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WHAT IS CRM

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    SANJAY BANGROO
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    T
    he concepts of customer relationship management have been in the air ever since one caveman had a choice of buying an arrowhead from either Og or Thag, but CRM as a term gained currency in the late 1990s. Market analysts squabble over the exact figure, but all agree that in the next few years companies will pour billions of dollars into CRM solutions – software and services designed to help businesses more effectively manage customer relationships through any direct or indirect channel a customer can get her hands on.

    So why, with the market for CRM technology exploding, why is “What is CRM?” the most common question. Probably because if you ask three CRM experts, you’ll get four slightly different answers. We put the question to a panel of CRM experts to weed out idiosyncratic spin and whittle CRM down to its essence:

    Customer relationship management (CRM) is a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes. CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy, and culture.

    There you go. Simple question, simple answer, right? Ah, what is simple is not always easy. As many business executives and CRM project managers can attest, effective CRM is about as simple as the answer to how to lose weight – eat less and exercise more – and just as easy to do.

    CUSTOMER – CENTRIC: THE STARTING POINT STRATEGY

    Let’s spread that definition of CRM out on the table here. How exactly does a company create a “customer-centric business philosophy and culture?” Hint: The answer is not “with a software package.”

    CRM – at least the successful, useful and profitable kind – always starts with a business strategy, which then drives changes in the organisation and work processes, which are in turn enabled by information technology. The reverse never works. Never. Flip a pyramid on its head and what happens? We’ll send you a case of champagne for every company you can find that automated their way to a new business strategy. Projects that focus on technology first, rather than business objectives, are destined for failure, according to both extensive best practices research and the sob stories at O’Malley’s Happy Hour. A customer-centric business, however, is perfectly poised to reap significant benefits using CRM technology.

    Now, the strategy part of CRM isn’t new. Savvy business executives have always understood focusing on customers with the best potential for sales and profits – Thag buys an arrowhead a day, Og buys three a month, well, Thag gets pinch orders filled – and provides good service so they’ll come back again and again. Notice that you need techno-toys for none of this. A kid at a lemonade stand could do it. Consider a successful small business: the business owner and the staff work hard to provide personal, high-quality service, building a loyal customer base over time. Computers optional.

    So why has CRM bulled its way to a billion-dollar industry? Bottom line: Power has shifted to customers, who stand astride three powerful currents:
     The failure of enterprise resource planning systems to bestow a lasting competitive advantage for companies. Your back office is fully automated? Nice. So?
     The cycle of innovation-to-production-to-obsolescence has accelerated, leading to an abundance of options for customers and a shrinking market window for vendors.
     Internet-surfing customers have a far easier time collecting information about competing suppliers, and can – and do – switch to another vendor at the click of a mouse.

    With product advantages reduced or neutralised in many industries due to increased “commoditization,” the customer relationship itself is the focus of competitive advantage. For larger businesses, the neighbourhood boutique – “Hello Mrs. Watkins, how’s Ryan’s broken arm coming along? I saved some of the gingham I thought you’d like, it’s under the counter here…” – approach is impractical. CRM technology provides a more systematic way of managing customer relationships on a larger scale.

    THE CUSTOMER RELATIONSHIP LIFECYCLE

    T
    raditionally – defined as “before you realised what the Internet was all about” – enterprise employees were the primary users of applications designated “CRM.” Then e-business or – a buzzword flavour of the month – “eCRM” applications were introduced to allow enterprises to interact directly with customers via corporate Websites, e-commerce storefronts, and self-service applications. Starting in 1999 partner relationship management applications hit the market, designed to support channel partners and other intermediaries between an enterprise and its end customers.

    These applications support the following business processes involved in the customer relationship lifecycle:
     Marketing. Targeting prospects and acquiring new customers through data mining, campaign management, and lead distribution. Remember, the emphasis here is on long-term relationship value, not quick hit.
     Sales. Closing business with effective selling processes using proposal generators, configurators, knowledge management tools, contact managers, and forecasting aids – all without appearing to do so, or uttering The Eight Words That Kill A Sale: “Let me get back to you on that.”
     E-commerce. In the Internet Age – welcome to it – selling processes should transfer seamlessly into purchasing transactions, done quickly, conveniently, and at the lowest cost. All customers should have one face with your company, no matter which touchpoint they choose to use.
     Service. Handling post-sales service and support issues with call centre applications or Web-based customer self-service options. We said “handling,” not “sloughing off to an inadequate FAQ page.”

