08 Customer Relationship Management (CRM)

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2 08 Custmer Relatinship Management (CRM) What s inside: An intrductin t custmer relatinship management (CRM), and why CRM plays a massive rle in marketing. We lk at different frms f custmer relatinship management and hw these can psitively benefit yur business. We discuss the imprtance f data, prvide a step-by-step guide t implementing CRM, tgether with sme tls f the trade and a case study shwcasing a CRM strategy.

3 CRM Intrductin CRM A CRM mdel 8.1 Intrductin 8.2 Key terms and cncepts CRM custmer relatinship management has existed since peple first started selling things. The first shpkeeper wh stpped t chat with his custmers, wh remembered their names, and perhaps gave them a small freebie fr cntinually Term Definitin using his services, was practicing a frm f custmer relatinship marketing by making custmers feel special. He was als prbably seeing the favurable impact n his bttm line. Custmer A persn wh buys r uses gds r services, with whm a cmpany shuld develp a relatinship. Tday, with businesses becming mre digitally remte, and persn-t-persn cntact becming mre scarce, CRM is mre imprtant than ever. We need t build and maintain relatinships with ur custmers. A faceless cmpany is nt persnable r engaging - it has t wrk harder t fill the gap between attracting Custmer-centric Custmer-driven Placing the custmer at the centre f an rganisatin s business planning and executin. Allwing and encuraging custmers drive the directin f a business. and retaining custmers (and their gd will). The relatinship a custmer builds with a cmpany is ften the reasn they return but building it tday is mre difficult than ever, in a sciety where data is prtected, custmers are smart and Custmer lifetime value (CLV) The prfitability f a custmer ver their entire relatinship with the business. Since ROI can be hard t establish, hw culd yu g abut cnvincing business decisin makers that it s imprtant t implement a CRM system? exercise their right t chse, and a cmpetitr can be just a click away. CRM is a custmer-fcused apprach t business based n fstering lng-term, meaningful relatinships. CRM is nt abut immediate prfit. It s abut the lifetime value f a custmer the purchases they will make in future, the psitive wrd f muth they will generate n yur behalf and the lyalty they will shw yur brand. Effective CRM enables businesses t cllabrate with custmers t infrm verall business strategies, drive business prcesses, supprt brand develpment and maximise ROI. Custmer relatinship management (CRM) Data Data mining A strategy fr managing a cmpany s relatinships with clients and ptential clients. It ften makes use f technlgy t autmate the sales, marketing, custmer service and technical prcesses f an rganisatin. Statistics and facts cllected fr analysis. The prcess f analysing data t discver unknwn patterns r cnnectins. There is a truism that a happy custmer tells ne persn, but an unhappy custmer tells ten. With yur custmers vices being heard n blgs, frums, review sites and Key perfrmance indicatr (KPI) A metric that shws whether an bjective is being achieved. scial media, they can talk really ludly and impact yur business much mre easily. Metric A defined unit f measurement. In this chapter, yu will learn: Mdel A strategic visual representatin f a prcess that a cmpany adheres t. Why CRM is essential fr any business Prspect A ptential custmer. The rle that custmers play in shaping and steering yur business Stakehlder A persn r rganisatin with an interest in hw a resurce is managed. The varius appraches and mindsets that are applied in CRM Hw t cllect, stre, analyse and update yur essential CRM data The step-by-step prcess f putting tgether yur CRM strategy 8.3 A CRM mdel Many cmpanies that practice CRM rely n a simple mdel t guide them strategically in many cases, this sums up exactly what CRM is abut. Here is a simple mdel that demnstrates this:

4 CRM A CRM mdel CRM Understanding custmers experience every time it interacts with its custmers. Tuchpints can be brand 20% Advcate Retain, win-back, crss-sell, up-sell initiated (fr example, a brand sending an newsletter) r custmer initiated (fr example, the custmer making a purchase in a stre). Peple dn t start ut as custmers; they begin as prspects peple wh merely Bnded Custmer Cmmunicatin view a business s ffering. Once a prspect has expressed interest, CRM can help t cnvert them int a custmer. Sme peple will always shp n price they 80% Custmer Cnversin need t be cnverted t lyal custmers. Here brand perceptin and service are ften the differentiatrs. Cnsider the prspect wh walks int a car dealership and is given utstanding service. In this case, CRM in the frm f an aware and trained sales frce can help turn a prspect int a custmer. What des great custmer service mean fr yur brand? Each business is different, and custmers als have differing expectatins and needs. Prspect Marketing Audience Figure 1. A simple CRM mdel can prvide strategic guidance. As yu can see, a gd CRM strategy turns strangers int custmers, custmers int friends, and friends int advcates fr yur business. 8.4 Understanding custmers Custmers can be seen as the mst imprtant stakehlders in a business. Withut custmers purchasing gds r services, mst businesses wuld nt have a revenue stream. But it can be difficult t shift frm realising this imprtant fact t implementing it in day-t-day business decisins and strategy. A successful relatinship with a custmer is based n meeting r even exceeding their needs. It is in determining what prblems the custmer has, and in prviding slutins, smetimes befre the prblem ccurs. It depends n cntinually giving the custmer a reasn t transact with yur cmpany abve any ther. CRM shuld nt nly mean implementing custmer-centric prcesses and cnsider technlgy, but embracing custmer-driven prcesses. Thrugh innvatins in digital technlgies, enhanced custmer engagement and the intrductin f mass persnalisatin, the custmer can ften drive the business Cnsumer tuchpints Cnsumer tuchpints are all the pints at which brands tuch cnsumers lives during their relatinship. This is the starting pint fr all CRM a brand needs t speak with ne vice acrss all f these tuchpints and deliver a rewarding A cnsumer tuchpint can be as simple as a print r banner ad. It can als be as multifaceted as a cnversatin between a call centre agent and a custmer. It can be a timely tweet, r an utbund giving the custmer details abut their accunt. Even statements and bills are tuchpints and need t be managed carefully t ensure that the brand cntinues its relatinship with the custmer successfully. Custmer tuchpints can generally be divided int three spheres r phases. Pre-purchase r pre-usage cvers the varius ways brands and prspects interact befre the prspect decides t cnduct business with a cmpany. The brand s gals here are t: Gain custmers Heighten brand awareness Shape brand perceptins t highlight the benefits it ffers ver cmpetitrs Indicate hw the brand prvides value and fulfils the needs and wants f cnsumers Educate cnsumers abut prducts and services Purchase r usage cvers the tuchpints at which the custmer decides t purchase a prduct, use a service r cnvert accrding t set criteria, and initiates the brand-custmer relatinship. The key gals are t: Instil cnfidence Deliver value Reinfrce the purchase decisin Heighten brand perceptins

