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Francis Buttle: Customer relationship management; Concepts and technologies – second edition

Customer relationship management – general

There are four types of CRM:

  • Strategic – focused upon development of a customer-centric business culture.
  • Operational – automates and improves customer-facing and customer supporting business processes.
  • Analytical – concerned with capturing, storing, extracting, integrating, processing, interpreting, distributing, using and reporting customer-related data to enhance both customer and company value.
  • Collaborative – is about strategic and tactical alignment of normally separate enterprises in the supply chain for the more profitable identification, attraction, retention and development of customers.

Companies are (according to Kottler) about product, production or selling, customer-centric approach is another potential business model.

Operational CRM is about sales force automation, marketing automation or service automation.

Models of CRM:

  • The IDIC model: identify, differentiate, interact and customize.
  • The QCi model: The model features people performing processes and using technology to assist in those activities.
  • The CRM value chain: The model has five primary stages (customer portfolio analysis, customer intimacy, network development, value proposition development and managing the customer lifecycle) and four supporting conditions (leadership, culture, data and IT, people and processes).
  • Payne’s five process model: Adrian Payne identifies five core processes (the strategy development process, the value creation process, the multichannel integration process, the performance assessment process and the information management process).


A relationship is composed of a series of interactive episodes between dyadic parties over time. Episodes are time bound (they have a beginning and an end) and are nameable. Each episode in turn is composed of a series of interactions. Interaction consists of action and response to that action. Relationship is a social construct; it exists if people believe in it.

Dwyler has five general phases through which customer-supplier relationship can evolve:

  • Awareness
  • Exploration
  • Expansion
  • Commitment
  • Dissolution

Trust and commitment are really important for relationship. Trust if focused. Reasons for trust can be: benevolence (acting in interest of others), honesty, competence. Trust phases can evolve: calculus-based trust, knowledge-based trust and identification-based trust. Commitment arises from trust, shared values and belief that partners will be difficult to replace.

Some customers may not be worth recruiting or retaining at all. Managing customer retention and tenure intelligently generates two key benefits for companies; reduced marketing costs and better customer insight.

There are seven stages of customer journey:

  • Suspect
  • Prospect
  • First-time customer
  • Repeat customer
  • Majority customer
  • Loyal customer
  • Advocate

LTV – lifetime value is a measure of a customer’s or customer segment’s profit generation for a company. LTV is a present-day value of all net margins earned from a relationship with a customer, customer segment or cohort. Reichheld and Sasser find out that margins tend to accelerate over time for four causes: revenue growth, cost-to-serve is lower, referrals are generated and higher prices are paid. Computation of meaningful LTV estimate requires companies to be able to forecast customer buying behavior, product and service costs and prices, the costs of capital (for determining the discount rate) and the costs of acquiring and retaining customers.

Reasons not to go into relationship with customers:

  • Loss of control
  • Exit costs
  • Resource commitment
  • Opportunity costs

Reasons to go into relationship with suppliers:

  • B2B
    • Product complexity
    • Product strategic significance
    • Service requirements
    • Financial risk
    • Reciprocity
  • B2C
    • Recognition
    • Personalization
    • Power
    • Risk reduction
    • Status
    • Affirmation

Reasons not to go into relationship with suppliers:

  • Fear of dependency
  • Lack of perceived value in the relationship
  • Lack of confidence in the supplier
  • Customer lacks relational orientation
  • Rapid technological changes

The satisfaction-profit chain is from customer satisfaction to customer loyalty to business performance.

Many direct marketing companies use RFM measures of behavioral loyalty. R – recency of purchases, F – frequency of purchases and M – monetary value of purchases. Variables are R – time elapsed since last purchase, F – number of purchases in a given time period, M – monetary value of purchases in a given time period.

KPI about business performance are about: people (learning and growth) do things (process) for customers (customer) that have effects on business performance (financial).

