need help

adlons

mis_chapter_9.pdf

Home >Information Systems homework help >need help

6/10/2015

Opening Case:

Twitter: A Social CRM Tool

Chapter Nine Overview

• SECTION 9.1 – CRM FUNDAMENTALS – Introduction – Using Information to Drive Operational CRM – Using Information to Drive Analytical CRM

• SECTION 9.2 – CRM BEST PRACTICES AND TRENDS – Implementing CRM – CRM Metrics – CRM Applications and Vendors – Managing Other Relationships – Future CRM Trends

Learning Outcomes

1. Explain the difference between customer relationship management and customer relationship management systems.

2. Describe the business benefits of customer relationship management and how customer relationship management systems can help achieve those benefits.

3. Explain the difference between: operational and analytical customer relationship management; the operational customer relationship management systems used by marketing departments, sales departments, and customer service departments; and the various analytical customer relationship management systems used by organizations.

6/10/2015

Learning Outcomes

4. Identify and explain best practices in implementing CRM in organizations, including the tracking of common customer relationship management metrics by organizations.

5. Describe the benefits of expanding customer relationship management to include suppliers, partners, and employees, as well as other future trends in CRM.

CRM Fundamentals

Learning

Outcome Customer Relationship Management involves managing all aspects of a customer’s relationship with an organization.

• Enterprise must switch from Sale-focused to Customer-focused strategies

• CRM provides insight into each customer’s shopping and buying behaviours

• Allows an organization to treat each customer individually tailoring offers to each individual specifically thereby increasing spending

• Flexibility is key

• http://www.youtube.com/watch?v=YEa_RNSX5Xo

Introduction

9.1

http://www.youtube.com/watch?v=YEa_RNSX5Xo

6/10/2015

Learning

Outcome

CRM as a Business Strategy

Figure 9.1

9.1

Customer

Relationship

Management

Overview

https://www.youtube.com/watch?v=wJ63PqPIj cM

Learning

Outcome

Business Benefits of CRM

Figure 9.2

9.2 Benefits of a Customer Relationship Management System

Better customer service Ability of sales staff to close deals faster.

Improved call centre efficiency Simplification of marketing and sales processes

Ability to cross-sell products more effectively

Ability to discover new customers

Learning

Outcome Organizations ask and track the following customer metrics to determine their most valuable customer:

• R - Recency

– How recently has a customer purchased items?

• F - Frequency

– How frequently does a customer purchase items?

• M - Monetary

– How much does a customer spend on each purchase occasion?

• RFM – Spells customer value

– At one time the data from each component was added or multiplied together. Today more sophisticated algorithms are used to extract patterns of behaviour that indicate loyalty and profitability.

RFM—Finding the Most Valuable Customer

9.2

6/10/2015

Learning

Outcome • Reporting – Identifying most valuable

customers

• Analyzing – Ranking customers from best to

worst – Profiling, determining attributes of

each customer segment

• Predicting – Applying profiles to potential

business opportunities – Selecting customers with highest

probability of profitability & retention

– http://www.eweek.com/c/a/Ent erprise-Applications/10-Cool- CRM-Developments/

Evolution of CRM

9.3

Figure 9.3

The Evolution of CRM

Abilities

Learning

Outcome

Examples of Reporting, Analyzing and Predicting Behaviours

Figure 9.4

9.3

Reporting: What Happened?

Analyzing: Why Did It Happen?

Predicting: What Will Happen

What was the total revenue by customer?

Why did sales not meet forecast?

What customers are at risk of leaving?

How many units did we manufacture?

Why was production so low?

What products will the customer buy?

Where did we sell the most products?

Why did we not sell as many units as last year?

Who are the best prospect for a sales call?

What are total sales by product?

Who are our customers? What is the best way to reach customers?

How many customers did we serve?

Why was customer revenue so high?

What is the lifetime value of a customer?

What are our inventory levels?

Why are inventory levels so low?

What transactions might be fraudulent?

Learning

Outcome

Operational and Analytical CRM

Components of an Enterprise CRM

Figure 9.5

9.3

Operational CRM • Supports traditional

TPS for day-to-day front office operations & systems that deal with customers.

