Customer Relationship Management Overview

Managing Operations in the Digital Enterprise (BUSI1061)

• Course Focus: Customer relationship management (CRM) and social media in buying products/services today.
• Course Instructor: Dr. Kenny Wong Meng Seng
• Course Email: [email protected]

Agenda

• B2C E-Commerce: Focuses on Business-to-Consumer e-commerce.
• Transactional Marketing to Relational Marketing: Describes the shift from short-term transactions to long-term customer relationships.
• Customer Relationship Management (CRM): Explores the concept of CRM as a capability for organizations to improve customer relationships.
• Benefits of CRM & Implementing CRM: Details the advantages of using CRM and how to put these systems into place effectively.
• Social Media and CRM: Explores the integration of social media into CRM strategies.

B2C E-Commerce

• USA's E-commerce Market: Is the most advanced e-commerce market globally.
• Global E-commerce Sales Growth: Projected to increase by 14% annually, reaching $6.3 trillion in 2024.
• Key Driving Factors: Increasing adoption of online shopping, advancements in payment technologies, and increased internet access globally.
• Dominant Consumer Spending Categories: Travel, books, and computer hardware and software.
• Media Products' Online Sales Share: Account for almost 25% of online sales.

Marketing Paradigm Shift: Transactional Marketing vs. Relational Marketing

• Transactional Marketing: Short-term focus on marketing mix. Consumers are more price-sensitive. Uses ad hoc customer surveys.
• Relationship Marketing: Long-term focus on interactive marketing; supported by marketing mix activities. Consumers are less price-sensitive. Employs real-time customer feedback systems.

What is CRM?

• Improving Organizational Relationships: Improves organizations' relationship with customers by restructuring services around customer needs.
• Customer-Oriented Philosophy: Involves analyzing, planning, and controlling customer relationships using modern information and communication technologies.

Types of Benefits

• Return on Investment (ROI): Focuses on tangible metrics like profit and cost-benefit analysis.
• Return on Relationship (ROR): Centers on intangible benefits, like customer satisfaction and loyalty.

Why Implement CRM

• Offensive Reasons: Improve profitability and increase revenue.
• Defensive Reasons: Competitive pressure, maintaining customer loyalty, and creating longer-term customer/company value.

Effect of CRM on Revenue

• Satisfaction & Repurchase A satisfied customer is more likely to return and repurchase, leading to increased revenue. Positive word-of-mouth.
• Losing Potential Customers: Dissatisfied customers might switch brands or leave, resulting in decreased revenue. Negative word-of-mouth.

Customer Loyalty

• Consistent Revenue Stream: Loyal customers can be a consistent source of revenue over many years.
• Value and Retention: Loyalty hinges on a customer feeling they receive better value from the company than from a competitor.

Case Study: Amazon.co.uk

• Customer Strategy: Proactively identifying and fulfilling customer needs, maintaining relationships, and remembering previous visitors.

Customer Portfolio Analysis @ TESCO

• Customer Base Examination: Identified that 25% of customers account for only 2% of sales, while the top 5% are responsible for the majority of sales.

How Do Your Customers ‘Experience’ Your Business?

• Intelligence-Based Marketing: The company understands its customers' preferences and communicates effectively through pertinent, timely messages using a comprehensive analytical intelligence framework.
• Schizophrenic Marketing: The company has a flawed understanding of customer preferences, leading to fragmented and ineffective communication strategies.

Customer Relationships & CRM

• Acquiring Customers: Using customer lifestyle data to identify potential customers. Determining qualities of a good customer. Matching customers with appropriate products. Utilizing prospect lists in marketing efforts.
• Rewarding Loyal Customers: Identifying and rewarding loyal customers. Differentiating strategies for handling loyal buyers and other customers. Determining suitable levels of personalization for communication strategies to customers.
• Retaining Customers: Understanding characteristics of profitable customers, evaluating their risk of leaving, comprehending buying patterns of best customers, strategically utilizing purchasing channels, and efficiently conveying timely and relevant communications with customers.