5 CRM Understanding custmers CRM CRM and data Pst-purchase r usage cvers all the pst-sale interactins between the brand and custmer. Nw, the brand wants t: Develp a relatinship Maximise the custmer experience Deliver n the brand prmise Increase brand lyalty Data shuld be used t drive cnsumer lyalty acrss all pssible tuchpints. Cnsider the cnsumer wh shps n her stre card at a retail utlet. Her transactins are recrded against her card she is sent ffers that detail the latest fashin trends and earns pints n her card shpping fr these. At sme pint, her transactinal data shws that she has started shpping fr baby clthes she can nw be crss-sld prducts t d with babies, and rewarded with duble pints when she buys them. Nw she is upping her spend in the stre, crss-shpping fr bth herself and her family and being rewarded fr this, thus ensuring that the retail utlet is ffering her value and retaining her business. Remain tp f mind Invite repeat purchases Custmer data Custmer lyalty A gd CRM prgramme begins with data. Wh are my custmers and what d they want? Why did they chse me in the first place? Hw many f them are active, and cntinue ding business with me? Why d the thers stp? Think f a brand that has extremely lyal fans - fr example, Apple, Nike r Harley Davidsn. What d yu think the brand did that encuraged peple t supprt them s vcally? The main bjective f any CRM strategy shuld be t gain custmer lyalty ver the lng term. But what is lyalty? This may mean different things fr different rganisatins. Ultimately, it is abut acquiring and retaining custmers wh: Have a prjected lifetime value that makes them a valuable prspect t yur business Buy a variety f yur prducts r use yur services repeatedly during their time as a custmer Often, yu will need t research this infrmatin. If the cmpany has a database, cnducting surveys, fcus grups r dipstick telephnic research can help yu get an idea. Cnsider that an Audi Q7 driver is vastly different t an Audi A1 driver, fr instance. They bth pick the brand fr the same reasns, but their mtivatins behind chsing the prducts vastly differ. Data can give yu these insights. It can enable a cmpany t create real value fr the custmer and thereby gain true lyalty. There is little pint in running a custmer insights survey, lking at the results and saying that s interesting withut putting int actin any changes suggested by the results. It als means custmers are less likely t take part in surveys ging frward, and quite rightly s what s in it fr them? Cnversely, if yu d actin changes, custmers will feel increased wnership in the brand and its ffering. Read mre abut this in the Market Research chapter. Share their psitive experiences with thers Prvide hnest feedback n these prducts and services, and their experiences Cllabrate with yu n ways t imprve their experiences 8.5 CRM and data The actual database in which yu chse t gather and cllate data is als crucial. Remember that there are many facets t CRM, and the quality and accessibility f the data will have a majr impact n hw well these prcesses run. Data is central t the success f CRM initiatives. Knwing wh yur custmer is and what they want makes a CRM strategy successful. Data gathering can begin even befre yur prspect becmes a custmer. Matching a prspect s prfile t the prduct r ffer is the first step. When lking at data, it is essential t keep in mind the Paret principle. The Paret principle, r 80/20 rule, hlds that in many situatins apprximately 80% f prfits are delivered by 20% f custmers. Als keep in mind that 20% f custmers are respnsible fr 80% f prblems related t service and supply (Kch, 2008). But data n its wn is meaningless if it is nt analysed and acted upn. Thrugh analysis, data can be turned int insights, which can then infrm the varius CRM prcesses and, indeed, the business itself. This means designing slutins with effrts directed at the 20% f custmers wh generate the mst prfits. T d this, yu shuld segment custmers effectively

