• Learn everything about your customers.
• Conduct focus groups to ensure that they want self-service.
• Define clear business goals.
• Evaluate the technology for its technical and financial merits.
• Does it match your customer base? Will it boost profitability?
• Learn everything about your customers.
• Conduct focus groups to ensure that they want self-service.
• Define clear business goals.
• Evaluate the technology for its technical and financial merits.
• Does it match your customer base? Will it boost profitability?
Thursday, February 17, 2011
Friday, February 11, 2011
What causes CRM projects to fail?
Many things. From the beginning, lack of a communication between everyone in the customer relationship chain can lead to an incomplete picture of the customer. Poor communication can lead to technology being implemented without proper support or buy-in from users. For example, if the sales force isn't completely sold on the system's benefits, they may not input the kind of demographic data that is essential to the program's success. One Fortune 500 company is on its fourth try at a CRM implementation, primarily because its sale force resisted all the previous efforts to share customer data.
As the largest health insurance provider in New York, Empire manages more than 29,000 corporate employer accounts, of which about 26,700 are small to midsize companies employing 50 people or fewer. Empire services these "community rated" employers via some 1,800 registered independent sales brokers. Because each customer's needs are different, brokers must produce customized coverage estimates for each one. For example, some companies want preferred provider plans, and some want health maintenance plans. Each plan has different "riders," or options, attached, such as vision care or prescription coverage.
As the largest health insurance provider in New York, Empire manages more than 29,000 corporate employer accounts, of which about 26,700 are small to midsize companies employing 50 people or fewer. Empire services these "community rated" employers via some 1,800 registered independent sales brokers. Because each customer's needs are different, brokers must produce customized coverage estimates for each one. For example, some companies want preferred provider plans, and some want health maintenance plans. Each plan has different "riders," or options, attached, such as vision care or prescription coverage.
the impact of CRM on the organisation
Implementing a CRM strategy will have far-reaching implications across your
organisation, from back-office functions (such as finance and logistics) through
customer-facing activities (such as sales, marketing and service) and beyond to
suppliers and partners. The enterprise-wide implications must be fully understood
before organisations embark on a CRM project.
The cultural implications of CRM are significant. Historically,many projects have failed,
despite effective IT implementations, because people-related issues have not been
tackled.
organisation, from back-office functions (such as finance and logistics) through
customer-facing activities (such as sales, marketing and service) and beyond to
suppliers and partners. The enterprise-wide implications must be fully understood
before organisations embark on a CRM project.
The cultural implications of CRM are significant. Historically,many projects have failed,
despite effective IT implementations, because people-related issues have not been
tackled.
Are there any indications of the need for a CRM project?
Not really :)
But one way to assess the need for a CRM project is to count the channels a customer can use to access the company. The more channels you have, the greater need there is for the type of single centralized customer view a CRM system can provide.
How long will it take to get CRM in place?
A bit longer than many software salespeople will lead you to think. Some vendors even claim their CRM "solutions" can be installed and working in less than a week. Packages like those are not very helpful in the long run because they don't provide the cross-divisional and holistic customer view needed. The time it takes to put together a well-conceived CRM project depends on the complexity of the project and its components.
How much does CRM cost?
A recent (2001) survey of more than 1,600 business and IT professionals, conducted by The Data Warehousing Institute found that close to 50% had CRM project budgets of less than $500,000. That would appear to indicate that CRM doesn't have to be a budget-buster. However, the same survey showed a handful of respondents with CRM project budgets of over $10 million.
What are some examples of the types of data CRM projects should be collecting?
• Responses to campaigns
• Shipping and fulfillment dates
• Sales and purchase data
• Account information
• Web registration data
• Service and support records
• Demographic data
• Web sales data
But one way to assess the need for a CRM project is to count the channels a customer can use to access the company. The more channels you have, the greater need there is for the type of single centralized customer view a CRM system can provide.
How long will it take to get CRM in place?
A bit longer than many software salespeople will lead you to think. Some vendors even claim their CRM "solutions" can be installed and working in less than a week. Packages like those are not very helpful in the long run because they don't provide the cross-divisional and holistic customer view needed. The time it takes to put together a well-conceived CRM project depends on the complexity of the project and its components.
How much does CRM cost?
A recent (2001) survey of more than 1,600 business and IT professionals, conducted by The Data Warehousing Institute found that close to 50% had CRM project budgets of less than $500,000. That would appear to indicate that CRM doesn't have to be a budget-buster. However, the same survey showed a handful of respondents with CRM project budgets of over $10 million.
What are some examples of the types of data CRM projects should be collecting?
• Responses to campaigns
• Shipping and fulfillment dates
• Sales and purchase data
• Account information
• Web registration data
• Service and support records
• Demographic data
• Web sales data
What is CRM
CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. After all, good customer relationships are at the heart of business success. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.
