CRM and Big Data Quiz

Chapter Objectives

• Students will be able to describe three major CRM forms: Strategic, Operational, and Analytical.
• Students will understand where Social CRM fits within the CRM landscape.
• Students will grasp the evolving nature of CRM.
• Students will recognize common misconceptions about CRM.
• Students will be able to define CRM.
• Students will identify key stakeholders with an interest in CRM.
• Students will understand CRM deployments across diverse contexts.
• Students will learn three CRM models.

Introduction

• The term "Customer Relationship Management (CRM)" has been used since the early 1990s.
• CRM encompasses various business activities.
• IT perspectives often associate CRM with software tools used in marketing, sales, and service functions.
• CRM software's commercialization accelerated in 1993 with Tom Siebel's founding of Siebel Systems.
• The current CRM software market includes numerous suppliers.

Table 1.1 Definitions of CRM

• CRM is an information industry term using methodologies, software, and internet capabilities to help an enterprise manage relationships.
• CRM manages all company-customer interactions (prospecting, sales, and service).
• This approach integrates various customer interaction viewpoints into one holistic picture.
• CRM is an integrated approach to attracting, acquiring, and retaining customers, leading to higher corporate performance.

Understanding Customer Relationships

• Global CRM software market, projected to grow to $145.79 billion by 2029.
• Significant portion of CRM spending now focuses on cloud-based solutions.
• CRM is widely adopted by various sectors, including large businesses and SMEs.

Managerial Perspectives of CRM

• CRM is considered a customer management strategy, emphasizing activities rather than solely technology.
• Questions managers address using CRM include which customers to serve, value propositions, and channels to serve them.
• Implementing CRM requires integrated company processes, systems, and procedures.

CRM and Customer Experience Management

• CRM is strongly related to customer experience (CX) management.
• CX management requires a thorough understanding of customer interactions across company touchpoints (stores, call centers, websites).
• New technologies, processes, and employees can significantly impact CX.
• CRM facilitates efficient and richer customer experiences through real-time information and streamlined workflows.
• Potential pitfalls of CRM implementation include inconsistent or incoherent customer experiences, favoring online over in-person interactions.

Three Forms of CRM

• Strategic CRM focuses on establishing a culture centered on customer value, success, and profitability.
• Operational CRM automates and improves customer-facing processes across sales, marketing, and service.
• Analytical CRM employs insights gained from customer data to enhance business value.

Case Illustration 1.1: Strategic CRM at PayPal

• PayPal is a notable example of strategic CRM, focusing on secure and convenient payment options adapted to changing consumer behavior.
• PayPal gathers data from both buyers and sellers to understand trends and personalize services.
• PayPal prioritizes user security and uses predictive analytics and automated processes to enhance customer experience.

Operational CRM

• Operational CRM streamlines and optimizes customer-facing processes, particularly in marketing, sales, and service.
• This often involves automation tools to execute activities efficiently and reliably.
• Operational CRM can include features like marketing automation, sales force automation, and service automation.

Marketing Automation

• Software-based applications automate marketing tasks using algorithms, minimizing human intervention.
• This can increase the efficiency and effectiveness of marketing campaigns by segmenting customers and their needs while being more precise with messaging.

Sales-force automation

• SFA automates sales processes using tools that manage lead generation, qualification, nurturing, and closing.
• Also features contact management, product configuration, and proposal creation.
• SFA improves resource utilization and consistency in sales processes.

Service Automation

• Service Automation applies technology to support customer service operations across various channels.
• Tools for call routing, AI-powered chatbots, and self-service options enhance efficiency and reduce costs.
• Real-time engagement and pro-active assistance improve customer satisfaction.

Case Illustration 1.3: Service Automation at Mercedes-Benz

• Mercedes-Benz uses CRM to automate service procedures, optimizing driver experience (diagnostics, resolutions, and repairs) through CRM data and tools.
• This leads to increased efficiency, reduced environmental impact, and greater customer satisfaction.
• Auto manufacturers often use CRM to enhance communication between dealers and end-users, and also to aid in managing their intricate distribution systems.

Analytical (or Analytic) CRM

• This involves analyzing customer data to understand patterns, preferences, and behaviors.
• It also identifies customer segments, develops targeted strategies, and gauges customer lifetime value.
• This provides actionable insights and fosters better business decisions, resulting in optimized customer profitability, including strategic, operational, and analytical applications.

Case Illustration 1.4: Analytical CRM at Dr Martens

• Dr Martens leverages CRM analytics to improve operational efficiency, enhance sales, and predict customer needs via real-time insights and data modeling.
• Accurate inventory management, efficient store stocking via real-time inventory reporting, and improved customer service during peak periods are notable examples.

CRM Constituencies

• CRM involves various stakeholders, including companies, customers, and partners, who each play different roles and functions.
• Companies implementing CRM often have extensive customer interactions and need comprehensive solutions.

Misunderstandings about CRM

• CRM is often mistaken for an IT system, while it is more a comprehensive strategic business initiative.
• CRM is sometimes wrongly viewed as solely a sales or marketing function, neglecting its broader role in serving customers.
• CRM is not limited to loyalty programs, but rather encompasses a wider range of customer interaction management initiatives.

Commercial Contexts of CRM

• CRM is increasingly utilized in diverse commercial contexts, such as banking, automotive manufacturing, technology, and consumer goods industries.
• CRM is used to enhance operational efficiency, improve customer experiences, and refine decision making.

Not-for-profit Context

• The "third sector" (NGOs and charities) also utilizes CRM to improve relationships with beneficiaries and stakeholders.

CRM Models

• Various models, like IDIC, illustrate CRM's multifaceted nature, from strategic decision-making to operational execution.

Five-process model

• This model highlights five interconnected processes crucial to successful CRM implementation: strategy development, value creation, multi-channel integration, performance assessment, and information management.

Conclusion

• CRM evolves from on-premise (CRM 1.0) to cloud-based (CRM 2.0) encompassing a broader range of data and sophisticated analysis capabilities.