crm session hrs 1+2

8/2/2019 Crm Session Hrs 1+2

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Customer Relationship

Management(CRM)


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What is CRM? CRM is a business strategy that aims to understand,

anticipate and manage the needs of an organisationscurrent and potential customers

It is a comprehensive approach which provides seamlessintegration of every area of business that touches thecustomer- namely marketing, sales, customer services andfield support through the integration of people, process andtechnology

CRM is a shift from traditional marketing as it focuses onthe retention of customers in addition to the acquisition of

new customers The expression Customer Relationship Management

(CRM) is becoming standard terminology, replacing whatis widely perceived to be a misleadingly narrow term,relationship marketing (RM)


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Definition of CRM

CRM is concerned with the creation, development

and enhancement of individualised customer

relationships with carefully targeted customers and

customer groups resulting in maximizing their total

customer life-time value


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The purpose of CRM

The focus [of CRM] is on creating value for the

customer and the company over the longer term

When customers value the customer service thatthey receive from suppliers, they are less likely

to look to alternative suppliers for their needs

CRM enables organisations to gain competitive

advantage over competitors that supply similar

products or services


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Why is CRM important?

Todays businesses compete with multi-product offerings created and delivered bynetworks, alliances and partnerships of many

kinds. Both retaining customers and buildingrelationships with other value-adding allies iscritical to corporate performance

The adoption of C.R.M. is being fuelled by arecognition that long-term relationships withcustomers are one of the most importantassets of an organisation


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Why did CRM develop?

CRM developed for a number of reasons:

The 1980s onwards saw rapid shifts inbusiness that changed customer power

Supply exceeded demands for most products

Sellers had little pricing power

The only protection available to suppliers ofgoods and services was in their relationships

with customers


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What does CRM involve?

CRM involves the following :

Organisations must become customer focused

Organisations must be prepared to adapt so that it take

customer needs into account and delivers them

Market research must be undertaken to assess

customer needs and satisfaction


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Strategically significant customers

Customer relationship management

focuses on strategically significant

markets. Not all customers are equally

important

Therefore, relationships should be built

with customers that are likely to provide

value for services

Building relationships with customers thatwill provide little value could result in a

loss of time, staff and financial resources


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Markers of strategically significant customers

Strategically significant customers need to satisfy at

least one of three conditions :

1. Customers with high life-time values (i.e. customers

that will repeatedly use the service in the long-term

e.g. Nurses in a hospital library)

2. Customers who serve as benchmarks for other

customers e.g. In a hospital library consultants who

teach on academic courses

3. Customers who inspire change in the supplier


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The Logical Next Step..

Having differentiated within the customer

spectrum, where should the spotlight veer to

?Market segments and their behaviour

What can the marketer do to cause / promote

consumption of its product ?Following the market orientation concept,

should not the marketer..


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Understanding and Identifying

Customer Needs

Considering the customers desires will pull productdevelopment into better direction and amplify success

Technologists Problemproduct development

undertaken with no basis for market acceptance. Very

common in engineering community.

Akia Morita (1986), founder of Sony Corp., our plan

is to lead the public to new products rather than ask

them what they want. The public does not know what

is possible, we do


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Customer ExpectationsCustomer expectations increase over time, it is very

important to stay in touch with customers and tounderstand their preferences. The more customer

expects, the harder it is to keep delighting the customer.

Example: Cup holder in cars.

Customer Population

The customer is a statistical concept.

The design team should define the customer

population using the product.

Example: Bicycle


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Types of Customer Needs

Direct Needscustomers have no troubledeclaring those needs they are concerned about.

Cost, good pictures, ease of operation

Latent Needsnot directly expressed by thecustomer without probing.

Obtaining prints, easy viewing on PC

General categories based on how easy the customer

can express them and how rapidly they change.

Example: Digital Camera


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Types of Customer Needs

Constant Needsthese needs are intrinsic to thetask of the product and always will be. When productis used, this need is always there.

Nighttime picture taking, number of digital

images.