What is the goal of CRM
The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. If it works as hoped, a business can
• 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
That sounds rosy. How does it happen
It doesn't happen by simply buying software and installing it. For CRM to be truly effective, an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs.
Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. Solid CRM systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. For example, if someone has a mortgage, a business loan, an IRA and a large commercial checking account with one bank, it behooves the bank to treat this person well each time it has any contact with him or her.
What is the goal of CRM
The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. If it works as hoped, a business can
• 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
That sounds rosy. How does it happen
It doesn't happen by simply buying software and installing it. For CRM to be truly effective, an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs.
Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. Solid CRM systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. For example, if someone has a mortgage, a business loan, an IRA and a large commercial checking account with one bank, it behooves the bank to treat this person well each time it has any contact with him or her.
Tuesday, February 01, 2011
CRM-The Technology
Technology is used to automate procedures, provide better information and to transform
entire business processes (Dedrick et al., 2003). These capabilities include not only
hardware and software, but also the technical and managerial expertise required to
provide reliable physical services and extensive electronic connectivity within and
outside a firm
Information on customers is critical to developing and maintaining customer
relationships. While small organizations with very few customers find it relatively easy to
collect and use relevant information in building customer relationships, larger
organizations find this practically impossible to do. Thus, information technology,
initially in the form of the database, was regarded as ‘an agent of surrogacy to be enlisted
to help marketers to re-create the operating styles of yesterday’s merchants’
entire business processes (Dedrick et al., 2003). These capabilities include not only
hardware and software, but also the technical and managerial expertise required to
provide reliable physical services and extensive electronic connectivity within and
outside a firm
Information on customers is critical to developing and maintaining customer
relationships. While small organizations with very few customers find it relatively easy to
collect and use relevant information in building customer relationships, larger
organizations find this practically impossible to do. Thus, information technology,
initially in the form of the database, was regarded as ‘an agent of surrogacy to be enlisted
to help marketers to re-create the operating styles of yesterday’s merchants’
CRM and TQM
It is worth considering in this section another contemporary organizational management
discipline that has a strong connection with and is similar to CRM, that is, Total Quality
Management. TQM is a set of management techniques that became popular in the
1980’s The basic principles provide significant contribution to many CRM fundamental concepts.
The four essential dimensions that comprise the practices and techniques of TQM) are:
1. Establish a customer focus – customer satisfaction behaviours and attitudes must be
inculcated into all areas of the organization.
2. Implement continuous improvement practices – procedures and processes must be in
place to allow and encourage continuous self-assessment and adjustment.
discipline that has a strong connection with and is similar to CRM, that is, Total Quality
Management. TQM is a set of management techniques that became popular in the
1980’s The basic principles provide significant contribution to many CRM fundamental concepts.
The four essential dimensions that comprise the practices and techniques of TQM) are:
1. Establish a customer focus – customer satisfaction behaviours and attitudes must be
inculcated into all areas of the organization.
2. Implement continuous improvement practices – procedures and processes must be in
place to allow and encourage continuous self-assessment and adjustment.
CRM: The Philosophy
Marketing practitioners and scholars have strongly recommended striving for close
relationships with customersOver the years many organizations have been compelled to accept this conclusion.
Most notable among these are the beliefs that existing customers are more profitable because
the acquiring and attracting of new customers is expensive, and that it is less costly to upsell
or cross-sell products or services to current customers . One of the most important studies conducted in this field is
by Reichheld and Sasser (1990), which showed the large impact on profitability of small
increases in customer retention rates, which made the marketing community more
conscious of the need to manage customer relationships in the long term as well as prior
to the first sale.
relationships with customersOver the years many organizations have been compelled to accept this conclusion.
Most notable among these are the beliefs that existing customers are more profitable because
the acquiring and attracting of new customers is expensive, and that it is less costly to upsell
or cross-sell products or services to current customers . One of the most important studies conducted in this field is
by Reichheld and Sasser (1990), which showed the large impact on profitability of small
increases in customer retention rates, which made the marketing community more
conscious of the need to manage customer relationships in the long term as well as prior
to the first sale.
Organization of the Thesis
The remainder of the thesis is organized as follows:
Chapter two reviews the literature on CRM and proposes the CRM conceptual model to
be used for the current study.
Chapter three details the research methodology used and the reasons for each decision
made by the researcher.
Chapter four reports the first stage of the analysis and includes a detailed write-up on the
central case study, Ford of Britain.
Chapter five reports the detailed write-ups on the three banks analyzed in the current
study
Chapter six reports the detailed write-ups on both Saudi airline and Standard life.
Chapter seven reports the detailed write-ups on the two small family businesses in the
current study: Bahrawi and Noortech.
