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Lecture Slides 11 10 08 - Presentation Transcript

1. ITM 309 Customer Relationship Management Dr. Frederick Rodammer Michigan State University Eli Broad College
of Business [email_address] November 10, 2008
2. Today’s Learning Objectives
○ Understand the CRM technologies used by sales departments, customer service departments, and marketing
departments
○ Discuss Ritz-Carlton Case
○ Identify the primary forces driving the explosive growth of customer relationship management
○ Summarize the best practices for implementing customer relationship management systems
○ Compare CRM, SRM, PRM, and ERM
3. CLOSING CASE THREE Ritz-Carlton
○ What are the two different types of CRM and how has the Ritz-Carlton used them to become a world-class
customer-service business?
○ Explain ERM and describe how the Ritz-Carlton could use it to increase efficiency in its business.
4. Customer Relationship Management: Definition The use of information technology to create a cross-functional
enterprise system that integrates and automates many of the customer-serving processes in sales, marketing, and
customer services that interact with a company’s customers
5. Operational and Analytical CRM
○ Operational CRM – supports traditional transactional processing for day-to-day front-office operations or
systems that deal directly with the customers
○ Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not
deal directly with the customers
6. USING IT TO DRIVE ANALYTICAL CRM
○ Analytical CRM information examples
 Give customers more of what they want
 Value their time
 Overdeliver
 Contact frequently
 Generate a trustworthy mailing list
 Follow up
7. Using IT to Drive Operational CRM
8. Marketing and Operational CRM
○ Three marketing operational CRM technologies:
 List generator – compiles customer information from a variety of sources and segment the information for
different marketing campaigns
 Campaign management system – guides users through marketing campaigns
 Cross-selling and up-selling
 Cross-selling – selling additional products or services
 Up-selling – increasing the value of the sale
9. CRM EXPLOSIVE GROWTH
 ○ CRM Business Drivers
10. CRM SUCCESS FACTORS
○ CRM success factors include:
 Clearly communicate the CRM strategy
 Define information needs and flows
 Build an integrated view of the customer
 Implement in iterations
 Scalability for organizational growth
11. CRM Failures
○ Lack of understanding and preparation
○ Rely on CRM to solve business problem without first developing the business process changes and change
management programs that are required
○ CRM projects implemented without the participation of the business stakeholders involved
12. CURRENT TRENDS: SRM, PRM, AND ERM
○ Current trends include:
 Supplier relationship management (SRM) – focuses on keeping suppliers satisfied by evaluating and
categorizing suppliers for different projects, which optimizes supplier selection
 Partner relationship management (PRM) – focuses on keeping vendors satisfied by managing alliance
partner and reseller relationship that provide customers with the optimal sales channel
 Employee relationship management (ERM) – provides employees with a subset of CRM applications
available through a Web browser
13. FUTURE CRM TRENDS
○ CRM future trends include:
 CRM applications will change from employee-only tools to tools used by suppliers, partners, and even
customers
 CRM will continue to be a major strategic focus for companies
 CRM applications will continue to adapt wireless capabilities supporting mobile sales and mobile
customers
 CRM suites will incorporate PRM and SRM modules
14. ITM 309 Homework
○ Assignment #5 due November 19-20
○ Read Baltzan - Chapter 10

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Driving business growth, increasing market share and

