Transcript part 2 CRM

CRM and external relationships
Part 2
Presented by
Mr. Ahmed El Seddawy
AASTMT – EC Department
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
Importance for organization to focus on
needs, wants, preferences and values of
customer
Use of IT and Internet to cause major
transformation in ways organizations interact
with customers
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企業價值
B2C
EC
企業策略
KM
SCM
ERP
Supplier
CRM
Customer
BI
B2B EC
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Customer relationship management (CRM): A
customer service approach that focuses on
building long-term and sustainable customer
relationships that add value both for the
customer and the company
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‘There is only one boss. The customer.
And he can fire everybody in the
company, from the chairman on down,
simply
by
spending
his
money
somewhere else.’
(Sam Walton, WalMart)
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‘Present a single face
to the customer’
Customer focus
win and retain loyal
and profitable customers
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1.
2.
Accurate view of internal operations
Service to customers
Information
1.
2.
3.
4.
Across
Across
Across
Across
product lines
geographic locations
subsidiaries, business units
multiple channels
Major challenge for most organisations
– cross-functional, complex
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Potential
customer
Customer
Loyal
customer
Former
customer
Costs
Benefits
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achievement costs gain once only
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Benefits increase from:◦
◦
◦
◦

Loyal
Loyal
Loyal
Loyal
customers
customers
customers
customers
referring other new customers
tend to purchase more over time
are less price sensitive
incur fewer administrative costs over time
Note also: damage from dis-satisfied customers can rise
(Cash 1999)
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Dissatisfied
customers
Share bad
experiences
with others
Loss of
customer
loyalty
Dollars lost
compound
over time
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Concept of order sequence
Supply chain
perspective
Product / service flows
Supplier
Manufacturer
Distributor
Retailer
Consumer
Customer demand flows
Demand chain
perspective
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Advertisement, Brand image
Focal Company
Customer
Low visibility
Advertisement, Brand image
Focal Company
Channel
Customer
Very low visibility
Advertisement, Brand image
Focal
Company
Salesmen
Channel
Customer
No
visibility
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As is
Focal
Customer
Sales/
Channels
To Be
Focal
Customer
Sales/
Channels
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Classification of CRM programs
◦
◦
◦
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Loyalty program
Prospecting
Save or win back
Cross-sell/up-sell
E-CRM: Customer relationship management
conducted electronically
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Scope of CRM
1. Foundation of service
2. Customer-centered services
3. Value-added services
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Extent of service
1. Customer
2. Customer
3. Customer
4. Customer
acquisition (pre-purchase support)
support during purchase
performance (purchase message)
continuance support (post-purchase)
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Customer and Product
centric services
Differential Marketing
◦ Mass marketing
◦ Focused marketing
◦ One-to-one marketing

Customers are not born
equal
Sales
Management
Customer
Management
Service
Management
Marketing
Management
Database
Marketing
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Benefits of CRM
◦ Provides:
 choices of products and services
 fast problem resolution and response
 easy and quick access to information

