Crm Assessment

8/8/2019 Crm Assessment

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Customer Relationship Management

Introduction

Customer Relationship Management (CRM) is a process companies use tounderstand their customer groups and respond quickly-and at times,

instantly-to shifting customer desires. CRM technology allows firms to

collect and manage large amounts of customer data and then carry out

strategies based on that information. Data collected through focused CRM

initiatives help firms solve specific problems throughout their customer

relationship cycle-the chain of activities from the initial targeting of

customers to efforts to win them back for more. CRM data also provide

companies with important new insights into customers' needs and

behaviors, allowing them to tailor products to targeted customer segments.Information gathered through CRM programs often generates solutions to

problems outside a company's marketing functions, such as supply chain

management and new product development.

Customer relationship management is a broadly recognized, widely-

implemented strategy for managing and nurturing a company¶s

interactions with customers and sales prospects. It involves using

technology to organize, automate, and synchronize business processes²

principally sales related activities, but also those for marketing,

customer service, and technical support. The overall goals are to find,

attract, and win new customers, nurture and retain those the company

already has, entice former customers back into the fold, and reduce the

costs of marketing and customer service.[1]

Customer Relationship Management (CRM) is an essential business tool for

companies to track and organise their current and prospective customers and

partners. By integrating a wide range of up to date software applications to

support customer interactions, CRM can provide a valuable process of improving service interactions.

Alyssa Dver ³CRM is the notion that businesses should focus on the

customer and reinvent themselves to deliver personalized, service-driven

sales and support.´ - Information management Magazine





Customer Relationship Management - Overview





y Inter-facers: they have frequent or extensive periods of contact with

customers and are heavily involved in delivery of services, e.g. banking

relationship managers, payments clerks or cashiers.

y Inter-jacents: staff such as receptionists or telephone operators who have

constant involvement but little delivery. They are often, however, the first

point of contact.

y Inter-fusers: often involved in development of services but they have little

involvement in delivery. Some examples of these include: strategic

managers, marketing, research. An organisation must enable them to

develop customer awareness by giving them the opportunity to understand

customer interactions.

y Inter-players: support staff who have little contact with customers and only

indirect involvement in service delivery

Customer Relationship Management (CRM), also known as relationshipmarketing or customer management, is an information technology industry

term for the methodologies, strategies, software, and other web-based

capabilities used to help an enterprise organize and manage customer

relationships. The goal of CRM is to aid organizations in better

understanding each customer's value to the company, while improving the

efficiency and effectiveness of communication. CRM captures, analyzes,

and distributes all relevant data from customer and prospect interactions to

everyone in the organization. This distribution of information helps an

organization better meet customer, product, and service needs.

CRM has replaced traditional marketing techniques that focused on key

marketing mix elements, such as product, price, promotion and place. By

being too functionally-based, traditional marketing techniques neglected the

customer in the after-sales process and failed to meet customers' desires.

CRM emphasizes customer retention over customer acquisition and is

recognized as one of the most viable tools used to further a company's

success in the highly competitive business world.

There are three major areas that focus on customer satisfaction: sales,marketing, and service. The functionality of and between these three fields is

essential to successfully connecting a company's front and back offices to

facilitate effective, enterprise-wide coordination. The professional sales

force predicts and proposes the real-time analysis of information and

distributes this information to the company and business partners. Marketing

concentrates on personalizing customer preferences and offering them



satisfying experiences. Service is associated with the companies' call centers

and coordinates interaction between Web, e-mail, and other communication

medias. These fields are developed further with the help of CRM

automation.

One of the main goals of CRM is to build up a rapport with clients and

partners and establish long lasting connections to ensure that the

services provided are up to date and that all details and contact

information is relevant for the targeted market. More than just a merely

a sales tool CRM is considered by many as a valuable process in providing

informative information to customers and partners to improve service interactions.

Over the last couple of years customers of CRM are demanding more information

and interaction with their management facility than ever before. This has

subsequently meant that many companies are redesigning their CRM databases toallow greater interaction and functionality for clients and their partners. In the

world of e-commerce and international trade, for companies to compete with the

maximum level of efficiency they need to be able to adapt and cater the demand of

their customer and provide a greater beneficial service than ever before.

The early days of CRM were mainly used to function for large organisations to

maintain their online information for customer service reps and staff: merely used

a a management tool to track the process of sales activities and to assess progress.

