CRM:

Part of Chapter 4

Customer Relationship Management

2

企業策略企業策略企業價值企業價值

B2B ECB2B EC

B2C ECB2C ECB2C ECB2C EC

BIBI

KMKM

SCMSCM ERPERP CRMCRM

CustomerCustomerSupplierSupplier

Electronic Business: Scope

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CRM and Its Relationship with EC

Customer relationship management (CRM): A customer service approach that focuses on building long-term and sustainable customer relationships that add value both for the customer and the company

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Top 20% contributed to 150% profit, while the worst 40% results in 50% profit reduction

Customer segments

Pro

fit

1 2 3 4 5 6 7 8 9 10

Twice the normal

turnover

50% profit reduction

Source: Manhattan Consulting Group

Why CRM ?

5

No visibility

Customer Relationship

Advertisement, Brand image

Advertisement, Brand image

Advertisement, Brand image

Low visibility

Very low visibility

Focal Company

Focal Company

Focal Company

Customer

Customer

CustomerChannel

ChannelSalesmen

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Changes in Relationship

Focal

Sales/ Channels

Customer

As is

Focal

Sales/ Channels

Customer

To Be

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CRM and Its Relationship with EC (cont.)

Classification of CRM programsLoyalty program

Prospecting

Save or win back

Cross-sell/up-sell

eCRM: Customer relationship management conducted electronically

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CRM and Its Relationship with EC (cont.)

Scope of CRM1. Foundation of service

2. Customer-centered services

3. Value-added services

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CRM and Its Relationship with EC (cont.)

Extent of service1. Customer acquisition (prepurchase support)

2. Customer support during purchase

3. Customer fulfillment (purchase dispatch)

4. Customer continuance support (postpurchase)

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Components of CRM

Customer and Product centric services

Differential MarketingMass marketing

Focused marketing

One-to-one marketing

Customers are not born equal

Sales Managment

Database Marketing

Marketing Management

Service Management

Customer Management

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CRM and Its Relationship with EC (cont.)

Benefits of CRMProvides:

choices of products and servicesfast problem resolution and responseeasy and quick access to information

Limitations of CRMRequires integration with a company’s other information systems which is costlyDifficult to support mobile employees

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CRM and Its Relationship with EC (cont.)

CRM implementation issuesSteps in building EC strategy focused on customer:

1.focus on the end customer

2.systems and business processes that are designed for ease of use and from the end customer’s point of view

3.efforts to foster customer loyalty

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CRM and Its Relationship with EC (cont.)

Five factors required to implement a CRM program effectively:1. Customer-centric strategy

2. Commitments from people

3. Improved or redesigned processes

4. Software technology

5. Infrastructure

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CRM and Its Relationship with EC (cont.)

Justifying customer service and CRM programs

Metrics: Standards of performance; may be quantitative or qualitative

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CRM and Its Relationship with EC (cont.)

Web-related metrics a company uses to determine the appropriate level of customer support:

Response timeSite availabilityDownload timeTimelinessSecurity and privacyOn-time order fulfillmentReturn policyNavigability

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CRM Applications and Tools: Delivering Customer Service in Cyberspace

CRM applications improve upon traditional customer service by means of easier communications and speedier resolution of customer problems

Customer service adds value to products and services

It is an integral part of a successful business

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CRM Applications and Tools (cont.)

Classifications of CRM applicationsCustomer-facing applications

Customer-touching applications

Customer-centric intelligence applications

Online networking and other applications

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Formation of CRM

Front-endCommunication

CRM

Back-endAnalytical

CRM

CoreOperational

CRM

• CTI• Net Banking• B2C e-Commerce

• Data Mining• OLAP• EIS

• Customer Mgt• Marketing Mgt• Sales Mgt• Service Mgt

Database

Data Mart

Data WarehouseDemographic Data

Transaction Data

Extraction

Transformation

Loading

Operational

Database

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CRM Applications and Tools (cont.)

Customer-facing applicationsCustomer interaction center (CIC): A comprehensive service entity in which EC vendors address customer service issues communicated through various contact channels

Intelligent agents in customer service and call centers

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CRM Applications and Tools (cont.)

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CRM Applications and Tools (cont.)

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CRM Applications and Tools (cont.)

Autoresponders: Automated e-mail reply systems (text files returned via e-mail), which provide answers to commonly asked questions

Sales force automation (SFA): Software that automates the tasks performed by sales people in the field, such as data collection and its transmission

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CRM Applications and Tools (cont.)