6 CRM CRM and data CRM CRM and data Yu ll als want t cnsider the exact data t cllect. While this will depend largely n yur business bjectives, here are sme cnsideratins: Infrmatin shuld be cmmercially relevant. Capture additinal cntact details frm the custmer at every interactin n purchases, cntracts, negtiatins, qutes, cnversatins and s n. Capture any infrmatin yu send ut t the custmer. Cnsider anything that adds value t the relatinship. Nte any legal implicatins arund capturing data, particularly web-based behaviural data, as the user s privacy must always be taken int accunt Where and hw t gather CRM data CRM data is gathered frm a variety f tuchpints. Let s lk at sme f the pssible pprtunities fr CRM data capture and analysis. Each avenue discussed belw cllects a range f data frm whichever tuchpints the business deems valuable. Data mining Data mining invlves analysing data t discver unknwn patterns r cnnectins. It is usually cnducted n large datasets and lks fr patterns that are nt bvius. Data is analysed with statistical algrithms that lk fr crrelatins. It is used by businesses t better understand custmers and their behaviur, and then t use this data t make mre infrmed business decisins. Fr instance, wmen might traditinally be shpping fr nappies during the week. But n the weekend, men becme the primary nappy-shppers. The things that they chse t purchase n the weekend, such as beer r chips, might dictate different prduct placement in a stre ver a weekend. Analytics data Analytics data is generally captured thrugh specialised analytics sftware packages. These packages can be used t measure mst, if nt all, digital marketing campaigns. Web analytics shuld always lk at the varius campaigns being run. Fr example, generating high traffic vlumes by emplying CRM marketing tactics like marketing can prve t be a pintless and cstly exercise if the visitrs that yu drive t the site are leaving withut achieving ne (r mre) f yur website s gals. Data mining is typically perfrmed by cmputers, which can sift thrugh massive amunts f data and find tiny (but significant) patterns that a human researcher may verlk. Read mre abut this in the Data Analytics chapter. Traditinal CRM system data Mst traditinal CRM systems are used t capture data fr sales, supprt and marketing purpses. On tp f simply creating a central repsitry fr data access, these systems and their related databases als ffer basic analytics. The actual range f data cllected within the traditinal CRM system is dictated by the CRM bjectives. Fr instance, data culd include: Scial media mnitring data There are many scial media metrics that are imprtant t mnitr, measure and analyse, and sme f these can prvide valuable insights fr CRM implementatin. This can cver everything frm quantitative data abut number f fans and interactins, t qualitative data abut the sentiment twards yur brand in the scial space. Demgraphic details n ptential leads, current leads and cntacts, such as age, gender, incme, etc. Qutes, sales, purchase rders and invices (transactinal data) Psychgraphic data n cntacts such as custmer values, attitudes, interests, etc. Service and supprt recrds Custmer reviews r satisfactin surveys Web registratin data Shipping and fulfilment dates, such as when rders were shipped and delivered Cllating and rganising yur data Typically, yu ll find that a business has: One r mre databases e.g. , custmer, mbile, r call centre databases. A pint f sale system where prduct purchase data is stred. Varius frms f web data frm display r search netwrks, keywrd research, site analytics, scial media r marketing. Scial media prfiles n sites like Twitter, Facebk r LinkedIn (which can als be cnsidered databases f srts)

7 CRM CRM and data CRM CRM and data CRM sftware can be used t autmate lead and sales prcesses, and t cllect all f this custmer infrmatin in a centralised place, allwing a cmpany t get a hlistic view f the custmer frm this, meaningful data insights can emerge Analysing data fr marketing Have yu ever had a frustrating service experience yurself as a custmer? Hw did yu feel abut the brand afterwards? Organisatins can be large, and a custmer ften speaks t several members f the rganisatin, depending n the nature f the cmmunicatin. It wuld be extremely frustrating fr the custmer t have t explain all previus dealings with the rganisatin each time, and equally frustrating fr an rganisatin nt t knw wh has spken previusly with a custmer and what was dealt with. This culd be a tuchpint at which a cmpany falls dwn, and leaves a less than psitive impressin with the custmer. One f the mst pwerful features f interactins and transactins ver the Internet is that everything is tracked and recrded (see the Data Analytics and Cnversin Optimisatin chapters). This prvides a wealth f data that can be analysed t make business decisins. Fr CRM, this means that the custmer acquisitin surce can be recrded and analysed against sales data. This leads t a very accurate return n investment (ROI) calculatin and indicates where CRM and marketing effrts shuld be fcused. Read mre abut this in the Optimise chapters. Frtunately, there are many technlgical ptins that help t recrd all this infrmatin in ne place. Mst f these services can als schedule elements f the sales prcess, and set reminders where apprpriate fr fllw-up actin. ROI stands fr return n investment and it s key t understanding whether marketing effrts have been successful. Here s a simple example: Cmpany A sells accunting sftware and makes R n each prduct it sells. It sends an t its custmer base peple wh have bught a previus versin f the sftware and might be interested in upgrading. The campaign has an verall cst f R Of the peple wh receive the , 10% decide t buy. That means it cst R200 t acquire each f the 500 custmers. The cmpany has made R5 millin an ROI f 50:1. Sme ntable examples include SalesFrce (www.salesfrce.cm), Genius (www.genius.cm) and Highrise (www.highrisehq.cm) frm 37signals. Bespke technlgy tailred t business prblems can have remarkable results Keeping data fresh The key t effective use f technlgy in CRM is integratin. Ensure that all channels can be tracked, and that infrmatin is usable t all parties within an rganisatin. Knwing where yur custmers cme frm, but nt what they purchase, is pintless: these tw metrics need t be cmpared in rder t prduce actinable insights. Call it what yu will, but stale, utdated r unhealthy data desn t benefit anyne. Sme generic lder data can help yu assess trends ver time, but identifiable custmer data is usually useless if nt up t date. Peple mve huse, update their cntact numbers and addresses, change jbs. They earn mre r less, stp wrking, start wrking, have kids, retire. All f these mean that their needs change, and their cntactability changes, s maintaining a custmer relatinship and delivering the things they want becmes impssible. S, hw d yu keep yur data fresh? Analysing CRM data can aid marketing initiatives in a variety f ways: Campaign analysis find ut which marketing campaigns are leading t the best returns s yu can refine them and increase ROI Persnalisatin custmise yur cmmunicatins t each custmer Fr generic data (like web analytics), yu must cntinuusly mnitr trends and what causes changes ver time. This is als useful fr mnitring trends and identifying gaps in data when a business evlves. Fr instance, if yu knw that yu generally receive increased website and stre visits during December, but yur sales drp, yu knw that yu need t gather mre data arund yur inventry and in-stre envirnment during that time. Keeping identifiable data current means yu need t facilitate regular dialgue with cntacts n yur database. Whether it s thrugh a call centre, an nline prmpt r a quick questin at yur in-stre pint f sale, there needs t be a plan fr updating details at regular intervals. Event mnitring tie ffline events, like shws r sales, t yur nline interactins and sales Predictive mdelling predict a custmer s future behaviur and meet this need at the right time Imprved custmer segmentatin, including: Custmer lifetime value (CLV) analysis predicting each custmer s lifetime value and managing each segment apprpriately (fr example, ffering special deals and discunts) Mbile marketing can play a key rle in ffline events - after all, the mbile phne is prtable and cnnected t the internet, meaning that peple can engage with a brand directly n lcatin

