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Chapter 6.docx

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Mirou Jaana

Chapter 6 – Customer Relationship Management (CRM) Customer Relationship Management (CRM) - It is about managing all aspects of a customer’s relationship with an organization. What is the goal behind it? o Increase customer loyalty o Retain customers o Increase profitability Who/What matter the most now?  CUSTOMERS Websites like Introduction Who can benefit from CRM? Microsoft CRM 3.0 - Lemonade Stand (YouTube Video) Benefits of CRM - Benefits associated with CRM include: o Provide better customer service o Increase customer revenues o Make call centers more efficient o Cross-sell products more effectively o Help sales staff close deals faster o Simplify marketing and sales processes o Discover new customers “RFM” - Organizations can find their most valuable customers through “RFM” – What do you think RFM represents? • Customers who spend more money • How recently a customer purchased items (Recency) • How frequently a customer purchases items (Frequency) • How much a customer spends on each purchase (Monetary Value) The Evolution of CRM 1. CRM reporting technology – help organizations identify their customers across other applications 2. CRM analyzing technologies – help organizations segment their customers into categories such as best and worst customers 3. CRM predicting technologies – help organizations make predictions regarding customer behaviour such as which customers are at risk of leaving Three phases in the evolution of CRM include reporting, analyzing, and predicting 1. Reporting – Asking WHAT happened (Customer Identification 2. Analyzing – Asking WHY it happened (Customer Segmentation) 3. Predicting – Asking WHAT WILL happen (Customer Prediction) Operational and Analytical CRM • Operational CRM – supports traditional transactional processing for day-to- day front-office operations or systems that deal directly with the customers. • Sales Systems • Sales Management • Contact Management • Opportunity Management • Marketing Systems • List Generator • Campaign Management • Cross-selling and up-selling • Customer service systems • Contact center • Web-based self-service • Call scripting • Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. • Data warehouse • Data mining Which of these two is more important for an organization?  You need the data captured in transaction system, in order to analyze the data and make decisions, so you absolutely need both. Single View of the Customer • The CRM system is the integrator, gathering all of the customer information from the many different systems to obtain a single view of the customer You want to be able to see the effect of marketing campaigns on sales, and on customers, so you want a unified profile of a customer, which is why all the operational CRM is combined. They are consolidated, and there is no discrepancy within the collected data. This allows you to serve the customer best. Sales and Operational CRM • The sales department was the first to begin developing CRM systems with sales force automation – a system that automatically tracks all of the steps in the sales process Sales and Operational CRM Sales and operational CRM te
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