Limitations of CRM
◦ Needed integration with a company’s other
information systems which is costly
◦ Difficult to support mobile employees
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CRM implementation issues
◦ Steps in building EC strategy focused on
customer:
1.focus on the end customer
2.systems and business processes that are designed
for ease of use and from the end customer’s point
of view
3.efforts to foster customer loyalty
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Five factors required to implement a CRM
program effectively:
1. Customer-centric strategy
2. Commitments from people
3. Improved or redesigned processes
4. Software technology
5. Infrastructure
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Justifying customer service and CRM
programs
Metrics: Standards of performance; may be
quantitative or qualitative
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Web-related metrics a company uses to determine
the appropriate level of customer support:
◦
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Response time
Site availability
Download time
Timeliness
Security and privacy
On-time order fulfillment
Return policy
Navigability
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CRM applications improve upon traditional customer
service by means of easier communications and
speedier resolution of customer problems
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Customer service adds value to products and services
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It is an integral part of a successful business
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Classifications of CRM applications
◦
◦
◦
◦
Customer-facing applications
Customer-touching applications
Customer-centric intelligence applications
Online networking and other applications
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Front-end
Communication
CRM
Core
Operational
CRM
• CTI
• Net Banking
• B2C e-Commerce
• Customer Mgt
• Marketing Mgt
• Sales Mgt
• Service Mgt
Operational
Database
Extraction
Transformation
Loading
Back-end
Analytical
CRM
• Data Mining
• OLAP
• EIS
Database
Data Mart
Data Warehouse
Demographic Data
Transaction Data
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Customer-facing applications
Customer interaction center (CIC):
A comprehensive service entity in which EC vendors
address customer service issues communicated
through various contact channels
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Intelligent agents in customer service and call
centers
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Know your customer
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Problems
◦ Customer relates to channel/salesmen, not
company
◦ Lost of valuable customer data upon departure of
sales personnel
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Online
◦ Membership
◦ One-to-one relationship
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Traditional channel
◦ Membership
◦ Data collection and usage
◦ Closer tie to customer
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Auto-responders: Automated e-mail reply
systems (text files returned via e-mail), which
provide answers to commonly asked
questions
Sales force automation (SFA): Software that
automates the tasks performed by sales
people in the field, such as data collection
and its transmission
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Customer-touching applications
◦ Personalized Web Pages
◦ E-Commerce Applications
◦ Campaign Management
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DM: Direct Mail
◦ For traditional market
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◦ Web Self-Service
Activities conducted by users on the Web to provide
answers to their questions (e.g., tracking) or for
product configuration
 Self-tracking
 Self-configuration and customization
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Customer-centric applications
◦ Data reports
◦ Data warehouse
A single, server-based data repository that allows
centralized analysis, security, and control over the data
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Data analysis and mining
◦ Analytic applications automate the processing and
analysis of CRM data
can be used to analyze the performance, efficiency,
and effectiveness of an operation’s CRM applications
◦ Data mining involves sifting through an immense
amount of data to discover previously unknown
patterns
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Online networking and other applications
◦
◦
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Forums
Chat rooms
Usenet groups
E-mail newsletters
Discussion lists
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Mobile CRM
the delivery of CRM applications to any user,
whenever and wherever needed
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Voice communication
people are more comfortable talking with a person,
even a virtual one, than they are interacting with
machines. The smile and the clear pronunciation of
the agent’s voice increases shoppers’ confidence
and trust
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Internal and external data is gathered, stored
and analysed to provide important
information to support decision making of
executives
Provide better forecasts of end consumer
demand, improved understanding of
changing consumer preferences and wants,
and so on
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Role of knowledge management and
intelligent agents in CRM
◦ Automating inquiry routing and answering queries
requires knowledge
◦ Generated from historical data and from human
expertise and stored in knowledge bases for use
whenever needed
◦ Intelligent agents support the mechanics of inquiry
routing, auto-responders, and so on
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Concept and Management
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Organizational buyer behavior
◦ number of organizational buyers is much smaller
than the number of individual buyers
◦ transaction volumes are far larger
◦ terms of negotiations and purchasing are more
complex
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Methods for B2B online marketing
◦ Targeting customers
 contact all of its targeted customers individually
when they are part of a well-defined group
 affiliation service
 advertising
◦ Electronic wholesalers
intermediary sells directly to businesses, but does
so exclusively online
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Connect programs
◦ Placing banners on another vendor’s Web site
◦ Content alliance program in which content is
exchanged so that all can obtain some free content
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Online data mining services
“My master degree case study !! “
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One-to-one marketing: Marketing that treats
each customer in a unique way
Personalization: The matching of services,
products, and advertising content to
individual consumers
User profile: The requirements, preferences,
behaviors, and demographic traits of a
particular customer
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Major strategies used to compile user profiles
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Solicit information directly from the user
Observe what people are doing online
Build from previous purchase patterns
Perform marketing research
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Cookie: A data file that is placed on a user’s
hard drive by a Web server, frequently
without disclosure or the user’s consent, that
collects information about the user’s activities
at a site
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Collaborative filtering: A personalization
method that uses customer data to predict,
based on formulas derived from behavioral
sciences, what other products or services a
customer may enjoy; predictions can be
extended to other customers with similar
profiles
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Variations of collaborative filtering:
◦ Rule-based filtering
◦ Content-based filtering
◦ Activity-based filtering
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Legal and ethical issues in collaborative
filtering
◦ Invasion-of-privacy issues
◦ Permission-based personalization tools to
request customer permission
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Customer loyalty
◦ Customer loyalty: Degree to which a customer
will stay with a specific vendor or brand
◦ Increased customer loyalty produces cost
savings through:
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

lower
lower
lower
lower
marketing costs
transaction costs
customer turnover expenses
failure costs
◦ E-loyalty: Customer loyalty to an e-tailer
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Trust in EC
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◦
◦
Trust: The psychological status of involved
parties who are willing to pursue further
interaction to achieve a planned goal
Trust is influenced by many variables
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How to increase EC trust
◦ between buyers and sellers trust is determined by:
 degree of initial success that each party experienced
with EC and with each other
 well-defined roles and procedures for all parties
involved
 realistic expectations as to outcomes from EC
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Issues in personalization
◦ brand recognition
◦ security mechanisms help solidify trust
◦ disclose and update latest business status and
practices to potential customers and to build
transaction integrity into the system
◦ guarantee information and protection privacy
through various communication channels
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