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BA 7015 CUSTOMER RELATIONSHIP MANAGEMENT UNIT IV CRM PLANNING AND IMPLEMENTATION Strategic CRM planning process – Implementation issues – CRM Tools- Analytical CRM –Operational CRM – Call center management – Role of CRM Managers. Table of Contents 4.1. CRM Strategy .................................................................................................................................. 2 4.1.1. What is Strategic CRM? ............................................................................................................... 2 4.1.2. Why is it important?...................................................................................................................... 2 4.1.3. CRM Strategy consideration ......................................................................................................... 2 4.1.4. CRM Strategy ............................................................................................................................... 4 4.2. Strategic CRM planning process...................................................................................................... 7 4.2.1. Planning CRM – Strategies to Success ......................................................................................... 7 4.2.2. CRM process................................................................................................................................. 8 4.2.3. CRM process model .................................................................................................................... 12 4.3. Implementation issues of CRM...................................................................................................... 12 4.3.1. Key Challenges in CRM implementation ................................................................................... 14 4.3.3. Problems and challenges in the effective implementation of CRM systems .............................. 16 4.4. Analytical CRM ............................................................................................................................. 17 4.4.1. Definition of Analytical CRM .................................................................................................... 17 4.4.2. Key Features of Analytical CRM................................................................................................ 17 4.4.3. Analytical CRM components ...................................................................................................... 19 4.5. Operational CRM ........................................................................................................................... 21 4.5.1. Definition .................................................................................................................................... 21 4.5.2. Process of Operational CRM ...................................................................................................... 21 4.6. Call Center Management ............................................................................................................... 23 4.6.1. 5 Steps to Effective Call Center Management ............................................................................ 24 4.6.2. Key Elements of Call Center Management ................................................................................. 25 4.7. Role of CRM Managers ................................................................................................................. 26 4.7.1. Steps to be followed by CRM managers ..................................................................................... 26 4.7.2. Important aspects of CRM managers .......................................................................................... 27 4.8. CRM Tools..................................................................................................................................... 28 4.8.1. 18 Important CRM tools ............................................................................................................. 29 | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 1 4.1. CRM Strategy 4.1.1. What is Strategic CRM? (2 mark) CRM is a business strategy whose outcomes optimize profitability, revenue and customer satisfaction by implementing customer-centric processes. When developing a CRM strategy, it‘s important to identify all of the functional areas of your business that touch your Customers or Prospects, and then develop and document the business processes that you will use to manage those touch points. 4.1.2. Why is it important? Help better understand the needs of every individual customer Reduce customer churn - eg: lower selling costs Increase leads - eg: referrals Increase revenue per customer - eg: cross sell, upsell Help deliver a consistent experience every time 4.1.3. CRM Strategy consideration People • Communicate vision • Recognise customer-centric behaviour • Train staff on Customer Service and customer dispute resolution • Make customers front and centre for all key business decisions • Measure and report -Surveys (written or face to face) -Social media monitoring -Mystery Shopping - Management involved with Customer | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 2 Processes • Lead management • Sales Pipeline management -Call back responses • Accounts Management - Record account specifics and all account interactions across the organisation - Customer care program -Account Ratings –Advocate, Passive, Detractor • Service Desk -Case management - Dispute recognition - Social media management • Marketing -Leverage technology, individual behaviours and context to drive more personalized marketing and engage prospects and customers Technology • Implement a CRM System - Use CRM to cement your process - Make CRM central source of truth • Integrate your CRM system - Content Management System (CMS) - eCommerce platform | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 3 - Marketing Automation software - Learning Management System - ERP - Accounting software 4.1.4. CRM Strategy 1. Identify the best customers, and the worst A business relationship requires that we identify good customers, ones that likewise want a relationship with us—and collaborate with them to create new value that will benefit both parties over the long term. First, then, who are the customers with whom we should form a meaningful relationship? Just the biggest? Or the most profitable? Or the ones that will be most profitable tomorrow? Or those that are most amenable to a relationship with us? Or perhaps even other customers? Deciding which customers to focus on and which ones to neglect is the first and most important strategic decision. 2. Distribute value differently to different customers A company should determine which are its best, average and worst customers and ensure that each receives appropriate value. Absurd though it sounds, most companies reward the worst customers and penalize the best by giving both groups average value. This is sometimes the result of not fully allocating all customer costs, including those that occur after gross margin, such as inventory carrying costs, late payments, customer communications and merchandise returns. 