Chapter 11

Building a Customer-Centric
Organization Customer
Relationship Management

McGraw-Hill/Irwin 2008 The McGraw-Hill Companies, All Rights Reserved

 Learning Outcomes
11.1 Compare operational and analytical customer
relationship management

11.2 Identify the primary forces driving the explosive

growth of customer relationship management

11.3 Define the relationship between decision

making and analytical customer relationship
management

11.4 Summarize the best practices for implementing

a successful customer relationship
management system 11-2
 Customer Relationship
Management (CRM)
CRM enables an organization to:
Provide better customer service
Make call centers more efficient
Cross sell products more effectively
Help sales staff close deals faster
Simplify marketing and sales processes
Discover new customers

11-3
 why, in the age of e-business, an
organization is challenged more
than ever before to truly satisfy its
customers

11-4
Recency, Frequency, and Monetary
Value
Organizations can find their most valuable
customers through RFM - Recency,
Frequency, and Monetary value
Personalized Promotions
How recently a customer purchased items
(Recency)
How frequently a customer purchased items
(Frequency)
How much a customer spends on each purchase
(Monetary Value)
11-5
 The Evolution of CRM

CRM reporting technology help organizations identify

their customers across other applications

CRM analysis technologies help organization

segment their customers into categories such as best
and worst customers

CRM predicting technologies help organizations

make predictions regarding customer behavior such as
which customers are at risk of leaving

11-6
 The Evolution of CRM
Three phases in the evolution of CRM
include reporting, analyzing, and
predicting

11-7
The Evolution of CRM

11-8
 Customer Relationship
Managements Explosive Growth
CRM Business Drivers

11-9
 Using Analytical CRM
to Enhance Decisions
Operational CRM supports traditional
transactional processing for day-to-day front-
office operations or systems that deal
directly with the customers - Customer service,
sales, billing

Analytical CRM supports back-office

operations and strategic analysis and
includes all systems that do not deal directly
with the customers - Accounting, finance,
human resources, data warehouses 11-10
 Using Analytical CRM
to Enhance Decisions
Operational CRM and analytical CRM

11-11
 Customer Relationship
Management Success Factors
CRM success factors include:
1. Clearly communicate the CRM strategy - all
departments and employees understand exactly what
CRM means and how it will add value to the
organization - critical to the success of the
implementation

2. Define information needs and flows - organization

understand all of the different ways that information flows into and
out of the organization to implement a successful CRM system. If
the organization misses one of the information flows, such as a
customer service Web site, then none of that information from that
Web site will be integrated into the CRM system and the company
will not have a complete view of its customers 11-12
3. Build an integrated view of the customer - the
CRM system must support the organization's
strategies and goals

4. Scalability for organizational growth - ensure the

system can support the organization's future growth

11-13
THANK YOU

11-14