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Title: Lecture Seven


1
Lecture Seven
  • Ian Harris
  • Entrepreneurial Champion

2
Customer Relationship Management (CRM)
Technologies (Part One of Two)
  • Lecture Aim To give an in-depth overview of CRM
    / eCRM technologies so that the student better
    understands the mechanics in relation to
    eMarketing

3
Lecture Objectives
  • In this lecture you will learn what the links
    between eMarketing and CRM actually are
  • You will learn what CRM actually is with
    definitions provided and resources for further
    learning
  • You will learn why CRM is important from the main
    provider of CRM Software (Siebel)
  • You will be presented with an array of facts and
    figures surrounding the paradigm which is CRM and
    will include positive and negative statistics
  • You will also learn and be given links to the
    main CRM software vendors
  • You will learn what the main objectives of a CRM
    strategy is including areas such as customer
    acquisition, profitable and unprofitable
    customers, churn rates and many more

4
Content
  • What is CRM?
  • Why is CRM Important?
  • Facts and Figures of CRM
  • Objectives of a CRM Strategy
  • Customer Acquisition
  • Profitable Customers
  • Unprofitable Customers
  • Customer Retention
  • Increase Customer Value and Customer Satisfaction
  • Reducing Customer Churn
  • Personalisation / Customisation
  • Customer Segmentation
  • Customer Loyalty
  • Cross-Selling Opportunities
  • Collaboration
  • Differentiation

5
Links between eMarketing and CRM
  • Upsetting your customers through any section of
    the transactional processes either online or
    offline may ultimately be the driver to enhancing
    your competitors revenue stream and profit
    margins
  • Getting your customer relationships right and
    making your customers feel satisfied, fulfilled
    and valued is integral to the overall success of
    any eMarketing campaign and links to all the
    lectures within this module!

6
What is CRM?
  • a.k.a. customer intelligence -or- e-business
    relationship management -or- e-CRM -or-
    personalisation
  • CRM Definition
  • There are several definitions of CRM
  • CRM is the process in which business and
    technological techniques are combined to create
    and enhance long-term relationships between a
    business and its customers. Through one-to-one
    marketing techniques and processes a business
    aims to have a better understanding of who their
    customers are, what they like, and what they
    expect. The ultimate goal of a business to
    maximise customer retention, loyalty and
    profitability
  • CRM is an effort to create the whole picture of a
    given customer, bringing together consistent,
    comprehensive and credible information on all
    aspects of the existing relationship, such as
    profitability information, risk profiles and
    cross-selling potential

Source http//www.netlingo.com/
Source Nolan, R, pp 5, 2001
Source Papows (1999) cited in Ryals et al (2000)
7
Why is CRM Important?
  • The benefits of CRM are clear By streamlining
    processes and providing sales, marketing, and
    service personnel with better, more complete
    customer information, CRM enables organisations
    to establish more profitable customer
    relationships and decrease operating costs
  • Sales organisations can shorten the sales cycle
    and increase key sales-performance metrics such
    as revenue per sales representative, average
    order size, and revenue per customer
  • Marketing organisations can increase campaign
    response rates and marketing-driven revenue while
    simultaneously decreasing lead-generation and
    customer-acquisition costs
  • Customer service organisations can increase
    service-agent productivity and customer retention
    while decreasing service costs, response times,
    and request-resolution times
  • Across every sector and industry, effective CRM
    is a strategic imperative for corporate growth
    and survival. Research has shown that companies
    that create satisfied, loyal customers have more
    repeat business, lower customer-acquisition
    costs, and stronger brand valueall of which
    translates into better financial performance

Source http//www.siebel.com/
8
Facts and Figures of CRM
  • This table shows the perceived important
    technologies in which CRM is required by
    businesses in 2001
  • It also shows the perceived important technology
    increases for the following 2 years i.e. 2002-2003

Source http//www.consultants-advisory.com/
(2001) (Outstanding free resource)
9
Facts and Figures of CRM
  • This is a graphical representation of the
    percentage of customers which used these various
    channels of communication to keep in touch with
    businesses in 2001. It also shows the perceived
    planned communication channels for the future
    from 2001

