3_Managing Customer Relationships
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Transcript of 3_Managing Customer Relationships
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MANAGINGCUSTOMER
RELATIONSHIPSDr. Vandana Khanna
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Managing Customer RelationshipsWhat Does it Entail?
CRM data warehouses customer information andhistorical buying patterns to understand buyingbehavior to provide enhanced services that driverevenueCRM is a critical component in building customer loyaltyand customer retention strategiesCRM is a tool that can drive high-value, loyal returnsfrom customers that continue to purchase and dobusiness with the companyCRM provides opportunities for the organization tocreate a competitive differentiation with differentiatedcustomer services targeted specific to high-value, long-term customers
DE
FINITION
Why is CRM critical to customer loyalty and retention?
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Managing Customer RelationshipsChallenges and Problems Solved by CRM
Lowers costs of recruiting customers throughstrengthened customer loyalty and retention strategiesCan focus attention on high-value customers andprovide preferred and customized services (e.g., high-value customers deserve high-value customer service)Reduced cost of sales (e.g., push marketing, selling toexisting customer base, inside sales/telemarketing, etc.)
Provides the foundation for long-term customerprofitabilityIncreases customer retention and loyalty through customized services
SO
LUTIONS
How does CRM Increase Shareholder Value?
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Managing Customer Relationships Who are the Customers? Customer Types
Business to Business (B2B) customers whopurchase a product or service and resale a finishedproduct to other customers or businesses B2Bprocess flow
Consumer (B2C) customers who buy the finalproduct or service (e.g., individuals, families, etc.) B2C process flowChannel/Distributor a person or organization thatresells or provides a value-added service around theproduct or service for resale and distribution to theircustomers and ChannelsInternal Customer a person or business unit withinthe organization that requires your product or
service
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Managing Customer Relationships Acquisition, Retention, Customer Lifetime Value
Customer
Retention
Customer
Lifetime Value
Customer Acquisition
The Value of a Customer is Based on the Amount of Revenue and Purchases that the Customer Makesover the Lifetime of the Relationship.
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Acquisition Vs Retention
Retention AcquisitionNurturing Relationships Acquiring Potential
Relationships
Internal Analysis Internal Research
Demographic History Demographic Profile
Actual Needs Given Projected Needs Given
Contact Must be Personal Contact can be less personal
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Acquisition Vs Retention
Retention Acquisition
Accuracy Required Inaccuracy Tolerated
Other Relationships Given Offers Can Be Event
Relatively High Response Relatively Low ResponseSupports Reactivating Supports Assimilation
Synergistic With Acquisition Synergistic with Retention
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Six Stage Model of Relationship
Exit
Contact
Involvement
Intimacy
Deterioration
Repair
Dissolution Adapted from DeVito, Joseph A. (1993)
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Customer Life Cycle
Customer NeedAssessment & Acquisition
Customer Retentionand referrals for newcustomers
Customer Developmentthrough personalizationand customization
Customer Equity Leveragethrough Cross Selling and
Up selling
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CRM Process Framework
Purpose Increase Effectiveness Improve Efficiency
Formation
Programs Account Management Retention Marketing Co-op Agreements Strategic Partnerships
Partners Criteria Improve Efficiency
Team Structure
Role Specification
Planning Process
Process Alignment
Monitoring Process
Communication
Employee Motivation
Employee Training
Evolution
Enhancement improvement
RelationshipPerformance Strategic Financial Marketing
Retention Satisfaction Loyalty
Management & GovernancePerformance
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CRM Process Cycle
1. KNOWLEDGEDISCOVERY
2. MARKETPLANNING3. CUSTOMER
INTERACTION
4. ANALYSIS & REFINEMENT
Learning
Action
CRM Process Cycle Links Customer-Centric Data
With a Continuous Learning and Action Cycle.
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CRM Process CycleKnowledge Discovery: this is the process of analyzing customer information to identify specificmarket opportunities and strategies.Market Planning: this process defines specificcustomer offers, delivery channels, schedules,dependencies. A market plan or campaign thatdrives revenue to existing customers.Customer Interaction: this process aligns thecustomer offers directly to the customer. This is
typically done from the Contact Center or whereCustomer Service is performed. Analysis & Refinement: this process conductsQ&A and analysis of customer interactions, such thatmessages and future dialogue can be refined.
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Tactical Integration of CRM Process
ConnectInteract
KnowRelate
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Tactical Integration of CRM Process
Interact: A series of transactions or interactionsthat make up a dialog between the customer and
the organization (e.g., IM Chat messages,recordings of customer service calls, e-mail dialog,etc.)
Connect: The mapping and management of interaction points between the customer and theorganization.
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Tactical Integration of CRM Process
Know: The insight gained through capture andanalysis of detailed customer information to createa continuous learning cycle from the datawarehouse.Relate: The application of insight to createrelevant interactions or communications with
consumers, customers, channels, suppliers, andpartners that build valuerelationships.
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Key Goals and Benefits of CRM
CustomerAcquisition
CustomerRetention Control
Cost
(Market share) (Customer share) (Scaling)
Impacts Top Line Revenue
Obtain More Cost IncreaseRetention Ratio
Lower OperationalCosts
IncreaseshareholderValue
Value
Drivers
CRM Can be Directly Linked to Measurable Revenue and LowerCosts Associated with Marketing, Sales, Customer Service, etc.
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Key Goals and Benefits of CRM
CRM Can Drive Revenue through creation andexecution of a targeted customer retention strategy
CRM Can Enhance Customer Loyalty by datamining and creating customized service deliverycapabilities for high-value customersCRM Can Lower Costs by creating, simplifying,and targeting smaller marketing plans and
campaigns based on data mining intelligence andcustomer buying analyses
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Key Goals and Benefits of CRM
CRM Can Provide Real-Time Access toCustomer Data by forcing a mapping and work
flow analysis of customer data and where it goesand where it residesCRM is a Critical Component when Deliveringa Customer Service Strategy Customer Servicewithout CRM is merely that, 1-dimensional
Real-Time Access to Customer Data Regardless of its Location must be Retrievable by the CRMApplication.
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Integrating CRM
Preferred Customer Service Agents can access CRMsystem to gather specific information about thecustomer as well as to service the customers call in
real-time. Access to customer information in real-time via the CRM application is critical in order toprovide enhanced customer service and support.Use of a CRM tool or application is critical toconsolidating customer data and for providing real-time responsiveness to customer inquiries.Integration of CRM with process flow and CustomerService functions is part of the overall solution andenhancement to Customer Service.
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Real-Time Access to Customer Data
Call Centre
Field
EngineeringDatabase
CustomerDatabase
CustomerAddressInformation
Manufacturing
Database
CRMSelf ServeWebsite
IVR System
Preferred
Agents
Customers