There are five main schools with perspectives on relationship between customers and supplier:

  • The Industrial Marketing and Purchasing school (IMP) – Relationships are composed of actor bonds, activity links and resource ties:
    • Actor bonds are interpersonal contacts between actors in partner firms that result in trust, commitment and adaptation between actors.
    • Activity links are the commercial, technical, financial, administrative and other connections that are formed between companies in interaction.
    • Resources are the human, financial, legal, physical, managerial, intellectual and other strengths or weaknesses of an organization.
  • The Nordic school – Christian Gronroos and Evert Gummesson. It identifies three major characteristics of commercial relationships: interactions, dialogue and value.
  • The Anglo-Australian school – Martin Christoper, Adrian Payne, Helen Pecka and David Ballantyne. Their Six-Market model is about six major stakeholder “markets”: internal (employee), supplier/alliance, recruitment (labor), referral (WOM advocates and cross-referral networks), influence (government, regulators, shareholders, business press) and customer.
  • The North American school – Morgan and Hunt’s Commitment -Trust Theory of Relationship Marketing. Trust is underpinned by shared values, communication, non-opportunistic behavior, low-functional conflict and cooperation. Commitment is associated with high relationship termination costs and high benefits.
  • The Asian (Guanxi) school – Guanxi is essentially, a philosophy for conducting business and other interpersonal relationship in the Chinese. Guanxi determines who can conduct business with whom and under what circumstances.

Planning and implementing projects

Key stages:

  • Develop the CRM strategy
  • Build project foundations
  • Specify needs and select partner
  • Implement the project
  • Evaluate performance

CRM strategy is about:

  • Situation analysis – good framework is customer strategy cube with three dimensions: market segments, market offerings and channels.
  • Commence education
  • Develop vision
  • Set priorities
  • Establish goals and objectives
  • Identify people, process and technology requirements
  • Develop the business case

Project foundations are about:

  • Identify stakeholders – management, marketing staff, salespeople, customer service agents, channel partners, customers and IT.
  • Establish governance structures
  • Identify change management needs (Kotter eight-step approach). Organizational culture – it is about a pattern of shared values and beliefs that help individuals understand organizational functioning and thus provide them with the norms for behavior in the organization.
  • Identify project management needs
  • Identify critical success factors – factors are variables and attributes that can significantly improve business outcomes
  • Develop risk management plan

Needs specification and partner selection is about:

  • Process mapping and refinement
  • Data review and gap analysis
  • Initial technology needs specification and research alternative solutions
  • Write request for proposals (RFP):
    • Instructions to respondents
    • Company background
    • The CRM vision and strategy
    • Strategic, operational, analytical and collaborative CRM requirements
    • Process issues
      • Customer interaction mapping
      • Process re-engineering
    • Technology issues
      • Delivery model – SaaS, on-premises, blended
      • Functionality required – sales, marketing and service
      • Management reports required
      • Hardware requirements and performance measures
      • Architectural issues
      • Systems integration issues
      • Customization requirements
      • Upgrades and service requirements
    • People issues
      • Project management services
      • Change management services
      • Management and staff training
    • Costing issues – TCO targets
    • Implementation issues – pilot, training, support, roll-out, timeline
    • Contractual issues
    • Criteria for assessing proposals
    • Timeline for responding to proposals
  • Call for proposal
  • Revised technology needs identification
  • Assessment and partner selection

Project implementation is about:

  • Refining project plan
  • Identify technology customization needs
  • Prototype design, test, modify and roll-out

CRM databases

Companies typically do not have a single customer database; instead, they have a number of customer-related databases. Operational data resides in OLTP database, analytical in OLAP database.

We can talk about files, records and fields (tables, rows and columns). Files (tables) are about single topic like customers, products, transactions or service requirements. Each table contains number of records (rows) and each record contains a number of elements of data. They are arranged as common sets of fields (columns).

We have primary and secondary data. Primary are the ones collected for the first time. Relational databases have one or more fields that provide a unique form of identification for each record. This is called the primary key. The customer’s unique identifying number enables linkages to be made between the various databases.

Data should be correct and there should be no missing data. Steps in ensuring accurate data are:

  • Source the data
  • Verify the data
  • Validate the data
  • De-duplicate the data
  • Merge and purge data from two or more sources

Data should be STARTS:

  • Shareable
  • Transportable
  • Accurate
  • Relevant
  • Timely
  • Secure

Data warehouses are repositories of large amounts of operational, historical and other customer-related data:

  • Subject-oriented
  • Integrated
  • Time-variant
  • Non-volatile

A data mart is a scaled down version, or subset, of the data warehouse customized for use in a particular business function or department.

There are three ways to get analytical view on data: standard reports, database queries and data mining. Standard report is generated periodically. OLAP allows drill down into data. Data mining in CRM context is the application of descriptive and predictive analytics to support the marketing, sales and service functions. Data mining can find associations, sequential patterns, you can use classifying, clustering and you can make predictions.