Special needsapply only to a smaller marketsegment within the entire population.

Under water application


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The Process

Collecting raw data from customers Interpreting the raw data

Grouping the needs into primary, secondary, needs

Establishing the relative importance of theneeds

Documenting the results for the entire design

team


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The Goals of the Process

Ensure that the product is focused oncustomer needs

Identify all needs, explicit and hidden

Make sure that no critical need is missed Creating a comprehensive list of the needs

for the design team

The idea is to create a high-quality information channelbetween the customers in the target market and the

developers of the product.


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Gathering Customers needsInterviewsDiscuss the needs with a singlecustomer, one at a time in the customers

environment where the customer uses the product.

Guideline for interviewingIntroduce yourself and state the purpose of the interview.

When and why do you use this product?

Walk us through a typical session using the product.

What do you like about the existing product?

What do you dislike about the existing product? What issues do you consider when buying this product?

What improvements would you make to the product?

What would be a reasonable price tag for the product?


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Guideline for interviewing

Go with the flowWherever the customertakes you, follow along, and askwhy and how

questions

Use visual stimuli and propsBringmodels of new product, competitors products.

Suppress preconceived notions about the

product technologydo not bias thecustomer with any concept or technology.

Uncovering a need that is independent from

the solution used helps in concept engineering.


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Guidelines for interviewing

Have the customer demonstratedont justask about the product, observing the customer inaction provides helpful information.

Be alert for surprises and latent needs

pursue any surprise answer with a question.

Watch for nonverbal informationlook forfacial and body language.


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Gathering Customers needs

Questionnairesuse the same guideline asfor the interview to develop a list of questions.

Prepare the questions carefully. Then organize

the responses provided. Make the list short.

Focus groupsa moderator facilitates a

session with a group of customers in the product

developers environment. The design team may

observe the session behind a two-way mirror.Very common in food industry. Look for facial

and body expressions.


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Comments on Gathering Customers needs

Questionnaires provide the lowest quality information.

The responses only pertain to the questions asked, notnecessarily what the customer wants to tell the design

team. Low percentage of returns.

Focus groups are more costly to attain the same amount

of information.

Conducting interviews is the most efficient way of

gathering quality information. Hauser (1993), reports that

interviewingnine customers for one hour each will obtain

over90% of the customer needs that would be uncovered

when interviewing 60 customers in a focus group.


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Example: Electric Wok

An electric wok redesign is desired. Current electric woks

are inadequate and do not satisfy the demands of customersto conveniently cook authentic Chinese food. The original

wok is a six-quart electric wok. A competitive wok is a

traditional wok, used over a gas flame.

I t i D t T l t El t W k


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Interview Data TemplateElect. Wok


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Product feelIndustrial Design

In addition to the activities of a product, it is also important

to capture the desired feel of a product. Industrial

designers emphasizes the important human qualities ofcomfort, safety , and aesthetic appeal.

Semantic Inquiry

O g i i g C t m N d


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Organizing Customer Needs

The design team reviews the

interpreted needs and sort them

into a list -Affinity DiagramMethod


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Determining Need Importance

Interview Data Methodthe subjective

importance ratings (good, must, ) are convertedinto numerical equivalents. Then the importance is

calculated using the average equation.

Questionnaire Methoda questionnaire is sentto customers asking for the importance of each

need. Costly but more accurate.

Determining Need Importance Interv Data Method


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Determining Need ImportanceInterv. Data Method

Must 9

Good 7Should 5

Nice 3

D i i N d I Q M h d


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Determining Need ImportanceQuest. Method


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Cluster Analysis Method

Construct a preference structure over the values.

For example, noise generated by a product andprice (decibels vs. dollar).

Construct a preference structure not over the

values of the needs but rather over the thedifferent product configurations. Show customersdifferent prototypes and include customer needs inthe design.

In previous method the importance ranking of each customer

need resulted in a constant weight.It may be desirable to obtain a correlation between needs.

crm session hrs 1+2

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