Now CRM systems have adapted to integrate from being merely storage facilitiesto now decision making tools for management that provide greater benefits to

customers and staff alike by greatly improving the service interaction and thus

adding value to the company and their service.

Overall CRM is becoming more ingrained into the overall business strategy of

many companies as the developing technology allows ever greater degrees of on

time interaction and updates of services and notifications. CRM is ³ a journey, not

a destination´ ( businessweek )



Structure of a sample CRM database.

The Benefits of Effective CRM

- Reduced operational costs

- Increase customer satisfaction and the service

encounter

- Expand the target market and attract new partners

- Increase the number of opportunities and develop additional streams of revenue

- Acquire a greater degree of information about the market and competitors

- Long term gains of profitability and sustainable income

- Provides additional room for an organisation to move forward and innovate new

ideas and concepts

- An effective CRM facility will highlight all the areas of inefficiency and whatoperational procedures need to be updated and modified

- Provides a strategic element to service interactions



Benefits

Customer relationship management tools have been shown to help companies

attain these objectives:[3]

y Streamlined sales and marketing processesy Higher sales productivity

y Added cross-selling and up-selling opportunities

y Improved customer service, loyalty, and retention

y Increased call center efficiency

y Higher close rates

y Better customer profiling and targeting

y Reduced expenses

y Increased market share

y Higher overall profitabilityy Marginal costing

A major benefit can be the development of better relations with your existing

customers, which can lead to:

y increased sales through better timing by anticipating needs based on historic

trends

y identifying needs more effectively by understanding specific customer

requirements

y cross-selling of other products by highlighting and suggesting alternatives or enhancements

y identifying which of your customers are profitable and which are not

This can lead to better marketing of your products or services by focusing on:

y effective targeted marketing communications aimed specifically at customer

needs

y a more personal approach and the development of new or improved products

and services in order to win more business in the future

Ultimately this could lead to:

y enhanced customer satisfaction and retention, ensuring that your good

reputation in the marketplace continues to grow



y increased value from your existing customers and reduced costs associated

with supporting and servicing them, increasing your overall efficiency and

reducing total cost of sales

y improved profitability by focusing on the most profitable customers and

dealing with the unprofitable in more cost effective ways

Once your business starts to look after its existing customers effectively, efforts

can be concentrated on finding new customers and expanding your market. The

more you know about your customers, the easier it is to identify new prospects and

increase your customer base

The better a business can manage the relationships it has Function:

CRM achieve the goal of customer management, sales, and market analysis to

enterprise, family and individual.A.Customer management refers to the overall events with the customers, including

the activity and deal of at a time and look at customer credit and information, etc.

Customer management divided into two parts:

(1) Customer-setting

(2) Customer file

Customer-setting module is applied in the customer file to set some initial value

and standard which could easy to manage the customer file.

They are:(1) Class-setting

The only identification of the class is a one-to-one relationship.

(2) Category-setting

The category which is the multistage tree structure has a one-to-one relationship.

The same customer could belong to different categories; the category itself is

multistage, so the category is comprehensive and systematic way of statistical

investigation.

(3) Credit-setting

easy to inquiry and statistics, including information, structure, liaison, shipment place, credit grade, customer's demand, product, account and customer

management.

(1) Customer information

The basic information of the customer includes the introduction, the contact

method and other information. The user could know the customer by and large.

(2) Structure



In this module, the user could clearly understand the subordinate relationship

between

(3) Liaison

Find out the liaison and contact method of the customer in order to get in touch

with them.

(4) Shipment place

It could provide a set of related shipment including information the shipment place,

shipment mode, transportation mode and contact method.

(5) Credit grade

The user could clearly understand the entire score of every credit item so as to

know the credit grade of the customer and provide it for the decision-maker to take

better

(6) Customer's demand

The demand for product could be easy to make reasonable production plan, sales

plan.(7) Customer's product

The user could know full well the products and directly acquainted with the basic

information. If the customer is the rival of the user, the user could find the

corresponding product number of both parties, therefore, make next competitive

strategy.

(8) Account

The user could find the type of the customer's account to acquaint with their mode

of payment and the ability to pay. In the negotiation between the two parties, the

user could make the strategy that related to the economic intercourse, such as

payment strategy,

(9) Customer management

B. Sales include pricing, order, delivery, receiving fund, invoice and returning

item, here reflect the sales record between the two parties and clearly show the

sales progress in order to ask for, statistics and give information for making

strategy.