Analytical CRM • Supports back-office

operations and analysis and systems that do not deal with customers.

http://www.eweek.com/c/a/Enterprise-Applications/10-Cool-CRM-Developments/

6/10/2015

Learning

Outcome

3 Primary Components of Operational CRM

Figure 9.6

9.3 Components of an Operational CRM

Marketing Sales Customer Service

List Generator Sales Management Contact Centre

Campaign Management

Contact Management

Web-based self- service

Cross-selling and Upselling

Opportunity Management

Call scripting

Learning

Outcome • List Generation

– List Generators compile data from a number of sources and segment it for marketing campaigns.

• Campaign Management Systems

– Guide users through marketing campaign planning, execution and success analysis

– Can provide quantified ROI and a de-brief including suggestions to improve future performance

– For a quick example of campaign management systems go to Canada Post business at http://www.canadapost.ca/web/business/precision-targeter.page

• Cross-Selling and Upselling

– Cross-selling adds additional products and services to current purchases

– Upselling increases the value of the sale by moving purchases to premium levels, increasing volume, adding additional uses etc.

Marketing CRM

9.3

Learning

Outcome • Sales Force Automation (SFA) – Automatically tracks all steps taken in the sales process including

prospects, calls, call results, next steps, successful closures and reasons why, and unsuccessful sales calls

– Goal is analysis and improvement at every step – With all the Sales Force automation software that is available, a useful

website is http://www.softwareadvice.com/crm/sales-force-automation- comparison/ that provides a comparison of the applications and what they can do.

• Sales Management CRM Systems – Automates steps in the sales process and displays prospect/customer

history and records and prompts next steps for each sales call

– Improves efficiency and effectiveness of performance, increases management visibility of sales efforts, measures performance cycle times

• Opportunity Management CRM – Determines potential customers and competitors and defines the

appropriate level of selling effort including budgets and schedules

Sales CRM

9.3

6/10/2015

Learning

Outcome

Sales Management CRM

9.3

Overview of the Sales Process

Figure 9.7

Learning

Outcome

Pointers for Gaining Prospective Customers

9.3

From Figure 9.8

Get Their Attention Make your appearance professional and do something positive to stand out.

Value Their Time In exchange for your customers’ time, you need to provide them something of value.

Over-deliver Do more than just keep your word.

Contract frequently Send updates and provide value continuously.

Generate a trustworthy mailing list

Ensure mailing list names are genuine contacts with authority to deal.

Follow up Send thank you notes for meetings…to everyone you contacted in the company.

http://boss.blogs.nytimes.com/2011/07/25/my-top-10-sales-tips/?_r=0

Learning

Outcome • Contact Centres or Call Centres

– CSRs (customer service representatives) answer customer inquiries or problems

– Knowledge-management systems can support CSRs by providing suggested responses. Applications can provide call history

– CSRs need training to use software effectively

• Web-Based Self-Service Systems

– Company web-site provides an interface for common problems to allow users to find the solution

– Live chat and email improve and personalize the service

• Call Scripting Systems

– Use a database of previous solutions to match to new inquiries

– Can provide diagnostic questions a CSR might ask

Customer Service CRM

9.3

6/10/2015

Learning

Outcome

Customer Service CRM

9.3

From Figure 9.9

Automatic call distribution

A phone switch routes inbound calls to available agents.

Interactive Voice Response (IVR)

Directs customers to use touch-tone phones or keywords to navigate or provide information

Predictive dialing Automatically dials outbound calls, and when someone answers a call, it is forwarded to an available agent.

Common Features included in Contact Centres

Learning

Outcome Used to enhance and support decision-making and works by identifying patterns in customer data collected from operational CRM

• Personalization

– Knowledge of preferences in product attributes, communications and other product/service aspects to provide customized offerings

– Individuals are analyzed to match marketing effort with profitability potential

• Enhances Employee performance

– Customer feedback forms are used to decide on training requirements for front-line personnel

• Takes advantage of thousands (millions) of transactions stored in Data Warehouses

Analytical CRM

9.3

Learning

Outcome

Analytical CRM Examples

9.3

From Figure 9.10

Give Customers more of what they want

Communications made more personal with personal solutions. CRM matches customer requests with new production & notifies customer.

Find new customers similar to your best customers

CRM matches the profiles of your best customers to select prospects out of a mass mailing list.

Find out what the organization does best

CRM can find the top performing segments and what your most popular offering is to them.

