Customer Relationship Management MKT 2227 PDF

Customer Relationship Management MKT 2227 Forms of CRM (Lesson Three) Maduka Udunuwara  Lesson outline The concept of satisfaction What CRM software is Forms of CRM Storing and analysing customer data Misund...

Customer Relationship Management MKT 2227 Forms of CRM (Lesson Three) Maduka Udunuwara  Lesson outline The concept of satisfaction What CRM software is Forms of CRM Storing and analysing customer data Misunderstandings about CRM  Satisfaction In simple terms it is fulfilment, leaving nothing to be desired, to be pleased (Oxford Dictionary) It is customers post-purchase evaluation of the overall service experience (processes and outcome). It is an affective (emotion) state or feeling reaction in which the customer’s needs, desires and expectations during the course of the service experience have been met or exceeded Customer satisfaction is expected to insulate customers from competitors, can create sustainable advantage, reduce failure cost, encourage repeat patronage and loyalty, enhance positive WOM and lowering cost of attracting customers.  What is CRM Software CRM software is a tool that helps businesses manage interactions and relationships with current and potential customers. CRM software allows businesses to centralize customer data, track interactions across various channels (such as email, phone calls, social media, and in-person meetings), and streamline processes related to sales, marketing, and customer service. By providing a holistic view of customer interactions and preferences, CRM software enables businesses to better understand their customers, personalize interactions, and ultimately improve customer satisfaction and retention. Popular CRM software includes Salesforce, HubSpot CRM, Zoho CRM, Microsoft Dynamics 365, and many others, catering to businesses of different sizes and industries.  Types of CRM Software On-premise CRM: On-premise CRM software is installed locally on the company's own servers and computers. Data is stored and managed internally, giving businesses full control over security and customization. Requires significant upfront investment in hardware, software licenses, and IT infrastructure. Maintenance, updates, and backups are the responsibility of the company's IT team. Suitable for businesses with strict data security requirements or specific compliance nee Cloud-based CRM: Cloud-based CRM, also known as SaaS (Software as a Service) CRM, is hosted on remote servers and accessed via the internet. Offers flexibility and scalability, with subscription-based pricing models and the ability to scale resources as needed. Data is stored securely in the cloud, reducing the burden on internal IT infrastructure. Updates and maintenance are handled by the CRM provider, ensuring the software is always up-to-date. Allows for remote access and collaboration, making it ideal for distributed teams or businesses with remote workers. Popular cloud-based CRM solutions include Salesforce, HubSpot CRM, and Zoho CRM.  Factors to consider when selecting a software When choosing between different types of CRM software, businesses should consider factors such as budget, IT infrastructure, scalability, data security, and industry-specific requirements. The right CRM solution will depend on the organization's size, industry, business objectives, and IT capabilities. For example; Some CRM software solutions are tailored to specific industries, such as healthcare, finance, real estate, or manufacturing.  Forms of CRM Strategic CRM- The commitment of top management to CRM Analytical CRM-The ability to measure how well you are providing that service through measuring people, process and technology Operational CRM-The ability to provide accessibility to your service through people, process and technology Strategic CRM Strategic CRM is defined as “a top-down perspective Based on CRM which reviews CRM as a core customer-centric business strategy that aims at winning and keeping profitable customers” Strategic CRM reflects the philosophy of the organisation and its customer centric approach. Strategic CRM is aimed at deepening the knowledge about the customers through four main components: ✓customer management orientation, ✓implementation and alignment of organisational process, ✓information capture and ✓alignment of technology and CRM strategy implementation After implementing CRM system ✓The company is differentiated from other competitors ✓The company can now share customer data across business units, distribution centers and customer service centers. ✓Allowed the company to cross-sell, retain and service accounts much more effectively. ✓One of the CRM system’s many features is web collaboration which allows representatives to co-browse and chat with customers online while making recommendations. Analytical CRM Analytical CRM is defined as “a bottom-up perspective on CRM which focuses on the intelligent mining of customer data for strategic or tactical purposes” The key component of analytical CRM is customer information. Along with IT, analytical CRM is assigned the task of accumulating, storing, organising, interpreting, and distributing customer data Analytical CRM is designed for analysts to use customer data, captured at numerous touch points to make decisions about the customers. Furthermore, analysis of data on the characteristics and behaviour of the customer can be used to predict customer behaviour, initiate proactive communication with the customer, and to optimise communication  A company wants a better understanding of its customers, in order to be able to make more personalized offers and implement customer loyalty campaigns. This requires data