What does CRM involve?

• Customer Focus: Organizations must prioritize customers’ needs and actively address these.
• Adaptability: Organizations must be adaptable; adjusting to customer needs and market demands.
• Market Research: Conduct comprehensive market research to understand customer preferences and satisfaction levels.

Strategically Significant Customers

• Important Customer Segment: CRM focuses on customers that will yield the most value.
• Value-Based Decisions: Relationships should be built with customers who provide value.
• Resource Prioritization: Avoid relationships with customers who won't yield enough value in the long term.

Markers of Strategically Significant Customers

• High Lifetime Value: Customers likely to use the service repeatedly.
• Benchmarking: Customers who act as benchmarks for improving service offerings to other customers.
• Innovation and Change: Customers who encourage supplier change (e.g., continuous improvement).

Information Technology and CRM

• Technological Role: Technology plays a key role in CRM systems.
• Data Management: Technology facilitates the collection and storage of customer data.
• Personalized Communication: Data allows for individualized customer interactions and services.

Benefits of CRM

• Reduced Costs: Achieved through efficient operation and executing the right tasks.
• Increased Customer Satisfaction: Meeting customer expectations and exceeding needs of customers.
• Growth of Businesses: Increasing customer base and promoting greater opportunities for revenue generation.
• Maximization of Opportunities: Leveraging resources to increase services, referrals, and other profits.
• Market Insights: Using CRM to gain better insights concerning the market and competitiveness.
• Operational Enhancement: Identifying and correcting operational deficiencies.
• Long-Term Profitability: Aiming for long-term profitable operations.

Implementing CRM

• Strategic Review: Begin implementing CRM with a strategic review of the company's current position.
• Core Business Analysis: Defining and adapting the core business to future trends.
• Appropriate CRM Model: Choosing the right CRM model for the current and future business needs.
• IT Infrastructure: Assessing and acquiring required IT infrastructure to support future organisational needs.
• Vendor & Partner Selection: Identifying suitable vendors and partners.

CRM Resources

• Various Software and Service Providers: List of relevant companies involved in CRM management.

CRM Helps to Improve Sales?

• Importance of Insight into Customers: Successful CRM implementation should be driven by understanding customer needs and fulfilling them.

Media: A Brief History

• Chronological Overview: Shows the evolution of media using examples from history.

Social Media

• Definition: Social media is about people exchanging information and ideas in virtual networks through Internet applications.
• Web 2.0 Foundation: Social media depends on mobile and web-based technology to communicate interactively.

Social Media Explained

• Examples: Illustrates different social media platforms and how their use cases differ.

Which Forms of Social Media Do You Use?

• List of Social Media Types: Provides some examples of widely used social media forms.

From Social Media to Social Customer Relationship Management

• Social Networking Sites: Companies tend to use social networking sites more often than other types of social media.

Reasons Why I Interact with Companies via Social Media

• Reasons Businesses are Following: Customers often seek out discounts, reviews and general information.

Companies' Misperceptions of Why Customers Interact Online

• Customer vs. Business Ranking Differences: Shows that companies often underestimate the importance of discounts and certain interactions like discussing products/services.

Create Social Media Experience

• Considerations to Reinvent Customer Relationships: Suggests key considerations required to create effective social media strategies.
• Social Interactions: Highlights the importance of social media in interactions and understanding the customer.
• Customer Experience Consistency: Emphasizes the need to make customer experiences uniform across different channels.

Sign-up for Your Grouping via Moodle

• Group Formation Instructions: Specific steps and guidelines covering how student groups will form.

MODE Enrollment (as your optional module)

• Enrollment Guidelines: A clear set of enrollment instructions, highlighting important considerations including proper scheduling and organizational clearance.

This quiz explores essential concepts of customer relationship management (CRM), including marketing strategies, customer feedback systems, and the significance of customer loyalty. Test your knowledge on the projected growth of e-commerce and the fundamentals of transactional vs. relational marketing. Perfect for students and professionals interested in enhancing their understanding of CRM principles.