MIB-VCM521S

1. PRESENTATION 2: CRM-PART VICTOR S.SOMOSU 2008 MIB-VCM521S

2. Customers may arrive at different times, request different kinds of service, possess different capabilities, make varying degrees of effort, and have different personal preferences. Should companies accommodate variability or reduce it? Accommodation often involves asking employees to compensate for the variations among customers-a potentially costly solution. Preamble

3. Reduction often means offering a limited menu of options, which may drive customers away. Some companies have learned to deal with customer-introduced variability without damaging either their operating environments or customers' service experiences. influencing behavior. Preamble contd.

4. Starbucks, for example, handles capability variability among its customers by teaching them the correct ordering protocol. Examples

5. Dell deals with arrival and request variability in its high-end server business by outsourcing customer service while staying in close touch with customers to discuss their needs and assess their experiences with third-party providers. Examples Contd.

6. The essence of a mirror in an elevators • Kellogg’s launch of cornflakes in India was a disaster • Gerber’s US packaging of baby food didn’t sell in some African Countries. • PepsiCo’s “Come alive with the Pepsi Generation” tagline translates to “Bringing your ancestors back from the grave” in China.

7. McDonald’s challenge in vegetarian India • US Army’s failure to win over Afghanistan with footballs covered in world flags. • Microsoft blunder in India [Kashmir], Korea & China. • Microsoft mistranslation of English to Latin-Spain • The Impact of global terrorism on Customers’ Care Riders contd.

8. Case Extract from Sunday Times

9. ·An organization-wide process, which focuses its activities on treating different customers [one-to-one] differently to increase value for both customer and organization. The European Centre Customer Strategies [2001] defined it as “a business strategy focusing on winning, growing and keeping the right customer.” CRM-Definition

10. CRM: it is a strategic approach designed to improve shareholder value through developing appropriate relationships with key customers and customer segments. CRM unites the potential of IT and relationship marketing strategies to deliver profitable, long-term relationship.’ Contd.

11. ‘The automation of horizontally integrated business processesinvolving front office customer contact points (marketing, sales, service and support) via multiple, interconnected delivery channels’. • ‘A process that addresses all aspects of identifying customers, creating customer knowledge, building customer relationships, and shaping their perceptions of the organisation and its products’ Definition contd.

12. ‘Building and sustaining customer and infrastructure relationships. It is the integration of customers in the company’s design, development, manufacturing and sales processes.… All employees need to be in the business of building CRM’ Contd.

13. Good CRM practice involves all business functions in an enterprise, and must be led from the top. • The visible backing of the top management is as important as the full commitment of the workforce and supply chain partners. The notion that competitive advantage stems from creating value for the customer and the company is a key to the success of CRM. Contd.

14. Suspects Prospects Customers Advocates CRM: Is about how the entire business operations and beyond [business partners and suppliers] help in influencing the customers to turn advocates for the company CRM MISSION

15. Pyramid of relationships

16. Configurations of touch and texture: Relationships Distinguishing Relationships Marketing is not a relationship. Even if You can pull in customers, what keeps them coming back and back again? Transactions Zero touch, zero texture. I will pay this price for that product. Thanks.

17. The objects of exchange

18. The objective of CRM is to produce high customer equity • Customer equity is the total of discounted lifetime values of all the firm’s customers • The more loyal the customers, the high the customer equity • Three drivers of customer equity are: value equity, brand equity, relationship equity CUSTOMER RELATIONSHIP MANAGEMENT (CRM): THE KEY

19. Value equity- is the customer’s objective assessment of the utility of an offering based on perceptions of its benefit relative to its costs • Brand equity- is the customer’s subjective & intangible assessment of the brand, over & above its objectively perceived value • Relationship equity- the customer’s tendency to stick with the brand, above & beyond objective & subjective assessments of its worth 3 Equity Drivers

20. Identifying, satisfying, retaining and maximizing the value of the firm’s best customers. • Wrapping the firm around the customer to ensure that each contact with the customer is appropriate and based upon extensive knowledge both for the customer’s needs and profitability. • Creating a complete picture of the customer. Contd.

21. Get cross-departmental participation in planning & managing the customer satisfaction & retention process • Integrate the Voice & Customer in all business decisions • Create superior products, services, & experiences for the target market The basics of forming Strong Customer bonds

22. Organize & make accessible a database of info on individual customer needs, preferences, contacts, purchase frequency, & satisfaction • Make it easy for customers to reach appropriate company personnel & express their needs, perceptions, & complaints • Run awards programmes recognizing outstanding employees The basics …Contd.

