Podcast
Questions and Answers
What is the main purpose of establishing performance measures in a CRM program?
What is the main purpose of establishing performance measures in a CRM program?
Which step involves creating a project team and testing a pilot application?
Which step involves creating a project team and testing a pilot application?
Which of the following trends emphasizes the importance of privacy laws in CRM?
Which of the following trends emphasizes the importance of privacy laws in CRM?
What is a primary characteristic of cloud computing in CRM?
What is a primary characteristic of cloud computing in CRM?
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What should be coordinated to ensure all CRM users are informed about customer activities?
What should be coordinated to ensure all CRM users are informed about customer activities?
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What is the main goal of Customer Relationship Management (CRM)?
What is the main goal of Customer Relationship Management (CRM)?
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Which of the following best describes relationship marketing?
Which of the following best describes relationship marketing?
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What is one of the seven Rs of knowledge management?
What is one of the seven Rs of knowledge management?
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What does the term 'churn reduction' refer to in CRM?
What does the term 'churn reduction' refer to in CRM?
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Which of the following is NOT a pre-transaction element of customer service?
Which of the following is NOT a pre-transaction element of customer service?
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Which tool in CRM aids sales representatives in managing their activities?
Which tool in CRM aids sales representatives in managing their activities?
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What outcome does effective call center management aim to achieve?
What outcome does effective call center management aim to achieve?
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What is involved in predicting customer behaviors within CRM?
What is involved in predicting customer behaviors within CRM?
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Which element is part of post-transaction activities?
Which element is part of post-transaction activities?
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How is customer value determined in CRM?
How is customer value determined in CRM?
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What role do websites play in customer service?
What role do websites play in customer service?
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Which calculation is relevant for determining lifetime customer value?
Which calculation is relevant for determining lifetime customer value?
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Which customer service element involves order processing capabilities?
Which customer service element involves order processing capabilities?
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What is a key component of effective target marketing efforts?
What is a key component of effective target marketing efforts?
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What is a critical issue in customer privacy capabilities?
What is a critical issue in customer privacy capabilities?
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Why is feedback from customers important?
Why is feedback from customers important?
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Study Notes
Customer Relationship Management (CRM)
- CRM is the infrastructure enabling a company to increase customer value and motivate customer loyalty to repeat purchases.
- Firms need methods for finding and developing good suppliers, as well as becoming and staying good suppliers themselves.
- Firms may need to certify intermediaries to adequately represent the firm's products.
Key Tools & Components of CRM
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Segmenting Customers: Grouping customers to create specialized communications about a product.
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Target Marketing Efforts: E-mail or direct mail saves labor and postage, reducing the chance of being considered a nuisance.
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Relationship Marketing/Permission Marketing: Customers select communication type and time. Needs software and customer participation.
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Cross-Selling: Additional products are sold as a result of the initial purchase.
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Predicting Customer Behaviors: Forecasting the likelihood of customer purchases.
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Customer Defection Analysis: Finding methods to retain customers.
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Churn Reduction: Reducing customer defections.
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Customer Value Determination: Verifying customer lifetime value for individuals or segments.
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Event-Based Marketing: Finding methods to re-offer products & services to customers at the right time.
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Calculating Lifetime Customer Value: Formula provided for calculating NPV (Net Present Value) using average annual profit/sales, the annual discount rate, and expected lifetime.
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Lifetime Value Example: Formulas and examples given to show calculation for the value of two different nurseries (Nursery A and Nursery B).
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Automated Sales Force Tools:
- Sales Force Automation (SFA): Documents field activities, communications with the home office, and retrieves sales history.
- Sales Activity Management: Provides guided sequences of sales activities for salespeople.
- Sales Territory Management: Provides sales managers with information on each salesperson's activities.
- Lead Management: Allows salespeople to follow prescribed tactics when dealing with prospective customers to close sales.
- Knowledge Management: Enables quick decision-making, better customer service, and equips sales staff.
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Seven Rs Rule: Having the right product in the right quantity, condition, place, time, for the right customer, at the right cost.
Managing Customer Service Capabilities
- Performance measures align with the seven Rs.
- However, providing services has associated costs.
- Pre-transaction Elements: Customer service policies, mission statement, organizational structure, and system flexibility.
- Transaction Elements: Order lead time, order processing capabilities, and the accuracy of the distribution system.
- Post-transaction Elements: Warranty repair services, efficient complaint resolution procedures, product return processes, and comprehensive operating information.
Call Centers
- Categorizing calls, calculating average resolution times, forecasting future demand, and enhancing overall staff productivity can elevate customer satisfaction levels.
Website Self-Service
- Websites act as support mechanisms for call centers.
- Customers access account information, operating hours, and contact information.
Field Service Management
- Customers communicate directly with product specialists using wireless devices.
- Right diagnosis can be made quickly.
Measuring Customer Satisfaction
- Customers frequently provide feedback about products, services, or organizations.
Customer Privacy Capabilities
- Two critical issues to address are ensuring privacy and minimizing customer harassment.
Designing & Implementing a Successful CRM Program
- Step 1: Creating the CRM Plan: CRM program objectives, fit with corporate strategy, new applications to be purchased or developed, integration/replacement of legacy systems, personnel requirements (personnel, training, policies), upgrades and maintenance, and costs & time frame.
- Step 2: Involve CRM Users From Outset: Project team from all affected organizational areas, pilot application testing.
- Step 3: Select the Right Application & Provider: Trade shows, research, and hiring a consultant, comparing based on performance, security, reporting capabilities, and system availability.
- Step 4: Integrate Existing CRM Applications: Coordinating customer contact information mechanisms so all CRM users in the firm know about associated customer activities. Centralized database/warehouse for all customer information.
- Step 5: Establish Performance Measures: Determine if objectives are met against expected performance and comparison to planned variance.
- Step 6: Providing CRM Training: Training for all initial users; ongoing training as additional applications are added.
Trends in CRM
- Customer Data Privacy: Rules and Regulations regarding privacy are expanding; encompass Patriot Act and European Union online privacy laws.
- Social Media: Creating virtual communities around product brands is powerful for engaging consumers.
- Cloud Computing: Software as a service accessed via web browser; changing the costs of CRM applications.
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Description
This quiz covers the fundamentals of Customer Relationship Management (CRM), including its infrastructure, key tools, and components aimed at enhancing customer loyalty and value. Learn about customer segmentation, targeted marketing efforts, and predicting customer behaviors to improve firm performance. Test your understanding of CRM practices and strategies.
