Introduction to CRM

• You loose a customer when you don’t meet their needs.
• The Internet can be the perfect place for customer service. It provides an area for the customers to find the exact piece of information they need. And its’ a customer service center that’s open 24 hours a day, seven days a week.
• Customers are expecting higher-quality goods, better service and quick delivery. This is where CRM comes in.
• How does CRM improve your relationship with customers?
  · Some examples of its value to your business include expediting responses to customer enquiries, increasing company knowledge of customers, and identifying profitable business activities.
• With the information gained from a CRM system you’ll receive customer feedback to improve products or services. This means sharing information with your partners to ensure customer satisfaction.
• What’s the value of implementing a CRM?
  · Your knowledge of your customers will grow. You will better understand your customer’s needs and will therefore, be more able to meet those needs resulting in satisfied customers.
  · Your goods and services will improve based on input from your customers. Valuable feedback from your customers will allow you to more directly meet their needs.
  · You will increase the speed of your response to customer concerns. This will result in happy and loyal customers, which, in turn will impact your company’s bottom line.
• “There is only one boss: The Customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.” – Sam Walton.
• Customer Relationship Management puts the business focus back on the customer, where it belongs. CRM combines business process and technology to create a better understanding of customers.
• CRM helps identify new customers and retain existing customers. To reach consumers who will truly benefit from your services, its important that marketing campaigns define clear objectives and goals directed at an appropriate audience. This audience is defined through CRM.
• Marketing team uses CRM to identify commonalities among clients. With this information, the company’s marketing strategy becomes more focused and effective.
  Sales team as a consequence notices the number of new customers and profits from existing customers increases as the company improves its ability to meet client needs.
• CRM can create personal approach to customer service.
• CRM allows you to customize relationships with individuals to provide a higher level of service. An effective CRM system will help you exceed your customers’ expectations by offering them what they need, when they need it – before they have to ask for it.
• CRM helps to create a personalized approach.
• CRM can:
  · Ease the exchange of information throughout every department in a company.
  · Personalize interactions with consumers to increase customer satisfaction.
  · Assist in pinpointing potential clients and monitoring relationships with current clients.
  In a nutshell, CRM will assist you in identifying new customers and retaining existing customers. It will streamline information exchange, and it will customize relationships with individuals to provide a higher level of service.
• CRM won’t make you smarter; it will help you serve your customers by identifying their expectations.
• CRM focuses on enhancing service to exceed your customers’ expectations. How is this accomplished? By allowing all departments’ access to the same information. The second goal of implementing a CRM system is using integrated information to create top-quality service. Customers don’t want to repeat the same information over and over to everyone they speak with. You’ll save time and minimize customer frustration by sharing information internally.
• Research has shown that it costs 6 times more to sell to a new customer than an existing one, and your odds of selling to an existing customer are 50% better than selling to a new one.
• Goals of implementing CRM:
  · To create a sense of loyalty with your customers.
  · To realize higher profits through netter customer relationship.
• An effective CRM system takes the customers’ view, not the products’ or company’s view.
• There are three stages in CRM. None is more important than the others, but you will need to make one your primary focus – without abandoning the other two,
  · Acquiring new customers.
  · Increasing the profitability of existing customers.
  · Retaining existing customers.
• The first stage of CRM is acquiring new customers. Through existing customer testimonials, product quality and availability convenience, and innovation, you can attract new customers to your company.
• The next stage of CRM is increasing the profitability of those existing customers. Enhancing your relationship through cross-selling and up-selling offers the consumer great convenience at reasonable costs. If you have everything the customer currently needs, make sure he knows it.
• To truly see the benefits of the customer/seller relationship, you must sustain customer loyalty. The third stage of CRM is retaining existing customers. Not only do you have to offer products the market wants, but you must also offer what your customers want. Your goal is to retain your customers for life. Many companies focus in this aspect of CRM because the greatest percentage of sales comes from existing customers.
• Focusing a company’s goals on customer satisfaction is a major benefit of CRM.
