Customer Relationship
Management (CRM)
Systems
MIS 4133
Software Systems
Outline
CRM and CRM System
Phases
Applications
CRM Software Capabilities
Aspects of CRM
Market Segments
Business Value
Performance Metrics
Success Stories
Challenges
CRM, ERP, and SCM Systems Integration
CRM
Used to maximize the benefits of a
company’s customer assets.
Used as a technology and business
discipline.
Seeks to optimize revenue, profitability,
customer satisfaction, and customer
retention.
CRM system – provides integrated approach to all
aspects of company-customer interaction
Marketing
Sales
Support / Service
CRM System
CRM Phases
1. Technology
Automate existing processes
2. Integration
Cross functional integration to create a
customized view of the customer
3. Process
Eliminate unnecessary activities, improve
outdated processes, and redesign activities
4. Customer-driven
Focus on understanding customer first and then
move to inward operations
CRM Applications
Partner relationship management (PRM)
Manage relationships with company partners
Employee relationship management (ERM)
Setting objectives, employee performance
management, employee training, and
performance-based compensation
CRM Software Capabilities
Sales force automation (SFA)
Focus on most profitable customers
Reduce cost per sale
Reduce cost of acquiring new customer and retaining old ones
Customer service
Increase efficiency of call centers, help desks, and customer support staff
Assign and manage customer service requests
Marketing
Capture customer data
Provide product/service information
Qualify leads for target marketing
Schedule and track mailings and email
Identify profitable and unprofitable customers
Design products/services to satisfy specific consumer needs
Identify opportunities for cross-selling, up-selling, and bundling
CRM Software Capabilities Example
Customer Data
Sales
Account Mgmt Lead Mgmt Order Mgmt Sales Planning
Field Sales Sales Analytics
Marketing
Campaign Mgmt
Channel Promotions Mgmt
Events Mgmt Market Planning Marketing Operations
Marketing Analytics
Service
Service Delivery
Customer Satisfaction Mgmt
Returns Mgmt
Service Planning
Call Center & Help Desk
Service Analytics
Aspects of CRM
Operational CRM
Includes customer-facing applications (SFA,
call center, customer service support, and
marketing automation)
Analytical CRM
Includes applications that analyze customer
data generated by operational CRM
applications
Operational CRM Analytical CRM
Campaign mgmt Develop customer segmentation strategies E-marketing Develop customer profiles
Account and contact mgmt Analyze customer profitability Lead mgmt Analyze product profitability
Telemarketing Identify cross-selling/up-selling opportunities
Teleselling Select the best marketing, service, and sales channels for each customer group
E-selling Identify trends in sales cycle length, win rate, and average deal size Field sales Analyze service resolution times, service levels based on
communication channel, and service activity by product line and account
Field service dispatch Analyze leads generated and conversion rates Customer care and help
desk
Analyze sales representative and customer service representative productivity
Contract mgmt Identify churn problems
Operational vs. Analytical CRM
Examples
Analytical CRM Data Warehouse
Channels
•Call center
•Web site
•Wireless
•Field sales
•Direct mail
•Retail store
•Partner
Other sources
•Legacy systems
•Demographic data
•Third-party data
•Marketing campaign data Customer Data
Customer
data
warehouse
•OLAP
•Data mining
•Other data analysis tools
•Profitable customers
•Market segments
•Customer profiles
•Churn rates
Traditional out-of-the-box CRM
Traditional CRM with templates for specific vertical
industries
Traditional out-of-the-box CRM with application
development hooks
Industry-specific vertical CRM packages
Custom solutions from vertical systems integrators
CRM Market Segments
CRM Systems Business Value
Increased customer satisfaction
Reduced direct marketing costs
More effective marketing
Lower costs for customer acquisition and
retention
Increased sales revenue
Reduced churn rate
CRM Performance Metrics
Cost per lead
Cost per sale
Number of repeat customers
Reduction of churn
Sales closing rate
Customer lifetime value (CLTV)
Cost Cutters and Revenue
Enhancers from a CRM System
Cost Cutters
Decrease cost of sales
More time to sell; less time
on administration
Decrease cost of service
Cost per service
interaction
Transition to more self-
service
Revenue Enhancers
Increase sales effectiveness
Add new customers at a
higher rate
Offer new products/services
Provide a better customer
experience
Increase revenue per
customer
Sell more of current
products/services
Improve customer retention
CRM Success Stories
Best Buy
Launched a “customer-centricity” effort
Trained store-level employees to recognize
five types of highly valued customers
American Cancer Society
Used CRM system to better target members in
its donor base
CRM System Challenges
Broad company goals
Generic strategies
Software-centric implementations
Poor communication which can lead to no
“buy-in” from sales force
Inadequate training of sales force
Competition between sales force leads to
political issues
Integrating CRM with ERP and
SCM Systems
CRM’s goal: to find the best customers and
concentrate efforts on serving them better
CRM and ERP integration
ERP to CRM – access information such as credit ratings,
payment status, sales volumes, and so forth
CRM to ERP – better able to prioritize work processes for
the best customers, etc.
CRM and SCM integration
SCM to CRM – access information regarding supply status,
assembly process, delivery status, product configuration,
and so forth
CRM to SCM – better able to schedule delivery of raw
materials, prioritize work flow, etc.
References
Greenberg, P. (2002). CRM: Capturing and Keeping Customers in Internet Real Time at the Speed of Light, 2nd edition, McGraw-Hill Companies, Berkeley,
California.
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Laudon, K.C. and Laudon, J.P. (2006). Management Information Systems:
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Martin, E.W., Brown, C.V., DeHayes, D.W., Hoffer, J.A. and Perkins, W.C.
(2005). Managing Information Technology, 5th edition, Pearson Education, Inc., Upper Saddle River, New Jersey.
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Rigby, D.K. and Ledingham, D. (2004). “CRM done right,” Harvard Business Review, pp. 118-129.
Ross, D.F. (2005). “E-CRM from a supply chain management perspective,”
Information Systems Management, Winter, pp. 37-44.
Taber, D. (2011). “Implementing Territories in CRM Systems,”
http://www.cio.com/article/2406846/customer-relationship-
management/implementing-territories-in-crm-systems.html [accessed: 15 September 2015].
Taber, D. (2012). “Why CRM Implementation is so Political,”
http://www.cio.com/article/2393601/customer-relationship-management/why-crm- implementation-is-so-political.html [accessed: 15 September 2015].
Wailgum, T. (2007). “CRM Definition and Solutions,”
http://www.cio.com/article/2439505/customer-relationship-management/crm- definition-and-solutions.html [accessed: 15 September 2015].