1. Introduction to CRM Systems and Technologies.pdf

CRM system

1. Introduction to CRM Systems and
Technologies
Session 1

2. Session-1
•Intro to CRM Systems & Technologies
•CRM Architecture
•Types of CRM
•Integrated CRM Systems

3. What is CRM?
•Discussion


•CRM is as old as the Customer
–What is new now….

4. What is CRM?
DIFFERENT PERSPECTIVES FOR
CRM
INTERNET STOREFRONT
PRODUCT
CRM PRODUCT COMPANY

DATABASE VENDOR
CHIEF PRIVACY
OFFICER
Live chats/ chatbots
Connecting databases to
applications
Opt-In Marketing
CALL CENTER

5. MANAGING RELATIONSHIPS THROUGH IMPLEMENTATION AND
ANALYSIS OF CUSTOMER DATABASES
MARKETING SALES SUPPORT
SHARED
DATABASE
CRM SYSTEM
OPERATIONAL
CRM
ANALYTICAL
CRM





RELATIONSHIP MANAGEMENT




MANAGEMENT

6. Evolution of CRM
Product centric view (1960s/1970s)
Selling as many products as possible without regard to who is buying them. No awareness of the
customers
Classical Marketing Tactics (1980s)
Television ads, mass mailings, bill boards- the companies put them and waited for customers to
come in
Increasing competition/ Deregulation
New Age Marketing and CRM strategies
(1990s)
MORE THAN COST REDUCTION
Call centers (ATM, IVRS), Analytics
Mass customization, Personalization
Decrease customer churn
Increase customer satisfaction
Customer differentiation (to discern which ones to keep and which ones to loose)
Providing analytical support


Objective- Maximize Profitability

7. BASIC PRINCIPLES OF CRM
‘CRM done well influences customer emotion/ experience’
It humanizes their purchase or service request or complaint

8. Basic Principles
•Different treatment for different customers
–Measure the value of each customer (Lifetime)
•Who are the profitable customers
•How long they have been there with you
•How long they are likely to stay with you

“all customers are equal”
“customer at any cost”
-Two Fatal Mistakes

9. Basic Principles
•Different treatment for different customers
–Keep track of how much business/ money you are getting from each customer
–For customers with high lifetime value, you can travel an extra mile secure in
the knowledge that you will make up the money you spent on them.
•Therefore, the service level depends on the lifetime value of the customer.

10. Unified View
•Across Product Lines
•Across Divisions
•Across Functions
•Across Geographic Locations
•Across Touch Points…………………

11. CRM experiences 
•You buy a laptop abroad and it does not work when you come back
•A customer has just lodged a complaint and a sales person approaches him for
marketing
•What is to be done with the 100 email addresses of customers who abandoned
their shopping carts during their last web visit
–Do you give a 5% discount if they fill a form explaining why they left
–Reward repeat customers
–Reward repeat/ profitable customers

12. 12
Customer Relationship Management
Islands of Automation Need To Be Bridged
Over time, channels & operational systems are added to cater to changing customer demands. The result…several
functional groups are interacting with customers independently
.
$
Sales Force
Customer
Service
Direct Mail
Web
Branches

13. •Vertical flow of information vs. horizontal flow
•Process view
•Centralized data base
•Data entry at source
Basic Principles

14. •Treat each customer as one single person irrespective of how
he interacts with you
–Addressing multiple touch points (channels of communication)-in
person, on phone (home delivery), web site etc.
–Addressing different departments: the restaurant section and
delivery section are integrated.
–
Addressing different geographical locations



Basic Principles

15. •CRM is a business process an organization goes through in order to
identify, select, acquire, develop and retain its most profitable
customers to serve them better.
•It involves
–Segregating the best customers from the rest and remembering the likes and
dislikes of each.
Basic Principles

16. But isn’t this old hat…??
Maybe something practiced at the neighborhood Kiryana shop…
Yes, its old hat but the scale, size, volume and complexity of business is different.
The Touch points are more (telephone, fax, e- mail, Internet etc)
Therefore, the only way you can realistically manage to store, track, analyze and act
on information is by using IT.

17. •CRM is not just a piece of software
•CRM is the way good businesses manage their customers. However, in
today’s complex business environment, they just have to use special
CRM technologies to do this-which includes both hardware and
software.

18. The cost of acquiring customers
and the need for CRM

19. •Studies show:
–It costs a company six times more to sell a product to a new
customer than it does to sell to an existing one
–One dissatisfied customer will tell 8-10 others of his experience
–By increasing the customer retention rate by 5% profits would
increase by 85%
–There is a 50% chance of making a sale to an existing customer and
only 15% of selling to a new customer
–70% of the customers will do business with a company again if their
complaint is successfully resolved
–Companies need integration of sales and service to support online
marketing and e-commerce. 70% companies do not have this
integration.
•
Discern the best customers and motivate them to stay that way

21. Targeting Acquisition Retention Expansion
Customer Relationship Management can be simply defined as everything involved with managing the customer
relationship.
•Who Do we target
•What segments are most
profitable
•What segments match our Value
Proposition
•What is the best segmentation
strategy for us / our industry
•What is the best channel for each
segment
•What is the acquisition cost for a
channel / segment
•Do certain channels deliver certain
types of customers
•Cost effective acquisition
•How can we improve retention
•What is our average customer
relationship length
•How can we hold customer for
as long as possible
•What is the most cost effective
method of retention
•How many products does our
average customer buy
•How can we induce our current
base to buy more products
•Who are the prime targets for
expansion
•What is the cost of expansion
Customer Relationship Management Definition
Duration of Customer Relationship
Value ( $ )

22. SATISFIED CUSTOMER

DISSATISFIED CUSTOMERS (FB post;
Whatsapp viral video………)

CHALLENGE FOR COMPANY: BALANCE PLUMMETING COST OF CUSTOMER SATISFACTION
Viral marketing can work for or against you!!
On an average, an unhappy customer tells eight other potential customers about his negative experience (1:8)

The good part-A lot of customers demand just basics-good manners; basic politeness!
A few customers demand more.