Customer-touching applicationsPersonalized Web Pages

E-Commerce Applications

Campaign Management

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CRM Applications and Tools (cont.)

Web Self-ServiceActivities conducted by users on the Web to provide answers to their questions (e.g., tracking) or for product configuration

Self-tracking

Self-configuration and customization

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CRM Applications and Tools (cont.)

Customer-centric applicationsData reports

Data warehouseA single, server-based data repository that allows centralized analysis, security, and control over the data

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CRM Applications and Tools (cont.)

Data analysis and miningAnalytic applications automate the processing and analysis of CRM data

can be used to analyze the performance, efficiency, and effectiveness of an operation’s CRM applications

Data mining involves sifting through an immense amount of data to discover previously unknown patterns

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CRM Applications and Tools (cont.)

Online networking and other applicationsForums

Chat rooms

Usenet groups

E-mail newsletters

Discussion lists

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CRM Applications and Tools (cont.)

Mobile CRMthe delivery of CRM applications to any user, whenever and wherever needed

Voice communicationpeople are more comfortable talking with a person, even a virtual one, than they are interacting with machines. The smile and the clear pronunciation of the agent’s voice increases shoppers’ confidence and trust

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CRM Applications and Tools (cont.)

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CRM Applications and Tools (cont.)

Role of knowledge management and intelligent agents in CRM

Automating inquiry routing and answering queries requires knowledgeGenerated from historical data and from human expertise and stored in knowledge bases for use whenever neededIntelligent agents support the mechanics of inquiry routing, autoresponders, and so on

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Internet Marketing in B2B

Organizational buyer behaviornumber of organizational buyers is much smaller than the number of individual buyers

transaction volumes are far larger

terms of negotiations and purchasing are more complex

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Internet Marketing in B2B (cont.)

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Internet Marketing in B2B (cont.)

Methods for B2B online marketingTargeting customers

contact all of its targeted customers individually when they are part of a well-defined groupaffiliation serviceadvertising

Electronic wholesalersintermediary sells directly to businesses, but does so exclusively online

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Internet Marketing in B2B (cont.)

Affiliate programsPlacing banners on another vendor’s Web site

Content alliance program in which content is exchanged so that all can obtain some free content

Infomediaries

Online data mining services

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One-to-One Marketing and Personalization in EC

One-to-one marketing: Marketing that treats each customer in a unique way

Personalization: The matching of services, products, and advertising content to individual consumers

User profile: The requirements, preferences, behaviors, and demographic traits of a particular customer

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One-to-One Marketing and Personalization in EC (cont.)

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One-to-One Marketing and Personalization in EC (cont.)

Major strategies used to compile user profiles

Solicit information directly from the user

Observe what people are doing online

Build from previous purchase patterns

Perform marketing research

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One-to-One Marketing and Personalization in EC (cont.)

Cookie: A data file that is placed on a user’s hard drive by a Web server, frequently without disclosure or the user’s consent, that collects information about the user’s activities at a site

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One-to-One Marketing and Personalization in EC (cont.)

Collaborative filtering: A personalization method that uses customer data to predict, based on formulas derived from behavioral sciences, what other products or services a customer may enjoy; predictions can be extended to other customers with similar profiles

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One-to-One Marketing and Personalization in EC (cont.)

Variations of collaborative filtering:Rule-based filtering

Content-based filtering

Activity-based filtering

Legal and ethical issues in collaborative filteringInvasion-of-privacy issues

Permission-based personalization tools to request customer permission

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One-to-One Marketing and Personalization in EC (cont.)

Customer loyaltyCustomer loyalty: Degree to which a customer will stay with a specific vendor or brand

Increased customer loyalty produces cost savings through:

lower marketing costs

lower transaction costs

lower customer turnover expenses

lower failure costs

E-loyalty: Customer loyalty to an e-tailer

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One-to-One Marketing and Personalization in EC (cont.)

Trust in ECTrust: The psychological status of involved parties who are willing to pursue further interaction to achieve a planned goal

Trust is influenced by many variables

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One-to-One Marketing and Personalization in EC (cont.)

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One-to-One Marketing and Personalization in EC (cont.)

How to increase EC trustbetween buyers and sellers trust is determined by:

degree of initial success that each party experienced with EC and with each otherwell-defined roles and procedures for all parties involvedrealistic expectations as to outcomes from EC

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One-to-One Marketing and Personalization in EC (cont.)

Issues in personalizationbrand recognitionsecurity mechanisms help solidify trustdisclose and update latest business status and practices to potential customers and to build transaction integrity into the systemguarantee information and protection privacy through various communication channels