    CRM is a business strategy to create and sustain long-term, profitable customer relationships. Successful CRM initiatives start with a business philosophy that aligns company activities around customer needs. Only then can CRM technology be used as it should be used – as a critical enabling tool of the processes required to turn strategy into business results. – Bob Thomson

    SUMMARY: The ideas behind customer relationship management are not new. Today it’s widely acknowledged that how you treat your customers goes a long way to determining your future profitability, and companies are making bigger and bigger investments to do just that. Customers are more and more savvy about what sort of customer service they should be getting and are registering their customer service preferences with their wallets.
    How exactly does a company create a “customer-centric business philosophy and culture?”
    Hint: The answer is not “with a software package.”

    WHY CLIMB THE CRM MOUNTAIN?

    B
    ecause you have to.
    We’ve all heard about how hard implementing real CRM is. It starts with new customer-centric business strategies, which require redesigned departmental roles and responsibilities, which require re-engineered work processes, which require boatloads of CRM technology. Friends, this is a high mountain for a company that’s been sitting around eating doughnuts for nine years to climb. So why do it?
    Companies implementing CRM will spout a slew of self-serving reasons why they’re doing it. The evil fun is then watching them self-destruct in short order. Be still, listen to them, and learn:

    “WHY WE’RE DOING CRM. HONEST.”

    “Automate inefficient and expensive work processes.” Sounds good, no? Get the same work for less cost, goose the bottom line, cut staff, fatten up the financial stakeholders. No quibble here, unless…

     You reduce human contact with customers to levels they don’t appreciate. Ask around any San Jose soup kitchen for a show of hands of e-tailers who sank with this strategy.
     You value efficiency over customer satisfaction. Automating and hurrying up customer service calls and providing financial incentives for service representatives to maximise call turns is a sure-fire way to maximise customer turns.

    “Use the Internet.” There’s our answer. Customers are dying to flock to our Website, where we can shunt off all low-margin customers and low-margin transactions. Great, except…

     Today’s buyers use the Internet more selectively than today’s sellers like. While you’re in that soup kitchen you’re meeting guys from dot.bomb companies whose companies performed spectacular half-gainers on NASDAQ – “But it was the Internet, man, how could we fail… ”
     Low-margin customers are often high-potential customers…and low-margin transactions often come from high-margin customers. One of our super, super-regional banks just wound up on its knees looking for a buyer because it didn’t get this.

    “‘Fix’ sales and marketing.” CRM will keep those lazy sales reps away from those 2:30 tee times. Load GPS in their laptops. Get those marketing prima donnas pounding numbers instead of sipping daiquiris while “creating” ads. Justice prevails, except…

     Sales is your lifeline to customers. Break it at your peril. Why isn’t half the corporate staff in heavy breathing just waiting to get their crack at field sales jobs, where they get big bucks to work on their handicaps? The word “courage” keeps swirling around in my head.
     Pounding sand may be fun, but it’s kind of pointless. Yes, marketing deserves a hiding for buying into the “brand” malarkey ad agencies use to demand higher and higher budgets – I’ll confess, I’m from the agency world myself. But go ahead, try to genetically re-engineer today’s creative marketers into tomorrow’s analysts and process managers. We’ll make popcorn and enjoy the show.

    CLIMBING MOLEHILLS, NOT MOUNTAINS. MUCH EASIER, BUT…

    A
    re these good reasons enough to climb the CRM mountain? Hell no, they’re a handful of dust. But you know, pilgrim, those companies aren’t doing CRM. They don’t believe in CRM – or they’re scared of heights – so they automate workflow and dink around online to look busy. That’s climbing molehills, not mountains.

    So why should we be climbing the mountain – becoming truly customer-centric rather than just automating work processes and fiddling with the Internet? Simple.

    WE’RE CLIMBING CRM MOUNTAIN BECAUSE
    OUR CUSTOMERS ARE HOLDING BAZOOKAS TO OUR HEADS…

    Feel free to frame that.

    Fundamental economic changes that started in the 1980s and are still picking up steam have put customers in charge of buyer-seller relationships. Companies trying to hang on to their beloved “command and control” approach to customers watch loyalty rates sink and find less margin for error. They’re headed for the toilet – and even in there the good seats are already taken. There’s your choice: Mountain or toilet?