3. Compete on scope One way of discriminating among customers is to become more relevant to each one. For many companies, this means broadening the range of products, services or solutions, whether or not the company makes them. Firms can collaborate with third parties to ensure that the customer receives the value each wants, rather than insisting that the customer buy what the company makes. This is a major strategic departure from the old belief that growing larger would give the company the economies it needed to succeed. In a world of individual customers, unique value must be created for each one. Being larger may not offer the opportunity to be more relevant. Frequently, the opposite is true. Larger companies can be | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 4 less able to cater to individual needs, especially where their technologies and processes have been engineered for efficiency rather than effectiveness. 4. Focus on strategic capabilities Managers sometimes do not want to plan because they fear that their plan will become rapidly outdated (it will), or that some of their strategies will be wrong (quite likely). Rather, in the era of CRM, strategies should be framed in terms of strategic capabilities rather than strategies per se. Base a plan on the range of capabilities that the company should have, including process, technology, people and knowledge/insight. CRM initiatives could prove difficult if technology is the only focus and people and their organizations receive insufficient attention. Stakeholders such as suppliers, employees and channel intermediaries form a chain of relationships, and the end-customer relationship can only be as strong as the weakest link. Plan to create durable bonds with these stakeholders, too. For example, when considering employees, pay attention to the link between relationship management and performance reviews, recruitment, training and compensation. 5. Win through customer-centric innovation Creating new and mutual customer value, the core of CRM, means that companies need to have a process for customer inclusion and collaborative innovation. Most firms continue to innovate in the old style, using off-line research and product definition, rather than by involving the customer throughout the process. The challenge is to involve customers as the company works with each one of them to define and create new value. Integrate the customer‘s technology, people and business processes with those of your own company. If you can tell where your firm ends and the customer‘s starts, you probably have not yet fully implemented relationship marketing. Amcan Castings makes castings for companies such as DaimlerChrysler. Their engineers work alongside those of their customers, and they would probably have difficulty saying when the sale is made. Design and development is collaborative. The purchase process is continuous; it is harder to tell when the sale starts and when it ends. 6. Measure customer performance Focus on customer profitability with the goal of improving it, rather than the tradition of only measuring product, product line and divisional profitability, customer costs and customer value perceptions. It is quite in order to sell products at a loss if the relationship is profitable | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 5 and/or strategic. Miss Mew cat food used to include the unprofitable tuna flavour, but the cats loved it and made the overall range of flavours quite profitable. 7. Unlearn and relearn We need to unlearn the principles of ―mass‖ everything if the company is to realize the benefits of CRM. The car industry, among the first to mass-produce, mass sell and mass market, is now among the first to go down the road to mass customization, building on the ability of the collaborative Covisint electronic marketplace to design its own approaches to mass customization. This is not a minute too soon. After a year-long examination of the Canadian automotive retailing industry, we know that the customer interface needs to be considerably improved and that the main challenge is to put the word ―custom‖ back into ―customer.‖ Unlearning is really needed if a company is to shed what made it successful in the past, but which now threatens its ability to adapt and rise to new heights. And unlearning may be hard to do, since it means changing entrenched attitudes throughout the chain of relationships to achieve the end result of a delighted customer. Inside most companies, there is tension between those who ―get‖ CRM and those who do not. If CRM is to take root and move the company into new territory, the group that doesn‘t ―get‖ CRM will need to learn or relearn what it is and the potential it has. In particular, the CFO should become involved in the visioning exercise; his or her commitment is most important if the plan is to work. 8. Redefine the focus Many leaders encourage their firms to ―focus,‖ by which they often mean focus on products or services. The company using CRM should instead see ―focus‖ in terms of customers, not products or services, and should welcome the very significant changes that this redefinition will force. In particular, the CRM company will have to make significant change in its processes as it begins to supply what customers want rather than what the company makes. This disruption can undermine the initiative in the early going, unless the changes have been anticipated and presold to internal managers. 9. The new competition The old rules of marketing are mostly broken and ineffective, providing a poor basis for making the company a winner. After all, there are only so many good customers to go round and all competitors want them. The 4Ps of marketing made little or no provision for this reality, nor did they create an opportunity for adjusting each aspect of product, price, | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 6 promotion and distribution according to the unique preferences of the customer. In the era of CRM, customers target companies even more than vice versa. The 4Ps do not address this much newer reality. In the era of CRM, competing has taken on a new meaning. Increasingly, companies will be competing for six things: 1. Obtaining preferential access to the best customers. 2. Becoming the ―lowest-time‖ producer, or taking up as little as possible of the customer‘s most precious resource. 3. Winning the right new employees, especially those who ―get‖ CRM, whatever their functional job titles. 4. Aligning and collaborating with a selected group of companies, both competitors and noncompetitors. 5. Developing more customer data, knowledge and insight than competitors, and moving faster than them down the ―customer‘s knowledge curve,‖ to position the company and its products when and where the customer is most likely to buy. 6. Creating the best new strategic capabilities. 