mining solutions. There are solutions that creates profiles and predictive models from customer data which enables more finely targeted campaign management, call centre management, sales-force automation and other activities involved in customer relationship management. This enables to design and execute personalized actions and customer loyalty campaigns tailored to the needs and expectations of high-value customers. Operational CRM Operational CRM is defined as “a perspective on CRM which focuses on major automation, sales force or marketing automation” Operational CRM is concerned with the automation of tasks related to the customer-facing level which focus on the total customer experience. While operational CRM collects customer data through numerous touch points such as contact management systems, mail, fax, sales force, and web it also uses the data for efficient and effective interactions. software solutions under operational CRM such as marketing automation (market segmentation, campaign management and event based marketing), sales force automation (lead management, contact management and product configuration) and service automation (which includes contact and call centre operations, web-based service and field service)  Data warehousing and mining Capable of capturing, processing, transmitting, and storing data which enables organizations to integrate their various databases into data warehouses. Data warehousing is defined as a process of centralized data management and retrieval. Data warehousing helps maintaining a central repository of all organisational data. Centralisation of data is needed to maximize user access and analysis. Technological advances are making this vision a reality for many companies. And, equally dramatic advances in data analysis software are allowing users to access this data freely. The data analysis software is what supports data mining.  Data mining is nontrivial extraction of implicit, previously unknown, and potentially useful information from the data. This includes a number of different technical approaches, such as clustering, data summarisation, learning classification rules, finding dependency networks, analysing change, and detecting anomalies. In other words, it includes retrieving, analysing, extracting, loading, transforming and managing data In involves sophisticated software techniques to identify patterns and regularities of structured data  It enables these companies to determine relationships among internal factors such as price, product positioning, or staff skills, and "external" factors such as economic indicators, competition, and customer demographics. And, it enables them to determine the impact on sales, customer satisfaction, and corporate profits. Finally, it enables them to "drill down" into summary information to view detail transactional data. With data mining, a retailer could use point-of-sale records of customer purchases to send targeted promotions based on an individual's purchase history. By mining demographic data from comment or warranty cards, the retailer could develop products and promotions to appeal to specific customer segments.  Use of data mining Identify buying patterns of customers Associating buying behaviour with certain segments Analysing responses to advertising or mailing-and therefore enabling predictive analysis of future responses and facilitating greater focus Identify fraudulent activities e.g. fraudulent credit card use, fraudulent mortgage patterns Loyalty analysis Spending and cross correlation to classes of customers Product penetration by types and classes of customers Risk analysis Branch network product sales  Example of data mining WalMart is pioneering massive data mining to transform its supplier relationships. WalMart captures point-of-sale transactions from over 2,900 stores in 6 countries and continuously transmits this data to its massive 7.5 terabyte Teradata data warehouse. WalMart allows more than 3,500 suppliers, to access data on their products and perform data analyses. These suppliers use this data to identify customer buying patterns at the store display level. They use this information to manage local store inventory and identify new merchandising opportunities. WalMart computers and processes over 1 million complex data queries.  Issues with data Reliance on data bases to supply raw data which tend to be dynamic, incomplete, noisy and large Limited information Adequacy and the relevance of the information stored Noise Database usually contain errors which contaminate the data they contain Subjective or measurement judgements that can cause errors which may result in misclassifications. Duplication Missing data Size updates and irrelevant fields Misunderstandings on CRM CRM is database marketing CRM is a marketing process CRM is an IT issue CRM is about loyalty schemes CRM can be implemented by any organisation Case Study Eric has been running service station together with petrol shed for 12 years. During that time he has seen his regular clientele decline and change. There are certainly the regulars who continue to bring their cars to him for the thorough service and personal attention to detail that they’ve come to depend on him to provide, and there are those who come in every Friday or Monday morning like clockwork for a fill-up, but Eric has noticed that lately there don’t seem to be as many. He’s started thinking about what he might be able to do about this with the aim of building a more regular and loyal customer base, especially since there are now two big service stations providing competition nearby, one of which has a convenience store attached to it, and the other a McDonald’s restaurant.