Chapter 11 – Building a Customer-Centric Organization – Customer Relationship Management

Customer Relationship Management (CRM)

Customer Relationship Management

• Managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability.
• CRM allows an organization to gain insights into customer's shopping and buying behaviors

The Benefits of CRM

• companies that understand individual customer needs are best positioned to achieve success.
• building successful customer relationship is not a new business practise , however, implementing CRM systems allows a company to operate more efficiently and effectively in the area of supporting customer needs.

CRM enables an organizations to :

• Provide better customer service
• Make call centers more efficient
• Cross sell products more effectively
• Help sales staff close deals faster
• Simplify marketing and sales process 
•  Discover new customers
• Increase customers revenues 

Organization can find their most valuable customers through "RFM- Recency,Frequency, and Monetary value

• How recently a customer purchased items ( Recency )
• How frequently a customers purchased items ( Frequency )
• How much a customer spends on each purchase ( Monetary value)

The Evalution of CRM

CRM reporting technology 

• Help organization identify their customers across other applications

CRM analysis technologies

•  Help organization segment their customers into categories such as best and worst customers

CRM predicting technologies 

• Help organizations make predictions regarding customers behavior such as which customers are risk of leaving

Three phases in the evolution of CRM include reporting analyzing and predicting

 CUSTOMER RELATIONSHIP MANAGEMENT 'S EXPLOSIVE GROWTH

Using Analytical CRM to Enhance Decision

• Operational CRM - supports traditional transactional processing for day-to-day front office operations or systems that deal directly with the customers 
• Analytical CRM - supports back-office operations and strategies analysis and includes all systems that do not deal directly with the customers

Operational CRM and Analytical CRM

Customer Relationship Management Success Factors

1. Clearly communicates the CRM strategy
2. Define information needs and flows
3. Build an integrated view of the customer
4. Implement in iterations
5. Scalability for organizational growth