Chapter 11 . Building a Customer-centric Organization - Customer Relationship Management

Customer Relationship Management (CRM)

• CRM enables an organization 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 processes
  - Discover new customers
  - Increase customer revenues

Recency, Frequency, and Monetary Value

• Organizations can find their most valuable customers through "RFM" : Recency, Frequency, and Monetary value
  - How recently a customer purchased items (RECENCY)
  - How frequently a customer purchased items (FREQUENCY)
  - How much a customer spends on each purchase (MONETARY VALUE)

The Evolutionary of CRM

• CRM reporting technology - help organizations identify their customers across other applications
• CRM analysis technology - help organization segment their customers into categories such as best and worst customers
• CRM predicting technology - help organizations make predictions regarding customer behavior such as which customers are at risk of leaving
• Three phases in the evolution of CRM include reporting, analyzing, and predicting

The ugly side of CRM

• customer can do a viral to make the business bankruptcy.

Customer Relationship Management's Explosive Growth

• CRM business drivers
  - Automation/productivity/efficiency
  - Competitive advantage
  - Customers demands/requirements
  - Increase revenues
  - Decrease costs
  - Customer support
  - Inventory control
  - Accessibility
• Forecasts for CRM spending (in billion)

Using Analytical CRM to Enhance Decisions

• 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 strategic analysis and includes all systems that do not deal directly with the customers.
• Operational CRM and analytical CRM :

Customer Relationship Management Success Factors

• CRM success factors include :
  - Clearly communicate the CRM strategy
  - Define information needs and flows
  - Build and integrated view of the customer
  - Implement in iterations
  - Scalability for organizational growth
  

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