(1) Pricing

The user makes out the price list of the product according to the cost or other factors. In the price negotiation, the staff number fixed the price with the customer

on the grounds of the sales strategy and the possible discount. The price process

between the two parties could be recorded in the price module in order to ask for

and statistics.

The price strategies include:



a)Basic price

The basic price is fixed according to the cost and other factors. It could provide a

benchmark at times of p

b)Discount

Fix the price according to the customer's sales strategy and the discount strategy.

c) Sales commission

Fix the price according to the customer's sales strategy and the sales commission

strategy.

d) Maximum discount

The user fixed the lowest item price to the salesman, and the salesman could fix on

the basis of it with the customer.

(2) Order

The order form reflects the price, receiving fund and delivery. The price includes

sales commission and invoice price, etc. The receiving fund reflects the time, payment terms (such as check and cash, etc.) and the mode of receiving fund (such

as paid in a lump sum or in installment). Delivery includes the delivery mode,

freight, incidental expenses and related information. This information was reflected

in the order module in order to ask for and statistics.

(3) Delivery

The user chooses the mode of delivery by delivery strategy or negotiating with the

customer. The three main mode of delivery: the customer will take the delivery of

the item; the user will deliver the item; relegate the transportation to the third party.

The module record will be involved the tariff, such as CIF and FOB and whether

or not the product will export. According to the information statistics of the order

quantity, the output quantity, the freight in transit quantity and actual number, the

production and operation will be decided whether came into being.

It will reflect the order quantity, the output quantity, the arrival quantity and the

customer's confirmed quantity in this module.

(4) Receiving fund

The user could ask for the corresponding order in the system to receive fund from

the customer according to the receiving fund strategy; the user could send out the

reminder to the customer according to the payment date, and offer the receipt or

invoice to the customer according to whether they paid off the fund, finally thefinancial management will came off as planned. The receiving fund process will be

recorded in this module, and the user will clearly know the receiving fund and

make better strategy according to the previous record of this module.

(5) Invoice

The information about the invoice in every sales process will be recorded in this

module. The user could ask for the past invoice information.



(6) Returning item

The information of the returning item will be recorded in this module, such as the

quantity and the cause. It could provide reference for making better delivery

strategy and other related strategywith its customers the more successful it will

become. Therefore IT systems that specifically address the problems of dealing

with customers on a day-to-day basis are growing in popularity.

Customer relationship management (CRM) is not just the application of

technology, but is a strategy to learn more about customers' needs and behaviours

in order to develop stronger relationships with them. As such, it is more of a

business philosophy than a technical solution to assist in dealing with customers

effectively and efficiently. Nevertheless, successful CRM relies on the use of

technology.

Why CRM?

In the commercial world the importance of retaining existing customers and

expanding business is paramount. The costs associated with finding new customers

mean that every existing customer could be important.

The more opportunities that a customer has to conduct business with your

company the better, and one way of achieving this is by opening up channels such

as direct sales, online sales, franchises, use of agents, etc. However, the more

channels you have, the greater the need to manage your interaction with your

customer base.

Customer relationship management (CRM) helps businesses to gain an insight into

the behaviour of their customers and modify their business operations to ensure

that customers are served in the best possible way. In essence, CRM helps a

business to recognise the value of its customers and to capitalise on improved

customer relations. The better you understand your customers, the more responsive

you can be to their needs.

CRM can be achieved by:

y finding out about your customers' purchasing habits, opinions and

preferences

y profiling individuals and groups to market more effectively and increase

sales

y changing the way you operate to improve customer service and marketing



How to implement CRM

The implementation of a customer relationship management (CRM) solution is

best treated as a six-stage process, moving from collecting information about your

customers and processing it to using that information to improve your marketing

and the customer experience.

Stage 1 - Collecting information

The priority should be to capture the information you need to identify your

customers and categorise their behaviour. Those businesses with a website and

online customer service have an advantage as customers can enter and maintain

their own details when they buy.

Stage 2 - Storing information

The most effective way to store and manage your customer information is in a

relational database - a centralised customer database that will allow you to run all

your systems from the same source, ensuring that everyone uses up-to-date

information.

Stage 3 - Accessing information

With information collected and stored centrally, the next stage is to make this

information available to staff in the most useful format.

Stage 4 - Analysing customer behaviour

Using data mining tools in spreadsheet programs, which analyse data to identify

patterns or relationships, you can begin to profile customers and develop sales

strategies.