Source http//www.consultants-advisory.com/
(2001) (Outstanding free resource)
10
Facts and Figures of CRM
  • Two years ago, at the height of the CRM boom,
    almost two-thirds (64) of the companies who took
    part in this survey declared themselves convinced
    that investment in CRM systems was responsible
    for putting them ahead of the competition
  • Last year (2002), that proportion slipped a
    little, down to 56, but still more than half of
    those polled felt that CRM was making a
    contribution to their success
  • This years results show a marked change,
    however, with just 42 claiming that using CRM
    technology is a sure-fire way to stay on top

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
Further Resource http//www.CRMCommunity.com/
(Good resource)
11
Facts and Figures of CRM
  • Last years survey (2001) showed that improving
    the lifetime value of customers was the number
    one goal in adopting a CRM strategy, with our
    respondents giving it an aggregated score of
    4.28. In contrast, retaining existing customers
    (4.26) or attracting new customers (4.00) were
    viewed as less important considerations
  • However the respondents this year (2002) put the
    need to improve customer service levels top of
    the list (4.50), followed by retention of
    existing customers (4.18). Improving the
    customers lifetime value to the company
  • drops to third place (4.10)

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
12
Facts and Figures of CRM
  • Where companies have apparently got smarter is in
    using customer analytics (lecture 8) to determine
    their requirements
  • A quarter of our sample (28) claim to be doing
    this to a great extent, while 34 are making
    moderate use of this technique and 24 say they
    make some use of it

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
13
Facts and Figures of CRM
  • The fact that virtually all companies appear to
    accept the value that customer analysis can add
    to their business operations is significant. Only
    6 of our current sample fail to use this
    technology at all, whereas a quarter (24) of
    last years respondents did not
  • The survey suggests that companies and their
    customers are gradually growing more comfortable
    at handling an online relationship. The vast
    majority (92) of those we polled report that
    customers or clients can contact their company
    via its website, for instance
  • At the moment, the more established options
    such as email (100), telephone (100) and fax
    (96) currently top the list of communications
    channels in use. However, in the future companies
    expect to place more weight on options such as
    call centres (64, up from 56) and on PDAs (32
    up from 20). Once again, the use of interactive
    TV is predicted to grow strongly (10 currently,
    28 in future)
  • With so many different channels either in use or
    viewed as potential options, it is not surprising
    that companies appear less concerned than before
    about achieving total channel integration. Only
    22 of those we spoke to believe this has a
    significant impact on customer acquisition,
    although a larger proportion (32) maintain it
    has an effect on customer loyalty (see Figure 4
    on previous slide)

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
14
Facts and Figures of CRM
  • In contrast, there is widespread agreement that
    content is crucial no matter which channel is
    being used
  • As Figure 5 shows, two-thirds (66) of our sample
    give this a high priority and 28 a medium
    priority, compared to just 4 who place a low
    priority on this and the 2 for whom it is not
    applicable
  • Content is viewed as particularly important for
    telephone (66), email (60) and call centre
    (42) operations. Interestingly, companies give
    very low priority to the content requirements for
    either PDAs or WAP-based channels perhaps
    suggesting that the novelty of the channel should
    be sufficient enticement for consumers to want to
    make use of it

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
15
Facts and Figures of CRM
  • For the first time in this survey, we asked our
    respondents about any plans they may have to
    expand their CRM applications to include other
    audiences, most notably their own employees or
    their suppliers and/or partners. A third (32)
    plan to do so in future
  • Meanwhile, half the sample (50) already offer
    self-service facilities via the corporate
    website for customers, employees or partners

Source http//www.consultants-advisory.com/
(2003) (Outstanding free resource)
16
Facts and Figures of CRM
  • Projected CRM growth in comparison to other
    technologies

Source Nolan, R , PhD Proposal, 2001
17
Facts and Figures of CRM
  • CRM Software Leaders

SourceGartner Dataquest, 2000
18
Facts and Figures of CRM
  • Some of the vendors of CRM Software for your
    reference. You can visit these and discover
    exactly what CRM Software can do to improve your
    customers relationships, Siebel in particular now
    offer a package for SMEs
  • Accpac Europe http//www.eware.com/
  • Applix http//www.applix.com/index.asp
  • Epicor http//www.epicor.com/
  • Mapics http//www.mapics.com/
  • NORKOM Technologies http//www.norkom.com/
  • Nortel Networks (UK) http//www.nortelnetworks.co
    m/corporate/global/emea/uk/index.html
  • Oracle http//oracle.ittoolbox.com/
  • PeopleSoft (UK) http//www.peoplesoft.com/corp/en
    /public_index.jsp
  • Prime Response http//www.primeresponse.com/home.
    html
  • Sales Page http//www.salespage.com/site/index.ht
    m
  • SalesLogic / Interact http//www.interact.com/def
    ault.php3
  • SAS (UK) http//www.sas.com/offices/europe/uk/
  • Siebel http//www.siebel.com/

