Use of CRM for Business Industry
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Customer relationship management (CRM) involves developing and managing relationships with customers to increase their loyalty and satisfaction. The history of CRM began in the late 1980s with systems for managing customer information and relationships. CRM strategies aim to optimize profitability, revenue, and customer satisfaction by organizing around customer segments, fostering satisfying customer behaviors, and implementing customer-centric processes. Potential benefits of CRM include increased customer retention, cross-selling opportunities, and up-selling existing customers to more profitable products or services. However, CRM also requires significant investments of time, money, and organizational change that can face resistance if not implemented appropriately.
Use of CRM for Business Industry
- 1. Customer relationship management CRM Ewhizsales.com Acknowledgements to Euan Wilson (Staffordshire University)
- 2. Purpose of CRM • Why we need CRM • Defining CRM • Identifying different customer types • Developing customers i.e. Loyalty programs • A buzz phrase…with meaning • Good CRM has a sophisticated database • Management of customers – don’t have to be passive recipients of their behavior
- 3. History of CRM B&S CIMS CRMRM B&S – Buying & Selling RM – Relationship Marketing CIMS – Customer Information Management Systems CRM – Customer Relationship Management e-CRM- A subset of CRM that focuses on enabling customer interactions via e-channels (The web, email and wireless) Time line e-CRM Late 80’s Mid 90’s 2002 - FutureEarly 90’s
- 4. Definitions • “is a business strategy with outcomes – that optimise profitability, revenue and customer satisfaction – by organizing around customer segments, – fostering customer-satisfying behaviors and – implementing customer-centric processes.” • “is a strategy – used to learn more about customers' needs and behaviors – in order to develop stronger relationships with them.”
- 5. Underpinning Theory • Customers have many points of contact with an organisation • Retaining customers is far most cost effective than recruiting new ones • Some customers are more profitable than others – The “80/20” rule – For most firms, 80 percent of profit comes from 20 percent of customers • Use of Technology
- 6. An example Call center telephone sales E-commerce Field sales Retail Web-based self service Field services and dispatch Third-party brokers, Distributors, agents Call Centers Managing aspects Of customer contact Data analysis And business Intelligence tools Content management Campaign management Data warehouse and data cleaning tools The Elements of CRM Sales force automation Customer service/call center management Marketing automation *Source: Computerworld
- 7. Potential Benefits Of CRM • Customer retention • Share of customer or share of wallet • Cross-selling • Up-selling
- 8. Potential Costs Of CRM • IT infrastructure • Process change
- 9. Benefits Of CRM For Customers • Continuity • A contact point • Personalisation
- 10. Three phases of CRM • Acquiring New Relationships – You acquire new customers by promoting your company’s product and service leadership. • Enhancing Existing Relationships – You enhance the relationship by encouraging excellence in cross-selling and up-selling, thereby deepening and broadening the relationship. • Retaining Customer Relationships – Retention focuses on service adaptability – delivering not what the market wants but what customers want.
- 11. Steps to improve CRM 1. Build a database 2. Analyse, define types, profitability 3. Customer selection 4. Activities to delight selected customers - discourage others 5. Analyse again to see how we’re doing
- 12. What should be in the database • Demographics – How do you get people to provide this? • History of contacts • Transaction history or summary • Response to marketing communications – How did you hear about us (this offer?)
- 13. Behavioral Patterns • Behavioral patterns • Consumption channel • Benefit segments • Degree of loyalty • Permission
- 14. Analytically Derived Segments • Analytically derived • On-line analytical processing (OLAP) • Customer lifetime value • Intangible benefits
- 15. CRM Applications
- 16. Customer Types • Platinum Heavy, reliable users, not price- sensitive, try new products, loyal • Gold Large users who push for price breaks, shop around and not so loyal • Iron Low volume or intermittent users; cost to serve them is quite high • Lead Demanding, want special attention but don’t buy much and show no loyalty
- 17. Advantages of CRM • While company is quickly growing, customers are more satisfied as well • Service provided in a better way, and a quicker way • Sales force automated • Integrated customer information • Certain processes eliminated • Operation cost cut, and time efficient • Brand names more quickly established • A central database so that everyone in your company can keep track of customer contacts • Sales and marketing teams can benefit from having all this inside knowledge about customers • Lets you set up rules for distributing work throughout your company • Lets you pick and choose the functionality that you want
- 18. • Disadvantages: -Organizational wise change of priority to customers. - Significant investment of time and money - Threatens management’s control/power struggle - Heightens people’s resistance to change - Inappropriate integration leads to disaster