improving customer relationships through best practices
in customer relationship management, marketing and
customer service
A leading study determined that a top organisational priority will be strengthening their
strategies in enhancing customer relationships. Indeed, it is crucial for any organization that
interacts with customers to have a strong and evolving framework to maintain competitive
advantage and boost organization growth. Increased exposure to competition, along with
increasingly sophisticated customers, has made organizations realise that if they do not refine
their customer experience and relationship management strategies, the customers will bring their
businesses to other competitors eventually.
Customer Experience Asia 2010 will showcase best practices in customer experience and
relationship management from different industries and explore key issues in CRM such as
customer experience management, marketing campaigns, latest technologies, integration of
channels and overcoming resistance to adopting CRM solutions.
Web Based CRM Software
Web based CRM software are affordable to any company compared to the conventional on-
premise CRM software applications and web based CRM software provides easy integration
too. CRM or Customer Relationship Management is implemented to manage and maintain
relationship between existing clients or potential customers and your business. Web based CRM
software is a mandatory for any progressive business firm.
It is undeniable fact that most organizations depend on the web based CRM software to manage
their business. Web based CRM software helps you maintain different modules of your business
– including sales, marketing, research and development, Human Resources, etc. Features of web
based CRM software supported may vary from software to software. However, in general, the
functions of these web based CRM software are the same: automating your business, storing and
analyzing customer data, etc.
Conventional software works on client-server network architecture. In this case you need to have
a dedicated server for the software to be installed and user workstations will have the client
software. These software create huge databases and thus cause high intensive traffic.
Here web based CRM software comes into picture. They are custom designed for certain
features. Say some for effectively storing customer data, another for analyzing and may be a
third one is known for its platform and user-friendliness. Hence, in order to select the best
suitable web based CRM software for your enterprise, analyze your requirements and compare
them with the features offered by each software. This helps you to opt for the best solution.
Web based CRM software has numerous advantages compared to conventional software.
Conventional applications are very expensive and are not adaptable to organizational growth.
Web based CRM software are affordable to any small businesses too. Here you are saving the
cost for installing a dedicated server and other hardware. It also lowers implementation cost and
operational cost.
Another advantage over on-premise CRM is, web based CRM software is available for every
employees of the company if they are connected to internet. They need not be at the same
geographical location to use the web based CRM software. This allows the developers of CRM
to test or modify the software from remote places.
Most of the web based CRM software are operational immediately when you purchase the
subscription online from the CRM vendors. Though it is ready-to-use, you may need to configure
the customer relationship management software to meet the specific requirement of the business.
This feature is also available with web based CRM software.
In a web based customer relationship management system, Internet connectivity is mandatory.
An authorized user access the services provided for by the online CRM solutions using the
Internet. Since the system is dependent on the software within the server, any alterations made to
the software will be evident throughout the entire system. Hence it is simple to maintain and is a
cost-effective means to streamline business and customer service processes.
Using a Web based CRM software increases the profits of a business. This application could
serve the businesses to offer more products and services that its target market is interested in.
And they offer uninterrupted ecommerce solutions. Choose one of the web based CRM software
packages according to the requirements of your business.
Gartner End-User CRM Survey in Europe Shows New Customer Acquisition Rises
to Second Priority in 2010
Analysts to Discuss Improving Customer Data Quality, CRM Business Value and ROI at Gartner
Customer Relationship Management Summit 2010, 16 17 March, in London
Egham, UK, January 26, 2010— Customer relationship management (CRM) is
weathering the economic downturn better than many other enterprise software
applications, according to a recent European survey conducted by Gartner, Inc.
Gartner predicts that CRM software revenues in Europe will remain flat in 2010,
exhibiting a 0.7 per cent growth from last year.