4.2. Strategic CRM planning process (16 mark) 4.2.1. Planning CRM – Strategies to Success CRM (Customer Relationship Management) is the successful blend of a business strategy and technology that enables a company to achieve their goals. The technology provides companies with ways to keep contact with existing customers, manage leads more effectively, measure results more often and standardize business processes. However, software can not do this on its own. The software is actually only there to help enabling the CRM-strategy that a company designed before the implementation of their CRM-software. CRM-strategies vary according to the company they are designed for, however, successful strategies have several things in common. Here are five essential things one should always consider in setting up their strategy. 1. Design a strategy before implementing your CRM-software. This might seem obvious since we are talking about essential things in setting up a strategy, but planning projects is often the one thing that companies tend to forget. It is essential to design the CRM-strategy before you go and implement the software. Your strategy should contain all | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 7 the short, medium and long term goals you have as a company in regard to your CRM usage. The plan must be complete, clear and for everyone to understand. 2. A CRM-strategy has to be aligned to the mission and purpose of the organization. It should communicate a consistent message about the company. But having a strong strategy that directly reflects your company‘s mission and purpose is not the only important aspect in creating a CRM-strategy. When having different departments, it is essential to also align all departmental strategies with the CRM-strategy. Each department has its own requirements and goals that you have to take in to account when developing your CRM-strategy. 3. CRM-strategies must acquire support by their senior executives to succeed. Not having executive sponsorship correlates to CRM failure. But gaining support from other stakeholders is mutually important! Since the sales management team will be the ones holding their salespeople and others accountable for using the CRM software in alignment with the organization‘s mission and purpose, it is especially important to get them on board. Without the full support of the sales management team, a successful CRM implementation can be very difficult. Companies may experience serious objections from salespeople as well as their sales managers if the CRM-strategy was not discussed with them before. 4. The key people from your organization, who will be using the CRM-system, should not only support but also fully understand how CRM works. Giving end-users the time to get to know the new system will make the implementation much easier. The sooner training begins, the sooner end-users will realize they are a part of the process and the quicker they will see the benefits to the application for them. Making them understand how the software works, how it will improve the company‘s competitive position and how they will benefit from it personally, will not only give you their support but will also increase their commitment to the software. 5. Choose your CRM-software wisely. Take the time to understand your business, decide what you truly need from the system and set up cost parameters in which the software can be implemented. Find a system that fits your business most, then, personalize the program to your needs with the help of the manufacturer. 4.2.2. CRM process The process can be defined as the way in which things are done within an organization. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 8 CRM processes is defi ned as "the activities performed by the organization concerning the management of the customer relationship and these activities are grouped according to a longitudinal view of the relationship". The objective of CRM process is to form customers' perceptions of an organization and its products through identifying customers, creating customer knowledge, and building customers relationships. CRM processes are categorized into vertical and horizontal processes, front-office and back-office processes, and primary and secondary processes. vertical processes refer to the processes that are placed completely within business functions like customer acquisition process while, horizontal processes refer to the cross-functional processes like product development process. Front-office processes refer to the customer facing processes like complaint management process while, back-office processes refer to the hidden and non-facing processes from customers like the procurement process. The primary processes are the processes that have major cost or revenue implications for organizations like the logistics process in courier organization and claims process in insurance organizations while, the secondary processes are the processes that have minor cost or revenue implication for organizations. Customer-facing level CRM processes CRM process at the customer-facing level can be defined as "a systematic process to manage customer relationship initiation, maintenance, and termination; across all customer contact points to maximize the value of the relationship portfolio". There are three CRM processes at the customer-facing level of CRM including relationship initiation, relationship maintenance, and relationship termination. For each one of these processes as the following: a) the initiation process refers to the activities that take place before or in the early stages of the relationship, such as identifying potential customers; b) the maintenance process includes the activities that portray normal customer relationships, such as cross-selling, upselling, or retention programs; and c) the termination process includes both the activities used to find and settle on ending a bad relationship for example, ending the relationship with unprofitable, or low value customer, and the termination management activities. This process could happen at any time of the relationship. The customer-facing level CRM processes includes the building of a single view of the customer across all contact channels and the distribution of customer intelligence to all customer-facing functions. This perspective emphasizes on the importance of coordinating information across time and contact channels to manage the entire customer relationship | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 9 systematically. Customer-oriented CRM processes Customer process encompasses the customer activities performed to satisfy a need or to solve a problem. Three kinds of customer-oriented CRM processes; (i) CRM delivery processes, (ii) CRM support processes, and (iii) CRM analysis processes. CRM delivery processes are the processes of direct contact with customer and are considered as part of the customer process including campaign management process, sales management process, service management process, and complaint management process. CRM support processes deal with accomplishing supporting purposes through the market research