8 CRM CRM and data CRM CRM and data Advanced custmer prfiles that identify certain behaviurs, such as big spenders r thse wh lk fr bargains by attending sales. This infrmatin can be used t tailr marketing cmmunicatins accrdingly Custmer priritisatin target small grups f custmers with custmised prducts and service fferings that are aligned t meet custmer needs, rather than simply generic current fferings. Yu shuld craft specialised retentin strategies fr custmers with the highest CLV Identifying brand influencers and advcates. Cnsider the realm f scial media, where influencers are central t the spread f cntent. Brands are increasingly priritising relatinship building with scial media influencers t build brand advcates wh will help market the business fr them. By identifying which custmers are prviding the mst value and psitively influencing thers t becme custmers, yu can fcus effrts twards them and increase their lyalty, creating true brand advcates Analysing the amunt spent n yur search campaign against the sales attributed t the campaign will give the cst per acquisitin f each sale. In this case, this is the cst f acquiring the new custmer. As the user s nw signed up t yur newsletter, each mnth yu send her cmpelling infrmatin abut prducts she might be interested in. These newsletters culd be fcused n her bvius interest in phtgraphy, and highlight additinal prducts she can use with her new camera. The csts assciated with sending these s are the csts f maintaining the relatinship with the custmer. When she purchases frm yu again, these csts can be measured against the repeat sales likely t be made ver the curse f the custmer s lifetime. Assuming that a custmer buys a new camera every three years, mves up frm a basic mdel t a mre expensive mdel, perhaps buys a vide recrder at a certain pint all f these allw a cmpany t calculate a lifetime value and ensure that their spending n a particular custmer is justified. Understanding custmer lifetime value CLV is the prfitability f a custmer ver their entire relatinship with the business. Businesses need t lk at lng-term custmer satisfactin and relatinship management, rather than shrt-term campaigns and quick wins this apprach leads t increased value ver the entire lifetime f a custmer and means that CLV is a metric central t any CRM initiative. It s imprtant t lk at yur custmer base and segment them accrding t hw ften they purchase and hw much they spend with yur cmpany. Very ften, custmers wh spend mre cst mre t acquire, but they might als stay with the cmpany fr lnger. Referrals made by a custmer can als be included as part f the revenue generated by the custmer. The key is t understand these csts and then target yur CRM strategies apprpriately. CLV lets yu decide what a particular type f custmer is really wrth t yur business, and then lets yu decide hw much yu are willing t spend t win r retain them. Fr example, a ptential custmer lking t purchase a digital camera is likely t search n Ggle fr cameras. As a cmpany selling digital cameras, yur excellent search advert and cmpelling ffer attract the ptential custmer, wh clicks thrugh t yur website. Impressed with yur prduct ffering, the user purchases a camera frm yu, and signs up t yur newsletter as part f the payment prcess. CRM lyalty prgrams There is a difference between CRM and lyalty prgrammes ften lyalty prgrammes actively seek t maintain custmers by rewarding them with a hard currency, like pints. Lyalty prgrammes are designed t develp and maintain custmer relatinships ver a sustained perid f time by rewarding them fr every interactin with the brand fr instance, yu may earn pints n a purchase, fr shpping n certain days, cmpleting a survey, r chsing t receive a statement by . Cnsider health insurer Discvery and their Vitality prgram: it aims t keep custmers healthy by rewarding them fr health-related behaviurs like exercising, having regular check-ups, stpping smking and buying fresh fds. By ding s, it reduces the burden f ill-heath n the medical aid itself. Nt all lyalty prgrammes are created equal. Many brands have embraced them as a way t imprve their sales, and cnsumers have cme t believe that they are simply a way f extrting mre mney frm them. T create an effective lyalty prgramme, cnsider the fllwing: Carefully calculate the earning and redemptin rates f pints a lyalty prgramme needs t give the appearance f real value, while wrking within the cmpany s prfit prjectins Lyalty prgrammes are abut engagement yu need t find a way t partner with the custmer The reward yu ffer must be meaningful, relevant and valuable - in ther wrds, smething the custmer really wants. They shuld als be exclusive t members f the lyalty prgramme, making them feel appreciated

