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					CUSTOMER RELATIONSHIP
    MANAGEMENT
Session Objectives:                         Define   CRM        Challenges
                                                                   and
                                            CRM      Process   Opportunities




    Define Customer Relationship Management &
         Discuss Why CRM Continues to be Important

    CRM as a Business Process
               Bonding with Customers:
               Reputation, Value and Structure

    Challenges and Opportunities
Business Relationships                   Why?

    in the late 80s and early 90s

     Adversarial

     Transactional

     Internal Process Focus

     One Dimensional - Buying/Selling
WHAT IS CUSTOMER                    Define

RELATIONSHIP MANAGEMENT?



 The process of creating and continuing
  a tailored business relationship that
  has been built on mutual trust,
  openness, shared risk, and
  shared reward.
WHAT IS THE OBJECTIVE             Define

OF CRM?



  CRM’s objective is to produce a
   competitive advantage resulting in
   business performance which is
   greater than would be achieved by
   the firms if acting individually.
Why is Customer Relationship             Why CRM?

          Management so Important?



    Customer                         Competitive
    Retention                         Intensity

                   Importance of
                     Customer
                    Relationship
                    Management
    Customer                             Cost
    Selectivity                       Efficiency
COMPETITIVE                      Why CRM?

ENVIRONMENT

                Customers




                  You &
 Substitutes   Your Current   New Products
               Competitors




                 Supplier
                    s
Drivers of CRM                                                  Why?
     -Changes in the business climate


  Environment          Customer Focus              Process Orientation

- Global & diverse     - Change from sell        - Shift from task
 competition (www)      what you make,            to process
                         to make what             orientation
- Need to               customers want
  differentiate your    (customization)          - Aligning your
  products and                                     processes with the
  services             - Power retailers           customer

- Need to be the low   - Return on               - Aligning your
  cost quality/value     investment focus          processes with
  supplier                                         suppliers
                       - Long term share of
                         customer requirements
Drivers of CRM                               Why?

Simplification/Customization

Customers want to reduce the number of
 “market choices”
                       because
- too many market choices require a high investment
  of money, time and effort
                        and
- customers want to reduce the risk due to
  uncertainty of outcomes - lack of trust.
                       plus
Customers want a more customized product.
                                 Why?
What are the GOALS of CRM?


    Customer Satisfaction
    Customer Knowledge
    Larger Share of Customer
    Improved Business Results
                                       Why?
What are the GOALS of CRM?


    Customer Satisfaction
    Customer Knowledge
    Larger Share of Customer
    Improved Business Results
                     through
    One “face” to the customer
    Results vs. task orientation
    Availability of value added resources
Road Map


   Define   CRM as a    Challenges
            Business       and
   CRM                 Opportunities
             Process
Customer Relationship Management                           Process

as a Business Process.

                        CRM Strategic Audit

           CRM Review   Determine CR Level


                        Prepare a CR Plan


                           Develop CR
                            Scorecard


                        Plan Implementation



                                        Adapted from Management Horizons 1996
Functional silos are a major                    Process

process disconnect

     Category A       Category B           Category C



        M             S   M        F   S      M           F
 S                F
        a             a   a        i   a      a           i
 a                i
        k             l   k        n   l      k           n
 l                n
        e             e   e        a   e      e           a
 e                a
        t             s   t        n   s      t           n
 s                n
        i                 i        c          i           c
                  c
        n                 n        e          n           e
                  e
        g                 g                   g
One objective might be to align functional        Process
expertise from the manufacturer and customer
to support the processes



  Customer’s Resources             Manufacturer’s resources

   Category Manager                     Sales

   Buying                               Order Management

   Merchandising                        Trade Marketing

   Accounts Payable                     Accounts Receivable

   Etc...                               Etc...
Customer Relationship Management              Process

as a Business Process.

                        CRM Strategic Audit

           CRM Review   Determine CR Level


                        Prepare a CR Plan


                           Develop CR
                            Scorecard


                        Plan Implementation
Customer Selectivity vs                                       Process

       Customer Retention

     $
              Retention               Selectivity
                Zone                    Zone




         KEY
         CUSTOMERS
                                                       COSTS
                                      SUBSIDIZED CUSTOMERS

                                                REVENUES

         Often Biggest    Customers          Often smallest
Customer Relationship Management              Process

as a Business Process.

                        CRM Strategic Audit

           CRM Review   Determine CR Level


                        Prepare a CR Plan


                           Develop CR
                            Scorecard


                        Plan Implementation
Sheth’s Triad Model of Enhancing   Bonding

Customer Relationships

  Enhancing Customer Relationships
                   through

   Reputation  Bonding
   Value Bonding
   Structural Bonding
Sheth’s Triad Model of Enhancing               Bonding

Customer Relationships

     Reputation Bonding
            Quality Obsession
             Doing it “right” the first time
            Responsiveness

             Speed and courtesy of response
            Competence and Professionalism

             Trust and respect
Sheth’s Triad Model of Enhancing      Bonding

Customer Relationships

     Value Bonding
           Value Engineering
            Improving Price<=>Value
           Mass Customization

            “Modular flexibility”
           Proactive Innovation

            New Product Development
Sheth’s Triad Model of Enhancing              Bonding

Customer Relationships
     Structural Bonding
             Information Systems
              Using Technology (scanners)
             Customer Focused Organization

              1-1 Marketing/Teams
             Customer Involved Marketing

              Affinity groups
             Customer Retention

              Reward and Compensation
Customer Relationship Management              Process

as a Business Process.

                        CRM Strategic Audit

           CRM Review   Determine CR Level


                        Prepare a CR Plan


                           Develop CR
                            Scorecard


                        Plan Implementation
CRM Scorecard                                Process




1. Do we meet with the customer at least once a
      year to find out what products or services
      they will need in the future?

2. Do individuals from our manufacturing
      department interact directly with the
      customers to learn how to serve them better?
3. Do we do a lot of in-house market research?

4. Are we fast to detect changes in the customer’s
      product preferences?
CRM Scorecard                                     Process




5. Do we poll end users at least once a year to
      assess the quality of our products and
      services.

6. Do we often talk with or survey those who can
      influence our end users' purchases (such as
      retailers and distributors).
Customer Relationship Management              Process

as a Business Process.

                        CRM Strategic Audit

           CRM Review   Determine CR Level


                        Prepare a CR Plan


                           Develop CR
                            Scorecard


                        Plan Implementation
Road Map


   Define   CRM as a    Challenges
            Business       and
   CRM
             Process   Opportunities
The Marketing Concept vs                 Challenges
Customer Relationship Management


   The Marketing                   Customer
       Concept          Relationship Management
      Customer
                         Customer Commitment
     Satisfaction
       Ad Hoc            Joint Business Process
        Marketing
      Programs
                           Share of Customer
  Sales, Sales, Sales      LTV of Customer
Changing an organization without
defining new roles and responsibilities          Challenges

is to plan for failure
   Cultural changes
      - Breaking down silos
      - Cross functional teams Vs functions

   Self directed empowered teams
       - Motivation and compensation
       - Decision making authority

   Management of teams and reward systems
     - Coach vs Supreme functional expert
     - Align the reward system with the desired outcome
                                                Challenges
The Productivity Loop
            SUPERIOR EXECUTION



                Lower Cost Structure




                                       Higher Sales

 Lower Prices
Things to Think About?
                                         Challenges




   What makes a strong or weak partner?

   Strategic versus Tactical partnerships.

   What industry/company
                Characteristics
                Processes
     are best suited for partnerships?

				
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posted:2/16/2013
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