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.

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 Evolution of CRM

Three phases in the evolution of CRM include reporting, analyzing and predicting.

• CRM reporting technology - help organizations identity their customers across other applications.
• CRM analysis technologies - help organization segment their customers into categories such as best and worst customer.
• CRM predicting technologies - help organizations make predictions regarding customer behavior such as which customers are at risk of leaving.

The Ugly Side of CRM

Customer Relationship Management's Explosive Growth

CRM Business Drivers

Forecasts for CRM Spending (in billions)

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 an integrated view of the customer.
• Implement in iterations.
• Scalability for organizational growth.