Customer Relationship Management Systems

1. Customer Relationship Management Systems 70-451 Management Information Systems Robert Monroe September 25, 2011

2. Quiz • What is the name of the organization you posted on the wiki who uses CRM in their interaction with you? • True or false: According to today’s reading, three critical factors for evaluating a customer’s value to a business are Recency, Frequency, and Monetary Value. • True or false: The two primary categories of CRM system modules are Operational and Effective

3. After Today's Class You Should Be Able To: • Explain why a company would invest in a Customer Relationship Management (CRM) system, and the primary uses for such a system • Explain the difference between Operational CRM and Analytic CRM, and the role that each plays • Explain how CRM systems can be used to acquire customers, enhance the companys relationship with its customers, and retain its customers

4. Customer Relationship Management

5. Let’s Talk Customers… • Why does a business care about its customers? • What makes a “good” customer for a business? • Why might customers want to spend their money at a specific business? • What are some things that businesses want their customers to do?

6. Lets Talk CRM Systems… CRM systems can help businesses deal more effectively with their customers • Acquiring new customers • Figuring out which ones are most profitable (and which ones are unprofitable) • Selling more effectively to existing customers (up-sell, cross- sell) • Being more responsive to customer needs and wants • Making customers feel special, valued, and cared for

7. CRM Systems Consolidate Interaction Points • CRM Systems: • Provide customer-facing employees with a single, complete view of every customer at every touch point and across all channels • Provide the customer with a single, complete view of the company and its extended channels CRM Company Customers

8. CRM Systems Consolidate Applications • Integrate and automate many customer serving processes • Create an IT framework of software and databases that integrates these processes with the rest of the company’s business operations • Includes software modules that provide tools that enable a business & its employees to provide fast, convenient, dependable, consistent service.

9. CRM Examples and Scenarios • Your interactions with large companies are frequently managed by CRM systems • Do you think these companies are using a CRM system? • “I’m sorry Mr. Monroe but I don’t have that information. Please hold while I transfer you to another department…” • “I’m sorry Mr. Monroe, the representative you spoke with previously isn’t available to help you now. Could you please explain the problem to me again from the beginning…” • “Thank you for flying Qatar Airways Mr. Monroe. I see that you prefer to have a window seat and are a gold privilege club member. Could I interest you in an upgrade to first class on this flight? We are offering a Ramadan promotion for our loyal customers with first class upgrades on sale at 30% off their regular price”

10. CRM Benefits • Enables a company to provide a consistent customer service experience • Allows a business to identify its best (and worst!) customers • Supports customer data mining and analytics • Makes possible real-time customization & personalization of products & services based on: • customer wants and needs • buying habits • life cycles and lifestyles

11. Major CRM Modules Source: O’Brien-Marakas, Management Information Systems, 7th ed.

12. Major CRM System Modules • Contact & Account Management • Helps capture and track relevant data about past and planned contacts with prospects & customers • Sales • Provides sales reps with software tools & company data needed to support & manage their sales activities. • Helps optimize cross-selling & up-selling • Retention and Loyalty Programs • Identify, reward, and market to loyal and profitable customers

13. Major CRM System Modules (continued) • Customer Service and Support • Software tools and real-time access to the common customer database • Create, assign, & manage requests for service from customers • Call center software • Help desk software • Marketing & Fulfillment • Helps direct marketing campaigns by automating tasks • Helps capture & manage prospect & customer response data • Helps in fulfillment by quickly scheduling sales contacts & providing appropriate information on products & services to them

14. Three Phases of Customer Lifecycle With CRM CRM systems provides value at three customer lifecycle stages: Shared CustomerDatabase Source: O’Brien-Marakas, Management Information Systems, 7th ed

15. Operational CRM • Focus on better transactions / interactions with customers • Lower value per-transaction but frequent transactions • Salesforce automation • Generate leads and prospects • Manage contacts • Track and guide sales process and pipeline • Operational CRM for marketing • List generator • Campaign management • Cross-selling and up-selling – online, by phone, or in person • Contact center management

16. Analytic CRM • Focus on making better decisions about customers • Examples of how to do this: • Give customers what they want • Find new customers similar to your best customers • Find out what your organization does best • Be proactive • Reactivate inactive customers • Let customers know they matter Source: [HBP09] page 424.

17. Discussion: Operational vs. Analytic CRM • What types of operational and analytic functionality might the following modules provide? • Contact and account management • Sales • Retention and loyalty programs • Customer service and support • Marketing and fulfillment

18. Discussion: Analyzing CRM Examples • Is this an example of an effective, or ineffective interaction with a customer • From the business’s perspective? • From the customer’s perspective? • Do you think the business is using a CRM system? • If they are using a CRM system: • Is a CRM system required to provide this level of service? • Which stage of the customer lifecycle is it helping with? • What functionality / module are they using? • Is this an analytic or operational system?

