Saturday, 26 September 2015

Chapter Eleven Building a Customer - Centric Organization ---- Customer Relationship Management

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Chapter Eleven Building a Customer - Centric Organization ---- Customer Relationship Management

Customer Relationship Management (CRM)

CRM is a business philosophy based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantage in the future.

- A customer strategy starts with understanding who the company's customers are and how the company can meet strategic goals.

- As the business world increasingly shifts from product focus to customer focus, most organizations recognize the treating existing customers well is the best source of profitable and sustainable revenue growth in the age of e-business, however, an organization is challenged more than ever before to truly satisfy its customers.

Recently, Frequency, and Monetary Value
An organization can find its most valuable customers by using a formula that industry insiders call RFM-recency, frequency, and monetary value. In other words, an organization must track:
- How recently a customer purchased items (recently)
- How frequently a customer purchases an item (frequently
How much a customer spends on each purchase (monetary value)

The evolution of CRM
CRM enables an organization to :-

  * Provide better customer service.

  * Make call centers more efficient.

  * Help sales staff close deals faster.

  * Discover new customer.

  * Increase customer revenue.

Knowing the customer, especially knowing the profitability of individual customers, is highly lucrative in the financial service industry.

The evolution of CRM include :-
  - CRM reporting technology
         > helps organization identify their customer across other application.

  - CRM analysis technologies
       >help organization segment their customer into categories such as best 
          and worst customer.

  - CRM predicting technoligies
       >help organization make predictions regarding customer behavior such as
           which customer are at risk of leaving.


The Ugly Side of CRM: Why CRM Matters More Now than Ever Before
Now companies have no choice as the power of the customer grows exponentially as the internet grows. In every case, customers have become an integral part of the action as a member of the aggregated, interactive, self-organizing, auto-entertaining audience on businesses. However, this should no be a surprise, since it was the customers crazy passion and hobbies and obsessions-that build up the web in the first place.

Customer Relationship Management's Explosive Growth
When customers buy on Internet, they see, and they steer, entire value chains.
- Customer web interaction become conversations, interactive dialogs with shared knowledge, not just business transaction. Web- based customer care can actually become the focal point of customer relationship management and provide breakthrough benefits for both the enterprise and its customers, substantially reducing costs while improving service.
- Current users allow allocating 20 percent of their IT budget to CRM solutions.


The two components of a CRM strategy are:
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.
The primary difference between operational CRM and analytical CRM in the direct interaction between the organization and its customers.

-Personalization occurs when a website can know enough about a person's likes and dislikes that it can fashion offers that are more likely to appeal to that person. Many organizations are now utilizing CRM to create customer rules and templates that marketers can use to personalize customer messages.

Customer Relationship Management Success Factor
CRM solutions make organizational business processes more intelligent. This is achieved by understanding customer behavior and preferences, then realigning product and service offering and related communications to make sure they are synchronized with customer needs and preferences. If an organization is implementing a CRM system, it should study the industry best practices to help ensure a successful implementation.
Using he analytical capabilities of CRM can help a company Anticipate customer need and proactively serve customers in way that build relationship, create loyalty, and enhance bottom lines.

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 organization growth.

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