19
Objectives of a CRM Strategy
  • There are several objectives to a business
    wishing to implement a CRM Strategy. The areas
    detailed below are important points to consider
    when implementing CRM
  • Customer Acquisition
  • Profitable Customers
  • Unprofitable Customers
  • Customer Retention
  • Increase Customer Value and Customer Satisfaction
  • Reducing Customer Churn
  • Personalisation / Customisation
  • Customer Segmentation
  • Customer Loyalty
  • Cross-Selling Opportunities
  • Collaboration
  • Differentiation

Source Nolan, R, PhD Proposal, 2001
Further Resource http//www.CRMCommunity.com/
(Outstanding free resource) http//www.opportu
nitywales.co.uk/ (Search here for CRM good
resource)
20
Customer Acquisition
  • Customer acquisition in the context of CRM is the
    beginning of the CRM process
  • Acquiring the customer and then being able to
    retain them is key
  • If a business is unable to communicate
    efficiently and effectively with a prospective
    customer and support multiple channels then the
    business is not providing effective CRM (see
    slide 7)
  • It has been suggested that Good CRM is
    pervasive Schreyer (2001)
  • Knowing your customers from the moment of
    acquisition will help to build deeper
    relationships with them (Peppard, p321, 2000)
  • and may ultimately lead to growth and increased
    margins (Swift, p42, 2001)
  • On acquisition a business may then need to
    determine which channel and communication media
    the customer prefers to be contacted by and thus
    increase retention rates of customers

Source Nolan, R , pp 23 - 28, 2001
21
Customer Acquisition
  • The customer should be known everywhere (Peppard,
    p313, 2000) by whichever channel they choose to
    communicate with the business
  • Also, knowing the customers preferences, the
    channels they prefer, the technologies they use
    within the context of CRM is important, on this
    exact point it has been suggested that knowing
    where your customers interact and the types of
    technologies and transactions they prefer to
    utilise is important(Swift, 2001, p42) and
    ultimately key
  • It could be suggested that effective CRM is
    about acquiring, analysing and sharing knowledge
    about and with your customers(Jutla et al)

Source Nolan, R , pp 23 - 28, 2001
Further Resources http//www.metagroup.com/
(simply go here and search for CRM) http//www.c
rmguru.com/members/papers/index.html (useful
resource)
22
Profitable Customers
  • For the greater good of a business it is
    imperative that a customer becomes profitable
  • A profitable customer is a person, household, or
    company that over time yields a revenue stream
    that exceeds by an acceptable amount the
    companys cost stream of attracting, selling, and
    servicing that customer. (Kotler, p 52, 1997)
  • Profitable customers are those, which a business
    may like to continue transacting with for their
    natural lifetime, this is referred to as
    lifetime value (Swift, p20, 2001)
  • As the relationship grows the customer may become
    someone who purchases profitable products on a
    regular basis, actively promotes the businesses
    products to friends, family and acquaintances in
    the form of referrals and will ultimately pay the
    premium price because in most business, old
    customers pay a higher price than newcomers
    (Gronroos, 2000, p131)

Source Nolan, R , pp 23 - 28, 2001
23
Unprofitable Customers
  • From the perspective of CRM it is important for
    businesses to find out exactly who their
    unprofitable customers are so that they can be
    persuaded to become profitable
  • It has been suggested by Reichheld and Schefter
    (p106, 2000) that if a business does not have the
    right customer from the point of acquisition then
    the business will face a dismal future catering
    to the whims of only the most price-sensitive
    buyers
  • The technology and software, which helps to
    identify profitable customers, can also identify
    the unprofitable ones
  • Once an unprofitable customer has been identified
    then a business would hope to transform them into
    a desirable customer (Davenport et al, p69, 2001)
  • If an unprofitable customer becomes too costly to
    retain and the business has exhausted all avenues
    to make them profitable then they may want to
    offload these to competitors
  • A business would need to be subtle in its
    approach to disposing of the customer, as they
    would not want them to become upset and so giving
    adverse word-of-mouth (Peck et al, p44, 1999)
    about the business. A way in which a business
    could do this is to take the customer off their
    mailing lists, not include them in promotions and
    so on