9 CRM CRM and data CRM The benefits f CRM Rewards are key t success yu need t reward the custmer in a way that is real and desirable Custmer care is imprtant technlgy allws fr effective real-time cnversatins Data is central t success yu need t maintain accurate recrds in ne central place Digital allws fr innvatin this can apply t new payment technlgy, digital cmmunicatins channels and mre Trust is pivtal t success custmers need t knw that their data is being prtected and that yu will hnur yur cmmitments Lyalty prgrammes are nt quick wins cnsider up-frnt hw the prgramme might cme t a clse r yu risk alienating and disappinting custmers and unding any psitive results A cst perspective decreasing the amunt yu spend n custmers; it csts mre t attract a new custmer than maintain an existing ne A sales perspective turning the peple wh knw abut yur service r prduct int peple wh have made a purchase A service perspective ensuring peple wh have interacted with yu are satisfied and delighted. Effective CRM can als create a pwerful new marketing and referral frce fr a cmpany: its happy custmers. Delighting custmers fsters psitive wrd f muth. The first step t any CRM initiative is t understand the value f a custmer relatinship t a business. Relatinship value = Revenue generated by custmer Cst 8.6 The benefits f CRM CRM implementatins CRM systems let yu be cnsistent in handling custmer queries - an essential aspect f trustwrthiness and gd service. At its cre, effective CRM prmises the fllwing: Increased revenue and prfitability Imprved custmer satisfactin and lyalty Imprved service delivery and peratinal efficiencies Decreased acquisitin csts keeping churn lw thrugh CRM ffsets the need t spend as much n acquisitin f new clients, while retentin f existing nes is cheaper fr bvius reasns Maintaining gd custmer relatinships is critical t the success f a business. The cst assciated with acquiring a new custmer is generally far higher than the cst f maintaining an existing custmer relatinship. While an investment in a CRM cmmunicatin prgramme r platfrm can be large, these csts are ften ffset ver the increased revenue generated by encuraging repeat business Putting a value n CRM Bradly, CRM can be lked at frm: CRM shuld infuse every aspect f a business (in the same way that marketing shuld be integral t everything yu d), but it is useful t lk at the different ways CRM is implemented. Marketing Cnduct persnalised targeting and prfiling acrss a range f marketing channels such as telemarketing, marketing, scial media marketing and campaign management prjects. Place the right mix f a cmpany s prducts and services in frnt f each custmer at the right time. Understand what custmers d and want, matching that knwledge t prduct and service infrmatin and measuring success. Sales Ensure the custmer receives the crrect prduct. Ensure crrect sales-related prcesses are carried ut within the rganisatin. This culd include: A marketing perspective increasing the number f peple wh knw abut yur service r prduct Client r campaign management Sales cnfiguratin (fr cnfiguring prducts, pricing, etc.)

10 CRM The benefits f CRM CRM Scial CRM Call management Cntact management 8.7 Scial CRM Ad management Sales frce autmatin (including territry) Accunt and lead management systems Enable all parties in the transactin t interact with ne anther. Include systems that put sales reps directly in tuch with custmers at the pint f sale. Widespread scial media usage means that CRM has t be cnducted in this frum in rder t deliver an all-rund experience fr the custmer. Nt nly shuld scial media be integrated int any existing CRM strategy and lked at frm a tuchpint and channel perspective, but scial media can als be used t drive CRM. CRM shuld embrace the scial custmer effectively summed up by scial CRM expert Paul Greenberg as fllws: Prviding a self-service supprt system can cut dwn n service csts and empwers custmers t find their wn slutins. Service and service fulfilment Imprve the service yu give t current custmers thrugh: respnse management Scial media supprt systems Telephny capabilities such as autmatic call distributin Cmputer-telephny integratin Queue/wrkflw management Interactive vice respnse and predictive dialling Include the develpment f prblem reslutin systems, wrkflw autmatin and field service dispatch systems. Services invked by the custmer Create and manage systems r capabilities that can be directly invked by the custmer: Web self-service Search Instant messaging queries Vice ver IP (VIP) Scial custmers are nt the custmers f yre. They trust their peers, are cnnected via the web and mbile devices t thse peers as much f a day as they wuld like. They expect infrmatin t be available t them n demand They require transparency and authenticity frm their peers and the cmpanies they chse t deal with (Greenberg, 2010). Scial media platfrms allw custmers t easily share their brand experience (gd r bad) with their nline scial cnnectins, wh in turn can share this experience n. This means a ptential wrd-f-muth audience f millins culd witness a single user s brand experience and weigh in n the situatin. Scial custmers place a great deal f value n the pinins f their peers, and are mre likely t lk favurably n a brand, prduct r service if a peer has recmmended r praised it. In fact, the 2012 Edelman Trust Barmeter, an annual trust and credibility survey, saw trust in scial media increase by 75%, nting that respndents are placing mre and mre imprtance n infrmatin gathered frm this space (Edelman, 2012). Brands have realised that they need t leverage this in their CRM strategies and nw understand that cmmunicatin is nt ne way (frm brand t cnsumer), r even tw way (between cnsumer and brand) but multi-directinal (brand t cnsumer, cnsumer t brand, cnsumer t cnsumer). The cnvergence f scial media with CRM has been termed scial CRM r CRM 2.0, and has develped int a field n its wn. Brwser and applicatin sharing Cnferencing Call me capabilities Scial media supprt Online frums Scial CRM and supprt Scial custmers are increasingly turning t scial media channels fr supprt. With the immediate accessibility ffered thrugh mbile devices, they see this as a cnvenient channel t cmmunicate with brands. This means that brands need t respnd quickly and transparently t cnsumers questins, gripes and even cmpliments. A supprt query ging unanswered n Twitter, fr instance, is likely t cause frustratin fr the cnsumer, and prmpt them t take a situatin that is already visible t ther cnsumers even further, ptentially causing a brand crisis

