CRM

CRM is an integrated information system that is used to plan, schedule and control the pre-sales and post-sales activities in an organization. CRM embraces all aspects of dealing with prospects and customers, including the call center sales-force, marketing, technical support and field service. The primary goal of CRM is to improve long-term growth and profitability through a better understanding of customer behavior. -CRM aims to provide more effective feedback and improved integration to better gauge the return on investment (ROI) in these areas.

CRM: Support, sales, service, orders, analysis, mkt, strategy.

Strategic CRM is focused upon the development of a customer-centric business culture. –This culture is dedicated to winning and keeping customers by creating and delivering value better than competitors.

Customer relationship life cycle: sales, service&support, management, mkt.

Operational CRM automates and improves customer-facing and customer supporting business processes. -CRM software applications enable the marketing, selling and service functions to be automated and integrated.

CRM: PR, communication, database, customer loyalty, acquisition, documentation, analysis, customer care.

Analytical CRM is concerned with capturing, storing, extracting, integrating, processing, interpreting, distributing, using and reporting customer-related data to enhance both customer and company value. -Analytical CRM builds on the foundation of customer-related information. Customer-related data may be found in enterprise-wide repositories: sales data (purchase history), financial data (payment history, credit score), marketing data (campaign response, loyalty scheme data) and service data.

Collaborative CRM is the term used to describe the strategic and tactical alignment of normally separate enterprises in the supply chain for the more profitable identification, attraction, retention and development of customers.  For example, manufacturers of consumer goods and retailers can align their people, processes and technologies to serve shoppers more efficiently and effectively. They employ practices such as co-marketing, category management, collaborative forecasting, joint new product development and joint market research.

CRM MODELS: The IDIC model -Companies should take four actions in order to build closer one-to-one relationships with customers: ● Identify who your customers are and build a deep understanding of them. ● Dfferentiate your customers to identify which customers have most value now and which offer most for the future. ● Interact with customers to ensure that you understand customer expectations and their relationships with other suppliers or brands. ● Customize the offer and communications to ensure that the expectations of customers are met.

CRM VALUE CHAIN model Consists of five primary stages and four supporting conditions leading towards the end goal of enhanced customer profitability. The primary stages of customer portfolio analysis, customer intimacy, network development, value proposition development and managing the customer lifecycle are sequenced to ensure that a company, with the support of its network of suppliers, partners and employees, creates and delivers value propositions that acquire and retain profitable customers. The supporting conditions of leadership and culture, data and IT, people and processes enable the CRM strategy to function effectively and efficiently.

Paynes five process model It clearly identifies five core processes in CRM: The strategy development process, the value creation process, the multichannel integration process, the performance assessment process and the information management process. The first two represent strategic CRM; the multichannel integration process represents operational CRM; the information management process is analytical CRM.

The Gartner competency model The model suggests that companies need competencies in eight areas for CRM to be successful. These include building a CRM vision, developing CRM strategies, designing valued customer experiences, intra and extra-organizational collaboration, managing customer lifecycle processes, information management, technology implementation and developing measures indicative of CRM success or failure.

Understanding relationships: Relationships change over time. Parties become closer or more distant; interactions become more or less frequent. Because they evolve, they can vary considerably, both in the number and variety of episodes, and the interactions that take place within those episodes. Dwyer has identified five general phases through which customer–supplier relationships can evolve 1. Awareness 2. Exploration 3. Expansion 4. Commitment 5. Dissolution.

Relationship with customers: The fundamental reason for companies wanting to build relationships with customers is economic. Companies generate better results when they manage their customer base in order to identify, acquire, satisfy and retain profitable customers. These are key objectives of many CRM strategies. Improving customer retention rates has the effect of increasing the size of the customer base.

Retention: There is little merit in growing the customer base aimlessly. The goal must be to retain existing customers and recruit new customers that have future profit potential or are important for other strategic purposes.  Not all customers are of equal importance. Some customers may not be worth recruiting or retaining at all, for example those who have a high cost-to-serve, are debtors, late payers or promiscuous in the sense that they switch frequently between suppliers.

Reduced mkt costs: Improving customer retention reduces a company’s marketing costs. Fewer dollars need to be spent replacing churned customers.  For example, it has been estimated that it costs an advertising agency at least 20 times as much to recruit a new client than it does to retain an existing client.