ppt explains about customer relationship management
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Pre Requisites for Implementing CRM
CRM is ultimately a philosophy of how your business
processes are organized
There is a technical side of it, but the emphasis is how
well you have integrated the customer experience into
your entire business process
It engenders business change and is one of the goals of
CRM
Is an enterprise-wide initiative and aims at integrating
the front-end customer facing systems with the back-
end systems that actually deliver the product and value
to the system.
Contd.
It involves not only the top management but the enterprise
as a whole with all the functional departments
Requires change management in the following aspects:
Processes
Goals
Orientation
Focus
Technology
Performance and effectiveness
CRM Implementation Roadmap
Helps the firm to develop a positive cultural
acceptance of CRM
Enables the firm to deal with organizational changes,
new businesses, customer needs and CRM
technologies
Stages of CRM implementation Roadmap
Scenario analysis
Purpose definition
Business planning
Process design
Technology and vendor selection
Solution development
Implementation
Measurement
Scenario Analysis
This involves evaluating the environment
What is the business of the firm?
Who are its customers?
Where is the firm placed with respect to its competitors?
What is the current business scenario and how is it likely to
evolve in the future in short, medium and long term?
Based on this the firm can define what it needs to
improve its performance against its competitors in the
market by developing relationship with the customers
Purpose definition
After scenario analysis the firm needs to define its
purpose for going in for CRM
Firms generally go for CRM to build more effective,
efficient and long lasting relationships with their
customers
The company should not merely go for this because
of their competitors or because it is the latest
technological trend
Planning
Here CRM’s overall objectives at the department and
enterprise level need to be defined
This includes documentation of high level CRM business
goals in the form of business document that forms the focal
point of strategy formulation
Also includes details of what needs to be done and who
would be responsible for what
Changes in following areas are expected:
Business focus
Organizational structure
Business metrics
Marketing focus
Technology
Process Design
Here the firm looks at the existing processes and try to
redesign them to make them more customer centric
Also effectiveness and efficiency of these processes need
to be considered at this stage
Technology and vendor selection
All the available technologies and vendors are evaluated at
this stage
Technology is evaluated on some of the parameters like:
Compatibility with the existing system
Capability of the solution in terms of functionality,
Service capabilities of the vendors
Solution Development
Includes the following aspects:
Customization of features
Development of new features required
Process integration and testing
Design of the database
Implementation
Here finally the system is put in place
System is deployed and documentation is done
properly for future reference
End users need to be trained
Solution needs to be sold internally so that it gets
positive response from the employees
Measurement
Here development of metrics to measure the
performance of CRM solution and comparing with the
desired performance is done
Success is measured in terms of how well CRM has
been able to solve business problem
Should also include user feedback to improve the
usability of CRM and business effectiveness
Technological Issues
Functionality
Flexibility in incorporating changes
Customization
Scalability
Fit with existing infrastructure (legacy system)
Fit with global best practices
Upgradeability
Commercial impact
Compatibility with other CRM solutions
Degree of integration
Vendor Issues
CRM expertise
Expertise in the industry
Geographical implementation experience
Focus of vendor on CRM
Credentials of the vendor like financials, client list, life
history etc
Vendor’s understanding of firm’s business problems
Preferred implementation partners
Technical handholding expected
Training and maintenance
Requirement of CRM Program
A clear understanding of and commitment to the
company’s customer focus
Vigilant adherence to detailed goals
Commitment from both executives and line workers
And a constant awareness of the customer’s
viewpoint
Contd.
It is difficult to develop CRM strategy without an
understanding of the value of the customers and their needs
A company should have strategic approach to treat
different customers differently
Without a proper CRM strategy, it will be difficult for the
company to target its limited resources at its most valuable
customers
Issues to be addresses by CRM vision and strategy
Which customers to target?
How to deal with rapidly increasing channel fragmentation and
media complexity so that it has a positive effect on company’s
communication with its customers
How should company balance quality of experience, cost to
serve and profitability of the customer
What is the appropriate level of CRM integration for the
company
How to get the customer insight on company’s products and
initiatives
What should be the corporate strategy for unprofitable
customers
CRM across Company Functions
Marketing – Account management expertise
Research & Development – Specifications that define
requirements
Logistics – Knowledge of customer service
requirements
Production – Manufacturing strategy
Purchasing – Sourcing strategy
Finance – Customer Profitability Reports
Measurement of CRM success
A research study conducted illustrates the following
four overreaching measurements for CRM success
CRM’s ability to impact corporate strategy (25%).
Successful technology integration (23%)
Enhanced strategic partnership (20%)
Assimilation of CRM related technologies (18%)
CRM Business Plan
Includes several discrete components that, when
combined explain the value proposition and tactical
implementation plan for CRM
Also includes:
The requirement for new technologies
The impact on existing technologies
Ongoing support and maintenance required
CRM alternatives
Contd.