A set of principles that has served as foundation for personal data protection legislation around the world:

  • Purpose specification
  • Data collection processes
  • Limited application
  • Data quality
  • Use limitation
  • Openness
  • Access
  • Data security
  • Accountability

Rights of user are:

  • Notification
  • Explanation
  • Correction/deleting/blocking
  • Objection

Customer portfolio

A customer portfolio is the collection of mutually exclusive customer groups that comprise a business’s entire customer base. One of strategic CRMs fundamental principles is that not all customers can, or should, be managed in the same way, unless it makes strategic sense to do so.

Basic disciplines during CPM are:

  • Market segmentation
  • Sales forecasting
  • Activity-based costing
  • Customer lifetime value estimation
  • Data mining

Market segmentation is the process of dividing up a market into more-or-less homogenous subsets for which it is possible to create different value propositions. Competitors can be: benefit, product or geographic competitors.

Consumers can be grouped based on user attributes and usage attributes. The basic segmentation is for many B2B segmentation is the International Standard Industrial Classification (ISIC).

Sales forecasting can be done with:

  • Qualitative methods: customer surveys, sales team estimates
  • Time-series methods: moving average, exponential smoothing, time-series decomposition
  • Causal methods: leading indicators, regression models

Activity-based costing is about different types of costs:

  • Customer acquisition costs
  • Terms of trade
  • Customer service costs
  • Working capital costs

ABC is an approach to costing that splits costs into two groups: volume-based costs and order-related costs. Volume-based (product-related) and order-related (customer-related).

Coopers and Lybrand estimated that top 4 per cent of customers account for 29 per cent of profits.

Sunil Gupta and Donald Lehmann suggest that customer lifetime value can be computed as:

LTV = m(r/1+i-r)

With m – being margin, r -retention rate and i – discount rate. Discount rate is usually determined by average cost of capital WACC.

Data mining is creation of intelligence from large quantities of data. SAS promotes five-step process called SEMMA (sample, explore, modify, model, assess). SPSS has 5As (assess, access, analyses, act and automate). In CPM you can use: clustering, decision trees and neural networks. Two tools that are used for predicting future behaviors are decision trees and neural networks.

Strength of customer relationship:

  • length
  • volume of business
  • share of business customer has at supplier
  • personal
  • cooperation in product development
  • management distance (language and culture)
  • geographical distance

Strategically significant customers:

  • high future lifetime value customers
  • high volume customers
  • benchmark customers
  • inspirations
  • door openers

Seven core customer management strategies:

  • protect the relationship
  • re-engineer the relationship
  • enhance the relationship
  • harvest the relationship
  • end the relationship
  • win back the customer
  • start a relationship

Customer experience

Amazon mission is to deliver high quality end-to-end, order-to-delivery customer experience. Customer experience is the cognitive and affective outcome of the customer’s exposure to, or interaction with, a company’s people, processes, technologies, products, services and other outputs.

The idea of customer experience has its origins in the work of Joseph Pine and James Gilmore. They suggested that economies have shifted through four stages of economic development: extraction of commodities, manufacture of goods, delivery of services and staging of experiences.

Attributes of services (HIPI – heterogeneity, intangibility, perishability and inseparability):

  • Intangible-dominant: services are high in experience and credence attributes, but low on search attributes.
  • Inseparable: consumed at the same place as produced. Customer is involved in it.
  • Heterogeneous: produced by people, hard to guarantee the content and quality of a service encounter.
  • Perishable: cannot be held in inventory for sale at a later time.

Engagement is customer emotional and rational response to a customer experience.

Blueprints are graphical representations of business processes.

Experience clues which customers are exposed to or interact with. They include: communication, visual identity, product presence, co-branding, spatial environments, websites and electronic media and people.

A research in the USA indicates a clear connection between employee experience, customer experience and business results.

Features of CRM software that influence customer experience: usability, performance, flexibility and scalability.

Value for customers

Value is the customer’s perception of the balance between benefits received from a product or service and the sacrifice made to experience those benefits.

Customers make several types of sacrifice: money, search costs, psychic costs.

A value proposition is the explicit or implicit promise made by a company to its customers that it will deliver a particular bundle of value-creating benefits.