    We’re climbing CRM Mountain because we have to, given that bazooka and all. Either we do business their way or they go their own way. Anybody can copy your product or service, and if they also provide more customer-informed and customer sensitive sales and service – along with such add-ons as shorter order turn times, direct lines of communication and more accurate invoicing – you’re toast.
    Kill the mental movie of Sir Edmund Hillaryesque bravery and endurance as you conquer CRM Mountain, swatting away challenges to end up holding hands in a circle with customers singing as the credits roll…Think instead of a forced march. Sweaty step follows sweaty step, up and down the big hill with the roar of cannons in your ears. Your diversion will be the yo-yos who ignore customer orders, thinking their heads are thicker than tank armour. One or two may be right. But the rest…

    CRM MOUNTAIN: IT’S BIG, FOLKS, REALLY BIG

    F
    riends, this CRM Mountain customers are herding us over is pretty damn big. Lots of companies try to step over something smaller – and wind up stepping in something smelly.
    Now here’s where the fun comes in. It’s not all blood, sweat and tears. If you’ve read this far sit back and smile. See, even though there’s no real choice of whether to climb CRM Mountain or not, there is a pot of gold on the other side:

     Competitive advantage. Those who make it to the other side first find their competition’s customers waiting to greet them. Does wonders for the aches and pains mountain climbing brings.
     Simplified internal organisation. Organising your business to satisfy customer demands simplifies your infrastructure. When we get over the mountain we discover that we had been complicating our businesses by creating functional silos and sending work from one silo to another, another and another. Organising around customers shrinks workflow, shortens cycle times and eliminates non-productive information flow. Goodbye silo walls.
     Bigger bottom line. Having more customers and a more compact company will position you to make more money and please more customers – and look at your poor competitors, still avoiding CRM Mountain, or playing around on molehills. Now that you’re here, it was downhill all the way, right?

    Even though there’s no real choice of whether to climb CRM Mountain or not, there is a pot of gold on the other side

    SUMMARY: Lose the idea that CRM is a walk in the park. You don’t buy CRM from a vendor. Lose the idea that it’s a glorious undertaking. It’s a slog up a mountain. It’s dirty, hard work and absolutely necessary, unless you like having a bazooka pointed at your company head by an itchy-fingered customer. Or put it another way: Life on the other side’s great. – BY Dick Lee

    THINK LEADERSHIP

    Are you enthusiastically committed to Escotel’s mission and goals? Do you take responsibility for your actions? Are you open, honest, and trustworthy? Are you flexible and adaptive? Do you welcome change? do you genuinely care about your customers? Do you know how to lead? Do you know how to follow? Are you skilled and sensitive when dealing with people? Are you constantly looking for ways to improve, to learn?
    Did you answer yes to all of the questions? If you did, you are a true leader. If you answered no to some, don’t worry, you, like most people, have some skills to master. If you answered no to most, or all, it’s time to worry. You are either in the wrong line of work, or have a lot of skills to master. You need to decide if you are committed to improving your skills. You need to know if you want to be a leader.
    Here are a few pointers:
    1. Be consistent with your team. People want to know they can expect the same treatment from their boss day after day.
    2. It is important that your people respect you and like you.
    3. Be a positive role model.
    4. Always use appropriate language and grammar.
    5. Earn your colleagues’ trust. Be honest and up front with them.
    6. Honesty will build trust, which will build loyalty, which will bring success.
    7. Treat everyone as though they are equally important to you.
    8. Do not act as if you are above doing a job.
    9. Share your success with your team, but take responsibility for blame.
    10. Be responsible for your own attitude.
    11. Do not wait around for someone else to make the decisions.
    12. One of the most important traits you can possess is resiliency.
    13. Act positive, and you will begin to feel positive.
    14. Stick with the basics.