“Last year the recession had less of an impact on CRM software than on other software
segments,” said Chris Pang, principle research analyst at Gartner. “With a slight improvement in
CRM software revenues expected this year, respondents still remain cautious about their CRM
investments with 45 per cent not planning to select new CRM technologies in 2010, up 5 per cent
from 2008.
In the third quarter of 2009, Gartner surveyed 302 European business and IT leaders who
influence the CRM strategy in their organisation to gain insight into their CRM plans for 2010.
“In terms of growth opportunity in the market, SaaS solutions, e-commerce and CRM analytics
will continue to see strong demand in 2010,” Mr. Pang said.
The survey respondents reported on their primary objectives for their CRM initiatives in 2010.
The survey uncovered significant changes in the top three rankings from 2009 and saw the
appearance of acquiring new customers as the No. 2 objective for 2010. “In last year’s survey it
was ranked sixth in order of priority, and its appearance indicates that organisations now believe
they should be finding new customers instead of focusing their efforts purely on existing
customers,” said Mr Pang. “Growth is very hard to achieve without net new customers.
Customer satisfaction moved to the top objective in 2010, previously ranked No. 2, while
enhancing cross-sell and upsell of products and services moved down to No. 3 priority for 2010.”
“Overall CRM investments are subject to heightened levels of scrutiny and executive-level
involvement, and as a result, we are seeing an increasing need for support and guidance in
measuring and assessing the business value and return on investment of CRM. However, we
foresee the CRM software market returning to single-digit growth in 2010,” said Mr Pang.
More information can be found in the report “User Survey Analysis: Practitioners Help Shape
Agenda for Gartner’s 2010 European CRM Summit”, available on Gartner’s website at
http://www.gartner.com/resId=1258424
About Gartner Customer Relationship Management Summit 2010
Gartner analysts will further provide both actionable advice and fresh ideas to initiate, reinforce
and optimise organisation’s CRM strategy at the annual Gartner Customer Relationship
Management Summit 2010 in London on 16-17 March, and in Los Angeles, 28-30 June.
Members of the media can register for the Summit in London by contacting Laurence Goasduff,
Gartner PR, on +44 (0)1784 267 195 or at laurence.goasduff@gartner.com. For further
information on the Summit, please visit www.europe.gartner.com/crm.
Members of the media can register for the Summit in Los Angeles by contacting Christy Pettey,
Gartner PR, at christy.pettey@gartner.com. For further information on the Los Angeles Summit,
please visit www.gartner.com/us/crm.
Event highlights will also be shared on Twitter at http://twitter.com/Gartner_inc and by using
#GartnerCRM.

Contact:

Ben Tudor
Gartner
Tel (Media Hotline): +44 (0)1784 267738
Tel: +44 (0)1784 267298
ben.tudor@gartner.com

About Gartner:
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and
advisory company. Gartner delivers the technology-related insight necessary for its
clients to make the right decisions, every day. From CIOs and senior IT leaders in
corporations and government agencies, to business leaders in high-tech and
telecom enterprises and professional services firms, to technology investors,
Gartner is the valuable partner to 60,000 clients in 11,000 distinct organizations.
Through the resources of Gartner Research, Gartner Executive Programs, Gartner
Consulting and Gartner Events, Gartner works with every client to research, analyze
and interpret the business of IT within the context of their individual role. Founded
in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,400
associates, including 1,200 research analysts and consultants, and clients in 85
countries. For more information, visit www.gartner.com.

Law Firms: Increase sharing to increase growth

The end of 2008 and the beginning of 2009 created new challenges for firms. Their capacity to respond to
these challenges as an organisation does not depend on size, far from it, but on the determination to grow
together, to learn and to share know-how in order to improve performance levels as quickly as possible.
More than ever, knowledge, information and actions conducted within the firm must be identified,
centralised and optimised. The question which is posed today is the following: in what way are professional
services firms learning organisations, given their specific features and mode of operation? Are they capable
of mobilising all their resources and knowledge to grow on an individual and collective level to face the new
challenges related to the crisis: identifying opportunities; optimising and rationalising development
operations; managing customer relations; developing or recruiting new business skills; minimising costs.

If we stick to Garvin’s definition , a learning organisation is “an organization skilled at creating, acquiring,
and transferring knowledge, and at modifying its behaviour to reflect new knowledge and insights”. To meet
this definition, professional services firms must develop five activities: group problem solving,
experimentation, drawing lessons from experience, learning from others, transferring knowledge.

What is the situation today?

