it and network organization ecommerce. it and network organization customer relationship management...

IT and Network Organization IT and Network Organization

Ecommerce


CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRMS) IN NETWORK ORGANIZATION


Topics

• The Customer Relationship Management strategy

• CLTV and up selling/cross selling• Classification of CRMS• CRM Success and failure• E-Customer Relationship Management

Systems (CRM)


The Customer Relationship Management strategy


CRM Business Strategy• Customers are the core of the business.• Success depends upon company effectively managing

relationships with customers.• It is a business strategy to select & manage customers to

optimize long-term value.• Requires a customer-centric business philosophy & culture

to support effective marketing, sales & services processes.• Idea is simple – treat different customers differently as

their needs are different & their value to the company may be different.


THE SHIFT FROM TRANSACTION-BASED MARKETING TO RELATIONSHIP MARKETING

• Transaction-based marketing Buyer and seller exchanges characterized by limited communications and little or no ongoing relationship between the parties.

• Relationship marketing Development, growth, and maintenance of long-term, cost-effective relationships with customers

• Encourages long-term relationships, repeat purchases, and multiple brand purchases from the firm.


– Capture and integrate customer data from all over the organization

– Consolidate and analyze customer data– Distribute customer information to various systems

and customer touch points across enterprise– Provide single enterprise view of customers

Customer Relationship Management Systems

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• Why CRM is related to long term relationship with consumers

Question

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CLTV AND UP SELLING/CROSS SELLING


EVALUATING CUSTOMER RELATIONSHIP PROGRAMS

• Lifetime value of a customer Revenues and intangible benefits such as referrals and customer feedback that a customer brings to the seller over an average lifetime, less the amount the company must spend to acquire, market to, and service the customer.

• Company may analyze lifetime value or payback from a customer relationship.

• May influence the types of customers a firm tries to reach.

• Companies of all sizes can implement technology that helps measure and improve customer value.


Cross Selling and Up SellingCross Selling and Up Selling

• Cross-selling- the act of selling a product or service to a customer as a result of another purchase. – Example- New mothers buy clothes for their babies and then

themselves as well.

• Up-selling- motivating current customers to trade up to more profitable products. – Example- encourages the customer of a hotel to reserve a

Deluxe room instead of the standard room

These two forms of selling are strategic because they are related to the know how of which products will increase the customer’s buying and satisfaction.


• What are the two logics of increasing sales based on an up selling

Question

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CLASSIFICATION OF CRMS


• Operational CRM: – Customer-facing applications

• E.g. sales force automation, call center and customer service support, and marketing automation

• Analytical CRM: – Analyze customer data output from operational CRM

applications– Based on data warehouses populated by operational

CRM systems and customer touch points• Customer lifetime value (CLTV)


CHAPTER 9: ACHIEVING OPERATIONAL EXCELLENCE AND CUSTOMER INTIMACY: ENTERPRISE APPLICATIONS

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Classification of CRM Applications

• Customer-facing – include all areas where customers interact with company (call centers, help desks, sales force automation).

• Customer-touching – customers interact with the applications (self-service, campaign management, general purpose e-business applications).

• Customer-centric intelligence – analyze results of operational processing & use results to improve CRM applications.

• Online networking – methods that provide the opportunity to build personal relationships (chat rooms & discussion lists).


– More comprehensive CRM software have modules for:

• Partner relationship management (PRM)– Integrating lead generation, pricing, promotions, order

configurations, and availability– Tools to assess partners’ performances

• Employee relationship management (ERM)– E.g. Setting objectives, employee performance management,

performance-based compensation, employee training


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• E-banking can be considered as operational or analytical CRM?

Question

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CRM SUCCESS AND FAILURE


• Business value of CRM– Increased customer satisfaction– Reduced direct-marketing costs– More effective marketing– Lower costs for customer acquisition/retention– Increased sales revenue– Reduce churn rate

• Number of customers who stop using or purchasing products or services from a company.

• Indicator of growth or decline of firm’s customer base


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Customer RetentionCustomer Retention

• Understanding why customers leave for competitors is key to find ways to retain them in the future.

• Churn- the customers leaving one business for its competitors.

• When a customer leaves there is:• Loss of revenue• Loss of investment in acquiring them


Issues Related to CRM Failures

• Difficulty in measuring intangible benefits.• Failure to identify & focus on specific

business problems that the CRM can solve.• Lack of active senior management

sponsorship.• Poor user acceptance.• Trying to automate poorly defined business

process.


• What is the churn rate and how is it related to CRMS?

Question

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E-Customer Relationship Management Systems (CRM)

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eCRM• E-CRM (electronic CRM) started in the mid-1990’s ,when customers began

using Web browsers, the Internet, and other electronic touch points.

We can differentiate three levels of e-CRM: Foundational service. This includes the minimum necessary services

such as Website responsiveness (e.g., how quickly and accurately the service is provided), site effectiveness, and order fulfillment.

Customer-centered services. These services include order tracking, product configuration and customization, and security/trust. These are the services that matter the most to customers.

Value-added services. These are extra services such as online auctions and online training and education.


E-CRM Activities• Customer Service on the Web

– Search and Comparison Capabilities– Free Products and Services– Technical and Other Information and Service– Allowing Customers to Order Products and Services Online– Letting Customers Track Accounts or Order Status– Loyalty Programs


E-CRM Activities• Tools for Customer Service

– Personalized Web Pages– FAQs– Chat Rooms– E-Mail and Automated Response– Call Centers– Troubleshooting Tools– Wireless CRM


Risks of e-CRM

• Taking on more than can be delivered.• Getting over budget & behind schedule.• Poor user adoption.• Expensive maintenance & support.• Isolation.• Garbage in-garbage out.• Failure to measure success.


• Why are we saying that there is a risk of garbage in and garbage out with e-CRM?

Question

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