11 CRM Scial CRM CRM Scial CRM Zapps, an nline retailer based in the US, has an excellent scial media supprt strategy. Have a lk at twitter. cm/zapps_service t see their persnalised, effective and psitive supprt strategy in actin. Brands shuld carefully cnsider whether all scial media channels are apprpriate fr them, and be prepared fr any eventuality. Brands that are well liked will generally have psitive respnses n scial media, thse that receive a medicre respnse frm cnsumers will have a bit f a mixed bag, but thse that have a lt f supprt issues are likely t experience very large numbers f cmplaints that need t be addressed. Scial supprt staff shuld have access t all the histrical data relating t custmer issues such as all the data cllected abut previus cmplaints and reference numbers. In this way, they can respnd directly t the cnsumer in the scial channel that they ve selected and escalate the prblem apprpriately. Savvy rganisatins can als prvide tls t custmers t drive their business, passing n tasks t custmers that might rdinarily have been perfrmed by the rganisatin. Fr example, many airlines nw allw travellers t check in nline prir t arriving at the airprt. As mre travellers elect t check themselves in, staff csts fr airlines can be reduced. The travellers are ding the jb fr free (and are getting a better experience t) Scial CRM and nline mnitring Scial CRM can als make use f nline reputatin management and mnitring tls. Online mnitring, r reputatin management, entails knwing what is being said abut yur rganisatin and ensuring that yu are leading the cnversatin. By using these tls, brands can rate and srt these mentins based n their sentiment. This allws them t effectively test the temperature f the nline cmmunity s feeling twards the brand, which can then guide any future actin Custmer-centric vs. custmer-driven rganisatins Effective CRM places the custmer s needs first in all dealings with the brand. Hwever, there is a vast difference between a custmer-centric rganisatin and a custmer-driven ne. Placing the custmer at the centre f an rganisatin s business planning and executin is different t having custmers drive the directin f a business. Many new, web-based businesses rely n the latter, and actively encurage custmers t take the lead and add value t the business. Figure 2. A CRM reminder t check in fr a flight, frm airline EasyJet. Custmer-centric strategy, n the ther hand, uses data t present the best pssible experience t the custmer. Amazn s cllabrative filtering is an example f a custmer-centric apprach. Using custmer data, Amazn will share prducts that yu are mre likely t prefer. Services such as Flickr (www.flickr.cm) and Twitter (www.twitter.cm) are userdriven rather than user-centric. They prvide tls that enable users t make the service their wn, ften by allwing utside develpers t create supplementary services. S, Flickr users can exprt their images and use them t make custm business cards n M (www.m.cm). There are many auxiliary services based n Twitter such as analysis services (www.klut.cm) and access services (www.twhirl.rg). Figure 3. Amazn prvides recmmendatins based n what custmers with similar prfiles are lking at

12 CRM Scial CRM CRM Step-by-step guide t implementing a CRM strategy Custmer-centric experiences are abut persnalisatin: using data t create a tailred experience fr the custmer. Custmer-driven experiences are abut custmisatin: prviding the tls that let a custmer tailr their wn experience Step 3 Set bjectives and measurements f success 8.8 Step-by-step guide t implementing a CRM strategy Step 1 Cnduct a business needs analysis A majr part f determining where t begin with a CRM implementatin is having a clear understanding f the business needs, and where CRM wuld mst benefit the rganisatin. CRM tuches n sales, marketing, custmer service and supprt bth nline and ffline. It s imprtant t review the needs f each business area s that yu can determine yur strategy fr CRM. CRM is a lng-term cmmitment and yu need t cnsider a lng-term apprach. Depending n the business needs, yur bjectives and success measures culd include: Increasing custmer numbers Increasing prfitability per custmer Increasing market share Imprving respnses t campaigns Raising custmer satisfactin Imprving end-t-end integratin f the sales prcess cycle Ideally yu shuld have individual gals fr each department and all members within the rganisatin shuld buy in t the strategy in rder t drive it successfully, frm the highest rank t the lwest. Implementing successful CRM acrss the rganisatin is a prcess, with stakehlders making decisins cllectively and sharing their views and needs. Decisins shuld be based n realistic budgets and resurces and full calculatins carried ut befre any kind f lyalty currency is decided upn. The metrics yu select fr measurement will depend n these bjectives. There are numerus metrics that yu can chse frm when measuring yur perfrmance, and the actual metrics yu chse are generally referred t as yur key perfrmance indicatrs (KPIs) Step 4 Determine hw yu will implement CRM Read mre abut this in the Data Analytics chapter. Keep a clse eye n cnsumer cmplaint sites (like hellpeter.cm) t identify any significant r recurring issues Step 2 Understand custmer needs CRM is abut the custmer. Yu might have identified a range f business needs, but what abut the needs f the custmer? Tw elements f CRM in particular service delivery and custmer supprt are actually all abut meeting the needs f the custmer. And what s the best way f determining custmer needs? By asking them, f curse. There are varius ways t find ut what custmers want, but in all f them, it is imprtant t listen. Use nline mnitring tls and insights frm scial media t gather a mre runded view f what yur custmers think, feel and want. Lk at past behaviur, churn rates, successes a detailed data mining exercise culd als be n the cards, as yu will need t understand which f yur custmers is the mst valuable and why. Once yu ve identified all f the bjectives f yur CRM implementatin, yu will need t determine hw yu are actually ging t rll it ut. What channels will yu use? What tuchpints will yu leverage? What data will yu need fr this? And what tls will yu need t gather this data and implement yur initiatives acrss these channels? Hw will yu address the shift and cmmunicate with yur internal stakehlders befre yu launch the initiative t yur external nes? Yu will need t make chices based n what is available t yu, r what yu intend n embracing. The digital space ffers a range f innvative spaces fr CRM delivery; yu simply need t get creative in yur executin Step 5 Chse the right tls There are lts f excellent CRM tls available, but these are useless withut a clear CRM strategy in place. Yu can nly select yur tls nce yu knw what yur bjectives are, what tuchpints and channels yu are ging t utilise and what data yu need t cllect and analyse