Source Nolan, R , pp 23 - 28, 2001
24
Customer Retention
  • Customer retention is important as it plays a
    major role within the overall context of the CRM
    process
  • The retention of customers can help to produce
    increased profitability (Swift, p75, 2001),
    loyalty (Kotler, p46, 1997), lifetime value (Peck
    et al, p47, 1999) and increase the chances of
    cross-selling (Peppard, p321, 2000).
  • With this in mind it could be said that customer
    retention is an integral part of the overall CRM
    process. In this day and age of ever-increasing
    choices customer retention may be described as a
    priority for businesses
  • The price of attracting new customers can be
    costly. It could be said that retaining existing
    customers is less expensive than trying to
    attract a new one away from a competitor or find
    new ones (Davenport et al, p66, 2001)

Source Nolan, R , pp 23 - 28, 2001
25
Customer Retention
  • The amount a business can save or indeed make by
    retaining customers is varied depending on the
    type of business sector, which it is in
  • If a business can improve its retention rate by
    5 then it may be able to increase its
    profitability by between 20 and 125 (Reichheld
    cited in Peck et al, p47, 1999)
  • A way in which a business may endeavour to retain
    its customers may be through providing its
    customers with high levels of satisfaction
    (Peppard, p321, 2000) and value which may
    ultimately lead to stronger bonds and loyalty
    (Kotler, p46, 1997) between the customer and
    business
  • It could also be achieved through the business
    encompassing high switching costs into its
    service in other words locking them into the
    service without making it look as though you are
    i.e. mobile phone companies lock you in with a
    minimal 12 month contract, which you would have
    to pay (in some way) to cancel
  • It could be suggested that customer value and
    satisfaction are of paramount importance when it
    comes to retaining customers (see next two slides)

Source Nolan, R , pp 23 - 28, 2001
26
Increase Customer Value and Customer Satisfaction
  • Within the context of CRM it could be suggested
    that building customer value and satisfaction are
    very important
  • It has been suggested by Davenport et al (2001)
    that adding value for the customer builds
    credibility and trust between the business and
    customer and so enhancing the relationship
  • Businesses seeking to gain advantage over
    competitors and differentiate themselves from
    them could possibly do this by offering the
    customer superior customer value (Day Wensley,
    p1, 1988)
  • Julta et al (1999) suggest that value is
    essential (Julta et al, p1, 1999) when a customer
    is willing to exchange cash for a product or
    service
  • In a recent publication Naumann et al (2001)
    suggest that satisfaction is undoubtedly one of
    the top strategic issues of recent times
  • A customer who receives high value and
    satisfaction may also be more inclined to refer
    the business to friends, family and colleagues
  • Naumann et al (2001) suggest that satisfaction
    has strong links with retention, profitability,
    loyalty, market share and growth

Source Nolan, R , pp 23 - 28, 2001
27
Increase Customer Value and Customer Satisfaction
  • Naumann et al also suggest that it is crucial to
    have some sort of satisfaction program in place
    in fact they suggest that having an effective
    program is critical (Naumann, p37, 2001)
  • DeRose describes value as the satisfaction of
    customer requirements at the lowest possible cost
    of acquisition, ownership and use (DeRose cited
    in Kotler, p10, 1997)
  • In simple terms a customer will weigh up the
    advantages and disadvantages of a businesses
    wares and decide which one offers the best value
    for money
  • A number of deciding factors could influence
    their choice including brand, the businesses
    image, the sales people, expected after sales
    service, the products reliability, durability and
    performance
  • The customer may also be influenced by values
    such as monetary, time, energy and the psychic
    costs of obtaining the product or service
  • Businesses, which have been successful in recent
    times for adding value, include the likes of
    Intel, Ericsson, Rover Group and BT (Cannon,
    p255, 1996)

Source Nolan, R , pp 23 - 28, 2001
28
Facts and Figures of CRM
  • From a survey of Siebel Software Users
  • Showing a 1 increase in customer satisfaction
    yields and a 3 increase in market capitalisation

