CUSTOMER RELATIONSHIP

MANAGEMENT
LECTURE 5
L.MFULA
Choosing A Customer service strategy
Customer Management Orientation
• Defined as the set of Organisational values, beliefs and strategic
actions that enable the implementation of customer management
principles.
• Characteristics by a top management belief and commitment that the
customer is set at the center of activity.
• Recognizes that customers are heterogeneous in needs and value to
the firm and reflects a readiness to treat different customers
differently.
• Considers the fact that a longer-term view of the revenue from
customers needs to be taken into account.
Business Model
• Every customer carries a specific & unique credit risk and potential
revenue profile, which determines high risk-return profile from the
company's point of view.
• The better the company can understand and assess a customers
specific risk, the better it can manage it.
• The better the company understands the customer, the more it can
tailor make to customer needs.
• Thus low risk and high returns.
• Analytical CRM is based on data mining and data interpretation. It's
used to analyze customer sales data, payment and credit history, and
evaluate customer response to marketing campaigns.
• Operational CRM -generally refers to services that allow an
organization to take care of their customers. It provides support for
various business processes, which can include sales, marketing and
service. Contact and call centers, data aggregation systems and web
sites are a few examples of operational CRM.
Characteristics of marketing driven CRM
implementation
• Activities and processes that constitute analytical CRM
• Activities and processes that constitute operational CRM
• A firms ability to understand the value of the customer to run the firm
and the variety of needs different customers have
• An acquisition and retention process that continuously aligns the
offering with customer needs and values
• An ability to continuously improve what the company offers by
learning about its customers
Steps in developing the CRM strategy
• Gain enterprise wide commitment

Build a CRM project team

Analysis of Business requirements

Define the CRM strategy

CRM STRATEGY
• A CRM strategy shows the intent of a firm concerning its customer
base pointing out how it shall acquire, maintain and retain customers
through improvement in customer value deliverables as the way to
enhance corporate performance.
Strategy Development
• This involves development of CRM strategy options for achieving
established CRM objectives for every targeted segment, thereafter
the best option shall be adopted as the CRM strategy and the right
measures for performance shall be established.
CRM Strategy Selection
Customer relationship management strategy is needed to achieve the
following:
• Govern how to satisfy customers beyond developing good products
and services
• Help retain existing customers to maximize efficiencies and reduce
the cost of acquisition
• Ensure customer satisfaction and a memorable brand experience
• Improve the overall relationship between the business entity and
specific audiences
In order to have the right strategy, you must do the following:
• Choose a distinctive value proposition.
• Tailor your activities to that value chain.
• Make trade-offs (choose what not to do) that differ from your
competition.
• Fit the parts of strategy together across the value chain.
• Find continuity over time. 
• Data-Driven Culture: Using data to drive business processes and achieve
organizational goals is more than just a strategy to improve upon and
earn customer relationships. Nurturing a culture of data before
undertaking new customer relationship management strategies is
recommended. This includes creating the documenting processes that
support your CRM strategy. For example, ask questions like: What do you
want to know about a customer? Is it necessary to record information on
their geographic location? Would you prefer to gather info on the person’s
level of education? Is it important to know who they purchased a similar
product or service from in the past? After determining what gets
documented and how, check to make sure this data is sufficient, change
the processes that aren’t working, and measure the impact of the
gathered data. Data-driven preparation results in greater comfortability
with change and more support for your CRM plan.
Consumer Privacy Concerns
Touch Point Activity
• “Quid pro quo”
• Unsolicited direct mail
• Imbedded personal information
• Time to view and sort mail
• “Open-the-envelope” tricks
• Offensive or inappropriate mail
• Mail as a result of recent activity
• Overuse of personalization
Consumer Privacy Concerns
Touch Point Activity
• Unsolicited e-mails
• Time to view and sort mail
• Time and cost to use software in effort to manage e-mails
• “Open-the-e-mail” tricks with subject line
• Offensive or inappropriate mail
• Virus concerns
Touch Point Activity
Consumer Privacy Concerns
Touch Point Activity
• Unsolicited e-mails
• Personal information captured by cyberspace pirates
• Spyware, cookies, and other mechanisms used to capture information and
track activity
• Phishing
Consumer Privacy Concerns
Touch Point Activity
• Unsolicited FAX
• Unsolicited telemarketing call
• Current customer
• Noncustomer
Consumer Privacy Concerns
Other Activity
• Ability of organization to secure and manage personal and sensitive
information
• Use information for respective function only
• Inadvertent misuse or illegal use of personal and sensitive information
Consumer Privacy Concerns
Other Activity
• Specific industry considerations
• Financial and insurance
• Retail and catalogue
• Hotel, entertainment, and travel
• Grocery
• Auto
• Medical
• Government
• Pharmaceutical
Organization Privacy Concerns

• Quest for information while adhering to privacy and ethical

responsibility
• Emergence of chief privacy officer
• Touch point interaction issues
• Internal management of information
• Consistency across channels
• Compliancy (formal and informal)
Organization Privacy Concerns

• Compliancy with regulatory entities (formal and informal)

• Agreement and relationship with customer
• Dynamics of privacy legislation
What the Consumer Can Do

• Mail preference
• FTC do-not-call registry
• DMA e-mail preference
• Understand opt-in and OPT-OUT
• Get smart!
What the Organization Can Do

• Be compliant with current and pending legislation

• Understand and meet or exceed customer and prospect privacy and
ethics expectations
• Assign privacy strategy ownership at executive level (e.g., CPO-Chief
Privacy Officer)
What the Organization Can Do

• Verify that the organization infrastructure supports respective privacy

initiatives
• Create internal awareness and support internal education on privacy
and ethical standards
• Ensure that all information-gathering touch point processes support
privacy initiatives
What the Organization Can Do

• Verify who within the organization needs access to customer and

prospect information relative to privacy and ethical issues
• Identify external partner management of respective privacy initiatives
• Create a formal privacy policy for internal use and external use
What the Organization Can Do

• Do-not-call registry
• Consumer protection commission search program
• Wireless - ported numbers
• Wireless block identifier
• Telephone and e-mail preference services
What the Organization Can Do

• Can-spam
• Deceased do not contact list
• Prison, military, and other suppression
• Build brand trust
Other Considerations

Technology
• Allows for dynamic information capture and behavior observation
• Attractive for cost reduction and timely customer interactions
• Can be perceived as invasive
Summary

• Privacy should be an integral component of the CRM strategy

• Organizations can turn privacy constraints into a positive differentiator with their
customers
• Technology has made it easier to capture information and monitor consumer
behavior
• Organizations should meet and if possible exceed consumer expectations relative
to privacy and ethical issues