1 The Fred Factor EQUITY CONTINUING EDUCATION SERIES Customer Relationship Management
2 What is CRM? CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers needs and behaviours in order to develop stronger relationships at the heart of business success.
3 Effective CRM increases revenues by: Providing exact customer want Offering better customer service Retaining existing customers and discovering new ones Reducing cost, wastage and complaints
4 It also reduces staff stress, because attrition- a major cause of stress reduces as services and relationships improve. It also helps you grow your business.
5 Features of Good CRM The new viewpoint in industry is: What exactly do our customers want and need and What do we need to do to be able to produce and deliver it to our customers?
6 There must be customer integration and a new way of doing things Capable and effective processes Structures and systems that support customer-centeredness Connectivity [end-to-end processes] both internally and externally [e.g., with suppliers]
7 Customers Expectations Customers normally become delighted when a supplier under-promises and over-delivers. To over-promise and under-deliver is a recipe for customers to become very dissatisfied.
8 Rules Do not assume customer expectations You must ask Customer expectations will constantly change so they must be determined on an on-going basis.
9 Ask customers what is important to them and why they do business with you. Relationship drivers are for example: Quality, price, product, location and customer service. When you ask you may find out some other drivers.
10 Managing Customers Managing customers entails: Knowing what customers want and need- which enables you to focus your production and service efforts. Knowing which products or customers have most growth potential-which enables you to focus.
11 Pareto s Law [ The Pareto Principle ] Pareto s Law is commonly known as the 80:20 rule. Typically in any organization: 20% of customers account for 80% of your turnover 20% of customers account for 80% of your profits
12 20% of customers account for 80% of your service and supply problems. It is important to know which customers fit into which category and then to mange them accordingly.
13 Achieving good CRM Traditional customer service is something you do to' the customer. Modern Customer Relationship Management is done with the customer.
14 Your relationships with customers should be ongoing, cooperative, and built for the long term. Organizations who have many transitory relationships with customers have to spend a lot of money on finding new customers.
15 Highly satisfied customers who perceive a high value in your products and services commonly make excellent advocates for your organization, nurture these customers and give them special treatment.
16 Dissatisfied customers who perceive a low value in your products and services are potential saboteurs. They could have little or no loyalty and may actively engage against your organization. You should seek to rebuild relationships and trust on a new basis.
17 Basis for a future relationship, or manage the separation with dignity, professionalism and integrity
18 Focus on building relationships The essential CRM focus of any organization should be in developing core competences, and an overall strategy of building customer relationships. In this way, all efforts in the organization can be aligned to:
19 Customer and the culture of exceeding customer expectation. Understanding and managing the people impact on the culture of the organization. Customers being recognized and treated as partners.
20 The value of relationship-building being valued Service being seen as a value-adding activity Reward and recognition being based on customer focus i.e., going the extra mile
21 Characteristics of Excellent CRM The following characteristics are associated with delivery of excellent CRM: Reliability Responsiveness Accessibility Safety
22 Courtesy Consideration Communication Recognising the customer Competence
23 Moments of truth Moments of truth are encounters with customers which cause them to form a view of the organization based on how they are engaged, particularly compared to their expectations.
24 Expectations can be met exceeded or disappointed. Moments of truth can therefore be positive, in the case of meeting and exceeding expectations or negative in the case of disappointment.
25 Monitoring the moments of truth allows the company to focus on improving areas responsible for negative customer experiences. Remedial action to prevent repetition is crucial. A single mistake is forgivable. A repeat rarely is.
26 If you put things right your customers will see that they are important to you and that you are a company that knows how to manage quality.
27 Bear in mind also that research has proven time and time again that when an issue of poor service to a customer is satisfactorily resolved by a supplier, the customer increases their loyalty to the supplier to a higher level than existed prior to the problem.
28 Managing moments of truth involves continuous improvement. This entails processes that continually monitor, check and resolve negative moments of truth by ensuring alterations happen to the customer process, and integrating these changes into business as usual.
29 Here are the elements of such an approach: Define the cycle of service Identify negative moments of truth Define the reasons [i.e., root causes-not symptoms] Develop solution/s Test solution[s]/review/amend Develop solution/s Test solution[s]/review/amend Implement Monitor impact on the cycle of service
30 Negative moments of truth carry a lot of weight with the customer and will adversely affect the relationship. It is important to know which customers fit into which category and then to mange them accordingly.
