The document discusses key elements of customer relationship management (CRM). It outlines four cornerstones of CRM: 1) customer knowledge, 2) relationship strategy, 3) communication, and 4) individual value proposition. It emphasizes that CRM requires understanding customers through segmentation, building long-term relationships rather than single transactions, enabling two-way communication across channels, and customizing products, services and prices for each customer. CRM systems can help manage large customer groups but require integrated front-office, mid-office and back-office IT.
2. Key Sources of the course:Key Sources of the course:
Harvard Business ReviewHarvard Business Review
CRM by Ed PeelenCRM by Ed Peelen
Snezana DraSnezana Draggicevicicevic
GeraldineGeraldine ClaessensClaessens
E mail: contact@rogerclaessens.be - Internet: www.rogerclaessens.be
R.J.ClaessensR.J.Claessens&&PartnersPartners
4. The key message of the courseThe key message of the course
We are in it, together!
5. The key message of the courseThe key message of the course
• In 2003, according to Harvard Business Review,
82% of interviewed companies in the USA, stated
they would introduce CRM, a large jump from the
35% who employed CRM in 2000.
• What changed?
6. The key message of the courseThe key message of the course
• The approach changed!
Rather than use CRM to transform entire
businesses, companies using CRM successfully
have directed their investments toward solving
clearly defined problems within their customer
relationship base
7. The key message of the courseThe key message of the course
• The approach changed!
CRM today result in highly focused projects that
are relatively narrow in their scope and modest
in their goals.
There is also an understanding that highly accurate
and timely data are not required everywhere
8. The key message of the courseThe key message of the course
« Achieving success with CRM is more difficult than
expected and it is not just a matter of marketing
and IT. »
9. IntroductionIntroduction
The philosophy of Customer Relationship
Management is this :
•CRM is about « Keeping the old-time spirit of
customer connection even when you can not
shake every hand ».
10. IntroductionIntroduction
The philosophy of CRM is:
•It is a comprehensive approach for creating,
maintaining and expanding customer
relationships.
•CRM is a way of thinking about and dealing
with customer relationships
11. IntroductionIntroduction
The focus is on:
•What will the customers buy, when, why and
for how much?
•What creates value for them?
•What does create a structural bond?
•What service can we provide that does create a
premium?
•What about market segmentation?
12. IntroductionIntroduction
What CRM systems do!
•The primary task of a CRM system consists in
supporting or performing the activities involved
in customer contact processes
•The secondary task is related to providing
customer and management information
13. IntroductionIntroduction
The concept of CRM is:
• Customer relationship management (CRM) is a
business strategy to select and manage the most
valuable customer relationships.
• CRM requires a customer-centric business
philosophy and culture to support effective
marketing, sales, and service processes.
14. IntroductionIntroduction
The concept of CRM is:
• CRM applications can enable effective
customer relationship management, provided
that an enterprise has the right leadership,
strategy, and culture
15. CRM should the end of the roadCRM should the end of the road
•CRM is a great concept BUT you might wonder
if it is worth the effort relative to your customer
base and expenses involved?
•It is the ultimate phase AFTER a solid market
research and a strategic planning process!
16. IntroductionIntroduction
• Is the issue we analyse strategic?
• Where could we make more money?
• Do we need perfect data?
• What is the next step?
17. IntroductionIntroduction
Is it strategic?
• A large and comprehensive CRM program
involves complicated business and technology
issues and requires investments of time and
money.
• Before spending money, key marketing
questions need to be addressed
• What are your key marketing questions?
19. IntroductionIntroduction
Where could we make more money?
• It is possible to use CRM to manage the entire
relationship cycle: that is usually a bad idea!
• Large systems usually do not pay back.
• The focus of CRM should be the weak points
that undermine performance
20. IntroductionIntroduction
Where can we make more money?
• Focusing on weak points can not only be an
effective way to build a successful CRM
program but can also put it back on track in case
you started one.
21. IntroductionIntroduction
Do we need perfect data?
• Perfect real time information comes at a very
high cost
• The requirements for real time and good data are
quite different
• Example: Outstandings on a current account
(real time) versus portfolio management data
(good data)
22. IntroductionIntroduction
What is the next step?
• Narrowly focused CRM system often reveal
additional opportunities for business
improvements.
• All the small improvements taken together, can
amount to a broad CRM application that extends
across the bank.
• The key is to make sure the step by step
approach fits into a defined strategic plan
23. IntroductionIntroduction
What is the next step?
• In most cases, the opportunities for development
lie in the activities adjacent to the customer
relationship cycle.
• Ultimately, CRM can be the glue that binds
together all activities related to a customer.