    TEAMWORK

    Why the focus on teamwork? Webster’s definition of teamwork answers that question: Teamwork is the cooperative effort by the members of a group or team to achieve a common goal.
    The words ‘to achieve a common goal’ sum up the importance of teamwork. Without teamwork, where will you all go if you are each heading in a different direction? How will any of you know which one of you has reached the goal? And how will you know which is the right goal?
    You have heard it before. Two can do it better and faster than one. As long as the two share common goals.
    A few points to keep in mind to develop a strong team:

    1. Build a strong team. You cannot do it alone.
    2. Building a strong, self-supportive, committed team takes a lot of your time initially; a lot less time thereafter.
    3. Think of yourself and your team as owners of the company.
    4. What are you and your team contributing to the overall success of the company?
    5. Ask for feedback on your performance from your team.
    6. Learn to delegate. But also learn to delegate to the right people.
    7. Know an easy way to boost the energy level of your team?
    Keep a smile on your face. A genuine smile. Be sincere.
    Be involved with your team.
    Build an environment of support for each other.
    Keep your own energy level high.
    8. know a long-lasting way to boost the effectiveness of your team?
    Have a strongly defined purpose with clear cut goals.
    Promote participation from all members.
    Respect everyone’s right to have different opinions.
    Have well-defined decision making procedures.
    Develop open communication.
    Make sure everyone knows their role and job assignments.
    Share the leadership with your team.
    Foster independent thinking. Create an atmosphere of support and cooperation.
    Focus on measures and areas of improvement.

    L
    et me show you the most perfectly practised CRM in business today.
    I walk into Ashland Coffee & Tea and whoever’s working says “Hi David.” They hand me the mug for the Bottomless Cup of coffee—except when I need to upgrade to The Racehorse: five shots of espresso in a fireproof cup. When I ask for “the toasted bagel with cheese deal,” whoever’s working knows to use an Everything bagel if they have one, and use Poppy-Seed and Plain in that order if they don’t, slice and toast the bagel and then apply thinly-sliced cheddar cheese, instead of melting the cheese onto the bagel.
    There’s never a charge for an improperly done bagel and cheese. New hires are told that when the guy with the laptop—David—comes in and asks for the toasted bagel with cheese, that this is what he gets. I avail myself of their free lending library, and contribute books from home.
    Once in a while they ask me which CD from their collection I’d like to have put on the house stereo, and don’t complain when I ask for Tom Waits. When there’s some live music in the evenings I’m coming to hear they put a couple of the locally-brewed Legend Lagers away on ice for me, since they’re usually the first to go. (I notice they’ve stocked extra Legends since I started ordering them.) The owners know my wife and kids’ names and ask after them. They let me use the phone to call home, and if my wife calls they hand me the phone. If I’m short of cash that day I can settle up next time I’m in.
    The masseuse who has her flyer posted here has sold me a couple therapeutic massages. An artist I met one snowy day when we were the only two customers got a nice commission for some work I needed done. The owner introduced me to another regular—there are a lot of us, as you can imagine—who will do me the favour of reading something I wrote and provide objective feedback. I’ll meet him at his framing shop down the street—and bring along a couple things it’s been in the back of my mind to have framed. An employee who just came back from Egypt brought me the hieroglyphic baubles for my kids I’d asked for. The owner, a long-time Ashland resident—we’re new here—has advised us about neighbourhoods and schools when it comes to buying a house and will recommend an agent.
    They’ve cross-sold me T-shirts, pricey tea leaves for my wife, frequent upgrades from bagels and muffins to sandwiches and all the beer me and my friends drink at the music evenings. I contribute generously to the standing tip jar.
    This, my friends, is perfect CRM. It cannot be improved upon. There is no way I’m going to cultivate another coffee shop, the exit barriers are way too high. I don’t want to go through all the getting to know the preferences with someone else—who, after all, might not care about them as much. Ashland Coffee & Tea will get my revenue stream for as long as I’m living around here.
    Why do I burn the gas and time to drive past half a dozen other coffee shops every time I come here when there’s nothing as commoditized as a cup of coffee and a bagel? Simple—they let me plug my laptop in the wall.
    When we moved here I went to a coffee shop close to home, ordered coffee and a bagel, sat down, plugged in and started working. The owner brought my order and she said she’d prefer I not use the store’s electricity (“So why don’t you paint over the outlets?”). I unplugged, ran my battery down, paid the bill and haven’t been back since. I drove farther down the road the next day, found another coffee shop, and asked if I could plug in before I ordered. They said no, I walked out and haven’t been back.
    Driving past those two places the next day I saw “Ashland Coffee & Tea” on a sign. I parked, walked in and asked the owner if I could plug in while I worked. She looked at me as if I’d asked permission to seat myself in one of their chairs, and took me around the shop locating all the outlets in the store for my benefit. I haven’t tried another coffee shop since.
    What, I ask, is the customer acquisition cost of a couple hours’ worth of free electricity for a desirable prospect who has been one of the most profitable of customers? At current rates (sorry), less than a nickel.
    By practising flawless CRM Ashland Tea & Coffee has assured themselves of a revenue stream annuity amounting to hundreds and hundreds of dollars a year. My wife has taken to dropping by when she’s in the neighbourhood as well, and buys juice for the kids and a cranberry scone with a cup of tea. I’ve told some people at church about this place. Someday I’ll do the owners of those other two coffee shops a favour and tell them as well. – David Sims

    What Is CRM?