Sharing knowledge is a state of mind

The growth of the firm is achieved through a genuine company business plan involving all the players:
professionals and support staff. The assumption of such an organisation is that each individual within the
firm can potentially contribute to corporate growth by achieving personal growth. To do this, upstream, the
firm must be capable of perfectly defining its recruitment needs, identifying and selecting the most suitable
profiles and assigning precise roles and responsibilities to each. Professionals, employees or partners, must
be perfectly aware of what the firm expects from them in terms of technical skills, behaviour and sales
know-how; support staff must be perfectly aware of their objectives and contribution to the firms’ growth,
and which decision-making value chain they are a part of.
Furthermore, beyond the organisational prerequisite, the individual prerequisite is vital: each person within
the firm must be determined to share information. Now, this is a sensitive point for professional services
firms: to what extent does a partner wish to share information about clients? From this determination to
share information and know-how comes the possibility for the firm of achieving growth as an organisation by
enhancing its assets: increased revenue generated by the sale of other services, more customer knowledge,
and more relations that will generate future leads. By growing the organisation and therefore other people,
we also grow ourselves. Compensation models can reinforce this determination to share. Depending on
whether the system is “lock-step” or “eat what you kill”. In other words, by making you better, I improve
myself.
To encourage this sharing, the firm as an organisation must stimulate continuous learning through working
together. Now, what is observed today? Are we witnessing the sharing of information and actions or are
individuals developing their activity in their own corner? In many firms, we note that the pooling of
information is culturally blocked: the principle may well be recognised, but it comes up against practice and
it has to be admitted that cross selling remains elusive. Not to mention development operations! How many
breakfasts organised with no concertation or coordination? One concrete example: a partner of a law firm
takes part in a round table while other members of the firm (partners and marketing or finance, in
particular) are unaware of this. The result is that the round table coincides with another event the next day
on the same topic, towards the same targets! This is an example, among many others, of the absence of
coordination. Beyond information loss, there is clearly a waste of resources which could have been shared to
create one more powerful, more effective action.

A firm that shares meets development objectives

For a firm to achieve an improvement objective, the objective first has to be defined! When designing its
strategy, the firm sets both quantitative and qualitative goals, which are those the learning organisation
should tend towards. This role is ultimately incumbent upon the managing partner. He is the leader who will
inspire and mobilise the intelligence within the firm. He must implement a system for the development of
individuals, structure and tools.

A learning organisation stimulates knowledge sharing

The learning organisation should help its members to optimise their possible relations. Within a professional
services firm, there are three types of relations: 1) between two professionals, the possibility of working on
the same customer or same target; 2) between a professional and a member of the support staff, the
possibility of using, for example, marketing or communication resources to increase the credibility of a
technical skill or bolster positioning on a given target; or make use of human resources when recruiting
employees or associates for a given skills domain or bid; 3) between two support positions, the possibility of
pooling resources to conduct structural projects (finance, marketing, IT, accounting, human resources, etc.).
All these relations must be mapped within a firm so that forms of cooperation, whether obvious or not, can
emerge. How many firms have produced this mapping? All too often, the complementarity of skills is ignored
within firms, precisely because the skills available are not well identified or managed. Activating these
relations generates opportunities for leads, joint bids or bids by sector, for example!
Obstacles to the sharing of knowledge
However, it is difficult to ignore the fact that sharing is based primarily on the individual will to invest efforts
and create advancement. In professional services firms, many cultural obstacles make sharing difficult:
recognition of the value of the shared information (through compensation, for instance), fear of sharing
customers with other partners, heterogeneousness of skills, lack of personal trust, etc.
Lack of investment also results from the lack of time related to the urgency and prioritisation of actions. In
many firms, marketing or Business development managers respond to impromptu requests from their
partners for a bid or a brochure. If the roles and responsibilities were clearly defined, the support positions
would have the power to say no when these requests are not aligned with the firm’s objectives and
priorities. We always come back to the basic concept: define positioning, targets and objectives upstream to
be able to build daily practices.

A learning organisation optimises knowledge

Developing skills within a firm is a permanent joint concern. It is a question of optimising the links between
offers, working methods and organisation. In other words, the firm, in its capacity as learning organisation,
must foster the links between professionals and support staff. The prerequisite for this is a continuous
awareness of who does what and when within the firm. Hence, the necessity of knowledge and effective
CRM. Here, we enter into another phase of relations, beyond straightforward information exchange: the use
and sharing of tools. You only need to look today at the number of firms which abandon CRM projects or
which do not have suitable tools as to be able to realise the difficulty to involve all of a firm’s staff in a
shared approach.
Development of the know-how of firms also comes from the use made of professional mobility. Openness
towards the outside, confrontation with other types of structures, other types of management, other
business lines, are a source of development for the individual but also for their organisation. We often
witness young professionals setting off to hone their skills abroad. How do the firms make use of this
experience feedback? Is it turned into profit? One of the most striking examples concerns secondment, when
a professional from the firm is sent to work on a customer’s premises (enterprise, investment fund,
investment bank, etc.). How many of these young professionals are “debriefed” when they return, so that
the firm can take advantage of their experience, contacts, working methods? Are they integrated into the
management of the customer account or the network of potential prescribers? If such were the case, firms
would then be obliged to acknowledge and reward the contribution this experience makes to enhancing the
organisation.