25. IntroductionIntroduction
Business before technology
• We should look at what CRM should do, not
so much on what it can do
• CRM depends more on strategy than on the
amount spent on technology
• Strategy is about the way you allocate your
resources to create a competitive advantage
and superior performance
26. IntroductionIntroduction
Implementing CRM before creating a customer
strategy = like building a house without an
architectural plan
• Effective CRM is based on segmentation
analysis
• Customer strategy is designed to achieve some
specific marketing goals
• Technology is not a marketing strategy
27. IntroductionIntroduction
Introducing CRM before changing your
organisation into a customer focused
organisation = like painting without sanding
• CRM will succeed only AFTER the organisation
and its processes – job descriptions, performance
measures, compensation systems, training
programs, and so on- have been structure to
provide superior customer value
28. IntroductionIntroduction
Assume that more technology is better = is like
building without foundation
• To start, see what lower-tech alternatives offer;
there may be no need for more in the very near
future
• In the future as sequence of individual software
solutions may lead to each step reinforcing the
next step
29. IntroductionIntroduction
Define the right customers you want to establish
a relationship with = a two way street
• Just because managers can contact customers,
does not mean they should by all means and for
whatever reason.
33. IntroductionIntroduction
Why might you consider CRM?
1. Gather customer information quickly
2. Identify the most valuable customers
3. Obtain loyalty by providing customized products
4. Possibly reduce cost of serving these customers
5. Making it easier to acquire similar customers
6. Retention of existing profitable customers
7. Getting the maximum out of existing customers
8. It can function as an early warning system
34. IntroductionIntroduction
Why might you consider CRM?
Current
situation
Medium
term
Long term
Financial
perspective
Turnover Increased
turnover
Value
Customer
perspective
Satisfaction Individual
satisfaction
Commitment
Communication One way Attuned Multi-
channels
Organisation Data Knowledge Integrated
image
35. IntroductionIntroduction
The ultimate goal of CRM :
The goal is to encourage the customer to make
its future purchases from you and reduce the
share of purchases being made from the
competition DUE TO THE FACT customer
knowledge has been accumulated and
therefore it will be more difficult for the
competition to offer a similar package
36. IntroductionIntroduction
CRM is only a part of the sales’ performance!
How would you assess your overall sales’
performance?
Please rate the questions hereafter as follows
Not effective Extremely effective
1 2 3 4 5 6 7 8 9 10
(Source HBR 08/06)
38. IntroductionIntroduction
Sales Managers' skills
•Planning for growing business
•Coaching – giving clear direction, expectations
and feedback
•Motivating – recognition and rewards
Not effective Extremely effective
1 2 3 4 5 6 7 8 9 10
39. IntroductionIntroduction
Support systems
•Recruiting and hiring capabilities
•Performance management systems
•Opportunities management systems
•Strategic account management systems
•CRM systems
•Training and development systems
Not effective Extremely effective
1 2 3 4 5 6 7 8 9 10
42. IntroductionIntroduction
Average for high-performing organisations° 123
Average for low-performing organisations° 109
We shall put the spot on CRM, but it is only a part
of a bigger picture
(° US based companies)
43. The structure of the courseThe structure of the course
CRMCRM
IntroductionIntroduction
ORGANISATIONORGANISATION MARKETINGMARKETING ANALYSISANALYSIS
1_Elements of CRM1_Elements of CRM
2_Customer-supplier2_Customer-supplier
3_Strategy3_Strategy
4_Relationship oriented4_Relationship oriented
1_Customer knowledge1_Customer knowledge
2_Customisation2_Customisation
3_Communication3_Communication
4_Relationship policy4_Relationship policy
1_1_RelationshipRelationship DataData
2_Data mining2_Data mining
3_Data selection3_Data selection
4_Data reporting4_Data reporting
SYSTEMSSYSTEMS
1_CRM systems
2_Implementation
3_The future
4_Conclusion
45. 1_Elements of CRM1_Elements of CRM
The four cornerstones of the
«elements of CRM » are:
1. Customer knowledge
2. Relationship strategy
3. Communication
4. The individual value proposition
47. 1_Elements of CRM1_Elements of CRM
2. Relationship strategy
•A long lasting customer – supplier relationship
•The key is not only the stimulation of a transaction
•Success is not measured by market share
48. 1_Elements of CRM1_Elements of CRM
3. Communication
•The issue is to carry on a dialogue with
individual customers
•Shifts should be possible between distribution
channels
49. 1_Elements of CRM1_Elements of CRM
4. The individual value proposition
•The product, service and price are adapted to the
individual circumstances
•The organisation has to build up the capacity to
supply customisation in one form or another
50. 1_Elements of CRM1_Elements of CRM
Systems
•If a relationship must be maintained with a large
group of customers, a portion of which
represents a low value to the supplier, the use of
IT becomes inevitable.
•Integration is therefore a must between front-
mid-back office