• Another advantage of implementing CRM is that it redefines marketing strategy so that it is more effective.
• Transforming to a CRM system aligns your organizational structure with actual business operations.
• A key advantage of implementing a CRM system is that it re-concentrates the single focus of product performance onto the customer.
• CRM is a bridge linking an organization to its valued customers.
• Implementing a CRM system dramatically affects everyone involved. It requires a political, cultural and organizational change.
• CRM cuts a wide swath across the entire organizational body that it demands a more cohesive approach toward meeting goals.
• Current incentive systems may work against CRM because they reward only a portion of the customers’ relationships with the company. Therefore, your organization may lack an incentive program that supports a CRM system.
• The challenge of implementing a CRM involves the cultural resistance to the change it requires. You also need to embrace the international market and create an infrastructure to facilitate the new system.
• To find out what your customer wants, you need to understand and identify the elements of the CRM loop. The CRM loop is the fundamental cycle of activity that drives CRM programs
  · Comprehension and Differentiation.
  · Development and Customization.
  · Interaction and Delivery.
  · Acquisition and Retention.
  The four stages of CRM loop are an interdependent and continuous cycle of activity. All your initiatives and objectives must be intrinsically connected to this core cycle of action to get the best results.
  As you transition from one stage to another, you will become more adept at implementation processes and achieve deeper insights that will improve each successive effort.
• So how does the CRM loop work? What are the purposes of the four stages? And how do they interrelate with each other? This underlying core of activity will be your primary method for gaining knowledge and understanding your customers. The CRM loop will also help you decide what subsequent actions to take. This helps you identify, connect, and hold on to your most valuable customers.
• Comprehension and Differentiation: As you learn, you will be able to zero in your valued customers quickly. And you will also attract new ones with similar learning’s. Retention comes by listening vigilantly so you are prepared to modify your services when customers change their preferences.
• Development and Customization: Use analysis and research to comprehend what your customers’ value. Then use your understanding to show customer that your organization is differentiating its service based on what they have told you and what you have learned independently.
• Interaction and Delivery: A basic principle of CRM is to develop products and services based on customers’ needs and expectations. Although most companies can’t afford to customize products for individual customers, they can customize their products for a proven customer sector.
• Acquisition and Retention: Besides marketing and sales channels, customers interact in many ways with your organization, including shipping and distribution and customer service. With new information, you can progressively enhance the value you deliver to your customer.
• Value is the quality of product, the service, the convenience, the ease of use, the responsiveness, and the excellence of customer service. Value isn’t just about the price of the product.
• A customer interacts with an organization in many ways, including shipping, distribution, and customer service.
• The infrastructure provides the solid foundation, but the core competencies provide the heart and soul of a successful CRM system. It is here that the philosophy of CRM is expressed. The first vital core competency is the fine art of up-selling. Up-selling in a CRM environment means identifying your customer’s needs and then matching their needs and then matching their needs to complementary products and services. The result is a richer, more profitable customer relationship.
• One aspect of up-selling is event-driven marketing. By implementing up-selling software, you can track customer contacts and establish triggers to identify prospects for additional sales.
• A second core competency of a successful CRM system is direct marketing. Direct marketing is the pre-sale interaction with potential customers. This involves the use of advertising techniques to influence and provide your customer with the information needed to make a purchase decision. As your business grows, you will be deluged with requests for information; be sure to manage the fulfillment end of this potentially overwhelming process.
• The third core competency of a CRM system is customer service. The goal of an effective customer service program is to provide support and to assign, create, and manage service requests for the customer.
• Walking hand in hand with customer service is field operations, the fourth core competency. Field service is the hands-on extension of customer support. It comes into play when a problem cannot be solved over the phone.
• In a nutshell the core competencies of CRM are:
  · Up-selling
  · Direct Marketing
  · Customer Service
  · Field Operations
• To involve the entire organization in CRM, you must be able to identify the benefits of such a system. What are these benefits? An effective CRM system will help you remain ahead in competition, tap into the worldwide market, instill loyalty in your customers, decrease cost, and increase profits.
