Customer Relationship Management Overview

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.

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.