CRM Chapter 1
What is CRM?
The good, the bad, and the ugly of CRM
Importance of CRM
2002 Goldman Sachs survey – 2nd most
important business initiative behind
As of 2003, 37 percent of business were
implementing CRM, 43 percent
considering it (Forrester Research)
From Technology driven to business
process (Late 1990s-Today)
Not just about automating customer service
Balancing efficiency with quality service
Vendors try to sell solutions not software
Can you think of ways in which internet
and e-technology has helped and will
help companies focused on CRM?
What is customer loyalty?
Why do I say CRM is an evolution of
Loyalty is emotional, not rational
In essence, customer loyalty is training our
customers to ultimately behave in a way that is
Impact of Loyalty
5% increase in loyalty (customer retention) can
increase profits from 35-100%
Reichold & Bain study
How is loyalty developed?
Positive experiences and value perception
How can companies develop loyalty?
How does customer intimacy impact loyalty?
What do you value with companies that offer
How does operational efficiency impact
What is the purpose of
Gain a better understanding of customers and
Quality of company/customer interaction
Shift from product to consumer focus**
Improve front-end customer interaction through
META Group 2000
Biggest cause for CRM
Lack of attention to the customer!
“Put the C back in CRM”
Who is involved in CRM?
Goals of CRM help establish ability to
determine return on investment (ROI)
Increasing customer acquisition rate
Decreasing churn (defection) rate
Increasing share of customer
Improving customer satisfaction
Decreasing front office staffing costs
How can an organization decide where to focus?
7 Tips for Effective CRM
Align with corporate strategy
Create an overall CRM vision for company
Evaluate process, people and tech changes
Secure commitment and buy-in of senior
Develop iterative and incremental approach
going after highest value opportunities first
Recognize changes and motivation required
Measure effectiveness and create