process and loyalty management process while, CRM analysis processes concentrate on combining and analyzing the collected customer knowledge in other CRM processes, including the processes of customer scoring and lead management, customer profiling and segmentation, and, feedback and knowledge management. Cross-functional CRM processes Five generic cross-functional CRM processes based on a holistic approach including (i) the strategy development process, (ii) the value creation process, (iii) the multichannel integration process, (iv) the information management process, and (v) the performance assessment process. Four of these CRM processes are allocated to the CRM forms; strategic, analytical, and operational those mentioned before, and how they interact with each other, as depicted in figure 1. Four CRM processes including strategic planning, information management, customer value, and performance measurement processes. The categorization is very close to classification where, there share phases between the two views and some of them are included within one another. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 10 The strategy development process (figure 1) encompasses an interactive set of strategic processes that inaugurate with a detailed review of an organization's strategy where, the focus within this process is on the organization's business strategy and customer strategy. CRM Macro-level processes CRM macro-level processes refers to the undertaken activities of an organization to create market intelligence that the organization can leverage to build and sustain a profitmaximizing portfolio of customer relationships through two sub-processes; knowledge management process and interaction management process. The knowledge management process and the interaction management process are highly dependent on the technological and human resources of the organization. Knowledge management process is defined from CRM perspective as the process that "is concerned with all of the activities directed towards creating and leveraging the market intelligence that firms need to build and maintain a portfolio of customer relationships that maximizes organizational profitability". The knowledge management process can be subdivided into three processes; data collection, intelligence generation, and intelligence dissemination. Data collection refers to the capture of information related to the market and customers. The intelligence generation refers to the conversion of the captured information into actionable intelligence witch needs to be disseminated in the intelligence dissemination process across the organization to all employees who have a direct contact with the customer or working on the marketing activities of the organization. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 11 4.2.3. CRM process model This model starts with the development of customer strategy in which the target market is identified. Differentiated strategies are developed to deal with customers segments based on their profitability. Then, the setting of customer objectives is performed that aim for achieving customer satisfaction, customer loyalty, and customer value. After that, assessing the organizational readiness is carried out through turning the organization focus toward customer rather than products, assuring the top management commitment and support, and planning for the implementation of a CRM system. 4.3. Implementation issues of CRM (16 mark) In today‘s business environment, most companies interface with their customers through a variety of channels including sales people, service personnel, call centers, Internet websites, marketing departments, fulfillment houses, market and business development agents, and so forth. For large customers, it also includes cross-functional teams that may include personnel from various functional departments. Although each of these units could operate independently, they still need to share information about individual customers and their interactions with the company on a real-time basis. For example, a customer who just placed an order on the Internet and subsequently calls the call center for order verification expects the call center staff to know the details of his or her order history. Similarly, a customer approached by | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 12 a sales person unaware of the fact that the customer had recently complained about dissatisfactory customer service is not likely to be treated kindly by the customer. On the other hand, if the salesperson was aware of the problem encountered by the customer, the complaint, and the action already initiated to resolve the complaint, the salesperson would be in a relatively good position to handle the situation well. Therefore, effective CRM implementation requires a front-line information system that shares relevant customer information across all interface units. Relational databases, data warehousing, and data mining tools are thus very valuable for CRM systems and solutions. The challenge is to develop an integrated CRM platform that collects relevant data input at each customer interface and simultaneously provides knowledge output about the strategy and tactics suitable to win customer business and loyalty. For example, if call center personnel cannot identify and differentiate a high value customer and do not know what to up- sell or cross-sell to this customer, it could mean a tremendous opportunity lost. CRM solutions platform needs to be based on interactive technology and processes. It should assist the company in developing and enhancing customer interactions and one-to-one marketing through the application of suitable intelligent agents that help develop the front-line relationship with customers. Such a system would identify appropriate data inputs at each customer interaction site and use analytical platforms to generate appropriate knowledge output for frontline staff during customer interactions. The lack of a CRM strategy or CRM programs would leave the front-line people without any knowledge of what they should be doing with the additional customer information that they now have access to. Those applying themselves and developing improvised solutions could find that their ad hoc solutions backfire and cause unintended deterioration in customer relationships. Exclusivity – one of the major problems of effective CRM implementation is being a loner department. In order to create a truly effective CRM initiative, every business should approach the issue as a single creature, and do so from the start. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 13 Poor Planning – pleasing the customer should, above all else, take precedence for a company, but it needs to be done in a systematic, well planned manner. Failing to do so may result in dissatisfied customers in general. Lack of Training – a business must hire a CRM expert and make sure everybody involved in CRM within the company is adequately trained with the tools. Wasted Funds – CRM is expensive. It can cost a lot to give the customers exactly what they want. Look at the cost associated with your CRM initiative and determine whether or not the additional money is actually a necessity. 