Source http//www.siebel.com/
29
Reducing Customer Churn
  • Customer churn or defection rate is the process
    in which customers move from one business to
    their competitors
  • In the context of CRM reducing churn rates is
    especially important from the perspective of the
    business
  • A loss of a customer may prove to be the loss of
    profit
  • The proliferation rate within competitive markets
    such as the mobile telephone sector can be
    especially high where the churn rates can be
    anywhere between 20 and 30 (Swift, p7, 2001)
  • It may be wise for businesses to stem the flow of
    churn from their business by trying to find out
    who the likeliest candidates are and then do all
    they can to try and stop them defecting,
    especially if they are a profitable customer
  • This can be achieved with the help of technology
    and software to help analyse customers behaviour
    and habits
  • One such mobile telephone business using
    technology in its battle to beat customer churn
    is the Pele-Phone Company of Israel

Source Nolan, R , pp 23 - 28, 2001
30
Reducing Customer Churn
  • The technology they have in place includes a data
    warehouse (lecture 8) coupled with sophisticated
    data mining techniques (lecture 8) enables them
    to pinpoint a customer who they think may be
    about to defect, this is achieved by analysing
    the customers usage
  • Once a possible defector has been detected the
    business can try to regain the customers loyalty
    by targeting them with special promotions or
    tailored services (Swift, p61, 2001) and so
    keeping the customer interested in Pele-Phones
    services and helping to retain them as a customer
  • Another way to reduce churn may be to devise a
    system, which locks the customer into a
    business
  • That is to say it is difficult for a customer to
    move to a competitor because it may involve time
    or other restrictions, for example, moving banks
    may include changing direct debits, standing
    orders, moving mortgages, savings, loans and or
    debit / credit cards, so in a way customers are
    locked into a business unless they are prepared
    to invest in the necessary time it would take to
    move to a competitor
  • To help reduce churn a business may like to
    review its customer satisfaction and value added
    specifics because a lot can be done to influence
    poor service, shoddy products, high prices and so
    on (Kotler, p47, 1997)

Source Nolan, R , pp 23 - 28, 2001
31
Personalisation / Customisation
  • In the early days of mass marketing Ford was
    famous for saying that customers could have their
    Model-T car in any colour as long as it was black
    (Kotler, p250, 1997)
  • Personalisation, customisation or one-to-one
    marketing is becoming an integral part of the
    overall CRM process, as Peppard (p313, 2000)
    argues the effective management of information
    has a crucial role to play in CRM
  • Getting to know your customers, their habits,
    their likes and dislikes may have its advantages
    if the information is used strategically
  • Hagel III and Rayport (p5, 1996) suggest
    companies have good reason to collect information
    about customers as it helps the business to
    target their most valued customers, enable them
    to tailor its marketing strategies more
    effectively and efficiently and ultimately helps
    to improve customer satisfaction and retention
  • and it will help to increase customer value also
    (Peck et al, p410, 1999)

Source Nolan, R , pp 23 - 28, 2001
32
Personalisation / Customisation
  • An example of personalisation within CRM could
    include Amazon.com who, once a user has
    registered their details and / or made their
    first purchase steers its repeat book buyers to
    other types of products according to interests
    theyve shown in past purchases (Davenport et al,
    p66, 2001)
  • Through the use of technology the Web site
    recognises a user when they return and greets
    them accordingly

Source Nolan, R , pp 23 - 28, 2001
33
Customer Segmentation
  • Customer segmentation is linked with
    personalisation and could be described as
    segments of one (Kotler, p252, 1997)
  • Peck et al (p37, 1999) argue that segmentation of
    the markets is a process of dividing up a broad
    generic market into a number of smaller groups,
    or market segments, given the characteristics of
    customers in those segments
  • It is linked with personalisation in the fact
    that once a customer can be segmented as an
    individual market then they may be targeted with
    greater accuracy and efficiency
  • That is to say a business segmenting its
    customers into singular individual markets
  • It was reported on the IBM Website that Safeways
    idea of customer segmentation was to create a
    marketplace of one. With the Safeway
    representative going on to say We want to market
    our services to the individual. In fact,
    everything we do here is customer-centered.
    Thats our business advantage. (Mike Winch cited
    at www-3.ibm.com)

Source Nolan, R , pp 23 - 28, 2001
34
Customer Loyalty
  • From a CRM perspective building loyalty can
    markedly help a business towards higher retention
    rates, higher profitability, increase
    cross-selling opportunities and increase
    competitive advantage over rival businesses
  • However, not only does a business need to build
    loyalty for these reasons alone, but also because
    it has been suggested that building loyalty is
    essential for survival (Reichheld Schefter,
    p113, 2000)
  • Customer loyalty is built up over time and forms
    an integral basis of a relationship between a
    customer and a business
  • Loyalty is about earning the trust of customers
    (Reichheld Schefter, p106 2000, Gronroos,
    p129, 2000)
  • It can also be influenced by branding (OReilly
    cited in Kotler, p444 1997)
  • Loyalty may also be influenced by other
    contributing factors such as satisfaction, value,
    geography, availability and convenience