The planning begins with development of strategy followed
by selection of technology to support the strategy
The acquisition and implementation of technologies should
allow the company to achieve its vision for CRM
This can be accompanied by effective change management
and technology enabled evolution
Issues to be addressed before
implementing CRM
Are various customer touch points (access tools) well
integrated?
How well do you empower customer service employees
with the ability to answer customer questions?
How well does your customer support assist people who
need help with your website or product?
How well are your internal departments connected? Are
they able to ensure cross- dissemination of information
quickly and efficiently?
Implementing CRM Strategy
If we implement CRM without a plan, its likely to
fail.
To make the road ahead clearer and enable us to
accomplish our goals, we need to choose among the
four major CRM strategies
Enterprises seldom limit themselves to just a single
CRM strategy
However, based on an enterprise's goals and culture,
one of four strategies is likely to predominate
Contd.
Gartner defines it as a business strategy designed to
optimize profitability, revenue and customer
satisfaction.
So, enterprises will pursue a wide variety of CRM
strategies.
One of the fallacies concerning CRM is that it
looks the same at all enterprises.
In reality, enterprises tend to pursue four different
"flavors" of CRM, depending on which of four
strategies they are emphasizing
Strategy No. 1: Extend Depth and Breadth
of Relationships
Most-common strategy that enterprises pursue, often
without overtly thinking about it.
The goal is to get a larger share of the customer
relationship.
Common terms include "up sell" and "cross-sell."
The presupposition is that the enterprise is
underrepresented in the customer's thinking, and that it can
expect a larger "fair share" of the relationship
Contd.
Information on the state of the current relationship is
important to this strategy, as is the upside potential
and the levers that influence the customer.
Hence, it is extremely data-intensive and data-
dependent.
Enterprises that emphasize this strategy will place a
heavy burden on related IT initiatives, such as data
warehousing and business intelligence
Typical Systems Used
Campaign management systems (CMSs),
Analytics/business intelligence and
Lead management
Traditional Metrics
Cross-sell ratio,
Close rate,
Average sales price,
Average increase in order size,
Involuntary attrition rate and cost,
Cost per lead,
Average order size and
Response rate
Pros & Cons of This Strategy
Pros:
Easy connection to revenue;
High payback
Cons:
Data-intensive;
Requires systems infrastructure, which often
requires retraining the marketing department
Strategy No. 2: Reduce Delivery Channel Costs and
Create Barriers to Entry
The idea here is to move customers and transactions
away from high-cost channels (the labor-intensive
channels) to low-cost channels (such as the Web).
Is aimed at using CRM to make the enterprise more
efficient, so much of the focus is on such areas as
revenue, channel costs, detailed transaction data and
changes in usage patterns over time.
Typical Systems Used
E-service/self-service,
Interactive Voice Response (IVR) and
Marketing Resource Management (MRM)
Traditional Metrics Used
Cost per transaction,
Revenue per customer,
Revenue per new customer,
Number of channels used,
Transaction errors per agent and
Average acquisition cost
Pros & Cons
Pros:
Direct impact on bottom line; builds competitive advantage
Cons:
May conflict with customer desires;
Requires a multi- touch point strategy; and may have
unintended consequences — for example, using Web self-
service to offload a call center can cause remaining calls to
become longer and more complex, which results in a need
for more agents of higher caliber to handle more-complex
questions
Strategy No. 3: Reinforce Brand
People claim that, in the age of CRM, the brand is
dead.
In fact, exactly the opposite is true.
The brand has become more important, because CRM
is the fulfillment of the promise created around the
brand.
In other words, a brand promises customers.
CRM is the ability to make that promise a reality.
This strategy emphasizes the handoff from branding
media (such as television) to more-interactive media
for example, the call center
Typical Systems Used
Call center,
Sales force automation (SFA),
Opportunity management,
E-commerce and
Unassisted selling
Traditional Metrics
Abandonment rate,
Once-and-done rate,
Pipeline forecast volume,
Calls per day,
Revenue per salesperson and
Number of new customers
Pros & Cons
Pros:
Synergistic with other marketing goals;
gives consistency for customers
Cons:
More qualitative in nature;
requires a long-term view of the relationship
Strategy No. 4: Create Customer
Satisfaction and Loyalty
The goal here is to create happier customers.
It is usually done in the area of customer service and
support, but it may also include operational systems
that enable customers to have access to needed
information.
A fundamental of this school of thought is that every
interaction with the customer does one of two things:
creates satisfaction or destroys it.
This strategy works to ensure that the interactions go
well
Typical Systems Used
Billing and partnership relationship management
(PRM) systems
Traditional Metrics
Customer satisfaction score,
Average duration of relationship,
Profit per time period,
Voluntary defection rate,
Lifetime value and
Quote-to-close cycle time
Pros & Cons
Pros:
High correlation between satisfaction and
longevity;
Builds on the back of necessary systems
Cons:
Extremely qualitative, so difficult to quantify;
hard to make links between satisfaction and loyalty