13 CRM Step-by-step guide t implementing a CRM strategy CRM Case study: Fuji Xerx CRM systems that gather infrmatin n custmer preferences and needs, as well as infrmatin n cmpetitrs and in the industry in general, let rganisatins fcus n prviding custmer slutins instead f simply pushing prducts. We ve utline a hst f ptins in the Tls f the trade sectin belw. 8.9 Tls f the trade Cllabrative CRM tls Cllabrative CRM refers t a prcess that cmbines custmer data acrss all facets f a cmpany. Fr example, queries regularly submitted t the technical supprt r custmer service arm f a business can be used t infrm prduct develpment and website cntent. Instead f varius departments cllecting their wn custmer data and using this in islatin, data is cllated s that all channels make infrmed decisins based n the hlistic custmer experience. MindTuch (www.mindtuch.cm) is an example f a CRM prduct that ffers cllabrative authring. This means that multiple users can simultaneusly edit shared dcuments while maintaining an audit trail and versin cntrl. Scial CRM tls Scial CRM tls perfrm a number f functins, frm standardising the cllectin f data frm scial media channels t autmatically psting links and accepting friend requests. These tls can als be used t identify custmer sentiment within scial media channels. BrandsEye (www.brandseye.cm), Radian6 (www.radian6.cm) and Simplify360 (www.simplify360.cm) are examples f scial CRM listening tls that cllect data n brand mentins acrss scial media channels nline, in real time. transactins and cmmunicatins with ptential and existing custmers, and generate detailed reprting n the sales prcess. Marketing autmatin tls identify current custmers and use their respnse infrmatin t manage marketing lists. The tls can als identify prspects, as well as unhappy custmers. HubSpt (www.hubspt.cm) ffers a marketing autmatin tl that allws cmpanies t generate and send behaviur-driven s. Analytical CRM tls Analytical CRM tls allw cmpanies t recrd, save and investigate custmer data t better understand custmers thrugh their behaviur. Fr instance, data cllected abut the nature f visits t yur website can be used t make infrmed decisins abut where t fcus attentin based n custmer behaviur. Past purchasing behaviur f custmers can be analysed t predict future purchasing behaviur. Data can be used t segment custmers and tailr cmmunicatins. These tls can help target marketing campaigns at custmers and predict future sales and custmer spending. KXEN (www.kxen.cm) is a ppular analytical CRM tl with the ability t frecast custmer behaviur and shed light n custmer preferences and spending pwer. It als allws yu t tailr marketing campaigns t specific custmers, segmented by varius demgraphics Case study: Fuji Xerx One-line summary Data can tell yu what yur custmers are ding - it s yur jb t investigate this and t determine why. Operatinal CRM tls Operatinal CRM tls deal with the mst bvius channels that relate t custmers: the frnt end f a business and its custmer service. Frm a web technlgy pint f view, peratinal CRM infrms the website a custmer sees as well as their entire nline user experience. Tw examples f peratinal CRM tls are OnCntact (www.ncntact.cm) and Zh CRM (www.zh.cm/crm). Fuji Xerx Thailand uses a traditinal CRM system t imprve their sales prcess The prblem Sales and marketing autmatin CRM tls Sales frce autmatin uses CRM sftware t manage sales cycles and t cllect custmer sales data. The sftware enables businesses t track leads, schedule Due t rganisatinal grwth and an increase in services ffered, Fuji Xerx Thailand needed t find a mre efficient way t gather and stre custmer data. The cmpany was als under pressure t prvide better business frecasting, which relied heavily n their ability t analyse accurate custmer data (Sundae Slutins, 2012)