23. A front office that integrates sales, marketing and service functions across media [call centers, people, stores, internet]. • A data warehouse to store customer information and the appropriate analytic tools with which to analyse the data and learn about customer behaviour. Components for successful CRM implementationsRyals et al. 2000 Financial Times

24. Business rules developed from the data analysis to ensure the front office benefits from the firm’s learning about its customers; • Measures of performance that enable customer relationships to continually improve; Components Contd.

25. Integration into the firm’s operational and support [or ‘back office’] systems, ensuring that the front office’s promises are delivered. Components Contd.

26. 1. Strategy Development: The CRM strategy must be aligned with and support the overall business strategy as well as that of the customers’ strategy [segmentation, customer service, relationships, customers’ attitudes and purchasing behaviours. • Where we are and what do we want to achieve? • Who are the customers that we want and how should we segment them? THE CRM PROCESS

27. Identify your strengths from talking to your customers • Identify what your customers’ different needs, wants and motivations are and how the market segments itself. • Don’t try to please everyone [if mass production to customized then] decide which segments to make your own and which to ignore. Segmentation steps to success

28. Differentiate to target the market then • Don’t over-value data [Read Britannia case]. • Try to identify the needs and wants that the customers may not know they have [For innovation/NPD] • Customers want value, not cheapness. Latent need often masquerades as demand for the cheapest price CRM Process Contd.

29. 2. Process: Value creation-the value the customer’s receives from the organization (total expectation) and vice versa ( for the organization it might be retention or getting customers-acquisition) • How should we deliver value to our customers? • How should we maximize the lifetime value of the customers we want Contd.

30. Peter Drucker – a company’s first task is ‘to create customers’ • Customers choose a companies they perceive will deliver maximum value • Customers are value-maximisers within the constraints of costs, limited knowledge, mobility and income VALUE CREATION & SATISFACTION

31. The premise is that customers will buy from the firm offering the highest perceived value • CPV- difference between the prospective customer’s evaluation of all benefits and all the costs of an offering & the perceived alternatives • Customers decide whether the co. is successful, only when they are satisfied. It is only then, that they favour the company Customer Perceived Value (CPV)

32. Total customer value- is the perceived monetary value of the bundle of economic, functional, & psychological benefits customers expect from a given offering • Total customer cost- is the bundle of costs customers expect to incur in evaluating, obtaining, using, & disposing of any given market offering CPV

33. 3. Channel and media integration: Creating an attractive value proposition is not a matter of designing a product or service. It involves the way customers get hold of that product or service, the way it is presented to them and support they receive once they have bought it. [Consistency across the channel and media matters here]- Multi-channel and multi-media integration CRM Process Contd.

34. What are the best ways for us to get to customers and for customers to get to us? • What does the perfect customer experience? • How does deliverable at an affordable cost look like? Contd. Step 3

35. Communication continuum

36. Dimensions in which channels may be scored

37. High Advice High Margins Advice Face Lower Advice Medium Margins Call Commodities Low Margins Click Leads and sales Low Margins Mail Margins Subtly moving the client to the most efficient and most effective channel combination. Channel management

38. 4. Information Management: This stage involved with the collection and collating of customer information from all customer contact points; using this information to construct complete and current customer profiles which can be used to enhance the quality of the customer experience. (Data warehousing) • How should we organize information on customers? • How can we replicate the mind of the customer? Contd.

39. 5. Performance assessment: Establishing an effective performance metric standard and monitoring system. • How can we create increased profits and shareholder value? • How should we set standards, develop metrics, measure our results and improve our performance? Contd.

40. A balanced scorecard for a Japanese restaurant

41. In today's competitive market, you need to cultivate a customer-centric culture. By strategically using customer feedback, your company will be able to drive profits; improve customer interactions across all touch points; increase customer loyalty, retention levels, and lifetime value; and guide product innovation to match emerging market desires. Importance of Customers Feedbacks

42. Customer service must involve all the services offered by a business. A successful outcome relies on optimized performance of each individual service component. For example, an airline may provide the very best in terms of boarding, on-time departures, comfort, in-flight services; but all this amounts to nothing when just one staff member shows no concern for a passenger whose luggage was lost. Conversely, experience shows that luggage losses or flight delays need not be serious problems when they are accompanied by a timely explanation and swift action from a sensitive staff. Customers’ feedback contd.

43. The knowledge of the customer, gained from close and extensive observation of them is what sets the good companies apart from others. • CRM is not about making customers to stay but not wanting them to leave you. Thanks QUESTIONS PLEASE!!! Key words