Stage 5 - Marketing more effectively

Many businesses find that a small percentage of their customers generate a high percentage of their profits. Using CRM to gain a better understanding of your

customers' needs, desires and self-perception, you can reward and target your most

valuable customers.

Stage 6 - Enhancing the customer experience



Just as a small group of customers are t he most profitable, a small

number of complaining customers often take up a disproportionate

amount of staff time. If t heir problems can be identified and resolved

quickly, your staff will have mRoles & Functions

Customer Relationship Management specific roles

Static Process Roles

See Customer Relationship section, Service Management Roles x Person for

details

CRM Process Owner

Initiator of the process, accountable for defining the process strategic goals

and allocating all required process resources. See Continual Process

Improvement Management for a detailed description of these activities.

CRM Process Manager (CRM Manager)

Manager of the entire process, responsible for its effectiveness and

efficiency. Team leader of the function "CRM Team". See Continual Process

Improvement Management for a detailed description of these activities.

CRM Team

Team associated to the CRM Process.

Dynamic Process Roles

These roles are dynamically created during the CRM Process. See the process-

specific or activity-specific rules for details.

Customer Owner

The attribute in the records contains the value of the Role/Function

currently accountable for the Customer and the Customer Relation (but

NOT for the CRM Process) The customer owner is also called Account

Manager or Key Account Manager for A-class customers.



Customer Agent

The attribute in the records contains the value of the Role/Function

currently responsible for the activity or task within an activity of the

Customer Relationship Management. The CRM Agent can be changed withthe help of a functional Escalation, if permitted by the rules.

Service Specific Roles

Roles depending on the affected service are found in the Service Description. The

Service Description, including the service specific roles, is delivered from the

Service Portfolio Management.

Example: Service Description

Service Expert/Service Specialist

Service Owner

Customer Specific Roles

Information artifacts

This section describes information/data required or recorded by the process.

Typically the customer relationship process contains a set of basic definition

documents and policies:

y Sales and Distribution Strategy

y Sales & Customer Handling Policy

and customer or services related documents:

y Service Catalogue and Portfolioy Service Level Agreements (SLA) to Service Description

y Customer contracts, agreements, terms and conditions

y Reports and analysis on customer, Customer Contact History and Report

(CCR)

y Reports and analysis on service performance



Additional documents are supporting the process:

y Market reports and other supporting documents

Sales and Distribution Strategy

Sales and Distribution Strategy defines general rules and conditions for the sales

and distribution of goods and services. Sales and Distribution Strategy is aligned

with the business strategy and can define basic rules.

More over the strategy defines general CRM process and organization.

Sales & Customer Handling Policy

Sales & Customer Handling Policy defines specific rules and conditions for the

sales of defined goods and services and the handling of the customer. Sales &Customer Handling Policy is aligned with the Sales and Distribution Strategy and

describes:

y CRM organization responsible for the sales and service of specific goods

and services and the customer handling

y CRM process for sales and service of specific goods and services and the

customer handling

y CRM resources and roles responsible for sales and service of specific goods

y CRM organization responsible for the sales and service of specific goods

Reports and Analysis on Customer

Supplier Management is supporting the Reporting Management and is assigning

and obtaing reports for further analysis from Reporting Management.

One of the basic activities of the CRM process is to collect and analyse all kinds of

customer data generated in customer contact. Basic set of customer related data

should contain following information:

y Customer unique ID: Identification of customer

y Customer owner: person responsible for customer contact

y Customer value information: To be defied individual by each provider.

Typically used metrics are profit and/ or turnaround generated with



customer on time period (e.g. turnaround with customer per year) and

overall in total

y Customer contact details: Responsible person at customer side

y Customer service details: Service sold to customer and services offered to

customery Customer contract/ agreement: Details on customer contract, agreement,

terms & conditions, prices agreed

y Customer specific: Special handling information on customer like

negotiating hints etc.

y Customer Contact History:

o Customer contact: Contact person at customer side

o Content of the contact: Details of the issues discussed

o Next steps: Next steps agreed with the customer and next steps

proposed by the internal staff o Services discussed:

