key message of the The key message of the coursecourse
• In 2003, according to Harvard Business Review, 82% of interviewed companies in the USA, stated they would introduce CRM, a large jump from the 35% who employed CRM in 2000.
• What changed?
The key message of the The key message of the coursecourse
• The approach changed!
Rather than use CRM to transform entire businesses, companies using CRM successfully have directed their investments toward solving clearly defined problems within their customer relationship base
The key message of the The key message of the coursecourse
• The approach changed!
CRM today result in highly focused projects that are relatively narrow in their scope and modest in their goals.
There is also an understanding that highly accurate and timely data are not required everywhere
The key message of the The key message of the coursecourse
« Achieving success with CRM is more difficult than expected and it is not just a matter of marketing and IT. »
IntroductionIntroduction
The philosophy of Customer Relationship Management is this :
•CRM is about « Keeping the old-time spirit of customer connection even when you can not shake every hand ».
IntroductionIntroduction
The philosophy of CRM is:
•It is a comprehensive approach for creating, maintaining and expanding customer relationships. •CRM is a way of thinking about and dealing with customer relationships
IntroductionIntroduction
The focus is on: •What will the customers buy, when, why and for how much? •What creates value for them?•What does create a structural bond? •What service can we provide that does create a premium?•What about market segmentation?
IntroductionIntroduction
What CRM systems do!
•The primary task of a CRM system consists in supporting or performing the activities involved in customer contact processes•The secondary task is related to providing customer and management information
IntroductionIntroduction
The concept of CRM is:
• Customer relationship management (CRM) is a business strategy to select and manage the most valuable customer relationships.• CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes.
IntroductionIntroduction
The concept of CRM is:
• CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy, and culture
CRM should the end of CRM should the end of the roadthe road
•CRM is a great concept BUT you might wonder if it is worth the effort relative to your customer base and expenses involved?
•It is the ultimate phase AFTER a solid market research and a strategic planning process!
IntroductionIntroduction
• Is the issue we analyse strategic?
• Where could we make more money? • Do we need perfect data?• What is the next step?
IntroductionIntroduction
Is it strategic?• A large and comprehensive CRM
program involves complicated business and technology issues and requires investments of time and money.
• Before spending money, key marketing questions need to be addressed
• What are your key marketing questions?
IntroductionIntroduction
Is it strategic?• An example: A well trained and
« proactive » sales force is a strategic necessity; this requires the right information!
IntroductionIntroduction
Where could we make more money?• It is possible to use CRM to
manage the entire relationship cycle: that is usually a bad idea!
• Large systems usually do not pay back.
• The focus of CRM should be the weak points that undermine performance
IntroductionIntroduction
Where can we make more money?• Focusing on weak points can not
only be an effective way to build a successful CRM program but can also put it back on track in case you started one.
IntroductionIntroduction
Do we need perfect data?• Perfect real time information
comes at a very high cost• The requirements for real time
and good data are quite different
• Example: Outstandings on a current account (real time) versus portfolio management data (good data)
IntroductionIntroduction
What is the next step?• Narrowly focused CRM system often
reveal additional opportunities for business improvements.
• All the small improvements taken together, can amount to a broad CRM application that extends across the bank.
• The key is to make sure the step by step approach fits into a defined strategic plan
IntroductionIntroduction
What is the next step?• In most cases, the opportunities
for development lie in the activities adjacent to the customer relationship cycle.
• Ultimately, CRM can be the glue that binds together all activities related to a customer.
IntroductionIntroduction
Customer relationship cycle.
Development
Sales
Experience
Retention
Targeting
IntroductionIntroduction
Business before technology• We should look at what CRM
should do, not so much on what it can do
• CRM depends more on strategy than on the amount spent on technology
• Strategy is about the way you allocate your resources to create a competitive advantage and superior performance
IntroductionIntroduction
Implementing CRM before creating a customer strategy = like building a house without an architectural plan
• Effective CRM is based on segmentation analysis
• Customer strategy is designed to achieve some specific marketing goals
• Technology is not a marketing strategy
IntroductionIntroduction
Introducing CRM before changing your organisation into a customer focused organisation = like painting without sanding
• CRM will succeed only AFTER the organisation and its processes – job descriptions, performance measures, compensation systems, training programs, and so on- have been structure to provide superior customer value
IntroductionIntroduction
Assume that more technology is better = is like building without foundation
• To start, see what lower-tech alternatives offer; there may be no need for more in the very near future
• In the future as sequence of individual software solutions may lead to each step reinforcing the next step
IntroductionIntroduction
Define the right customers you want to establish a relationship with = a two way street
• Just because managers can contact customers, does not mean they should by all means and for whatever reason.