• Integrating a CRM system will help you decrease costs and increase profits, tap into the worldwide market, and remain ahead of the competition.
• Effective sharing of client information throughout a company is a key ingredient for successful CRM.
• Some examples of CRM information sources are:
  · The Internet: tracking visits to your website can give you a good idea of what customers are looking for some pages might get more hits than others indicating a demand for certain products. Using this information within a CRM framework will help you focus on customer needs.
  · Customer Surveys: Surveys can be given online or through the mail. An effective CRM system can take this information and make it available to marketers, sales people, and customer service people. With a clear understanding of customer needs, each department is more likely to meet those needs.
  · Customer Purchasing Habits: With data mining and other techniques, you can learn what your customers buy from you. What are your top selling items? Who’s buying them? What isn’t selling? Answers to these questions and more lie in customer purchasing habits.
  · Customer Service Calls: Anytime a customer calls you is an opportunity to learn more about him. A CRM system designed for your company can help service representatives increase knowledge of your customers.
• The second way to understand your customers is to integrate customer information into your company’s system. This allows everyone access to customer information. Marketers can identify customer demographics. Sales people can generate new leads based on customer buying trends. Customer service based on the information gathered.
• The Internet is driving a revolution of one-to-one marketing and mass communication.
• Effective sharing of client information throughout a company is a key ingredient for successful CRM.
• The first key to successfully implementing CRM is Integrating Internal Business Processes.
• Creating a seamless flow of information throughout your own company isn’t always enough. You should include external business partners in your information stream. Sharing customer information is essential to meeting your customers’ needs. Consider third party suppliers and vendors as an extension of your business, and use them to provide solutions for your customers. A CRM infrastructure using Web-based applications can eliminate communication hassles and cost overruns.
• To successfully create your own CRM infrastructure, you must integrate computer systems. These systems are known as “enabling technologies” that work together to provide more fluid CRM system. With more powerful applications in the future, this integration might not be necessary, but because methods of delivering information are so varied, you need a CRM solution that can handle information across al delivery channels.
  · Legacy Systems: Many companies rely on 20year old systems that cannot simply be replaced. Because of this fact, special software tools, such as “middle ware”, become part of the CRM solution. This software helps integrate old legacy systems with new CRM applications.
  · Computer Telephony Integration (CTI): CTI is used to manage incoming calls. It allows information about a caller to be entered into a CRM data repository. This information becomes a valuable part of the entire CRM process because it helps determine what solutions the caller requires.
  · Date Warehousing: With all the information gained through CRM, data warehouses become invaluable tools. Not only do they store the enormous amount of information you have gathered, but they also supply you with the material needed for customer research. Data warehouses offer customer data for later analysis.
  · Decision Support Technology: You need a way to analyze the information in your data warehouse. Decision support technology is a set of analytical tools that help you make decisions based on accumulated customer data. You won’t get the most out of your CRM system without these tools.
• A CRM system creates a new approach to customer service. To ease the transition, everyone in the organization must understand and contribute to the CRM process.
  The first step is involving the entire management team is to establish the CRM strategy throughout the company. Adopt an approach that is consistent with your company’s overall approach to its business. Involve leaders from marketing, sales, IT, and customer service. Discuss their future goals and explore ways that CRM can help them meet these goals.
  The second step is involving the entire management team to define your CRM integration goals. Identify how you’ll track your customers; what software is most appropriate, what vendors can help you, etc. Understand your customers and create a business plan to meet their needs.
  Once you have defined your vision and established a strategy, its then time to measure company readiness. This is the third step for involving the entire management team.
  The final step in involving the entire management team is to monitor progress through stages. Because of the complex nature of CRM, approaching is through stages will create a better chance of success. Create a time line for strategy evaluation. Set milestones you hope to reach and continually check your progress.
• Through an effective e-CRM system, you can personalize interactions with your customers and expedite the closing of business transactions.
• e-CRM and data mining systems help personalize interactions with customers. It also creates interactions with customers. It also creates interactions based on relevant customer information, and expedites business transactions.
