3. crm vs. mkis
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7/28/2019 3. CRM vs. MKIS
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CUSTOMER FOCUSED
CONCEPTS IN SCM
MKIS & CRM
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WHAT IS MODERN SELLING?
Evolution of the selling concept: It is more integrated with Marketing
Management today
Focus on Relationship selling: To a collaborative/ partnership form of
selling
Give the customers exactly what they want
Relationship entails creating customer loyalty
This involves a trade-off: Separating the wheat from the chaff
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COMMON JARGON
CRM:Customer Relationship Management
CRM: Continuous Relationship Marketing (McKinsey)
eCRM: Electronic CRM
mCRM: Mobile CRM
ERM: Enterprise Relationship Management
PRM: Partner Relationship Management
SRM: Supplier Relationship Management
CEM: Customer Experience Management
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COMMON JARGON
SRM: Supplier Relationship Management
CFM: Customer Focussed Marketing (??)
RM: Relationship Marketing (Regis McKenna)
TERM: Technology Enabled Relationship Marketing (Gartner Group)
Interactive Marketing (John Deighton, HBS)
Database Marketing (Direct Marketers)
1 to 1 Marketing (Don Peppers & Martha Rogers)
Customer Intimacy (Fred Wieserma)
XRM: Extended Relationship Management4
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PERSPECTIVES OF CRM
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THE IT PERSPECTIVE
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Oracle
Data Warehouse
OLAP
I-Miner
Seagate Crystal Reports
RDBMS
Open architecture approach to Data
Thin clientSiebel CRM suite
Enterprise data analysis systems
Application Server
Users & Permissions
DATA MINING
Entities & Relations
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THE MATHS-BASED PESPECTIVE
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Regression
Standard Deviation
CHAID: Automatic Interaction Detector
Multivariate Analysis
Exploratory Data AnalysisANOVA
FactorAnalysis
Discriminant Analysis
Statistical Significance
ConfidenceClustering
Neural Networks
Modeling
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THE SALES MANAGERS PERS
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RFM
CustomerLifetime Value
Market Basket AnalysisLoyalty
Modeling
Campaign analysis
Program Scoring
Customer Satisfaction Index
Catchment Area analysis
Scenario analysis
Predictive Modeling
Time-of-day, Day-of-weekChannel design and effectiveness
Early Warning Systems ROI
Propensity Models
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THE MODERN SALES CONCEPT
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Old
Classical
Modern
Factory
TargetMarket
IndividualCustomer
CRM Profits through
Customer loyalty
Profits through customersatisfaction
IntegratedMarketing
Customerneeds
ProductsSelling andPromotion
Profits throughSales Volume
CustomerExperience
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SO WHAT IS CRM?
To recognize and treat each customer individually to optimize customer
experience by serving their unspoken needs
and make him buy the product
again & again.
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WHAT EXACTLY IS LOYALTY?
A psychological and emotional bond between the customer (or anyother stakeholder) and the corporate conducing to a long-term
relationship
Manifested through:
Repeating purchase
Purchasing premium products
Referring to friends Becoming an advocate
Wanting to give opinion and have it heard
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WHY IS LOYALTY IMPORTANT?
Retaining customers is much profitable than acquiring new customers
Reduction of 5% of defective customers may result in 80% increase in
profitability (Reichheld & Sasser, 1990)
60% to 80% of lost customers were satisfied (King, 1996)
90% of customers who love a company will repeat but only 30% ofcustomers who like the company will repeat (Opinion Research Corp.)
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ZERO DEFECTION
Ranging from Goods to Services selling
Extending from Inventories to Intellectual Capital
Scrap heap (Low value customers) to Lost Valuable customers
Zero-defect to Zero-defection
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WHY CRM?
For relationship building. Technological Progress
Continuous communication
Understanding
Get Personal
Interactivity
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Technology: Database, Internet & Mass Customization
Cherry Picking - 80:20s rule
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THE CRM PROCESS
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Learning about Customers
Knowledge Acquisition
Customer Differentiation
Customization of Marketing Mix
Product
Price
Place
Promotion
Interactions
Interactions
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CRM & MKIS
Traditional MKIS relies only on data collection, data warehousing,
data mining and information retrieval.
MKIS systems can give a large scale consolidation of customer
behavior, but is unsuitable for identifying individual customerneeds.
CRM goes beyond MKIS in collecting those key customer specific
data that is then used to serve individual customers
Eg. Right from salutation, needs, preferences along with time,
duration and complexity of sale and service
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IMPLICATIONS OF CRM
Modern day CRM has pan-management reach
Has a close interlink with technology- Innovation is key
CRM and innovation produce product and service innovations
CRM helps in attracting, maintaining and enhancing customerrelationships
Relationships are key to understanding customers- retainingcustomers helps in building performance
Customers have a big role is idea generation and productconceptualization
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AREAS OF CRM
Widespread reach in Management related fields.
Technology Management
Business Process Re-engineering
Organizational Learning
Relationship quality and organizational performance improvement
Balanced score card design
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CRM STANDPOINT FOR SALES
Does the CRM implementation enable the company to identify and focuson its key customers?
Does the use of multi-channels enhance customer relationships while
reducing the cost of transactions with low-profit yielding customers?
Does sales force automation enable the sales people to enhance share ofwallet with key customers?
Does the analysis of the data gathered through customer interactionsenable cross-selling and up-selling opportunities?
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NEXT CLASS:
DISTRIBUTION SYSTEMS
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