Customer Relationship Management Overview

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Questions and Answers

What is the primary goal of a customer relationship management (CRM) strategy?

To minimize customer service interactions

To assess customer needs and enhance their experience (correct)

To exclusively focus on acquiring new customers

To automate all marketing processes without human intervention

Which of the following describes customer churn?

The segmentation of customers based on value

The process of acquiring new customers

The retention of high-value customers

The loss of customers over time (correct)

What is meant by maximizing the lifetime value of a customer?

Understanding and growing a customer's potential revenue stream over years (correct)

Focusing solely on high-value customers while neglecting others

Reducing the interaction time with customers

Increasing the number of customer complaints

How do modern CRM strategies primarily benefit organizations?

By improving employee productivity and increasing profits Signup and view all the answers

What role does information technology play in CRM approaches?

It enables access to necessary information across systems and applications Signup and view all the answers

What is the primary goal of data consolidation in CRM systems?

To improve communication among departments via shared customer data Signup and view all the answers

Which of the following best describes operational CRM systems?

Systems that support front-office business processes directly interacting with customers Signup and view all the answers

What feature is NOT typically included in sales force automation (SFA) systems?

Marketing campaign management Signup and view all the answers

What is the purpose of customer identity management in large organizations?

To understand and manage customer relationships across different divisions and brands Signup and view all the answers

Which approach involves offering customers the chance to buy higher-value products or services than what they initially selected?

Upselling Signup and view all the answers

What is a key feature of customer-touching applications?

They facilitate direct interaction between customers and technology. Signup and view all the answers

Which of the following CRM applications is focused on planning and executing marketing campaigns?

Campaign management Signup and view all the answers

What is the term used to describe the ability of organizations within a supply chain to access relevant data on materials?

Supply chain visibility Signup and view all the answers

Which part of the supply chain involves sourcing or procurement from external suppliers?

Upstream Signup and view all the answers

Which component of supply chain management focuses on scheduling activities necessary for production?

Make Signup and view all the answers

What is referred to as 'reverse logistics' in the supply chain?

The return of damaged or unwanted products Signup and view all the answers

Which type of flow in the supply chain involves monetary transactions?

Financial flows Signup and view all the answers

What is the primary goal of supply chain management systems?

To minimize disruptions and friction Signup and view all the answers

What is the purpose of a network of warehouses in supply chain management?

To coordinate the receipt of orders and facilitate distribution Signup and view all the answers

Which tier of suppliers produces integrated components such as dashboards for automobile manufacturers?

Tier 1 suppliers Signup and view all the answers

Which method allows customers to order products not in stock at a local store?

Endless aisle Signup and view all the answers

What is the primary purpose of loyalty programs in customer relationship management?

To influence future customer behavior Signup and view all the answers

Which of the following is NOT a key technology used in analytical CRM systems?

Email automation Signup and view all the answers

What is one significant disadvantage of on-demand CRM systems?

Difficulty in modifying software Signup and view all the answers

How do mobile CRM systems primarily operate?

Via portable devices like smartphones Signup and view all the answers

What is a major risk associated with open-source CRM systems?

Quality control issues Signup and view all the answers

What is the main focus of social CRM?

Engaging customers through social media Signup and view all the answers

What do real-time CRM systems primarily enhance for organizations?

Customer satisfaction and responsiveness Signup and view all the answers

What is a characteristic feature of customer-touching applications?

Engagement with digital platforms Signup and view all the answers

Which of the following best describes the function of FAQs in e-CRM applications?

Answering repetitive customer queries Signup and view all the answers

Study Notes

Customer Relationship Management (CRM)

CRM is a customer-focused strategy to understand customer needs and provide a positive experience.
It prioritizes customer satisfaction and profitability, focusing on acquiring, retaining, and expanding relationships with valuable customers.
CRM processes include marketing to generate leads, customer segmentation, and maximizing customer lifetime value.
Customer churn (loss of customers) is inevitable, and a successful CRM strategy accommodates diverse customer needs.
CRM systems support the CRM strategy by consolidating customer data.
CRM involves recognizing customer touch points (various interactions).
Data consolidation creates a 360-degree customer view that enables the organization to share comprehensive customer information effectively.
CRM systems comprise operational CRM (front-office) and analytical CRM (business intelligence) systems.

Operational CRM Systems

Operational CRM supports front-office processes (sales, marketing, service).
Customer-facing applications and customer-touching applications forms operational CRM.
Customer-facing CRM includes customer service & support, sales force automation, marketing, and campaign management.
- Customer service & support systems automate requests and use various channels like call centers.
- Sales force automation (SFA) systems automate sales transactions, manage contacts, and track leads.
- CRM systems have marketing applications to identify, target customers, and manage marketing campaigns. Cross-selling, upselling, and bundling are marketing strategies.
Customer-touching applications (e-CRM) allow customer self-service.
- e-CRM supports search and comparison, personalized information, customized products, personalized webpages, FAQs, email/automated responses, and loyalty programs.

Analytical CRM Systems

Analytical CRM uses data analysis to understand customer behavior, transactions, and responses.
Statistical models analyze customer behavior, value, acquisition, retention, and attrition.
Analytical CRM uses data warehouses, data mining, decision support, and business intelligence tools.
It generates reports and dashboards for actionable insights.

Other CRM Systems

On-demand CRM is hosted by a vendor, reducing costs but offering limited customization and security risks.
Mobile CRM systems enable sales, marketing, and service interactions through mobile devices.
Open-source CRM systems have flexible customization and pricing but require constant quality oversight.
Social CRM leverages social media for customer engagement and collaborative conversations.
Real-time CRM enhances customer satisfaction by enabling instant responses to customer inquiries.

Supply Chain Management (SCM)

A supply chain encompasses materials, information, and money flow from suppliers to customers.
Supply chain visibility and inventory velocity are crucial for customer satisfaction.
Supply chains involve upstream (procurement), internal (manufacturing), and downstream (distribution) segments.
Supply chains have material, information, and financial flows, possibly bidirectional (returns).
Supply chains feature tiers of suppliers (e.g., Tier 1, Tier 2, Tier 3).
The SCM process involves planning, sourcing, making, delivering, and returning goods.
SCM aims to minimize friction (delays, costs, etc.) and optimize business processes.
Push (make-to-stock) models forecast demand and produce accordingly.
Pull (make-to-order) models produce based on customer orders.
Issues include forecasting, delivery times, quality, and inventory levels.
The bullwhip effect refers to erratic shifts in orders.

Information Technology Support for SCM

EDI (Electronic Data Interchange) is a standard for electronic communication of routine business documents.
Extranets connect business partners' intranets to facilitate collaboration.
Extranets connect internal employees to business partners for various tasks, improving access to information, orders, and service, optimizing collaboration, and reducing costs.
Corporate portals provide a centralized access for business information, useful in procurement (sourcing) and distribution processes.
RFID (Radio Frequency Identification) chips improve efficiency in receiving, warehousing, and inventory control in supply chains.

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Description

Explore the essentials of Customer Relationship Management (CRM) and its operational systems. This quiz covers customer-focused strategies, processes such as marketing and customer segmentation, and the significance of data consolidation for a comprehensive customer view. Test your knowledge on how CRM enhances customer satisfaction and business profitability.