Chapter eight reports the second stage of the analysis, the cross-case analysis and its
results.
Chapter nine discusses and interprets the research findings along with the conclusions
and some managerial implications.
Chapter two reviews the literature on CRM and proposes the CRM conceptual model to
be used for the current study.
Chapter three details the research methodology used and the reasons for each decision
made by the researcher.
Chapter four reports the first stage of the analysis and includes a detailed write-up on the
central case study, Ford of Britain.
Chapter five reports the detailed write-ups on the three banks analyzed in the current
study
Chapter six reports the detailed write-ups on both Saudi airline and Standard life.
Chapter seven reports the detailed write-ups on the two small family businesses in the
current study: Bahrawi and Noortech.
Chapter eight reports the second stage of the analysis, the cross-case analysis and its
results.
Chapter nine discusses and interprets the research findings along with the conclusions
and some managerial implications.
Outline of Research Methodology and Data Analysis
Qualitative research methods are designed to help researchers understand people and the
social contexts within which they live. Kaplan and Maxwell (1994) argue that the goal of
understanding a phenomenon from the point of view of the participants is largely lost
when textual data is quantified. Since one of the major reasons for doing qualitative
research is to gain more experience with the phenomenon under study in order to
investigate complex and sensitive issues, the researcher adopted qualitative methods to
understand and explore CRM initiatives in their real-life context.
The approach in the case study is an empirical inquiry that investigates a contemporary
phenomenon within its real-life context, especially when the boundaries between
phenomenon and context are not clearly evident (Yin, 2002) Since the case study is an
ideal methodology when a holistic, in-depth investigation is needed
social contexts within which they live. Kaplan and Maxwell (1994) argue that the goal of
understanding a phenomenon from the point of view of the participants is largely lost
when textual data is quantified. Since one of the major reasons for doing qualitative
research is to gain more experience with the phenomenon under study in order to
investigate complex and sensitive issues, the researcher adopted qualitative methods to
understand and explore CRM initiatives in their real-life context.
The approach in the case study is an empirical inquiry that investigates a contemporary
phenomenon within its real-life context, especially when the boundaries between
phenomenon and context are not clearly evident (Yin, 2002) Since the case study is an
ideal methodology when a holistic, in-depth investigation is needed
Research Objectives and Questions
The central research question for this study is:
Why and how do CRM initiatives succeed or fail?
The above question is pivotal because the results of research in this success/failure area
will contribute to the building of thriving customer relationships, thereby contributing
substantially to corporate survival.
In order to obtain topical and valid answers to the above question, the researcher decided
to divide it into four subsidiary questions, the sum of which would constitute the crux of
the question above. These are:
RQ1: What are the critical success factors of CRM initiatives?
RQ2: What are the common difficulties when adopting a CRM initiative?
RQ3: What does CRM mean for different organizations?
RQ4: Is CRM the right solution for every organization?
Why and how do CRM initiatives succeed or fail?
The above question is pivotal because the results of research in this success/failure area
will contribute to the building of thriving customer relationships, thereby contributing
substantially to corporate survival.
In order to obtain topical and valid answers to the above question, the researcher decided
to divide it into four subsidiary questions, the sum of which would constitute the crux of
the question above. These are:
RQ1: What are the critical success factors of CRM initiatives?
RQ2: What are the common difficulties when adopting a CRM initiative?
RQ3: What does CRM mean for different organizations?
RQ4: Is CRM the right solution for every organization?
Thursday, January 27, 2011
What kinds of companies use CRM software?
If you probe and would like to understand what kinds of companies use CRM, you are unlikely to get any specific names. This is so, because customers are the kings in any business. Whether you are part of a bank, an insurance company, a retail outlet or a manufacturing entity, you need to understand that customers define your business. Using a CRM software will mean that you care for them and are ready to go the extra mile to offer them things, even before they ask for it.
Companies need to realize that CRM software helps in bridging three of the main elements in any business – people, process and technology. There needs to be a process in order to ensure that things take care of themselves. Any business is built around people. Lastly, technology helps you to get things closer.
Small companies use CRM software to help them manage things efficiently. Research tells us that only about 3% of sales happen in your first ever meeting. The % is slightly increased when you meet your customers 2 or 3 times. Eventually, it could take anywhere between 5 and 10 meetings to get a customer. However, this is a time taking process and you need to measure how long it will take for you to go through the entire process from solicitation to sales closure. Unless you have CRM software in place to give you the metrics, things could become rather difficult. Most number of start-up companies use CRM software applications too.
Lastly, big companies and conglomerates find varied uses for CRM applications. These include relationship building with customers, tracking sales processes, analyzing their High Net worth individual customers. Finally, whether you are a small size firm or a huge corporation, it all boils down to adding value!
What is the price range for CRM software?