A firm cannot be a place of work only

The learning organisation implies a consideration of the business activity and place of work in a positive,
optimistic way. In other words, in a law firm, for example, the love of Law and a passion for Marketing (in
the case of the Marketing manager) must guide the actions of professionals and support staff. The firm must
be considered a place of life and not just a place of work. Is this the case today? Faced with market
uncertainty, falling pay, decreasing number of deals, fear of unemployment, etc., is a firm still a haven of
peace and well-being? It should be.
The learning organisation has two levels of apprenticeship: “single loop” when problems are detected and
corrected; “twin loop” when problems are corrected and the way of thinking and therefore of working is
completely changed. This is the case, for instance, when a firm decides to adopt a customer strategy instead
of a business line strategy. The result is total organisational upheaval. And it is precisely through this
capacity to totally rethink itself that a firm can be considered a learning organisation. Hence the difficulty for
very large corporations who, like “ocean liners” have difficulty changing course.

The managing partner at the heart of the learning organisation

At the heart of the learning organisation is the leader, who mediates, inspires, acts boldly, is convincing
and… is a teacher. The managing partner plays this role because he has the vision: vision of what is and
vision of what should be. Between the two, it is up to him to breathe this learning dynamic into the team by
giving preference to the development of new ways for members of the firm to cooperate, by inciting the
others to act differently. And then, above all, he should place value on change.
Today, is it necessary to convince partners of the amplitude of existing difficulties and of the necessity to
adapt? Or should we consider that the environment will revert to what it was before, which would imply that
we must definitely not change anything? And therefore not be a learning organisation. The professional
services firm is a learning organisation if it learns how to learn: understanding the outside situation,
knowing the firm’s internal situation, identifying its capacity to act and make the changes that are
necessary. How many firms are capable of this?

By Olivier Chaduteau, Managing Partner, Day One International LLC*

and Jérôme Rusak, Partner, Day One France.

Business Process Management (BPM) Software for CRM

Applications
This competitive arena is evolving on a second-by-second basis and no company is free from the effect of commercial
rivalry. Indeed, as Customer Relationship Management (CRM) professionals readily confess, the relentless jostling for the
acquisition of new customers or the retention of existing clients have now become precise arts in their own right.

Yet, throughout the evolution of CRM, one thing has remained true; the customer is king. Industrial analysts from both the
technical and non-technical arenas have predictably revamped this old-age marketing truth with phrases such as
'Personalisation,' 'One-to-One Marketing,' 'Customer Experience Management" and today's latest mantra 'Customer-Centric'
marketing. Unfortunately, the fact remains that nothing has really changed in 20 or so years. It's all about who can fulfil the
customers needs cheaper, quicker and in the most personal, professional and intelligent manner.

In pursuit of this Holy Grail of CRM, many organisations have deployed powerful CRM applications and brought about
greater structure, meaning and professionalism to the management of their customer relationships. Furthermore, CRM
systems have facilitated strong business forecasting, increased accountability and visibility of the marketing department and
made a solid contribution to organisational growth.

Yet, although the success stories of CRM systems are well documented in industrial circles so is CRM's Achilies heel; its
complete dependence on people.

TaskCentre’s Business Process Management (BPM) Software Solutions remove the administrative burden placed on CRM
users to conduct routine, repetitive activities such as creating and distributing contract renewal polices, the archiving of e-
mail communications or the creation and sending of event-based e-mail shots.

Popular business processes CRM professionals have automated include:

• Event-Based E-mail/SMS Marketing Shots

• Sales Reports

• Literature Request Fulfilment Processes

• User E-mail Archiving

• Sales Representative Performance Reports

• Creation and Distribution of Welcome Packs

Learn more about TaskCentre for CRM applications