Customization has both cost and revenue implication. Giving customers’ choice has been the default strategy when companies have been unable to identify and meet customers’ precise requirements. Companies may make products, but customers do not buy products. Customers buy solutions to their problems. They buy benefits or, better said, they buy benefits or, better said, they buy the expectation of benefits.

Product-based value is created for customers through product innovation, additional benefits, product-service bundling, branding and product synergies.

There are two major perspective on service quality:

  • Quality is conformance to specification
  • Quality is fitness for purpose

A service guarantee is an explicit promise to the customer that a prescribed level of service will be delivered.

A service level agreement is a contractual commitment between a service provider and a customer that specifies the mutual responsibilities of both parties with respect to the services that will be provided and the standards at which they will be performed. Metrics used to measure performance of the supplier and compliance with SLA service standards:

  • Availability
  • Usage
  • Reliability
  • Responsiveness
  • User satisfaction

Service recovery includes all the actions taken by a company to resolve a service failure. Getting service right first time demonstrates reliability, but recovering well after service failure shows empathy and responsiveness.

Process of customer complaints handling is important.

Value also comes from people. Key account manager should have knowledge and attitude profile including selling skills, negotiating skills, communication skills, analytical skills, problem-solving skills, customer knowledge, market knowledge, competitor knowledge, customer orientation, as well as a detailed understanding of what their own company’s network can deliver.

Customer acquisition

Customer lifecycle activities:

  • Acquiring new customers
  • Retaining existing customers
  • Developing customer value

A customer can be new to the product category and new to the company.

When thinking about customer acquisition is about segmenting, targeting and prospecting. Leads are individuals or companies that might be worth approaching. The leads then need to be qualified.

Networking is the process of establishing and maintaining business-related personal relationships.

Advertising is the creation and delivery of messages to targeted audience through the purchase of time or space in media owned by others. It can be successful at achieving two different classes of communication objective: cognitive and affective. Cognition is concerned with what audiences know; affect is concerned with what they feel.

Consumer sales promotion:

  • Sampling
  • Free trials
  • Discounts
  • Coupons
  • Rebates of cash back
  • Bonus packs
  • Banded packs
  • Free premiums
  • Cross-promotions
  • Lotteries
  • Competitions

Merchandising is any behavior-triggering stimulus or pattern of stimuli other than personal selling that takes place at retail or other point-of-sale. It includes retail floor plans, shelf-space positioning, special displays, window displays and point-of-sale print.

A customer referral scheme (CRS), CRSs are also known as member-get-member (MGM) and recommend-a-friend (RAF) schemes.

Costs of customer acquisition are one-off costs that are not encountered again at any stage in a customer’s tenure. The costs might include prospecting costs, advertising costs, commissions to salespeople, collateral materials, sales promotion costs, credit referencing, supplying tangibles (credit cards) and database costs.

Operational CRM tools for customer acquisition:

  • Lead management – sales force automation (SPA) software helps B2B companies to manage the selling process. Some of the lead management approaches are the Customer-Centric Selling, Miller Heiman and Solution Selling methodologies. Lead management is about lead qualification, lead allocation and lead tracking.
  • Campaign management
  • Event-based marketing (EBM) – provides companies with opportunities to approach prospects at times which have a higher probability of leading to a sale.

Customer retention and development

A customer retention strategy aims to keep a high proportion of valuable customers by reducing customer defections (churn). We should know which customers will be targeted for retention, what customers retention strategies will be used and how will the customer retention performance be measured.

Customer retention is the number of customers doing business with a firm at the end of a financial year, expressed as percentage of those who were active customers at the beginning of the year.

The appropriate interval over which retention rate should be measured is not always one year. Rather, it depends on the customer repurchase cycle.

Sometimes companies have problem tracking customer due to: product silos, channel silos or functional silos. There are three measures of customer retention: raw customer retention rate, sales-adjusted retention rate and profit-adjusted retention rate.

Not all customers are worth keeping. Some may be value-destroyers, not value creators. Some of the reasons for customer retention are:

  • Increasing purchases as tenure grows
  • Lower customer management costs over time
  • Customer referrals
  • Premium prices

Customer retention drives up customer lifetime value. Negative customer retention strategies impose high switching costs on customers.