Source Nolan, R , pp 23 - 28, 2001
35
Customer Loyalty Example
  • An example of a business building loyalty in
    recent times would be Tesco PLC who in 1995
    launched a loyalty card called Tesco Clubcard
    (Peck et al, 1999)
  • Within the first six months the Clubcard had
    increased the businesses six monthly profits by
    16 and market share increased by 2.1 (Peck et
    al, p86, 1999), which led the Chairman of Tesco
    to proclaim that the Tesco Clubcard is the
    loyalty card in retailing (Sir Ian McLaurin cited
    in Peck et al, p87, 1999)

Source Nolan, R , pp 23 - 28, 2001
36
Cross-Selling Opportunities
  • In the context of CRM cross-selling is highly
    important as it can help create higher retention
    rates and increase customer loyalty (Davenport et
    al, p69, 2001)
  • It may also help in the context of reducing
    customer churn rates and increase customer
    referrals
  • Cross-selling and up-selling are techniques used
    to entice customers to buy all of their purchases
    from one business as oppose to them going to
    multiple suppliers
  • Although, cross-selling could be linked with
    acquisition in the fact that once a customer is
    acquired then cross-selling opportunities exist.
    It would have to be argued that until a customer
    is completely satisfied with a business and is
    also happy that the business is trustworthy, then
    cross-selling would become an opportunity in its
    own right

Source Nolan, R , pp 23 - 28, 2001
37
Cross-Selling Opportunities - Example
  • If a bank acquires a new customer with them
    opening a new account cross-selling opportunities
    may become immediately apparent from the
    interview conducted by the manager before the new
    account was authorised. Questions such as pension
    provision, savings provision, mortgage
    requirements may have all been asked by the
    manager, which would give the bank multiple
    cross-selling opportunities, if the customer can
    be satisfied, feels they are getting value and
    can trust the bank

Source Nolan, R , pp 23 - 28, 2001
38
Collaboration
  • Success within CRM may be helped by collaboration
  • That is to say that a business may find it
    helpful to collaborate in the following ways
  • Via internal mechanisms and communications
  • Departments within businesses do not always have
    the most effective and efficient communication
    channels. However collaboration between key
    departments is essential for businesses to
    succeed within CRM. Information collected in
    databases about customers needs to be made
    available to all so that everyone is aware of the
    customer they may be conversing with
  • Building and forming strategic alliances /
    partnerships, joint ventures with other
    businesses
  • An example of collaboration could be that of
    businesses becoming part of one anothers supply
    chain. For instance, a supermarket being supplied
    with its products gives the necessary hardware to
    its suppliers to enable it to deliver its goods
    using a more efficient form of just-in-time
    delivery, for instance, when the supplier can see
    the level of stock on the supermarket shelf is at
    a low level it could dispatch an order. The
    supply chain becomes more streamlined, cost
    efficient and reliable because of this
    collaboration

Source Nolan, R , pp 23 - 28, 2001
39
Collaboration
  • Success within CRM may be helped by collaboration
  • That is to say that a business may find it
    helpful to collaborate in the following ways
  • With its Customers
  • To collaborate with customers in the form of
    building alliances with them could be a way in
    which businesses gain competitive advantage
    through CRM in the future?
  • Customers may be willing to give information
    about themselves if they are going to get
    something in return such as a money off voucher.
    Hagel III and Rayport (1996, p7) argue that most
    consumers have shown that they are willing to
    release personal data if they can profit by doing
    so
  • From the perspective of CRM this type of
    collaboration would help to build a clearer
    picture faster of a businesses customer base and
    enable more precise and accurate segmentation of
    its markets

