Purpose of the tool
This tool will help you to acquire, service and retain customers for life.
Description of the tool
This four-step tool enables you to identify the major steps required to undertake customer relationship management (CRM). CRM is an integrated sales, marketing and service strategy that depends on coordinated enterprise-wide actions, not just the actions of individual staff members.
The following table provides a quick overview of the tool.
Table T6.1: Introduction to Tool No.6: Customer Relationship Management Aspect Explanation Benefits of using the
tool The tool will ensure:
• You undertake necessary preparation before you implement CRM in your RTO
• You use the technology to assist you to acquire, retain and delight your customers, for life.
Why and when to
apply the tool The tool will help RTOs that seek to be at the cutting edge of customer service.
The tool is appropriate when your RTO is ready to embark on a comprehensive approach to customer relationships.
Easy steps for using
the tool The tool involves four steps:
• Prepare your RTO before implementing the software • Acquire new customers
• Enhance the profitability of existing customers • Retain profitable customers for life.
Underpinning
concepts Some of the concepts underpinning this tool are:
• CRM is a business strategy and an integration framework: the technology is the enabler.
• Implementing CRM requires a thorough analysis of current and proposed work processes and staff roles.
• CRM goes beyond delighting the customer on the one occasion: it is about maintaining an effective and improving relationship over time.
Step 1: Prepare your RTO before implementing the software
Educational organisations are becoming increasingly interested in Customer Relationship Management (CRM). If your RTO is not yet ready to embrace a comprehensive CRM strategy, including the installation of software, you will still find the following discussion will assist your development of a market-orientation. CRM software helps organisations manage customer relationships better by tracking customer
interactions of all types. The suite of CRM software products available on the market spans all the steps of the selling and customer service cycle to help automate direct-mail marketing campaigns, telemarketing, telesales, lead qualification, response management, lead tracking, opportunity management, quotes and order configuration (Kalakota & Robinson, 2001, pp. 172–3).
A number of steps are required before the CRM technology can be installed and used: • Redesign staff roles so they are aligned with the new business focus on customers • Modify work processes to deliver the new customer services
• Manage the cultural resistance to change and inspire staff with the benefits. Each of these steps is very challenging.
Good practice The Securities Institute of Australia used a specialist in organisational re-engineering to analyse work processes, to identify new roles and to prepare staff before CRM was introduced in the organisation in 2001.
Step 2: Acquire new customers
The first phase in CRM is to acquire new customers. Your RTO can acquire new students, for instance, by promoting your RTO’s services and its differentiating features such as its experience in the field or its outstanding staff or the high levels of student satisfaction.
In the future, in an increasingly market-oriented, not supplier-driven VET, RTOs will survive and profit if they can meet increasingly demanding customer expectations for customer service. The RTOs that offer most value for the students will prevail.
Behind the scenes, your CRM software will provide a powerful database for not only capturing information about each student such as name and address, but about their preferences for how and when they access learning opportunities.
Step 3: Enhance the profitability of existing customers
Establishing and enhancing relationships with students as customers is the next phase of CRM. This can be achieved by developing ways of communicating with the students, to find out their academic needs and wishes, to address their concerns and to offer them alternatives and solutions.
Increasingly RTOs will establish multiple ways for students to maintain contact with the RTO, such as call centres and help desks.
RTOs will also offer students the opportunities to undertake other courses, such as a course that is complementary to the one already undertaken (‘cross-selling’) or a course that is similar but more prestigious (‘up-selling’).
Behind the scenes, the CRM technology can assist the staff member taking a phone call or receiving an email from a student, by suggesting different options for the student, in response to the current
Step 4: Retain profitable customers for life
In the past, RTOs may have only looked at a student as likely to do one or two courses, and then the relationship finishes. Those days are over. As VET becomes increasingly competitive, a key to RTOs’ survival and growth is to retain profitable customers. This means being willing to adapt and provide good customers with new services and products, as the customers’ needs change, over their life.
CRM technology can assist the RTO to track the customer for life, by monitoring the contact with the RTO initiated by the customer and vice versa. The technology can provide a record and an analysis of the responses by the customer to any contact from the RTO. For instance, the RTO may offer all graduates special discounts for certain courses and the CRM technology can record the responses to such special offers.
Customising this tool
You can customise this four-step tool to suit your RTO’s context, staff and markets. For each of the four steps, ask yourself questions as below.
Table T6.2: Questions to assist customisation
Steps Questions to help you customise the tool 1. Prepare your RTO
before implementing the software
Is your RTO ready for the staffing and other organisational implications of CRM?
Does your RTO have the resources to implement CRM?
2. Acquire new
customers What new standards of service can you offer students, to acquire new enrolments? 3. Enhance the
profitability of existing customers
How can you provide additional services to your existing students, to complement or extend their previous studies?
4. Retain profitable
customers for life How will your RTO adapt to providing ongoing, life-long services to your existing students?
Sample resources on the topic
Sample resources on the topic are set out below.
Table T6.3: Resources related to Customer Relationship Management Resource Type Key resources
Generic resource Kalakota, R. & Robinson, M. (2001), e-Business 2.0, Addison-Wesley, Boston
VET resource Mitchell, J.G, Latchem, C., Bates, A. & Smith, P. (2001), Critical Issues in Flexible Learning for VET Managers, TAFE frontiers, Melbourne (Section 3.7) http://www.tafefrontiers.com.au