A CRM system can help identify individual preferences………….

23. How IT can help in Relationship Management??
Targeting Acquisition Retention Expansion

24. 24
Customer Relationship Management
Current
Current
Every Company’s Big Unknown ... Customer Value
Full Potential
Current
Customer
Value
Number of Relationships
Relationship Duration

25. Customer Life Time Value (LTV) is defined by a customer’s Life Time
worth to the firm and is measured by the net present value (NPV) of
the cash flows generated over the Life Time of the relationship.

Cost of Service
Acquisition
Cost
Duration of
Relationship Annual Cash Flow
Service/Usage Revenue
Successful Customer Relationship Management can generate positive shareholder value.
Customer Relationship Management and
Shareholder Value

26. How do you define Customer Loyalty
Is a deeply held commitment to rebuy or repatronize (sell a companies
products to other customers) a preferred product or service
consistently in the future, despite situational influences and
marketing efforts having the potential to cause switching behavior

27. Harley Davidson sells less as a ‘means of transportation’ and
more as a ‘way of life’
Serving customers unspoken needs!

29. CRM SYSTEMS

30. CRM Systems & Technologies
•CRM systems is the infrastructure that enables the identification of and increase
in customer value and motivates the customers to remain loyal
•CRM systems have the potential to CHANGE a customers relationship with a
company and increase revenues
•Its more than Technology
–CRM=Technology + Strategy
•Technology supports strategy for marketing initiatives such as for
–New customer acquisition
–Web based marketing
–Cross sell
–Up sell
–Personalization etc
•This requires recognize and treat each customer as an individual

31. •Therefore, is CRM a software product?
–Siebel, Salesforce……………..

•CRM is not just a software product
•It is business processes, People, Management behavior,
Organizational culture and Strategy…………….
•
The software product enables the CRM strategy.

32. CRM SYSTEMS HAVE
2 FACETS Support sales and
marketing staff
(employees)

Enable customers to interact
with client organization

33. •Knowing the customer
In large businesses, too many customers and too many ways customers interact
with firm (touch points)

•B2B vs. B2C: What’s the essential difference ? Volume/ value

•Customers managed individually as against Aggregates



Customer Relationship Management Systems

34. Technology deployed
How the Technology is deployed

35. Application of Technology in CRM
A CRM system helps in Customer Life Cycle Management

36. THE CRM ARCHITECTURE

37. THIN CLIENT WEB- ENABLED CRM ARCHITECTURE
Web Enabled
Customers

Web Server/
Application
Server

CRM (Siebel
Oracle, SAP, Peoplesoft
SalesLogix )
Database
Server

Call
Center
Customer Facing Employee (Salesman
Marketing Executive Customer Support Executive)

Enterprise Marketing
Automation
Sales Force Automation

38. THIN CLIENT WEB- ENABLED CRM ARCHITECTURE
Web Enabled
Customers

Web Server/
Application Server

CRM (Siebel
Oracle, SAP, Peoplesoft
SalesLogix )
Call
Center
Customer Facing Employee (Salesman Marketing
Executive
Customer Support Executive)

Operational CRM
Analytical CRM
(OLAP software/
Data Mining)
Database
Datawarehouse
Management
Databases from OLTP and
other ERP systems
Customer/ Employees
ERP and other OLTP systems

39. CRM Applications
*Source: Patricia Seybold Group

40. Integrated CRM Systems

41. Enterprise Applications: New Opportunities and Challenges
ORDER- TO-CASH
SERVICE
Order-to-cash is a composite
process that integrates data from
individual enterprise systems and
legacy financial applications. The
process must be modeled and
translated into a software system
using application integration tools.
FIGURE 9-11

42. TYPES OF CRM SYSTEMS

43. •CRM packages typically include tools for:
Sales force automation (SFA)
E.g. sales prospect and contact information, and sales quote generation capabilities
Customer service
E.g. assigning and managing customer service requests; Web-based self-service
capabilities
Marketing
E.g. capturing prospect and customer data, scheduling and tracking direct-marketing
mailings or e-mail

Customer Relationship Management Systems

44. Unlock the Mysteries of Your Customer
Relationships
By Jill Avery et al, 2014, HBR
Session 1.1

45. Managing Relationship Expectation
•Analytics is allowing companies to personalize and manage
customer relationships
•The challenge is people now expect companies to understand
what type of relationships they want & respond appropriately
•Despite implementing CRM software, companies are poor in
relationship intelligence
–Understanding variety of relationships customers have with a firm
–They do not know how to reinforce or change those connections
–Meeting relation expectations is important!

46. •Companies are collecting data such as demographics data and matching with
purchasing information for segmentation leading to cross sell/ up sell.
•Customers have different kind of relationships with brands
•The paper identifies 29 distinct type of relationships such as buddies, enemies,
one-night stands, marriage partners, master- slave etc
•Discusses characteristics/ treatment for each type
•These relationships are unique to an industry (fashion, consumer technology,
social media and gaming) / organization
•Understand the types of relationships of the customer with your brand using
surveys/ interviews, web crawling tools, data mining techniques;
–Find what the customers desire; and which relationship profile is most profitable
–Keep shifting the relationships.

47. THANK YOU