Source Nolan, R , pp 23 - 28, 2001
40
Differentiation
  • Within the context of CRM a business
    differentiating itself from others may prove to
    be beneficial
  • A business may be able to differentiate itself by
    increasing value and customer satisfaction,
    personalisation and one-to-one marketing
    including segmentation and affiliation with
    customers (Evans and Wurster, p87, 1999)
  • These in turn may help to acquire new customers
    as they may be attracted by the differences
    available
  • These attributes may also reduce retention rates,
    improve profitability, reduce customer churn,
    improve customer loyalty and increase
    cross-selling opportunities
  • Peppers and Rogers have what they call their
    customer differentiation matrix (Peppers and
    Rogers cited in Puschmann and Alt, p6, 2001),
    which could prove useful when a business is
    ascertaining exactly how it may differentiate
    itself from competitors

Source Nolan, R , pp 23 - 28, 2001
41
Summary of Learning Outcomes
  • In this lecture you will have learnt what the
    links between eMarketing and CRM actually are
  • In this lecture you will have learnt what CRM
    actually is
  • You will also have learnt why CRM is important
    from one of the main providers of CRM Software
    (Siebel)
  • You were presented with an array of facts and
    figures surrounding the paradigm of CRM which
    should have opened you eyes to the buzz factors
    surrounding CRM
  • You will also have been presented with the main
    CRM software vendors for reference and can now
    discover what they offer
  • You will learnt what the main objectives of a
    businesses CRM strategy may be including areas
    such as customer acquisition, profitable and
    unprofitable customers, churn rates and many more

42
Assessment Question
  • In your own words please describe the different
    areas and their importance a business would need
    to consider when devising their own objectives
    within a CRM strategy?

43
References and Useful URLs (Lectures 7 8)
  • Brown, S 2000, Customer Relationship Management
    A Strategic Imperative in the World of
    e-Business, John
  • Wiley Sons Canada Limited
  • Cannon, T 1996, Welcome to the Revolution
    Managing Paradox in the 21st Century, Pitman
    Publishing, London
  • Christopher, M Clark, M Payne, A Peck H 1999,
    Relationship Marketing Strategy and
    Implementation,
  • Butterworth-Heinemann, Oxford
  • Davenport, T H Harris, J G Kohli, A K 2001,
    How Do They Know Their Customers So Well?, Sloan
  • Management Review, Winter 2001, pp 63 73
  • Evans, P Wurster, T S 1999, Getting Real about
    Virtual Commerce, Harvard Business Review,
    November
  • December 1999, pp 85 93
  • Feeny, DF Ives, B 1990, In Search of
    Sustainability Reaping Long-term Advantage from
    Investments in
  • Information Technology, Journal of Management
    Information Systems, Summer 1990, Volume 7,
    Number 1,
  • pp 27 46
  • Feeny, DF Willcocks, LP 1998, Core IS
    Capabilities for Exploiting Information
    Technology, Sloan
  • Management Review, Spring 1998, pp 9 21
  • Greenberg, P 2001, CRM at the Speed of Light
    Capturing and Keeping Customers in Internet Real
    Time,
  • Osborne / McGraw-Hill, USA
  • Gronroos, C 2000, Service Management and
    Marketing A Customer Relationship Management
    Approach, John
  • Wiley and Sons Limited, England
  • Hagel III, J Rayport, J F 1996, The Coming
    Battle for Customer Information, Harvard Business
    Review,

44
References and Useful URLs (Lectures 7 8)
  • http//www.CRMguru.com
  • http//www.crmguru.com/members/papers/index.html
    (useful resource)
  • http//www.lloydstsb.com
  • http//www.netlingo.com/
  • http//www.nwfusion.com/
  • http//www.metagroup.com/ (simply go here and
    search for CRM)
  • http//www.opportunitywales.co.uk/ (Search here
    for CRM good resource)
  • http//www.siebel.com/
  • Ives, B Learmonth, GP 1984, The Information
    System as a Competitive Weapon, Communications of
    the
  • ACM, December 1984, Volume 27, Number 12, pp 1193
    1201
  • Jutla, D Craig, J Bodorik, P 2001, Enabling
    and Measuring Electronic Customer Relationship
    Management
  • Readiness, Proceedings of the 34th Hawaii
    International Conference on System Sciences
    2001
  • Kahaner, L 1997, Competitive Intelligence How
    to Gather, Analyze, and use Information to move
    your
  • Business to the top, Simon Schuster Inc. USA
  • Kotler, P 1997, Marketing Management Analysis,
    Planning, Implementation and Control,
    Prentice-Hall
  • International (UK) Limited, London
  • Kundisch, D Wolfersberger, P Calaminus, D
    Kloepfer, E 2001, Enabling eCCRM Content Model
    and
  • Management for Financial services, University of
    Augsburg, Business School, Department of
    Information
  • Systems, Germany / Proceedings of the 34th Hawaii
    International Conference on System Sciences
    2001