    I
    t must be understood that at its core, CRM is more than just a set of technologies: it is a process. This fact will be of significant importance to Information Technology (IT) professionals who will be asked to support CRM with information and applications. Furthermore, it is intended to be a repeatable process to ensure ongoing, continually improving, and consistent results.

    CRM is a business strategy aimed at understanding and anticipating the needs of an enterprise’s current and potential customers.
    From technology perspective, CRM involves capturing customer data from across the enterprise, consolidating all internally and externally acquired customer-related data in a central database, analysing the consolidated data, distributing the results of the analysis to various customer touch points and using this information when dealing with customers via any touch points.

    Group Simply stated, CRM comprises the acquisition and deployment of knowledge about customers to enable a company to sell more of their product or service more efficiently.
    CRM begins with in-depth analysis of customer behaviour and attributes to achieve complete knowledge of the customers, their habits and desires, and their needs. It then applies this knowledge to the formulation of marketing campaigns, strategies, and treatment plans. However, managing the relationship also implies customer interaction. Therefore, CRM also encompasses enabling a network of “touchpoints” by which the organisation can establish, cultivate, and maintain long-lasting and mutually beneficial interactions with the customer. These are the two cornerstones of CRM–the knowledge or customer information platform and the customer interaction platform.
    Finally, in order to achieve continuous improvement, it is necessary to track the results of the customer interaction and use those results to refine future actions. This implies capturing the essential information exchanged through the touchpoints.
    CRM is the next step in the evolution, and it moves us back towards developing an intimacy with today’s customers, using today’s tools, and maintaining our mass production and distribution systems. It recognises that the equation that yields trust and loyalty from a customer has two variables.
     The first variable is information and analysis (knowledge): one has to know what the customer wants, needs, and values.
     The second variable is the need for interactivity and personal contact and the way in which the customer wants to be contacted. The success of a customer-centric business strategy is measured not only by “share-of-market” but also by “share-of-customer”.

    The goal of CRM is profitable growth through delivery of the right product or service, to the right customer, through the right channel, at the right time and at the right cost.

    Assess
    The assessment phase develops a model of the behaviour of target customers, using a combination of in-house data and external demographic, psychographics, and other data. Here, marketing will explore a number of questions, including:
     Who are the customers? What are their demographics and lifestyle?
     Where do they live? Here geocoding and proximity measures are applied.
     What are they worth? What is their lifetime value potential?
     What and how do they buy? What are their purchasing patterns? Is there a model of their profitability or the risk associated with doing business with them?
     How can they be reached? How have they responded to promotions in the past and through which channels do they prefer to be contacted?
    Integration of legacy and external data sources is required, usually through data warehousing technologies. The analysis of the data will require tools such as OLAP (On-Line Analytical Processing), data mining, and statistical analysis tools such as CHAID (CHI-squared Automated InDuction), CART (Classification And Regression Trees), and other complementary tools to report, analyse, and unearth hidden trends in the data. Because this is the part of the process where the target segment of the customer base is selected and customer requirements are analysed, it is also the most critical phase of the cycle.

    Plan
    During this phase, marketing decides how best to approach the customers defined in the assessment stage by designing marketing campaigns and strategies. Although there are IT solutions available for campaign planning, this phase is less dependent on technology for its success. Traditionally, the planning phase is the creative part of marketing, with support provided by tools and frameworks.

    Execute
    The execution phase of the cycle is where an organisation puts all this knowledge to work, using all of the customer touchpoints available. Effective customer interaction, which has two dimensions, is the key here.
     The first dimension is the execution and management of marketing campaigns and customer treatment strategies through these interaction touchpoints.
     The second dimension is the tracking of responses, which also represents an important aspect of this phase: gathering data on the results of each plan which are to be used in the next assessment cycle or the next time a customer interacts with the company.