4.3.1. Key Challenges in CRM implementation 1. Defining Clear Objectives The organization should have a clear set of objectives which it would like to achieve through the CRM. These objectives need to be listed and defined as measurable metrics. Without doing so, the company can‘t assess the benefits or the ROI of the CRM system. 2. Appointing a Core CRM Team The CRM initiative is not an IT project. A core CRM team should be formed in addition to the participation from Top Management, Senior Executives, Customer Service, IT and endusers. Only after the requirements are clear should they be handed over to IT for implementation. 3. Defining the Processes It is important for the processes to be clearly defined and enforced in order to set up the CRM project for success. One good practice is to create a central repository, accessible to all, which stores all the process definitions. This allows the document to be available for referencing by anyone using the system. Key processes that need to be defined from the start are Change Management process, Feature Re-evaluation process, etc. Also, clear security measures with access management need to be in place to make sure that important data is not accessible by those who shouldn‘t be accessing it. 4. Managing the Application Once the CRM has been rolled-out, it is important to re-align the work culture of the teams around it. The business operation should properly map with the CRM application. This also | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 14 means that end users should perform day-to-day operations through the CRM application by default and not optionally. 5. Finding the Right Partner The rate of CRM success considerably goes up with the right solution partner. Ideally select a partner who can do both, strategy & implementation. It is important that your partner shares the risks of your implementation. Working with a vendor who understands local work culture, technology limitations and listens to the employees, are ideal. 4.3.2. Keys to CRM Implementation Success Executive Sponsorship Assign a senior executive who is committed to the project, stays informed, clears roadblocks, allocates resources, manages saboteurs (people invested in the status quo), and acts as cheerleader for the project. Project Team Commitment Include the right people, give them the time and authority to complete project tasks, and make sure all team members are committed to the project‘s success. Project Manager Assign a strong Project Manager with a business focus of Customer Service and/or Sales and marketing. Planning and Business Process Analysis It is tempting to skip all the preparation and jump right to the implementation. DON‘T! Take an enterprise-wide approach and consider the entire customer life cycle. Facilitation It may be advantageous to hire an outside (objective) facilitator to help with business process analysis and redesign if people seem to be protecting the status quo. Define Success List all the things that would fit in the blank in this sentence: ―I will know this implementation has been successful when_______.‖ Be sure to include all the reasons you chose the system in the first place. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 15 Phased Approach Work towards the long-term enterprise rollout through a series of smaller, phased implementations, either by functional business unit or by feature set or both. Keep it Simple Recognize that what you are embarking on is the intertwining of a computer application with your business processes. Train, Train, Train Every one of the people involved with this project will need to be trained. Ensure that the project team is trained before they begin making decisions about the implementation. 4.3.3. Problems and challenges in the effective implementation of CRM systems The implementation of CRM systems varies from one organization to the next; each one must be treated as a separate application, having different needs and requiring different solutions. Seven types of CRM applications: (1) CRM systems for call centers (2) CRM systems for service representatives in the field (3) CRM systems for telemarketing (4) CRM systems for sales managers in the field (sales managers who are in direct contact with the client) (5) CRM systems for marketing (6) Analytic CRM systems for the creation of BI insights and reports based on a database of client contacts (7) XRM systems for servicing partners and clients over the Internet. What is needed to succeed in the introduction of a CRM system? The success of a CRM project depends first and foremost on the people who implement it and on the manner in which they use the system. A working CRM system that is not being used is useless. A smart CRM system requires a smart user. Therefore the successful deployment of a CRM system | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 16 depends on upgrading the entire sales and service organization, including the personnel and the supporting tools. 4.4. Analytical CRM (16 mark) 4.4.1. Definition of Analytical CRM (2 mark) Analytical CRM comprises the analysis and systematic evaluation of customer data using business intelligence functions. The aim is to filter out the key facts from gathered information and gain customer knowledge. Analytical CRM allows customer satisfaction to be measured, for example, or trends among customers to move to other suppliers to be detected. Knowledge of customers' behavior can also be used specifically for communication and addressing customers in operational CRM, such as in campaign management. Example: Customers' buying behavior is analyzed in analytical CRM. This analysis reveals which customers have not bought anything for a considerable length of time. A mailshot campaign, guided by operational CRM, will address this target group directly and encourage it to purchase various products. 4.4.2. Key Features of Analytical CRM Seizing all the relevant and essential information of customers from various channels and sources and collaboratively integrating and inheriting all this data into a central repository knowledge base with a overall organization view. Determining, developing and analyzing inclusive set of rules and analytical methods to scale and optimize relationship with customers by analyzing and resolving all the questions which are suitable for business. Implementing or deploying the results to enhance the efficiency of CRM system and processes, improve relationship and interaction with customers and the actual business planning with customers. Combine and integrate the values of customers with strategic business management of organization and value of stakeholders. Analytical CRM is a solid and consistent platform which provides analytical applications to help predict, scale and optimize customer relations. Advantages of implementing and using an analytical CRM are described below. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 17 1. Leads in making more profitable customer base by providing high value services. 2. Helps in retaining profitable customers through sophisticated analysis and making new customers that are clones of best of the customers. 3. Helps in addressing individual customer‘s needs and efficiently improving the relationships with new and existing customers. 4. Improves customer satisfaction and loyalty. The power of CRM provides a lot of managerial opportunities to the organization. It implements the customer information in an intelligent way and creates views on customer values, spending, affinity and segmentation. Analysis is done in every aspect of business as described below: 1. Customer Analytics- This is the base analytic used to analyze customer knowledge base. It provides a better view of customer behavior and by modeling, assessing customer values and assessing customer‘s portfolio or profiles and creates an exact understanding of all the customers. 2. Marketing Analytics- This helps discovering new market opportunities and seeks their potential values. It also helps in managing marketing strategies and scale and plan marketing performance at district, regional and national levels. Marketing analytics also focus on campaign management and planning, product analysis and branding. 3. Sales Analytics- Sales analytic provides essential environment to plan, simulate and predict sales volumes and profits by constantly analyzing organizational sales behavior. It helps in pipelining all the selling opportunities in an efficient way by indulging and improving the sales cycle. 4. Service Analytics- Analytical CRM has major role in enhancing the services which answering all the questions regarding customer satisfaction, quality and cost of products, complaint management etc. It even helps in improving and optimizing the services by sophistically analyzing the service revenue and cost. 5. Channel Analytics- This type of analysis helps to determine the customer behavior on channel preferences, like web channel, personal interaction, telephone channel etc. This information is efficiently integrated in customers‘ knowledge base so that they can be contacted accordingly. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 18 4.4.3. Analytical CRM components Data Warehousing Data warehousing technology and a comprehensive customer data warehouse are keys to making analytical CRM work. Ideally, there should be a single customer repository for all transactions, behaviors, preferences, customer profitability and valuation, and segmentation treatments - but the reality is that most organizations have created silos of data and it will not be easy to coordinate all of the sources initially. Data warehousing technologies include the extract, transformation and load (ETL) functions to move data in and out of legacy systems and disparate data marts into the comprehensive customer data warehouse. Data Enhancement This is a broad category consisting of data cleansing, data enhancement and customer profitability. Data cleansing includes cleaning up, standardizing and linking the data as it is loaded from the legacy systems. Data enhancement involves adding external data such as demographic or spatial information. Customer profitability is the application of identifying | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 19 historical, current and projected value of your customers and then using it to improve segmentation and to implement customer strategies. Customer profitability analysis is one of the most important and underappreciated components of analytical CRM. Data Mining, Personalization and Segmentation These solutions are related but are sometimes perceived as vastly different because of how they arrive at their answers. Ultimately, they are performing the same task - using various modeling techniques to predict, tailor and present customers with better messages and increase the odds of acceptance. Business Intelligence Business intelligence solutions range from ad hoc query and OLAP analysis to portals, standardized reports and balanced scorecards. Business intelligence provides users with access to the customer information and will be different for different types of users. Business intelligence is the window into understanding the analytical information. Marketing The marketing or campaign management application is generally seen as the link between the analytical and operational worlds. The marketing application manages the marketing process by creating, executing and tracking offline batch and real-time offers to customers. The execution of marketing offers is the link into the operational or customer-facing CRM solutions and the reason marketing is sometimes seen as the Trojan Horse of the traditional CRM world. Data Movement, Workflow and Integration into other CRM Applications This last category is the glue that will connect the analytical and operational solutions into a cohesive and seamless total solution. Without getting into too many details, the emergence of XML as a standard for integration will be a huge enabler. Workflow and business-rule driven capabilities are also key. Ultimately, suites of CRM applications will dominate the landscape and minimize the integration issues - but it will take time and money to swap existing systems for new systems. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 20 4.5. Operational CRM (16 mark) 4.5.1. Definition (2 mark) The operational CRM includes the systematic use of analytical CRM filtered customer knowledge within the operational processes. This knowledge is used, for example, for the assessment and classification of customers, sales work or campaign management. The operational CRM provides the functions to do this, so that customer groups are specifically approached and customer loyalty is strengthened. Example: In analytical CRM, customer buying patterns are evaluated. Through the analysis, it becomes clear which customers haven‘t bought for a long time. Thanks to a mailing campaign, which runs through operational CRM, this target group is directly addressed and incited to buy various products. 