45
References and Useful URLs (Lectures 7 8)
  • Nolan, R J, 2001, PhD Proposal, Henley Management
    College, 2001
  • Nolan, R J, 2001, Towards A Model of IT enabled
    CRM, 10th EDAMBA European Conference Summer
    School,
  • July 2001
  • Nolan, R J, 2001, What is CRM Customer
    Relationship Management?, Henley Management
    College, 2001
  • Nolan, R J, Ezingeard, J-N, Money, A, 2001, A
    Taxonomy of Objectives of IT-Enabled Customer
    Relationship
  • Management as a Basis of Evaluation of CRM
    Success, Eighth European Conference on
    Information
  • Technology Evaluation, Oriel College, Oxford, UK,
    Sept, 2001
  • Peppard, J 2000, Customer Relationship Management
    (CRM) in Financial Services, European Management
  • Journal, June 2000, Volume 18, Issue 3, pp 312
    327
  • Porter, ME 2001, Strategy and the Internet,
    Harvard Business Review, March 2001, pp 63 78
  • Puschmann, T Alt, R 2001, Customer Relationship
    Management in the Pharmaceutical Industry,
    Proceedings
  • of the 34th Hawaii International Conference on
    System Sciences 2001
  • Reichheld, F F Schefter, P 2000, E-Loyalty Your
    Secret Weapon on the Web, Harvard Business
    Review,
  • July August 2000, pp 105 113
  • Rockart, JF 1979, Chief Executives Define Their
    Own Data Needs, Harvard Business Review, March
    April
  • 1979, pp 81 92
  • Rockart, JF, Earl, MJ Ross, JW 1996, Eight
    Imperatives for the new IT Organisation, Sloan
    Management
  • Review, Fall 1996, pp 43 55
  • Ross, JW, Beath, CM Goodhue, DL 1996, Develop
    Long-Term Competitiveness Through IT Assets,
    Sloan

46
References and Useful URLs (Lectures 7 8)
  • Swift, R S 2001, Accelerating Customer
    Relationships Using CRM and Relationship
    Technologies, Prentice-Hall
  • International (UK) Limited, London
  • Thompson, J 1997, Strategic Management Awareness
    and Change, International Thomson Business Press
  • Vandermerwe, Sandra 2000, Ford Motor Company
    Using Web-Strategies to Drive Customer
    Relationship
  • Management, The Management School, Imperial
    College of Science, technology and medicine,
    London
  • Venkatraman, N, Henderson, JC, Oldach, S 1993,
    Continuous Strategic Alignment Exploiting
    Information
  • Technology Capabilities for Competitive Success,
    European Management Journal, June 1993, Volume
    11,
  • Number 2, pp 139 149

47
Glossary of Terms
  • Please refer to the following references to help
    you understand
  • IT terms used throughout all of the lectures
  • http//www.marketingterms.com/ (Internet
    Marketing Dictionary and Acronyms)
  • http//www.xetg.com/articles/search_engine_secrets
    /glossary.shtml (Xtreme eMarketing Techniques and
  • Guide)
  • http//www.activemarketingtips.com/amthome/dict.ht
    m (Essential Tips for Marketing Success)
  • http//www.atwebo.com/glossary.htm (_at_WEBO
    eMarketing Glossary)
  • http//www.matisse.net/files/glossary.html
    (General IT Glossary of Terms)
  • http//www.animatedsoftware.com/statglos/statglos.
    htm (Internet Glossary of Statistical Terms)
  • http//www.weihenstephan.de/schlind/genglos.html
    (A Hypermedia Glossary of Genetic Terms)
  • http//www.webopedia.com/ (The only online
    dictionary and search engine you need for
    computer and
  • Internet technology)
  • http//www.grantasticdesigns.com/glossary.html
    (Glossary of Graphic Design and Web Page Design
  • Terms)
  • http//www.walthowe.com/glossary/ (Glossary of
    Internet Terms)
  • http//www.wwli.com/translation/netglos/glossary/g
    lossary.html (Internet Terms)
  • http//www.sharpened.net/glossary/index.php
    (Glossary of Computer and Internet Terms).
  • http//www.lib.berkeley.edu/TeachingLib/Guides/Int
    ernet/Glossary.html (Glossary of Internet and Web
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