IntroductionIntroduction
How do consumers define us in terms of competition?
IntroductionIntroduction
How do consumers define us in terms of competition?
• Cost• Time• Quality• Opportunity• Information• Knowledge• Choice• Culture
IntroductionIntroduction
Why might you consider CRM?
IntroductionIntroduction
Why might you consider CRM?1. Gather customer information quickly2. Identify the most valuable customers3. Obtain loyalty by providing customized
products4. Possibly reduce cost of serving these
customers5. Making it easier to acquire similar
customers6. Retention of existing profitable customers 7. Getting the maximum out of existing
customers8. It can function as an early warning system
IntroductionIntroduction
Why might you consider CRM?
Current situation
Medium term
Long term
Financial perspective
Turnover Increased turnover
Value
Customer perspective
Satisfaction
Individual satisfaction
Commitment
Communication
One way Attuned Multi-channels
Organisation
Data Knowledge
Integrated image
IntroductionIntroduction
The ultimate goal of CRM : The goal is to encourage the customer to make its future purchases from you and reduce the share of purchases being made from the competition DUE TO THE FACT customer knowledge has been accumulated and therefore it will be more difficult for the competition to offer a similar package
IntroductionIntroduction
CRM is only a part of the sales’ performance!
How would you assess your overall sales’ performance?
Please rate the questions hereafter as followsNot effective Extremely effective1 2 3 4 5 6 7 8 9 10
(Source HBR 08/06)
IntroductionIntroduction
Salespeople’s capabilities•Finding customers – identifying sales opportunities•Winning customers – converting opportunities into business•Keeping customers – cementing customer relationships - CRM
Not effective Extremely effective
1 2 3 4 5 6 7 8 9 10
IntroductionIntroduction
Sales Managers' skills •Planning for growing business•Coaching – giving clear direction, expectations and feedback•Motivating – recognition and rewards
Not effective Extremely effective
1 2 3 4 5 6 7 8 9 10
IntroductionIntroduction
Support systems •Recruiting and hiring capabilities•Performance management systems•Opportunities management systems•Strategic account management systems •CRM systems•Training and development systemsNot effective Extremely effective
1 2 3 4 5 6 7 8 9 10
IntroductionIntroduction
Sales organisation climate •Clarity of goals and expectations•Staff dedication to achieve challenging goals•Staff initiative •Acknowledgment of good work
Not effective Extremely effective
1 2 3 4 5 6 7 8 9 10
IntroductionIntroduction
• The total score for your sales organisation is:……..
IntroductionIntroduction
Average for high-performing organisations° 123Average for low-performing organisations° 109
We shall put the spot on CRM, but it is only a part of a bigger picture(° US based companies)
The structure of the The structure of the coursecourse
CRMCRMIntroductionIntroduction
ORGANISATIONORGANISATION MARKETINGMARKETING ANALYSISANALYSIS
1_Elements of CRM1_Elements of CRM
2_Customer-supplier2_Customer-supplier
3_Strategy3_Strategy
4_Relationship oriented4_Relationship oriented
1_Customer knowledge1_Customer knowledge
2_Customisation2_Customisation
3_Communication3_Communication
4_Relationship policy4_Relationship policy
1_1_Relationship Relationship DataData
2_Data mining2_Data mining
3_Data selection3_Data selection
4_Data reporting4_Data reporting
SYSTEMSSYSTEMS
1_CRM systems
2_Implementation
3_The future
4_Conclusion
1_Elements of CRM1_Elements of CRM
1_Elements of CRM1_Elements of CRM
The four cornerstones of the «elements of CRM » are:1.Customer knowledge2.Relationship strategy3.Communication4.The individual value
proposition
1_Elements of CRM1_Elements of CRM
1.Customer knowledge• Segmentation• Awareness, Attitude
• Usage• Concept• Customer satisfaction
• Customer loyalty
• Brand Image• Brand equity• Pricing• Advertising
1_Elements of CRM1_Elements of CRM
2.Relationship strategy
•A long lasting customer – supplier relationship
•The key is not only the stimulation of a transaction
•Success is not measured by market share
1_Elements of CRM1_Elements of CRM
3.Communication
•The issue is to carry on a dialogue with individual customers
•Shifts should be possible between distribution channels
1_Elements of CRM1_Elements of CRM
4.The individual value proposition
•The product, service and price are adapted to the individual circumstances
•The organisation has to build up the capacity to supply customisation in one form or another
1_Elements of CRM1_Elements of CRM
Systems
•If a relationship must be maintained with a large group of customers, a portion of which represents a low value to the supplier, the use of IT becomes inevitable.
•Integration is therefore a must between front-mid-back office