CHAPTER 11

Building A Customer-Centric
Organization – Customer
Relationship Management
CUSTOMER RELATIONSHIP
MANAGEMENT
( CRM )
Provide better customer Help sales staff close deals faster
service

Make call centers more Simplify marketing and sales

efficient processes

Cross sell products more Discover new

effectively customers

Increase customer
revenues
 RECENCY
How recently a
customer purchased
RECEN items

MONETARY
VALUE
CY
RF
Organizations can find their
most valuable customers
FREQUENC
How
Y frequently a
customer purchased
items

M
through ‘RFM’

FREQUEN MONETARY
How much a customer
VALUE
CY spends on each purchase
 THE EVOLUTION OF CRM

Help organizations segment their

customers into categories such as best
and worst customers.

CRM Reporting CRM Predicting

Technology Technologies

CRM Analysis
Technologies

Help organizations identify their Help organizations make predictions

customers across other applications regarding customers behavior
 PREDICTING
- Customer Prediction -

ANALYZING
Business - Customer Segmentation -
Value

REPORTING
- Customer Identification -

Time
 REPORTING ANALYZING PREDICTING
‘Asking What Will
‘Asking What Happened’ ‘Asking Why It Happen’
Happen’
What is the total revenue Why did sales not meet What customers are at
by customer? forecasts? risk of leaving?

How many units did we Why was production so What products will the
manufacture? low? customers buy?

Where did we sell the Why did we not sell as Who are the best
most products? many units as last year? candidates for a mailing?

What were total sales by What is the best way to

Who are our customers?
product? reach the customer?
What is the lifetime
How many customers did Why was customer
we score? revenue so high? profitability of a
customer?
What are our inventory Why are inventory levels What transactions might
levels? so low? be fraudulent?
THE UGLY SIDE OF CRM
CRM’S EXPLOSIVE GROWTH
CRM BUSINESS DRIVERS
CRM’S EXPLOSIVE GROWTH
FORECASTS FOR CRM SPENDING
(IN BILLIONS)
USE ANALYTICAL CRM TO ENHANCE
DECISIONS
ANALYTIC
AL CRM
Supports back-office
operations & strategic
analysis & includes all
systems that do not deal OPERATION
directly with customers
AL CRM
Supports traditional
transactional processing for
day-to-day front-office
operations or systems that deal
directly with customers.
 ENTERPRISE CRM
OPERATIONAL & ANALYTICAL CRM

FRONT OFFICE – OPERATIONAL CRM

Sales Customer
Marketing
Systems Service
Systems
Systems

Collaborative CRM Data Data

System Warehouse Mining

BACK OFFICE – ANALYTICAL CRM

 CRM SUCCESS FACTORS
03
IMPLEMENT 04
IN BUILD AN
01 ITERATIONS
Avoid big-bang INTEGRATED VIEW
CLEARLY
approach & OF THE CUSTOMER
COMMUNICATE implement in small The system must support
CRM STRATEGY pieces. organization’s strategies &
Ensuring all departments
goals.
& employees understand
exactly what CRM.

05
02 SCALABILITY FOR
DEFINE ORGANIZATIONAL
INFORMATION GROWTH
Organization
NEEDS & FLOWS must
understand all of the Ensure the system can
different ways support the organization’s
information flows. future growth.
THANK
YOU