There are many companies waiting to grab a fair share of the CRM software space. Microsoft, Oracle and SAP are some of the big names that most of us are aware of. In a bid to woo customers, they seem to be offering software applications at great prices. Depending on the kind and size of the company, you may manage to have something installed for as low as USD 5000. However, if you are looking at seasoned players, you may end up shelling amounts as high as USD 500,000.
Apart from this, there are some players who are willing to offer this on a subscription basis, just like how you would rent a library book. You just need to become a member to utilize the services. You do not need to worry too much about maintenance and service related issues. The vendor would be more than glad to take care of these issues on your behalf. Subscriptions as low as USD 130 – USD 150 are possible.
Most vendors focus on making you become first time users. This, they realize, would be possible only if they offer you a significantly low price. Moreover, every company would have different requirements from a CRM tool. While someone would want to manage accounts, someone else might just be interested in customer features. Another company might just place emphasis on the sales process. As a result of increased competition and diverse requirements by different companies, most vendors offer trial packages that may be used for a month or so for as low as USD 35. Once you are satisfied, you may choose to buy the packages.
Lastly, there are companies that use an incremental method of pricing. You may get a basic package for USD 40 or so, some extra applications for an extra 10 dollars or a complete range for USD 70 or so per month per user.
Why should a company use CRM?
CRM – The key to managing your business better!
The customer is the most important visitor in your office. Most companies do realize this fact and know for a fact that their customers have to be kept happy at all times, to ensure that they don’t stay in business, but keep growing every year.
Investing in a tool that could help a company manage its customers is something that requires no second thoughts about. A CRM application has been designed exclusively for this purpose. CRM – customer retention management is something that every company needs to keep in mind. Managing customers is absolutely vital, since it would cost you at least 7 times more to have a new customer! In addition to this, a satisfied customer is the best salesman that a company could ever dream of. Companies are also aware of the factor that good news spreads really fast. Hence, taking steps to keep your customers would mean increased business at the end of the day – through them and through their contacts as well.
There are different contact management software applications that have been developed. These ensure that the net profitability of the company goes up, unnecessary overheads are nipped right at bud, relationships with customers are enhanced and results are quantified.
Most of the time, the sales team puts in loads of efforts. However, having an effective CRM application would help the management understand where they are scoring and where they are missing out. Apart from this, it would give the management a clear example of what needs to be to ensure that the customers graduate from being happy customers to delighted customers.
A CRM application could be installed in office or be web-based. Sales people keep traveling most of the time. Hence, a web-based application would allow them to plan their day more effectively, manage sales leads better, pull out sales data even if they are at home or on a holiday and to follow up with customers at the right time.
Most CRM tools allow you to have a tracking or a queuing system that lets you make phone calls based on priority. Moreover, you can record the status, record and analyze your calls, automatically set reminders etc. Whether you are prospecting, generating leads, forecasting or qualifying your leads, nothing could be more effective than a CRM tool. Several vendors like SAP, Microsoft and Oracle have come out with CRM applications to help you manage your business better. Install them and see your business grow at a rate you never imagined!
CRM – Manage Your Business Better
How would you feel if you had a system that tells you how to manage your customers, clients and your sales deals? Great, isn’t it? Well, there are plenty of software applications available in the marketplace. These have been launched, since businesses have started understanding that managing customers and taking active steps to retaining them is the key to running a successful business?
So, what exactly is CRM and how does it benefit a company? CRM – Customer retention management is a process that helps corporations manage their customers more effectively by having certain processes in place. Most of the time, the sales team has data. The data is quite varied, since the sales team has to follow too many steps, right from the time of making the first contact to closing the deal.
A CRM tool allows the sales team to manage data, to have a look at their customer lists, understand how many clients need to be managed etc. In short, the application allows the sales team to access any data pertaining to their customers. Apart from managing individual customers, businesses will be able to manage groups of customers with ease using a software application.
Most managers believe that almost 80% of the data that is available is never used by their managers. If something like CRM software is in place, chances of the date being used would significantly go up. Sales people need not waste time remembering when they made their first call, when to keep in contact with their client next, how often to follow-up etc.
These CRM tools serve not just the sales associates, but the sales managers too. It allows managers to streamline the available data, allocate territories, in order to ensure that one member gets credit for something that isn’t actually due or someone does not barge into someone else’s territory etc. It also allows sales managers to make sales plans more effectively, since they would be able to understand the ‘sales cycle’ completely. By sales cycle, it refers to the total time it takes to make someone a customer, the number of phone calls made, personal visits, samples handed out etc.
There are different kinds of CRM software packages available in the marketplace. However, what price you pay for the same depends on what package you opt for and who you choose to buy it from. Ideally, it would make business sense to choose a basic package and keep adding to it, as you feel the need to graduate to advanced levels.