Beat competitors to the punch

Determine sales trends offering best customers deals ahead of the competition.

Reactivate inactive customers

Periodically select lapsed customer and send targeted promotions to bring them back.

Let customers know they matter

CRM lists best customers and makes suggestions for personalized rewards.

6/10/2015

OPENING CASE QUESTIONS

Twitter: A Social CRM Tool

1. Summarize the evidence of CRM and provide an example of

a reporting, analyzing, and predicting questions that a

company using a Social CRM tool might ask its customers or

followers?

2. How has BMC Racing effectively used Social CRM systems to

improve its operations? What other CRM systems could a

company like WestJet employ to improve its operations?

3. Define analytical CRM. How could a company effectively use

analytical CRM in the context of using Social CRM? How

important is analytical CRM to companies using Social CRM?

4. What is the difference between customer data, customer

information, and business intelligence?

Data Warehousing

Learning

Outcome 1. Creating a CRM vision that provides a “Big Picture” of what the customer-centric organization should look like.

2. Defining and weaving a CRM strategy that aligns with broader marketing and sales strategies, and informs operational and production strategies.

3. Understand and engaging the customer.

4. Ensuring organizational collaboration between internal groups and external business partners.

Implementing CRM

9.4

6/10/2015

Learning

Outcome

5. Focusing on improving customer processes.

6. Achieving data integrity across the enterprise.

7. Leveraging information systems to implement CRM.

8. Defining, collecting and analyzing CRM metrics.

Implementing CRM

9.4

Learning

Outcome

Industry Best Practices for CRM Implementation

1. Clearly communicate the CRM Strategy. Gartner Dataquest indicates that enterprises with CRM success had committed senior executives who set goals for CRM, match strategies with corporate objectives and tied measurement to goals and strategies.

2. Define Data needs and flows. Have a clear understanding of how data flows in and out of the organization because it tends to come in many different forms from many different touch points.

3. Build an integrated view of the customer. Choose the correct CRM solution that can meet strategic goals and be successfully implemented including integration into current systems.

http://events.asug.com/2013AC/CM/0101%20SAP%20CRM%20Success%20s

tory%20at%20Day%20and%20Zimmermann.pdf

9.4

Learning

Outcome

Industry Best Practices for CRM Implementation

4. Implement in manageable pieces which makes it easier to manage, measure and track the design, building and deployment of the system. Allows an early warning of fatal flaws.

5. Make the CRM system scalable, able to grow and contract as needed to be adaptable to current and future needs. Understand the organization and its growth strategies. Take time to answer tough questions up front to get the most out of the CRM system.

http://www.sap.com/solution/lob/customer-svc/customer-reviews.html

9.4

6/10/2015

Learning

Outcome

CRM Metrics

9.4

From Figure 9.12

Sales Metrics Service Metrics Marketing Metrics

Number of prospective customers

Cases closed same day Number of marketing campaigns

Number of new customers Number of cases handled per agent

New customer retention rates

Number of retained customers

Number of service calls Number of responses by marketing campaign

Number of open leads Average number of service requests by type

Number of purchases by marketing campaign

Number of sales calls per lead

Average number of service calls per day

Cost per interaction by marketing campaign

Learning

Outcome

CRM Metrics

9.4

From Figure 9.12

Sales Metrics Service Metrics Marketing Metrics

Amount of new revenue Percentage compliance with service-level agreement

Number of new customers acquired by marketing campaign

Amount of recurring revenue

Percentage of service renewals

Customer retention rate

Number of proposals given

Customer satisfaction level

Number of new leads by product

An important source of CRM metrics comes from external communities such as social media. CRM analytics collect and determine quantity and quality of Facebook message, Tweets, blog comments among others.

Learning

Outcome

Customer Power

9.4

Figure 9.13

6/10/2015

Learning

Outcome • Gartner predicts worldwide CRM markets will be around US$36.5 billion by 2017.

• Top three providers of CRM in early 2014 were:

– Salesforce.com

– Oracle Sales Cloud

– Microsoft Dynamics CRM

• CRM applications will continue to be developed for the SME market and to take greater advantage of mobile devices

CRM Applications and Vendors

9.4

Learning

Outcome Supplier Relationship Management (SRM)

• Evaluates and categorizes suppliers for different projects to optimize supplier selection

• SRM system analyzes vendors based on key variables such as strategy, business goals, prices and markets to find complementary partners

• SRM systems provide seamless communication channels where data can be shared by all parties

• Benefits include:

– Single consolidated view of all suppliers

– Consistent, detail management information with multiple views

– Elimination of duplicate suppliers.