    There are three primary reasons why CRM has taken hold as rapidly as it has:
     competition is fierce,
     the economics of customer retention are unequivocal,
     and technology allows organisations to do this more effectively and profitably today.
    The benefits of CRM are contained in results: top line growth, bottom line performance, and employee and customer satisfaction. Pursuit of these goals means aligning the entire enterprise around serving customers within a longer-term context and can begin from many vantage points.

    D
    riven by a number of key factors, CRM has emerged because businesses are striving for differentiation and growth in increasingly competitive “buyer’s” markets. Contributing factors include:
    1) Increasing competitive pressures due to rapid innovation and broad information access
    2) New awareness of the lifetime value of customers
    3) The differing needs of customer segments, even to a “segment of one”
    4) Customer churn, or turnover, driven by low barriers of exit and poor service, and
    customer retention, or loyalty emerging as the most positive influence on top line business growth.
    5) These factors are taking place within a business landscape that is changing with the emergence of the Internet, data warehouses, sales force automation, changing communications networks, and the increasing demands by customers for high satisfaction. The options available for effectively competing are getting more limited and the promise of CRM top line and improvements are becoming more attractive.
    As businesses strive for greater expertise and the related support in systems and technology, it is becoming even more challenging to align the enterprise in order to meet the needs of the customer. Meeting customers’ demands range from being available 24 hours a day, 7 days a week though the telephone, e-mail, and the Internet – to having accurate records of customer interactions and resolving issues quickly and with care. As the range of products and services expand and customer demands increase, the support systems and tools become the “integrating factor” in the operations of the business. The ability for an employee or self service option to serve the customer well depends on the speed and latency of the infrastructure moving the data to the person who needs it, the data profiling tools to understand a customer’s preferences rapidly, well constructed web interfaces, and the ability to manage it all as if the company is aligned around delivering on each customer’s needs.
    Aligning the organisation and integrating the many interactions into a holistic view of each customer relationship – these are the challenges that leading edge companies are tackling today.
    A commitment to CRM means moving beyond serving the customer in a transaction and sourcing new and improved tools and support systems that can link together the many pieces of the enterprise into an aligned delivery engine. CRM means that businesses can now match the customer’s vantage point, perhaps for the first time. Customers, as front line employees know, see the company as an overall entity, When they contact a business by e-mail, fax, or in person, these interactions are part of an overall impression of the business and how it delivers on its promises.
    Impacting the consistent delivery on these promises is the key to CRM. With multiple customer segments and multiple products and services, it is increasingly difficult to deliver the expertise required to keep the many promises a business is making every day. To do this and concurrently maintain a competitive cost is challenging. The solution to this problem is intelligent and proactive software than can manage various interactions and follow up work items in a manner that aligns to the business goals and delivers the promises made, over and over again – which leads to attracting new customers and keeping them.

    An Architecture for Developing CRM
    A
    rchitecture is a blueprint created to define the solution to a problem. The architecture brings together the tools and elements of the solution in such a way that they work together as a single, cohesive entity. The more complex the system, the more need for a good blueprint to help guide the development team members in their individual tasks.

    Data warehouses represent the linchpin of the architecture for CRM initiatives. It is the warehouse that becomes the nucleus for all the data required to perform the assessment phase, and from which all of the detail information is disseminated to call centres, SFA, and campaign management components. The data warehouse infrastructure for CRM needs to be a comprehensive customer information platform that supports the marketing process.
    A typical architecture for a CRM system could include the following process components supported by a customer information platform.

    Analysis/Profiling
    The data warehouse is the technology and infrastructure heart of the architecture. All the marketing process components are enabled by the data warehouse and depend on the quality of the data warehouse for the accuracy of the derived results. The analysis and profiling activity uses a number of tools and technologies to derive knowledge about the organisation’s customers, as well as attribute the results of previous campaigns and customer interactions to the actions performed. This process utilises various analytical tools, such as, OLAP, data mining, and statistical analysis. The analysis and profiling activity primarily evaluates previous customer treatment strategies and uses the analysis to modify different kinds of models that are used to indicate a particular customer, or customer segment’s propensity to buy, churn, up-sell, cross-sell, etc. The results of the analysis and profiling activity are used extensively in the planning phase to construct the different promotional campaigns and treatment strategies, which are then fed to the customer interaction systems.