Companies should understand customers. This is why CRM is grounded on detailed customer-related knowledge. Customer delight occurs when the customer’s perception of their experience of doing business with you exceeds their expectations. There are three common forms of value-adding programs: loyalty schemes, customer clubs and sales promotions. Loyalty takes two forms: attitudinal and behavioral loyalty. Attitudinal loyalty is reflected in positive affects towards the brand or supplier. Behavioral loyalty is reflected in purchasing behavior.

Sales promotions:

  • In-pack or on-pack vouchers
  • Rebate or cash back
  • Patronage awards
  • Free premium for continuous purchase
  • Collection schemes
  • Self-liquidating premium

Bonding is one way to improve customer retention.

Types of bonds are:

  • Financial
  • Legal
  • Equity
  • Knowledge-based
  • Technological
  • Process
  • Values-based
  • Geographic
  • Project
  • Multi-product

Customer commitment has different forms:

  • Instrumental commitment
  • Relational commitment
  • Values-based commitment

Different contextual consideration impact on customer retention practices:

  • Number of competitors
  • Corporate culture
  • Channel configuration
  • Purchasing practices
  • Ownership expectations
  • Ethical concerns

Susan Keaveney identified eight causes of switching behaviors in service industry generally:

  • Price
  • Inconvenience
  • Core service failures
  • Failed employee responses to service failure
  • Ethical problems
  • Involuntary factors
  • Competitive issues
  • Service encounters failures

Some early warning signals for defections:

  • Reduced RFM scores
  • Non-response to a carefully targeted offer
  • Reduced level of customer satisfaction
  • Dissatisfaction with complaint handling
  • Reduced share of customer
  • Inbound calls for technical or product-related information
  • Late payment of an invoice
  • Querying an invoice
  • Customer touchpoints are changed
  • Customer change of address

Cross-selling is selling additional products and services to an existing customer. Up-selling is selling higher prices or higher margin products and services to an existing customer.

CRM technologies that are useful for customer development purposes:

  • Campaign management
  • Even-based marketing
  • Data mining
  • Customization
  • Channel integration
  • Integrated customer communications
  • Marketing optimization

Managing networks

Conventionally it has been the manufacturer or service provider that dominates business network. A business network is made up of nodal companies, organizations and individuals and the relationships between them.

In CRM recognizing need for collaboration means introducing PRM – partner relationship manager, the integration of websites for investor relationship, the management of relationship with employees (ERM) and through ERP the management of suppliers.

SCOPE – suppliers, customers, owners/investors, partners and employees.

Supplier network is important. Some companies use tier one supplier to manage whole network for certain areas. It is similar concept as category captains.

Tomas Ritter and his colleagues have developed the idea of “network competence” to describe the proficiency of companies in the twin tasks of managing both networks and individual relationships within networks.

Management of network is about: identify network requirements, acquire network expertise, manage network performance.

Network members can add to network by adding new customers or creating value-adds. Roles in network management are:

  • The network architects
  • The lead operator
  • The caretaker

The conflict and cooperation can coexist in strong relationships, they are not necessarily mutually exclusive.

Supplier and partner relationship

Excel is a global leader in providing supply chain solutions to the automotive industry.

Quality is sometimes very important factor in supplier relationship. Quality is the totality of features and characteristic of a product or service that bear on its ability to satisfy stated or implied needs. Once customers and suppliers make a commitment to each other, they may begin to look for opportunities to align their processes. Two processes are widely aligned: quality processes and the order fulfilment process.

EDI (electronic data interchange) delivers a number of strategic and operational benefits to companies.

Some of the trends in supplier relationship management:

  • Vendor reduction programs
  • Category management
  • Product development alliances
  • Electronic procurement

Vendor reduction programs benefits:

  • Reduced transaction costs
  • Additional volume discounts
  • Performance compliance (OTIFNE – on time (OT), in full (IF) and with no error (NE))
  • Increased technical cooperation

Category management is the management of a group of related or substitutable products as a single strategic business unit. It is also a management system that aims to reduce distance from customer to suppliers by managing product categories rather than individual brands in an environment of enhanced mutual trust and cooperation between manufacturer and retailer. Category managers are responsible for procurement, pricing and merchandising of all brands in category.

Taxonomy of business models in B2B e-commerce:

  • E-shops
  • E-procurement
  • E-mall
  • E-auctions
  • Third-party marketplaces

Partners in value creation: joint venture or alliance partners, category teams, benchmarking groups, regulators, customer advocacy groups and sponsors.