• e-CRM makes it possible to recreate the customer service of the past. Companies can use technology to combine a personal touch with customized service and the illusion of the one-to-one shopping of the past.
• The four features of e-CRM are:
  · Information Analysis
  · Customer Personalization
  · Direct Marketing
  · Simplified Transactions.
• The first feature of e-CRM is information analysis. With e-CRM, your ability to collect and analyze information is more efficient. It will help you determine inventory sizing, product pricing, sales items, credit policies, and other business decisions. With the analysis you will be able to effectively use the second feature of e-CRM: Customer Personalization.
  Individual relationships with customers can be created and maintained through e-CRM. An effective e-CRM system will gather customer preferences and ensure customer-made shopping experiences for each customer.
• Technology allows mass-market efficiency with a personalized feel. You can recreate the shopping experience of a mom-and-pop store at minimal cost through the third feature of e-CRM: Direct Marketing.
  Customers can order goals online and give you permission to send them additional personalized messages about new products, sales item, and other services you want to offer.
• e-CRM allows you to simplify transactions, analyze information, and create effective direct marketing material.
• Companies that focus on customer information and use that information to maintain relationships are most successful in the market place.
• What is data mining? It is the process of analyzing enormous amounts of data to identify meaningful patterns. Data mining is used for:
  · Research
  · Process Improvement
  · Marketing
• Data mining is an important tool for lowering overhead costs. The first way data mining facilitates business operations is as a research tool. Research and Development is a costly process that can be streamlines and automated through data mining.
• Data mining lowers costs from the beginning of the manufacturing cycle, during the research and development phase, by quickly shifting through vast amounts of information.
• Manufacturing and inventory control is another area in which data mining can help your company cut costs. The second way data mining facilitates business operations is through process improvement. Data mining systems can monitor processes to ensure that variables are kept at expected levels. Huge amounts of measured data for the hundreds of variables can be monitored and corrected through data mining.
• Although both research and process improvement; are valuable aspects of data mining, they are the least customer – oriented aspects of it. The most successful use of data mining is in marketing. This is the third way data mining facilitates business operations.
  Data mining encovers information that reveals buying behaviours of existing customers. All useful marketing information is available in your customer database. Data mining will help you sift (distinguish) through it all.
• Data mining streamlines and automates research methods, improves business processes, and identifies valuable marketing information.
• Customer databases are an unlimited source of information. They are important business tools, but there are technical aspects of data mining that require knowledge of algorithms, decision trees, and predictive models. Some technical aspects of data mining are:
  · Decision Support Technology
  · Directed Classification and Prediction
  · Undirected Association, Clustering, and Recognition.
• The first technical aspect of data mining is decision support technology. Decision support covers the entire information infrastructure system that companies use to make informed customer decisions. It’s based on recognized data patterns. Data mining helps, identify those patterns.
  · Data Warehousing: A data warehouse is a database that stores information from a variety of operational systems. It allows companies to view information as a single entity rather than as a collection of information bits.
  · Online Analytical Processing: OLAP databases are often speedier and more clearly organized than data warehouses, OLAP databases organize information along specified variables and allow for more precise analysis of the information they contain.
  · Integration of Decision Support: Facts churned out by databases and mainframe computers don’t always create a vivid enough picture to create solutions. Decision support technology is a collection of software and hardware that allows you to visualize the information gained through data mining.
• In data mining, you use data to build a model demonstrating how every record in your customer database can be categorized based on any combination of variables. This method is the second technical aspect of data mining: classification is the method of categorizing records in a database by predefined criteria – for e.g. assigning customers to specific purchasing categories. Prediction is taking the mined customer information, analyzing it, and predicting how customers may react in the future.
• Undirected data mining is an automated process in which similarities among all records in a database of customer records are found. The third technical aspect of data mining is undirected association, clustering, and recognition.
• Some technical aspects of determining are directed classification and prediction, undirected recognition and clustering, and data warehousing and OLAP.
• In directed data mining, you use data to build a model demonstrating how every record in your customer database can be categorized, based on any combination of variables.