31 Standards using the SMART criteria [which may also be objectives] can be established using the SMART framework. Specific,Measurable, Agreed, Realistic and Time-bound
32 Feedback, especially complaints- are essential for good performance and development. Most avoid, discourage and hide from complaints. Don t. Complaints are free guidance for improving your quality, and free Opportunities to increase customer loyalty.
33 People and CRM Successful and effective CRM people display the following key characteristics: Positive attitude, People orientation Organizational skills, Analytical skills Customer focus, Understanding of the link between CRM and profitability
34 Empathy On the subject of empathy: Empathy is about understanding, not necessarily agreeing. Effective customer focus enables the organization and its staff to see both sides, and to work with the customer to arrive at a mutually satisfactory and sustainable solution.
35 Agreement alone amounts to capitulation, which is neither practicable nor sustainable.
36 Benefits of Effective CRM The business benefits which accrue from an effective, integrated CRM approach include: Reduced costs, because the right things are being done [i.e., effective and efficient operation] Increased customer satisfaction, because they are getting exactly what they want [i.e exceeding expectations]
37 Ensuring that the focus on the organization is external Growth in number of customers Maximization of opportunities [e.g. increased services, referrals, etc] Increased access to a source of market and competitor information Highlighting poor operational processes
38 Setting a clear customer experience strategy To establish a good strategy, certain key practices are required: Understand the overall organizational vision and mission Define the organization's customer service direction, slogan and values
39 Ensure customer service is defined as a key responsibility for the business/ department. Share the customer experience strategy via a comprehensive communications program. Ensure that this strategy does not conflict with other business strategies.
40 Developing, Motivating and Managing your People To build a CRM culture, it is important to: Provide training in key areas required to deliver exceptional personal service Reinforce these skills using ongoing coaching and feedback Measure current performance levels Reward performance using a combination of monetary awards and non-monetary recognition.
41 Establishing Effective Service Delivery Processes Effective processes and procedures provide the foundation for smoothing or inhibiting the material service element of the customer interaction. Efficient service delivery system appear transparent to the customer. Poor systems create those speed bumps that necessitate personal intervention in order to satisfy the customer requirements.
42 The critical elements in ensuring a positive material customer experience are: Mapping the service delivery processes Evaluating critical success points in the process Defining service standards and objectives for these essential points
43 Establishing service delivery procedures to optimise material service Creating service level agreements to smooth internal service delivery
44 Building in Continuous Improvement Despite effectiveness and efficiency, things go wrong. Products have faults. Customers get frustrated. Things slip through the cracks. The organizations that are built around managing the customer experience are able to resolve through recovery and build loyalty.
45 Recovery In order to recover effectively, it is necessary to: Actively seek customer feedback and complaints: you cannot improve if you don t know what went wrong in the first place. Train staff how to handle customer Complaints effectively using the correct mix of empathizing, apologizing and resolution.
46 Make sure that the real problem is solved, not just the systems. Focus on proactive [prevention] as well as reactive [cure] problem solving. Actually, we believe that if you create good, healthy customer relationships, people will even forgive your mistakes [as long as mistakes aren t the norm!]
47 Here are a couple of tips Tell customers what s going on If you don t have an answer to a complaint, tell the customer you don t have one yet, but you ll get one. If you have to give bad news, just give it.
48 People can be reasonable when they are told straight out about something, instead of hedging around or implying something might happen that you know won t. Some customers may be unreasonable customers, but don t assume everybody will be difficult.
49 Find out what they want This seems so obvious and simple that it gets overlooked surprisingly often. It is easy to assume what other people want without checking it out. To compound things, we often give people what we want to give them [or think they should want], rather than what they actually need.
50 By finding out what it is that will support them, you are demonstrating concern and attentiveness. If you re able to give your customers what they want, all the better. When that isn t possible, it s still better to ask and make the try than to stick with your assumptions, which may or may not be accurate. Give more than they expect
51 Not necessarily do more But keeping your relationships with other people dynamic means noticing what s going on with them and offering insight, ideas and support [if needed]. It means recognizing and acknowledging their contributions.
52 In other words, by adding something they aren t expecting, you create or reinforce a positive impact. You re looking here at the customer relationship equivalent of loyalty points!
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