4.5.2. Process of Operational CRM Operational CRM is mainly focused on automation, improvement and enhancement of business processes which are based on customer-facing or customer supporting. The main importance of a CRM system lies on how the selling, marketing and service oriented processes are automated, and for which operational CRM systems are embedded with following major automation applications: 1. Marketing automation- As the name implies, marketing automation is basically focused on automating marketing processes. In marketing, campaign management involves marketers to use customer specific information to determine, evaluate and develop communications that are targeted to customers in individual as well as | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 21 multilevel or multichannel environment. Campaigns developed to communicate customers individually are easy and involves unique and direct communications. For multichannel environment the implementation of marketing strategies and campaign management is quite difficult and challenging. For example, some retailers have multichannel transactions like shops or stores, wholesale stores, websites, home shopping and even television shopping. Here integration and implementation of communication strategy is difficult and evaluation of performance and quality of campaigns needs to be automated and should be technologically sound across each of the channels. For handling this, a CRM marketing strategy called event-based marketing is inherited. Using event based marketing communication and offers are presented to customers as and when they are required. For example, credit card customer calls the call center for inquiring the current interest rates, this indicates that customer is specific about the interest rates and is trying to compare the interest rates and may switch to different competitor to find specific deals which suits him. Without wasting time the automated CRM system pops up an event of offer which is best suited for that customer and helps to retain him back. 2. Sales-force Automation- A CRM system is not only used to deal with the existing customers but is also useful in acquiring new customers. The process first starts with identifying a customer and maintaining all the corresponding details into the CRM system. This process can be distributed into many stages which includes generation of lead and then qualifying those leads as prospects. The Sales and Field representatives then try getting business out of these customers by sophistically following up with them and converting them into a winning deal. Automation of selling process is efficiently handled by Sales-force automation which automates all the methodologies or sales cycle and above described process sophisticatedly. 3. Service Automation- Service automation deals with managing organization‘s service. The actual interactions with customers such as contact, direct sales, direct mail, call centers, data aggregation systems, web sites and blogs etc. are examples of operational CRM. Each interaction with a customer can be collected to the client database generally known as ‗customer‘s history‘ and the information can later be used wherever necessary. Any one in the organization can have access to this information about customer which gives a clear view of customers needs and important information on the customer such as products owned, prior support calls | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 22 etc. It naturally eliminates the need to obtain this information individually from the customer. On the basis of the information, if required, the customer can easily be contacted at right time at the right place. Operational CRM refers to services that provide support for various ‘front office’ business processes in helping organization to take care of their customers. Focus on customers‘ value is important for a successful operational CRM strategy. Different customers have to be treated differently so information on variables like customers‘ ranking, actual value and potential value is of strategic value. 4.6. Call Center Management (16 mark) One of the biggest issues of call center management is how to meet or exceed service levels while controlling payroll costs. More accurate forecasting, flexible scheduling and real-time adherence will make your daily call center management more effective by avoiding under or over staffing and ensuring agents are working when they are needed, directly resulting in improved service levels. Monet Workforce Management Live is an affordable and easy to use call center forecasting and employee scheduling solution which includes ACD integration, real-time agent adherence and intra-day management. Call centers will start improving service levels and | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 23 reducing center costs within days - all without the upfront expenses and IT requirements of traditional software. Monet Workforce Management Live was especially designed for small and medium sized call centers to meet their specific needs: Fast setup within days, avoiding large implementation projects Affordable monthly fees without large upfront investment Easy to use through 100% web interface Quick integration with any ACD or PBX for call history and real time adherence 4.6.1. 5 Steps to Effective Call Center Management Hiring Natural Talent Few call center managers put sufficient time and energy into hiring the best people for the job. It is important for call centers to bring in employees that have a natural aptitude for customer service, with effective communication and listening skills, an enthusiastic attitude and a strong memory retention. By carefully screening new hires into call centers, you can begin working with individuals who have the characteristics necessary to provide optimal customer service in the first place. Thorough Training Once you have hired the best people for the job, a comprehensive training program is another essential feature of a high quality call center. Special focus should be placed on dealing with customer complaints, since these customers may make up a majority of the calls received. When employees feel equipped to handle complaints, and they see them as an opportunity rather than a hurdle, they will be more likely to tackle those calls with zeal. Smart Scheduling When call center employees begin to feel over-worked and overwhelmed, the quality of service automatically goes down. Proper scheduling is essential to ensure customers get assistance in a timely fashion and that the service they do receive is patient and friendly. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 24 When determining scheduling, do so by the quality of calls, rather than the quantity. This will ensure that you have sufficient staff to provide the highest quality of service possible to your customers. Regular Evaluation To keep call center staff motivated, it is important to regularly assess the quality of service that is being provided. Your evaluation program should accommodate every call center employee on your staff and provide you with sufficient information to accurately assess the quality of service each employee is giving. Evaluations need to be given regularly to ensure call center reps maintain a consistent level of service every time they are on the job. Positive Incentives Negative consequences like evaluations work, but they work much more effectively when they are balanced with positive incentives to encourage employees to put their best foot forward every day. Contests and service quality quotas can keep employees motivated and maintain a higher morale level across your entire staff. Happier employees tend to provide higher quality service overall. A call center can be challenging when it comes to quality customer service, but there are steps you can take to raise the bar on your level of service. With these tips, you not only keep your call center employees more satisfied, but you have the potential to delight your customers as well. 4.6.2. Key Elements of Call Center Management 1. Contact Center Performance – When investigating a potential solution, ask about the performance measures that are used to determine success levels. Once you have established measures, ask how monitoring of performance is accomplished, how often it takes place and what incentives are used to ensure expected performance is achieved. 