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Customer Relationship Management (CRM) Systems. MIS 4133 Software Systems

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(1)

Customer Relationship

Management (CRM)

Systems

MIS 4133

Software Systems

(2)

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

(3)

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.

(4)

 CRM system – provides integrated approach to all

aspects of company-customer interaction

Marketing

Sales

Support / Service

CRM System

(5)

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outdated processes, and redesign activities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

(6)

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

(7)

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

(8)

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

(9)

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

(10)

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

(11)

Analytical CRM Data Warehouse

Channels

•Call center

•Web site

•Wireless

•Field sales

•Direct mail

•E-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

(12)

 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

(13)

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

(14)

CRM Performance Metrics

 Cost per lead

 Cost per sale

 Number of repeat customers

 Reduction of churn

 Sales closing rate

 Customer lifetime value (CLTV)

(15)

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

(16)

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

(17)

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

(18)

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.

(19)

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.

Haag, S., Cummings, M. and McCubbrey, D.J. (2013). Management Information Systems for the Information Age, 9th edition, McGraw-Hill Companies, Inc., New York.

Huang, A., Yen, D.C., Chou, D.C. and Xu, Y. (2003). “Corporate applications integration: challenges, opportunities, and implementation strategies,” Journal of Business and Management (9:2), Spring, pp. 137-150.

Laudon, K.C. and Laudon, J.P. (2006). Management Information Systems:

Managing the Digital Firm, Pearson Education, Inc., Upper Saddle River, New Jersey.

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.

McNurlin, B.C. and Sprague, Jr., R.H. (2006). Information Systems

Management in Practice, 7th edition, Pearson Education, Inc., Upper Saddle River, New Jersey.

(20)

Motiwalla, L.F. and Thompson, J. (2009). Enterprise Systems for Management, Pearson Education, Inc., Upper Saddle River, New Jersey.

Peppers, D. and Rogers, M. (2005). “Best Buy Counts Customers,” CIO

Magazine, July, http://www.cio.com/archive/070105/circuit_sidebar_three.html [accessed: 19 October 2005].

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].

References

References

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