Market reports and other supporting documents

Information helping to project the behaviour and requests of the customer. This

could be:

y Market analysis

y Expert interviews

y Competition analysisy Interviews with own staff recently changed from competition

y General economic analysis

Customer Record

Each customer contact needs to be documented in the customer contact report. This

report is used for established customer relationships as well for pojected

relationships. Following information should be regarded:

y Customer unique ID: Identification of customer

y Customer Name

y Customer Representative

y SLA & services of the Customer inkluding the historie of the Service Reports

y Customer Owner (Account Manager)

y Customer Agent



y Historie of Customer Contacts

y Customer Class

y Customer Category

y Customer Turnover

y Customer Profit

K ey Concepts

Customer Category

y By definition, customer basis is split up in three supply classes by value/

commercial importance(based on ABC analysis). Typically each class is

handled in separate way, having different customer handling policies

defined:

o Class A: Customer of high value, low turnaround time, sophisticatedtender process necessary, customer needs special handling, often

dedicated CRM agent defined

o Class B: Customer of medium value, medium turnaround time,

tender process necessary

o Class C : Customer of minor value (but might have high commercial

volume), high turnaround time, easy to be supplied (e.g. standard

services)

y Customer can also regarded by their business relations history to theprovider:

o non customer: person or provider is not customer of the provider.

o prospect customer: non active customer but possible future

customer.

o active customer: customer obtaining currently service from the

provider or who obtain services recently.

o non active customer: customer not obtaining services form the

provider since a time period.

Customer Value

Customer value to the provider is calculated by

y defining past and current turnaround with the customer and and cost of

service for the customer



y projecting future turnaround with the customer and and cost of service for

the customer

y defining possible side effects of the customer relationship (e.g. Might the

customer relationship with this customer effect other customers or

prospect customers?)

This value should be regarded as life time calculation. Some hints on that:

y Typically customer winning is the most costly activity in the customer life

cycle,

y Customer retention activities are less expensive then new customer

winning activities

y Non satisfied customer is distracting up to 12 other customer

Customer Status

Often customer are divided by their status regarding the service delivery:

y prospect customer: customer asks for service but not obtained service up

to now.

y active customer: customer currently obtaining services or recently obtained

services.

y non active customer: customer not obtain any services any more since a

period of time.

Process

Critical Success Factors

Critical Success Factors (CSF):

y Understanding of the service delivery staff for the need of customer centric

thinking

y Clear customer / internal CRM staff allocationy Defined and communicated CRM process

y Documentation and communication of every customer contact through the

whole organization



CRM Strategy Definition

CRM Strategy Definition is dealing with definition and control of

y Basic CRM rules and

y Specific CRM rules for defined customer (groups), products, goods and

services

High Level Process Flow Chart

This chart illustrates the CRM Strategy Definition process and its activities.

Performance Indicators (KPI)

y CRM strategy performance:

o Turnaround/ profit

o New customer

per customer, per service/ good, per location, per category, «

ore time for other customers.

Increased Tracking Abilities



Customer relationship management software breaks down your sales funnel into

a visual process populated with your company's data. Potential customers can be

organized by date contacted, contract worth, or location in the funnel.

Your sales force can also be held accountable. Each account executive's performance is presented clearly, and individual pipelines and past conversions are

itemized by type and client.

WebpageFX can configure your CRM to compare sales data between

salespeople, locations, or time periods so you always know how well your

business is performing.

Greater Process Organization



Customer relationship management software organizes all of your business

processes into a centralized location.

A usable and aesthetically pleasing dashboard visualizes all of the data from

your sales force. We can configure your web-based solution to function perfectly

on mobile devices (including BlackBerrys and the iPhone) to enable easy access

from anywhere.

Our CRM solutions can also automatically transfer website leads directly into

your CRM, saving your salespeople the hassle of entering web leads manually.

Data for Improvement



With the extra data available from a CRM, you can pinpoint weak areas in your

sales process and improve continuously.

Customer retention statistics tell you how well you are pleasing your most

profitable customers. WebpageFX CRM Customer Surveys are modeled after the

Net-Promoter Score and provide you with invaluable feedback on the performanceof your operation. With these data you can accurately forecast future business

performance.

Brands of Customer Relationship Management Software



If you prefer a web-based solution, we offer development advice for the Sugar

CRM Suite and also the salesforce.com customer relationship management

system. Each of these programs can be accessed 24/7 from anywhere with an

internet connection.

Another option is Sage ACT!: an out-of-the-box traditional software CRM. This

CRM works best for small companies in need of a lean, easy-to-install and local

solution.

Microsoft Dynamics CRM integrates with existing Microsoft products. This

means flawless communication with applications like Microsoft Office and

enterprise-scale Microsoft mainframes and databases.

A customer relationship management system:

y Simplifies your sales process

y Reduces redundancy

y Improves your bottom line

Documents

Crm Assessment