Ch 8.2 Managing Customer Relationships – Flashcards
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a means of managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability -allows an organization to gain insights into customers' shopping and buying behaviors
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customer relationship management (CRM)
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-sales metrics -customer service metrics -marketing metrics
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CRM metrics
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-number of prospective customers -number of new customers -number of retained customers -number of open leads -number of sales calls -number of sales calls per lead -amount of recurring revenue -number of proposals given
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sales metrics
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-cases closed same day -number of cases handled by agent -number of service calls -average number of service requests by type -average time to resolution -average number of service calls per day -percentage compliance with service-level agreement -percentage of service renewals -customer satisfaction
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customer service metrics
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-number of marketing campaigns -new customer retention rates -number of responses by marketing campaign -number of purchases by marketing campaign -revenue generated by marketing campaign -cost per interaction by marketing campaign -number of new customers acquired by marketing campaign -customer retention rate -number of new leads by product
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marketing metrics
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-finding company's most valuable customers: recency, frequency, and monetary value
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RFM formula
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-how recent a customer purchased items
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recently
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how frequently a customer purchases items
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frequently
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the monetary value of each customer purchase
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monetary value
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1. reporting 2. analyzing 3. predicting
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three phases in the evolution of CRM
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help organizations identify their customers across other applications -asks what happened -What is the total revenue by customer -How many units did we make -What were total sales by product -How many customers do we have -What are the current inventory levels
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CRM reporting technologies
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help organizations segment their customers into categories such as best and worst customers -asks why it happened -Why did sales not meet forecasts -Why was production so low -Why did we not sell as many units as previous years -Who are our customers -Why was revenue so high -Why are inventory levels so low
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CRM analysis technologies
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help organizations predict customer behavior, such as which customers are at risk of leaving -asking what will happen -What customers are at risk of leaving -Which products will our customers buy -Who are the best customers for a marketing campaign -How do we reach our customers -What will sales be this year -How much inventory do we need to preorder
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CRM predicting technologies
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operational CRM and analytical CRM
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two primary components of a CRM strategy are...
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supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers
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operational CRM
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supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers
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analytical CRM
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-Marketing operational CRM technology -Sales operational CRM technology -Customer Service operational CRM technology
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operational CRM technologies
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-list generator -campaign management -cross-selling and up-selling
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three primary marketing operational CRM technologies to increase customer satisfaction
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-sales management -contact management -opportunity management
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three primary sales operational CRM technologies
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-contact center -web-based self-service -call scripting
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three primary customer service operational CRM technologies
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compiles customer information from a variety of sources and segment it for different marketing campaigns -ex: surveys, questionnaires
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list generator
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-guide users through marketing campaigns by performing such tasks as campaign definition, planning, scheduling, segmentation, and success analysis
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campaign management
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selling additional products or services to an existing customer -ex: asking the customer if they wanted to by the soundtrack after buying the movie
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cross-selling
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increasing the value of the sale -ex: asking customers whether they would like to super-size meals for an extra cost
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up-selling
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a part of operational CRM that automates service requests, complaints, product returns, and information requests
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customer service and support (CSS)
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automatically tracks all the steps in the sales process
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sales force automation (SFA)
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automate each phase of the sales process, helping individual sales representative coordinate and organize all their accounts -ex: calendars, reminders
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sales management CRM systems
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maintains customer contact information and identifies prospective customers for future sales, using tools such as organizational charts, detailed customer notes, and supplemental sales information -ex: telephone number can display with customer name and what product they purchased
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contact management CRM system
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target sales opportunities by finding new customers or companies for future sales
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opportunity management CRM system
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where customer service representatives answer customer inquiries and solve problems, usually by email, chat, or phone -one of the best assets a customer-driven organization can have because maintaining a high level of customer support is critical to obtaining and retaining customers
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contact center/call center
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allows customers to use the web to find answers to their questions or solutions to their problems
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web-based self-service
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allow customers to click a button and talk with a representative via the Internet
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click-to-talk
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gather product details and issue resolution information that can be automatically generated into a script for the representative to read to the customer
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call scripting systems
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a form of predictive analytics for marketing campaigns that attempts to identify target markets or people who could be convinced to buy products -uplift refers to the increased sales that can follow after this form of analytical CRM analysis
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uplifting modeling
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divides the market into categories that share similar attributes such as age, location, gender, habits, and so on
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customer segmentation
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occurs when a website has stored enough data about a person's likes and dislikes to fashion offers more likely to appeal to that person
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website personalization
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-supplier relationship management (SRM) -partner relationship management (PRM) -employee relationship management (ERM)
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extending customer relationship management
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focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects
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supplier relationship management (SRM)
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discovers optimal sales channels by selecting the right partners and identifying mutual customers
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partner relationship management (PRM)
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provides web-based self-service tools that streamline and automate the human resource department