2. Contact Center Scheduling – While this may seem like a topic to leave up to the contact center management, this is an area that you should make a priority to cover. Improper scheduling practices lead to higher stress for agents and degradation in customer service. This can also lead to higher attrition, resulting in the contact center being understaffed when | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 25 handling your customer interactions. Ask contact center leaders about their scheduling practices and how they ensure the anticipation of peaks and valleys, to make efficient use of agent time. 3. Workforce Management – While closely related to scheduling, workforce management also looks at how employees are tied to certain tasks. If the contact center does not have an effective workforce management program in place, they most likely cannot offer you a quality solution. This type of program will ensure that specific customer interactions are handled by the most qualified agent to not only achieve first contact resolution, but to also deliver a high level of customer service. 4. Customer Care Solutions – Customers today demand information and services any time and anywhere. If your customers meet this profile, look for a solution that offers inbound calling and electronic communications such as Web, chat and IVR selfservice 24 x 7. An outsourced solution that is available 365 days a year can guarantee that customer interaction and experiences remain healthy-- contributing to long-term customer loyalty. 4. Recruitment and Retention – This is an area where many organizations fail in their search for an effective contact center outsourcing solution. Attrition rates are directly linked to contact center performance and customer satisfaction levels. If the outsourcer is not employing comprehensive recruiting practices as well as proper ongoing training and coaching, robust scheduling and workforce management practices are not likely to offset the impact that high attrition has on the customer experience. Be sure that efficient practices are in place and that attrition rates are lower than the industry average. 4.7. Role of CRM Managers 4.7.1. Steps to be followed by CRM managers | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 26 Customer relationship managers should know their customer's needs , wishes and dreams. He or she should be well versed in the value delivered to customers and the problems customers are trying to solve. The customer relationship manager will not only solve customer requests but will proactively offer ideas and insights to improve the customer's issues and challenges. The customer relationship manager will follow up on every issue and ensure complete satisfaction and maximum utilization of the product or services sold to customers. 4.7.2. Important aspects of CRM managers This role is increasingly valued in large companies as customer knowledge becomes ever more important in marketing strategy. The CRM manager will plan, execute and follow up on customer retention campaigns through a variety of media – most likely to be SMS, direct mail, email and social marketing. The CRM Manager is ultimately responsible for retention campaigns, from conceptualization through to post-event analysis. This includes coming up with creative ideas, proposal preparation, overseeing the production process, overseeing execution, and reporting back results. A CRM manager needs to have a detailed understanding of how CRM databases work, and be able to use them strategically to deliver business value. In most businesses the CRM manager will report directly to the Director of marketing and may manage a team of CRM administrators and data analysts. The role also requires a strong knowledge of budgeting and forecasting. Senior level CRM database managers will be expected to have excellent knowledge of IT systems, such as Microsoft Dynamics, Oracle CRM or Sale force. Large organizations need sophisticated reporting and security as they manage their CRM systems. They are likely to have large data volumes, and will be implementing a lot of customization. So the CRM manager will be aiming to tailor the system to their exact business processes and to tie in with other back office systems such as inventory, fulfillment, and billing. | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 27 Traditionally, all CRM systems were in-house applications – installed and run on servers within the organization. Nowadays, newer CRM systems are Cloud based, meaning that the application and data is all held on the CRM providers‘ servers in a data centre, and accessed via a browser. What makes a great CRM manager? • They love data and can explain its complexities simply in order to drive actionable consumerinsight. • They will be able to own and manage a loyalty scheme and ongoing campaigns, setting the strategy in place for revenue benefits through loyalty. •They will have great marketing communication ideas • They will communicate well and work closely with other marketing department players such as email managers, social media and PR 4.8. CRM Tools Choose the right tool and generate more sales Choosing a good CRM tool for your business is as important is choosing a good employee. once you know what a CRM tool does, it will be easy to see how a CRM tool can boost your business. CRM tool for customer data One of the most important features of a CRM tool is its ability to record and analyze customer data. A CRM tool will allow you to personalize your customers experiences and drive repeat business through the roof. CRM for organization Another convenient tool is the ability to organize various aspects of your business. From assigning tasks to maintaining client contact at regular intervals, all of this can be accomplished using a CRM tool. CRM Tools for Reports | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 28 A great CRM tool will allow you to make customized reports that will let you know what your sales outlook is, what your conversion rate looks like, and where your employees are not utilizing the CRM tool to its fullest. Using a CRM tool to close sales Once the initial contact with a customer is made, the key to closing more sales with a CRM tool is follow up and direct marketing. 4.8.1. 18 Important CRM tools 1. Batch book 2. Big contacts 3. Daylite 4. Infusion soft 5. Insightly 6. Landslide 7. On contact 8. Oprius 9. Pipeline Deals 10. Plaxo 11. Sage act 12. Splendid CRM 13. Stride 14. Stitch labs 15. Sugar CRM 16. Vtiger | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 29 17. Work 18. Xobni | This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV. Violators will face infringement proceedings of copyright laws. Page 30