What is C R

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An example of CRM.

iF
Marketing Direct Sell Strategy

CRM

INDIRECT Sell Strategies to Keep Customers LOYALTY

teaching plan of

Customer Relationship Management

teaching plan of

Customer Relationship Management

Basic concept and definition

Customers

Relationship

Management of relationship

Information

Process

Technology

People

Implementation of CRM

Learning Objectives
Identify and explain the roles of Customer

Relationship Management (CRM) in an organization. Understand the goal of CRM. Understand the four types of CRM programs. Understand the core components of CRM. Familiarize with the CRM process cycle. Explain the common misconceptions of CRM. Understand the development of CRM in Asia
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What is a Relationship Company?

(For discussion before we start the module)
What kind of company is

? A technology-driven company, dedicated to research for the newest technology. What kind of company is ? An institute dedicated to educating people with a vocational skill. What is the business of Hong Kong Bank? A finance company or a relationship company? It all depends on how their business strategies change when their customers change.
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What is a Customer?
Transaction Giving you the opinion

to improve your products Making referral to other customers and generating the word of mouth (WOM)

New Customer

Retain
Existing Customer

Loyal customers who buy

from you in their lifetime
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The lines represent the relationship. Relationship generates businesses.

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A Story of successful CRM

What is Customer Relationship Management?

The Overall Process of building and

maintaining profitable customer relationship by delivering superior customer value and satisfaction. (Kotler & Armstrong)

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1. What is Customer Relationship Management (CRM)?

Traditional View Customer database management Job of IT dept Modern View Delivers customer lifetime value Optimize profit, revenue, customer satisfaction by focusing on a highly defined group of customers. Strategic use of Information, Process, Technology and People to achieve CRM (Not just database management)

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2. The Reasons why CRM Becomes Important to Organization

Facing expanding economy and rapidly growing markets. A plentiful supply of new customers. Companies could keep filling

the market with new customers without worrying about losing old customers to competition. Changing demographics, more-sophisticated competitors and overcapacity in many industries. Many companies are now fighting for shares of saturated or declining markets. On average, it costs 5 to 10 times as much to attract a new customer as it does to keep a current customer satisfied. Working to retain and grow customers makes good economic sense.

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3. Understanding the Goal of CRM

Produce high customer equity. Customer equity = total combined customer lifetime

values of all of the companys customers. The more loyal the firms customers, the higher the firms customer equity. Customer equity may be a better measure of a firms performance than current sales or market share. Whereas sales and market share reflect the past. Constantly meets and exceeds customer expectations and increases their loyalty.

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If Marketing is a direct strategy to teach you how to sell your products, CRM is to teach you the INDIRECT strategies to KEEP your customers LOYALTY.
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4. CRM Programs are to Achieve the Desired Business Purposes

There are four types of CRM programs

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Win back or Save

four types of CRM programs

Prospecting
win new , First time customers three most critical elements segmentation, selectivity and sources.

four types of CRM programs

Loyalty
1. 2. 3. prevent customer from leaving need-base segmentation value-base segmentation develop a predictive churn model

four types of CRM programs

Cross-Sell / Up-Sell
increase Wallet-Share

four types of CRM programs

5. Components of CRM
The information needed to understand customer better The process management needed to deliver efficient and

appropriate experiences to customers The technology - software tools that allow us to use that knowledge The training and change management elements so the people - staff and organization understand and are capable of delivering experiences that build stronger relationships and increase loyalty.

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Oriental Hotel in Thailand

A story inside this hotel

(select the story at 10 min)

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Application at Hong Kong Jockey Club

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5. Components of CRM

CRM is the strategic use of information, process, technology and people to manage the customers relationship with your company (marketing, sales services, and support) across the whole customer life cycle.

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5.1 Information
Information is the raw material of CRM

Identification data: Name/address/phone data collected from customers to complete a business transaction.
Marketing data: Descriptors/traits/preferences collected from customers during a transaction (either by asking questions or tracking behavior) List data: Name/addresses collected by a third party, which can be bought or leased

Overlay data: Customer profile data collected by a third party, which can be leased and added to existing customer records
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5.2 Process
Customer-centered processes are the

products of CRM
All current/future processes that directly connect the customer Touch points, or means by which organization interacts with customers, such as phone, e-mail, etc. Identifying and eliminating process disconnects and white space Integrating and rationalizing processes from the customers point of view

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5.3 Technology
Technology is the machinery that

enables CRM to work

Software products (process automation tools, analysis tools, web site development, and management tools) Network and integrating applications and databases Databases, either purchased solutions or homegrown, central or distributed

Security features, protection of customers privacy by using encryption tools and firewalls in IT systems.

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5.4 People
People are the power supply of CRM

Recruitment Training and education Measurements and rewards

Job design

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An Example

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Consider the following case: My cat fell from 22nd floor and was badly injured

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Consider the following experience

Information: the health record of the cat was analyzed. The disease was compared with the records throughout the world in order to find out the best way to cure the cat. Process: the cat was sent to hospital. He was put into an oxygen box. New way of applying medicine on the cat. Technology: internet allowed the health record to be sent to the hospital from the clinic. Information to be obtained in real time and learn cases from other parts of the world. People: the nurse with the medical knowledge shows the cat owner how to take care of a cat which is seriously ill.

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6. Business Model: The CRM Cycle

1. 2. 3. 4. 5. 6.

Establish customer relationships within the organization. Establish and manage interactions with current customer base. Acquire and capture customer data based on interactions. Use technology to store and integrate customer data. Analyze data for profitable / unprofitable segments. Leverage and disseminate customer information throughout the enterprise.

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7. Common Misconceptions of CRM

CRM is the solution that will solve all our customer problems. CRM is the Internet. CRM is another name of direct marketing CRM means recognizing a customer wherever he interacts with our

company. Point program, frequent buyer, buy 10-get-one-free are all CRM tools. Credit card bonus point accumulation schemes are CRM and create customer loyalty. Methods that restrict customers abilities to buy from competitor can effectively be used to retain customers.

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