There are three main strategic motives behind alliances between non-competing firms: market expansion, vertical integration and vertical diversification. Between competitor alliances are about: shared supply alliances, quasi-concertation alliances and complementary alliances.

Benchmarking is a business improvement discipline involving the continuous, systematic evaluation of products, services and processes against organizations that are recognized as representing best practices.

Different types of partners in value delivery: agents, brokers, management contractors, consortia, franchisees and licensees.

Management contractors: consortia, franchisees and licensees.

In Japan organizational form keiretsu is known. It is a family of interlocked organizations, connected by common memberships on board of directors, shared banking arrangements and close personal relationships. Korea has chaebols.

Licensees are rights granted to a business partner to exploit intangible assets, such as technology, skills, designs or knowledge in exchange for remuneration such as fees or royalties.

Investor and employee relationships

Shareholder value can only be created if the business makes a return on investment that is greater than the weighted average of cost of the capital invested in the business (WACC).

CRM have a huge impact on shareholder value. It does so by creating and retaining profitable relationship with customers. Specific CRM competences influence shareholder value:

  • Target market selection
  • Customer acquisition
  • Customer retention
  • Customer development
  • Value proposition development
  • Technology implementation
  • Database management
  • Network management

Two main improvement of shareholder value is to sell more or to reduce cost-to-serve. Revenue generation is greater potential. It can be done through improving customer retention rate, grow share of category spending with cross and up-sell and introducing new categories to existing customers.

ROI for strategic CRM can be 3-5 years, operational CRM within 12-24 months, analytical almost immediately if data are accurate and available, collaborative can take two or more years.

Internal marketing is a planned effort to overcome organizational resistance to change and to align, motivate and integrate employees towards the effective implementation of corporate and functional strategies.

The connection between business performance, customer satisfaction and employee satisfaction were first spelt out in the service-profit chain, a model developed by a group of Harvard professors. Sears has their TPI (total performance indicator), measurement model that connects customer experience and employee experience with business performance.

IT for CRM

Building blocks of today’s CRM technology have been in place for several decades, including call centers, sales-force automation systems and customer information files (CIF). Single view of customer is about operational CRM.

We have enterprise-wide CRM suits and specialty suites. Service providers are about: strategy consulting, business consulting, application consulting, technical consulting and outsource service providers.

Main areas are marketing, sales and service and support. CRM deployment for marketing purposes enables customers or prospects to be segmented, lists to be generated, campaigns to be run and assessed and leads to be allocated. CRM sales applications typically support many different types of selling, ranging from complex selling in the business-to-business environment, business-to-consumers tele sales and browser-enabled self-service sales. The central element in CRM-enabled service is the service request or trouble ticket.

Partner relationship management is known as collaborative CRM.

CRM analytics has grown in importance over the last few years. Reporting can be standardized (predefined) or query-based (ad-hoc). OLAP (online analytical processing) has become an essential part of CRM. OLAP technologies allow warehouse data to be subjected to analysis and ad hoc inquiry.

Data mining provides considerable CRM analytical power that is highly valued in some industries. The data mining process seeks to identify patterns and relationships in the data, using selection, exploration and modelling processes.

There are two main types of integration: batch and real-time. Batch is technically simple than real-time.

CRM systems generally face four integration challenges:

  • Application integration – ties together the CRM system and other business systems, such as accounting, billing, inventory and human resources.
  • Telephony integration – ties the CRM application into the telephone system.
  • E-mail integration – streamlines communication with the customer
  • Web integration – can be a significant challenge.

Knowledge management is the organizational practice of consciously gathering, organizing, storing, interpreting, distributing and judiciously applying that knowledge to fulfill the mission of the organization. Six attributes of good quality data (STARTS): shareable, transportable, accurate, relevant, timely and secure.

Many customer-related processes can be predefined and automated in modern CRM applications. Automated workflow engineering applies to many CRM processes, including the following:

  • Service enquiry escalation
  • E-mail reponse
  • Lead assignment
  • Dialogue scripting
  • Log-in navigation
  • System integration

Sales-force automation

It is made up of three components: SFA solutions providers, hardware and infrastructure vendors and associated service providers.

SFA is the application of computerized technologies to support salespeople and sales management in the achievement of their work-related objectives.