    Customer Interaction
    Organisations cannot truly develop a relationship with their customer base without instituting mechanisms for direct, bi-directional contact. These mechanisms are called “touchpoints” or “channels.” They consist primarily of three architectural constructs:
     The sales force automation system that allows direct sales forces to promote products and gather customer feedback;
     The call centre, which allows both customer-initiated direct contact and outbound telemarketing/telesales; and
     The expanding Web access component for self-service.
    The key to success here is the need for these touchpoints to be integrated into a cohesive whole. Customers must be able to get the same information from the Web, the sales force, or the call centre. The sales force and call centre must know the same facts about the customer and their history. Treatment strategies and campaigns must be consistent across these channels so as to ensure consistent relationship management. All of these elements must be connected within a “closed-loop” to make a CRM system successful.

    CRM Analytical Solutions Empower One To By Datamining Your Data One can
    Gain a deeper understanding of your customers and maximise your marketing ROI. Identify customers who exhibit similar behaviours, who is most and least likely to purchase within specific affinity groups and model best customers in terms of purchase behaviours to identify events, attributes and behaviours that occur together.
    Develop targeted marketing programs and offers that match customers natural buying patterns and increase response. Predict who is the most likely to respond to different marketing programs.
    Recommend the mix of products, services and offers that customers are most likely to buy, at the optimal time and increase sales. Model “market baskets” – which products and services are purchased together, or in sequence.
    Spend resources wisely by matching spending relative to expected lifetime value and maximise customer profitability. Model your customers in terms of lifetime value and profitability to your organisation; identify risky and non-profitable customer groups.
    Develop targeted customer retention and loyalty programs and reduce customer defection. Model churn behaviours – look at customers who have left the organisation and profile when and why they leave.
    Respect Web visitor’s time and privacy by limiting the questions you ask them to those that are necessary to improve the relationship. Refine surveys and forms with knowledge of the factors that are important and asking the right questions at the right time.
    Develop new product and service features based on what your customers value, increase satisfaction and extend your customer lifetime. Conduct customer satisfaction surveys, evaluate changes over time; combine with customer profiles to identify programs and specific actions to take.

     Do you have product-focused IT systems that are hindering your organisation’s ability to create a single view of customer data across the enterprise?
     Are you planning to take advantage of new channels to market-such as call centres, self-service kiosks, or e-business Web sites-to reach and retain more valuable customers?
     Do you want to integrate these customer touch-points with traditional marketing communications media-such as direct mail, billing inserts, telemarketing, print and broadcast-to enable consistent delivery of service?
     Do you want to significantly decrease the time it takes to plan and execute a marketing campaign from months to days and increase the velocity of your marketing and sales cycle?
     Is the IT infrastructure supporting your front office sales, marketing and service applications able to deliver 24×7 availability of applications, high performance and scalability to handle increased business?

     Failure To Gain TOP Management Support & Involvement
     Inadequate Team Involvement In The Initiative
     Insufficient Planning & Resources
     Automating A Dysfunctional Manual Process
     Scrimping On Training & Support

    The rewards of executing an effective CRM program are largely self-evident: increased customer value, higher customer retention, increased customer recruitment, and higher profitability. The traps and pitfalls or lessons learned are equally important as they can affect the outcome and prevent a CRM from achieving its potential.
    Some recommendations:
     Start with a clear vision of a customer-centric, as opposed to a product-focused approach;
     Remain focused on a disciplined and structured marketing process driven by detailed data;
     Retain business focus — don’t get distracted by the technology;
     Ensure the technology infrastructure can adequately capture and track promotional history and customer responses to campaigns;
     Recognise that multiple steps may be required to move from the current state to the ideal;
     A marketing warehouse infrastructure must exist for any serious CRM initiative;
     Data mining and analytical tools add complexity to a marketing warehouse but provide powerful behavioural and segmentation insights efficiently;
     New campaign management technology can augment previous investments in targeting and other marketing programs; and
     Reduce the risk associated by building a project team made up of business users, IT professionals, executive management, and external consultants as appropriate.

    #11528 Reply
    SANJAY
    Guest

    BIKRAM GO THROUGH THIS

    #11529 Reply
    Bikram Singh
    Guest

    Thank u sir,

    thank u very very much

    #11530 Reply
    Vedula Srinivas
    Guest

    It is a good attempt to explain CRM. What bothers me most is the fact that inspite of CRM being labelled as customer centric /the CRM implemntations worldwide are a cropper . Any explanations?

    Vedula

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