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employee relationship management (ERM)
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integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so employees can make decisions by viewing enterprisewide information about all business operations
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enterprise resource planning (ERP)
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-erp -extended erp -erp II
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evolution of ERP
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improving the manufacturing process through automation, primarily addressing back-office business processes such as inventory ordering and product distribution -materials planning -order entry -distribution -general ledger -accounting -shop floor control
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ERP focus
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second generation of ERP systems extended its reach into the front office and primarily addressed customer issues, including marketing and sales -scheduling -forecasting -capacity planning -ecommerce -warehousing -logistics
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Extended ERP
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the third generation of ERP allows a company to compete on a functional level by adopting an enterprisewide approach using the Internet to connect all participants in the value chain -project management -knowledge management -work flow management -customer relationship management -human resource management -portal capability -integrated financials
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ERP II
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-core and extended
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the current generation of ERP, ERP-II is composed of two primary components
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the traditional components included in most ERP systems and primarily focus on internal operations
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Core ERP components
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the extra components that meet organizational needs not covered by the core components and primarily focus on external operations
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extended ERP components
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-accounting and finance -production and materials management -human resources
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three most common core ERP components focusing on internal operations are
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manage accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management
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accounting and finance ERP components
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handle production planning and execution tasks such as demand forecasting, production scheduling, job cost accounting, and quality control
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production and materials management ERP components
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track employee information, including payroll, benefits, compensation, and performance assessment and ensure compliance with all laws
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human resources ERP components
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-business intelligence -customer relationship management -supply chain management -Ebusiness
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four most common extended ERP components are
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collect information used throughout the organization (including data used in many other ERP components), organize it, and apply analytical tools to assist managers with decisions
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business intelligence components of ERP systems
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include contact centers, sales force automation, and advanced marketing functions -the goal is to provide an integrated view of customer data, enabling a firm to manage customer relationships effectively by responding to customer needs and demands while identifying the most (and least) valuable customers so the firm can better allocate its marketing resources
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customer relationship management ERP components
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allows firms to monitor and control all stages in the supply chain from the acquisition of raw materials to the receipt of finished goods by customers
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supply chain management ERP components
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allow companies to establish an Internet presence and fulfill online orders
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Ebusiness ERP components
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elogistics and eprocurement
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two of the primary features of ebusiness components
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manages the transportation and storage of goods
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elogistics
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the business to business (B2B) online purchase and sale of supplies and services
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eprocurement
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modifies existing software according to the business's or user's requirements
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software customization
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-software costs -consulting fees -process rework -customization -integration -testing -training -data warehouse integration and data conversions
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ERP costs
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purchasing the software can cost millions of dollars for a large enterprise
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software costs
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hiring external experts to help implement the system correctly can cost millions of dollars
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consulting
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redefine processes to ensure that the company is using the most efficient and effective processes
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process rework
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if the software package does not meet all the company's needs, customizing the software may be required
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customization
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ensuring that all software products, including disparate systems not part of the ERP system, are working together or are integrated
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integration
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testing that all functionality works correctly along with testing all integrations
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testing
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training all new users and creating the training user manuals
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training
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moving data from an old system into the ERP system
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data warehouse integration and data conversions
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-business processes or workflows -code modification -integrations -reports, documents, forms -user-interface changes
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software customization examples
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software can be customized to support the needs of business process work-flows unique to each business or department
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business processes or workflows
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the most expensive customization occurs when application code is changed and should only be done if the code changes provide specific competitive advantages
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code modification
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data integration is key for business process support that spans functional areas and legacy systems
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integrations
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customization to reports, documents, and forms can consist of simple layout or design changes or complex logic programming rules for specific business requirements
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reports, documents, forms
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an ERP system can be customized to ensure that each user has the most efficient and effective view of the application
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user-interface changes
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a management system as well as a measurement system that a firm uses to translate business strategies into executable tasks
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balanced scorecard
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-the learning and growth perspective -the internal business process perspective -the customer perspective -the financial perspective
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four primary perspectives of the balanced scorecard
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allows an organization to have an on-premises ERP system along with cloud ERP applications
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two-tier ERP architecture
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-tier I -tier II -tier III
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ERP vendors by tier
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-enterprise size: large enterprise -ERP vedor: SAP, Oracle, Microsoft
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tier I
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-enterprise size: midsize business -ERP vendor: Infor, Lawson, Epicor, Sage
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tier II
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-enterprise size: small business -ERP vendor: exact globe, syspro, netsuite, consona
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tier III