Managing Other Relationships—SRM

9.5

Learning

Outcome • Alliance Partners Competitor organizations that cooperate to compete more successfully

• Dealers Agents who sell product on behalf of an organization, usually a manufacturer or distributor

• Retailer Stores operating at the end of the supply chain from the manufacturer selling directly to consumers

• Resellers Bulk purchasers who add a margin and sell in smaller lots for profit.

• Partner Relationship Management (PRM) has a goal to select and foster relationships with effective partners.

• PRM systems facilitate communication with partners and monitor partner activities

Managing Other Relationships— Partner Relationships

9.5

6/10/2015

Learning

Outcome • Unhappy employees may upset or anger customers leading to customer attrition

• Employee Relationship Management (ERM) focusses on increasing employee morale, productivity, communications and change readiness

• ERM systems

– Subset of CRM systems

– Assist employees in dealing with customers by providing just in time information on the company, policies, products, services etc.

Managing Other Relationships— Employee Relationship Management

9.5

Learning

Outcome • Will integrate with RFID, wireless, SaaS and other information technological developments to improve in providing a 360-degree view of the customer

• Already support mobile sales and communications by integrating wireless into CRM systems

• Greater incorporation of RFID (and other coding systems) to track sales, shipping, product uptake, productivity and providing a richer source of CRM metrics

Future CRM Trends

9.5

OPENING CASE QUESTIONS

Twitter: A Social CRM Tool

5. Describe some best practices evident in the CRM industry. Discuss to what extent a company using Social CRM can follow these best practices.

6. Describe the trends found in the CRM industry. Discuss to what extent a company using Social CRM can follow these trends.

7. Explain SRM. Do you see potential for Social SRM, and if so, how could it be used to improve its business?

8. Explain PRM. Do you see a potential for Social PRM, and if so, how could it be used to improve its business?

9. Explain ERM. Do you see a potential for Social ERM, and if so, how could it be used to improve its business?

6/10/2015

CLOSING CASE ONE: Harnessing Customer Relationships at Fairmont Hotels

& Resorts

1. How can Fairmont’s marketing department use operational CRM to strengthen its relationships with its customers?

2. How can Fairmont’s customer service department use operational CRM to strengthen its relationships with its customers?

3. Review all of the operational CRM technologies and determine which ones would add the greatest value to Fairmont’s business?

4. What benefits does Fairmont gain from using analytical CRM?

5. How does Fairmont use CRM to increase efficiency in its business?

CLOSING CASE TWO: Target: CRM and Big Data

1. How is Target using CRM to drive customers to its stores?

2. How would you classify what Target is doing in terms of the types of CRM systems?

3. In your opinion, what types of best practices need to be adopted when companies like Target start using predictive analytics in the CRM system?

4. Read Kashmir Hill’s February 16, 2012 article, “How Target Figured Out a Teen Girl was Pregnant Before Her Father Did”. (www.forbes.com/sites/kashmirhill/2012/02/16/how-targe-figured-out- a-teen-girl-was-pregnant-before-her-father-did). What would your reaction be?

CLOSING CASE THREE: Revving Up Customer Relationships at Harley-Davidson

1. What are the two different types of CRM, and how has

Harley-Davidson used them to become a customer-centric

business?

2. Which of Harley-Davidson’s customer-centric strategies is

most important for its business? Why?

3. Evaluate the HOG’s CRM strategy, and recommend an

additional benefit Harley-Davidson could provide to its

HOG members to increase customer satisfaction.

http://www.forbes.com/sites/kashmirhill/2012/02/16/how-targe-figured-out-a-teen-girl-was-pregnant-before-her-father-did

6/10/2015

CLOSING CASE THREE: Intuitive ERP

4. Describe three ways Harley-Davidson can extend its

customer reach even further by performing CRM functions

over the Internet.

5. What benefits might Harley-Davidson gain from using

analytical CRM?

6. Explain ERM, and describe how Harley-Davidson might use

it to increase efficiency in its business.