19. Customer Experience Example: Karwa “… I once needed a cab, all i did was call Karwa and gave them my phone number. The call center person who picked up was able to identify who I am, where I live and where I usually head to. Using CRM system makes the process of Karwa reservation way easier for me and definitely a better experience. In less than 5 minutes I'm able to book a cab and in the same time the company gains a customer.” -- Amal

20. Customer Experience Example: Apple “The most recent experience I had with a CRM system was at an Apple store in the US. I made a purchase with my credit card. Every sales person at Apple has a credit card swiper attached to their iPhone which means you can make a purchase on the spot instead of going to a cashier desk and waiting in line. This was definitely a positive experience as Apple stores are very crowded and this procedure saves customers a lot of time. They had a record of my previous purchases as well as my email. They sent the receipt to my email, instead of printing out a paper copy. This was also a unique experience.” -- Maryam “The app store on iTunes for me is best examples of CRM. Whenever I buy a game or a movie on line, when I go back to the site they recommend other games and movies according to what I have purchased before. Last week I downloaded a comedy, this week they recommended other comedies with the same actors. They have narrowed my search and provided me with what I was looking for before I typed it, which gave them more sales.” -- Khadeejah

21. Customer Experience Example: Kempinski Hotels I had an experience that involved a CRM system this summer. I was in Amman, Jordan and me and some friends were going to Aqaba. We had a reservation in Kempinski hotel, which is the same hotel we go to every summer. In Jordan, you travel to different cities using public transportation, and it is very disturbing that when you reach Aqaba and get off the bus, you can never find a taxi to take you to the hotel you want to stay in. However, when we reached Aqaba, and the bus stopped, we found a car waiting for us with our name written on it. The driver had welcome packages and soft drinks in the car. We were very curious because we were confident that we didn't ask for a pickup service. The receptionist then reminded us that we complained during our last stay that it was very difficult to find a taxi, and when they saw our reservation again for this year, they wanted to make sure we do not struggle to get to the hotel again. This was a very good start for the vacation, and we all felt very welcomed and valued. -- Layal

22. Customer Experience Example: McDelivery “One of the frequently used CRMs is McDonald's delivery service. McDelivery uses personal data such as address, name and telephone number to increase the speed and reduce the hassle of ordering in the future as well as using the phone number as a reference for customer queries. It saves time and helps induce clarity, as it can be a pain to try and spell your name every time.” -- Patrick

23. Self-ServiceCRM Collab.CRM AnalyticalCRM Operational CRM Building CRM Capabilities Incrementally • Operational CRM • Baseline capability • Track and manage customer interactions • Analytical CRM • Analyze customer behavior and demands to better meet needs • Collaborative CRM • Integrate CRM efforts with customers, suppliers, partners • Self-Service CRM • Move customer interactions to the web and mobile devices

24. Why Is Implementing CRM So Hard? • They are big, complex undertakings • Changing both business processes and info systems • CRM implementations involve integrating many: • Business functions • Legacy information systems • People • Processes • Failure to fully grasp scope of the project • Which leads to lack of understanding and preparation • CRM is not a silver bullet!

25. CRM Summary • Used effectively, a CRM system can provide tremendous benefits to a company throughout the full customer lifecycle • Unfortunately, it is difficult to: • Implement a broad enterprise-grade CRM system effectively • Use it effectively once it is implemented and deployed • Avoid harming your relationships with your customers through careless application of the system • Do the benefits outweigh the costs and risks?

26. And now for something completely different… Preparing for a case study class

27. How A Case Study Class Works • All participants carefully review and analyze the day’s case study prior to class • The students ‘own’ the discussion • The professor facilitates the discussion. He asks questions, helps the class explore and refine the issues, frame the problem, propose alternate paths, and debate which path(s) the business should take • You need to come well prepared for the class to work! • Read, and think about, the HBS note “Learning By The Case Method” before you read the Cisco case • Plan to spend a couple of hours reading, analyzing, and discussing the Cisco case before coming to class – discussing the case with other students is encouraged!

28. References [HBP09] Stephen Haag, Paige Baltzan, and Amy Phillips, Business Driven Technology, 3rd Edition, McGraw-Hill Irwin, 2009, ISBN 978007337645. [OM05] James O’Brien, George Marakas, Management Information Systems, 7th Edition, McGraw-Hill Irwin, 2005.