SFA applications offer a range of functionality:

  • Account management
  • Activity management
  • Contact management
  • Contract management
  • Document management
  • Event management software
  • Incentive management
  • Lead management
  • Opportunity management
  • Order management
  • Pipeline management
  • Product encyclopedias
  • Product configuration
  • Product visualization
  • Proposal generation
  • Quotation management
  • Sales forecasting
  • Territory management
  • Workflow engineering

Marketing automation

Marketing automation is the application of computerized technologies to support marketers and marketing managers in the achievement of their work-related objectives.

Marketing automation benefits:

  • Enhanced marketing efficiency
  • Greater marketing productivity
  • More effective maketing: closed-loop marketing (CLM), CLM is based on a plan-do-measure-learn cycle.
  • Enhanced responsiveness
  • Improved marketing intelligence
  • Improved marketing intelligence
  • Improved customer experience

Marketing automation functionality:

  • Asset management: what customers purchase, license, use, install or download. Track and identify.
  • Campaign management:
    • Workflow
    • Segmentation and targeting
    • Personalization
    • Execution
    • Measurement
    • Modelling
    • Reporting
  • Customer segmentation: methods used – cluster analysis, discriminant analysis, classification and regression threes (CART) and chi-square automatic interaction detection (CHAID).
  • Direct mail campaign management: making the right offer to the right person at the right time in the right way will produce greater success.
  • Document management
  • E-mail campaign management
  • Enterprise marketing management: it encompasses the business strategy, process automation end technology required to operate a marketing department effectively, align resources, execute customer-centric strategies and improve marketing performance.
  • Event-based marketing
  • Internet marketing
  • Keyword marketing
  • Lead generation
  • Loyalty management
  • Market segmentation
  • Marketing analytics: a cross-sectional analysis involves description at a single point of time. Longitudinal analyses involve repeated data collection about the same variables over time. Three types of analytics: standard reports, OLAP and data mining. Data mining used for: scores, predictions, descriptions, profiles.
  • Marketing optimization: goal oriented.
  • Marketing performance management
  • Marketing resource management: planning and budgeting, product launch, event calendaring, event planning and registration, project management, campaign planning, collateral production, digital asset management, expense and budget management, time management, media buying and procurement.
  • Partner marketing
  • Product lifecycle management
  • SEO
  • Telemarketing: autodialing, predictive dialing, automated voice-messaging, contact list management, agent management, do not call compliance, screen pop with caller ID, scripting, including objection response, computer-aided telephone interviewing (CATI), interactive voice response (IVR)
  • Trigger marketing
  • Web analytics

Service automation

Fred Wiersema talks about six common attributes for excellent customer services:

  • Customer service is pervasive
  • Their operations run smoothly with minimal product and service defects rates
  • Always looking for improvement
  • Customer service lies at the heart of value proposition
  • They build personal relationship with customers
  • They employee the latest IT

Service automation is the application of computerized technologies to support services staff and management in the achievement of their work. Service automation is used in five major contexts:

  • Contact centers
  • Call centers
  • Helpdesks
  • Field service
  • Web self-service

Service automation benefits:

  • Enhanced service effectiveness
  • Greater service productivity
  • Improved customer experience

Service automation functionalities:

  • Activity management
  • Agent management
  • Case assignment
  • Case management
  • Contract management
  • Customer self-service
  • E-mail response management
  • Escalation
  • Inbound communications management
  • Invoicing
  • Job management
  • Outbound communications management
  • Queuing and routing
  • Scheduling
  • Scripting
  • Service analytics
  • Service level management
  • Spare parts management
  • Web collaboration
  • Workflow engineering

Organizational issues and CRM

Some of the roles using CRM:

  • Sales representative are: deliverer, order taker, missionary, technician, demand creator and solution vendor.
  • Account manager: serving nominated customers or groups of customers.
  • Marketing manager: their core goal is to manage demand. They take care of target market selection and value proposition development.
  • Market analyst
  • Campaign manager
  • Market manager
  • Customer relationship manager
  • Customer service agent

Some of the organizational structures:

  • Functional structure
  • Geographical structure
  • Product, brand or category structure
  • Market or customer structure
  • Matrix structure (geography against industry; market or customer against product)

Motivation to adopt key account management structure:

  • Concentration of buying power
  • Globalization
  • Vendor reduction programs
  • More demanding customers
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