14 CRM Case study: Fuji Xerx CRM The bigger picture T achieve this, they decided t invest in a CRM system that wuld allw them t centrally stre infrmatin and capture everything in ne place. Up until that pint, they had used Excel spreadsheets and paper systems t recrd data, which lead t inaccuracies due t: Human errr in recrding in custmer details Individual recrds being kept within different divisins Fr the cmpany this meant a lss f sales due t lng turn-arund times n qutes r discunt requests. It als meant that infrmatin sils created bstacles t frmulating lng-term business strategies (Sundae Slutins, 2012) The results Thrugh the new system, the sales team was empwered with infrmatin. This meant: Mre efficient sales management Speedier qutatins Imprved apprvals prcesses In the past, sales representatives culd nly submit qutes r discunts fr apprval t their managers back at the ffice, which wuld take a few days and decrease the likelihd f sales cnversins. The new system meant sales representatives had sftware that wuld simulate cst, prfit and discunts immediately. This meant quick preparatin f qutes and cnfidence in knwing that these were accurate and made sund business sense The slutin By implementing an integrated CRM system, namely the Sage CRM slutin, they created a centralised repsitry fr infrmatin. Fuji Xerx als needed a system that wuld integrate well with their existing systems. These included an Oracle ERP system at the backend (Sundae Slutins, 2012). The Oracle ERP system is an enterprise resurce planning sftware slutin that enables businesses t manage all facets f their rganisatin frm develpment t manufacturing and sales. The cmpany was als using Micrsft Office n their desktps, which means the system needed t integrate with Outlk calendars and (Sundae Slutins, 2012). The system ffered cntact and custmer management functinality as well as sales frce autmatin, and placed the fcus n the custmer and their needs (Sundae Slutins, 2012). By implementing a CRM system f this nature, Fuji Xerx essentially enabled the sales team t manage their sales pipeline effectively. Generally, CRM systems allw rganisatins t chse the exact sales prcess jurney t fllw by inputting infrmatin such as: The industry Hw lng the sales cycle is The qualifying criteria fr a sale The nature f the sales and hw big they are Hw many team members are invlved in the prcess What experience they have in their field Hw much managers need t be invlved The new CRM slutin als meant quicker respnse times t sales and supprt queries, imprving custmer experience (Sundae Slutins, 2012). After implementing the system, the Fuji Xerx sales teams saw an 8% imprvement in custmer satisfactin ratings. There was als clear revenue grwth as a result f the initiative (Sundae Slutins, 2012) The bigger picture Managing custmer relatinships shuld be built int every marketing tactic and activity yu perfrm, especially if yur rganisatin has adpted CRM as an nging strategy t drive custmer retentin. In the digital space, here are sme t watch ut fr. Successful marketing is built n tw very basic custmer needs: privacy and permissin. The very first step in using t cmmunicate with a custmer is gaining their permissin. Data mining and segmenting custmer databases allws marketing t be tailred and persnalised. is ften the primary pint f cntact fr service-related messages. Online advertising is a duble-edged swrd when it cmes t CRM. It can be a very effective acquisitin tl fr new custmers, but intrusive advertising can attract attentin fr all the wrng reasns. Effective nline advertising speaks t custmers needs and presents slutins t them, attracting attentin withut being verly intrusive. The key is t be relevant and useful wherever pssible. Affiliate marketing started by making the mst f existing relatinships ther parties have with ptential custmers. Affiliate marketing can be an excellent sales and acquisitin channel, but is nt withut its prblems frm a CRM perspective. Anther entity is acquiring leads n yur behalf, which can mean a lss f cntrl. Search engine ptimisatin and search advertising start with custmer intent. Existing custmer data can indicate where t fcus search engine marketing effrts, especially when it cmes t analysing hw well a website caters t the intent indicated by a custmer s search term

15 CRM The bigger picture CRM References Scial media marketing is based n custmer needs and preferences. It is als a pwerful tl fr turning delighted custmers (wh are expressive nline) int advcates fr an rganisatin. Scial media creates new cmmunicatin channels fr an rganisatin, enabling discussins and custmer service t take place where the custmer feels mst cmfrtable. Effective web develpment and design starts with understanding and catering fr custmer needs, and shuld fcus n the experience f the web user. Designing fr custmers first and fremst gives web visitrs a seamless experience - CRM data can tell yu what yur custmers need, and web experiences can supprt the custmer jurney. Web designers and develpers can als create sphisticated custmer service prtals t manage CRM, such as the Nike+ supprt page: nikeplus.nike.cm/plus/supprt. Thrugh all f the digital marketing tactics, effective analytics is the mst useful CRM tl. It allws each channel t be measured n its merits, and the custmers acquired by each channel can be analysed Summary Custmer relatinship management is the crnerstne f yur interactins with custmers. Digital technlgy makes the prcess f discvering key insights seamless, effective and very useful, but CRM cannt be restricted t nly digital channels as custmer interactins happen ffline t. There are many benefits t implementing a CRM strategy frm reduced custmer service csts t happier custmers and mre tailred and effective cmmunicatins. Naturally, understanding custmers is the biggest utcme f CRM and this understanding leads t meeting their needs much mre effectively, which in turn has direct bttm-line benefits fr the brand. There are many facets t CRM that yu shuld cnsider befre deciding hw yu will apprach it. The key nes are: Brand tuchpints hw d custmers interact with the brand, and vice versa? The tls yu need fr yur business peratinal CRM, analytical CRM, cllabrative CRM and sales frce autmatin are the main categries. What channels are available t yu t cmmunicate with yur clients? Implementatins CRM can be implemented fr sales, marketing and custmer supprt and service fulfilment. What are the steps yu need t take within yur rganisatin t ensure a successful CRM strategy? What cst are yu lking at and what return n investment are yu expecting? Yur lng-term aims CRM is never a shrt-term slutin. What are yur data capabilities and needs are yu gathering the crrect data, string it crrectly, updating it cnstantly and then analysing it fr insights? 8.13 Case study questins 1. What type f CRM slutin did Fuji Xerx implement? 2. Which pitfalls and prblems did the new CRM system slve? 3. What ther ptential imprvements culd the CRM system make in the lng term? 8.14 Chapter questins 1. Hw d yu think CRM changed r evlved as scial media rse t ppularity? 2. Why d custmers respnd s psitively t persnalised cmmunicatin? 3. What ethical prblems d yu think custmers might raise with regards t behaviural tracking? 8.15 Further reading This useful website regularly psts white papers and reprts breaking dwn updates and develpments in the field f CRM. This useful blg regularly features guest writers and experts in the field f scial media and CRM. Hme f the Cluetrain Manifest, a set f guiding principles geared twards cnducting business in the digital wrld References Edelman, Edelman Trust Barmeter [Online] Available at: Summary [Accessed 8 May 2013]. Greenberg, P., The impact f CRM 2.0 n custmer insight. Emerald Grup Publishing Limited. Kch, R., The 80/20 Principle: The Secret f Achieving Mre with Less. United States: Dubleday. Sundae Slutins (10 April 2012) CRM Case Study: Fuji Xerx Thailand [Accessed 22 May 2012]

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