Tuesday, 23 February 2016

MGT300 Chapter 11 : Building a Customer-centric Organization- Customer Relationship Management.

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
  • Increase customer revenues


Recency, Frequency, and Monetary Value
Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value
  • How recently a customer purchased items (Recency)
  • How frequently a customer purchased items (Frequency)
  • How much a customer spends on each purchase (Monetary Value)


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
  • Three phases in the evolution of CRM include reporting, analyzing, and predicting.




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
  • Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers
  • Operational CRM and analytical CRM



Customer Relationship Management Success Factors

CRM success factors include:

  • Clearly communicate the CRM strategy
  • Define information needs and flows
  • Build an integrated view of the customer
  • Implement in iterations
  • Scalability for organizational growth

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