To assist in better understanding the mission of CRM, it might be useful to sketch out a map of the functions associated with CRM found in the typical organization.
As will be discussed, CRM is not concerned with a particular aspect of customer management, but actually encapsulates several related business processes and tech-nologies and directs them to search for ways to optimize the customer experience.
As detailed in Figure 5.1, the customer is the fulcrum of all CRM processes and acts as the centrifugal force attracting the customer value-producing functions of the firm. Clustered around the customer are seven critical technology-driven processes.
EBS
◾ . The enterprise business system (EBS) provides the “backbone” for all aspects of customer management. A firm’s EBS consists of five critical appli-cations. The pivotal customer-facing application provided by an EBS is the customer database. The database contains a complete profile of the customer,
from contact information and accounts receivable data to order management and shipping preferences. The second application, transaction maintenance, enables the entry and maintenance of sales orders and today is often driven by Internet-driven shopping functions. The results of sales transactions are then kept in the sales history file for use by standard EBS reporting functions and CRM analytical tools. The third application is the availability of easily configurable yet very powerful displays of the status of open and closed sales orders. In the fourth component, information, the EBS provides sales manage-ment personnel with visibility to such data files as pricing, promotions, and inventory balances. Finally, the EBS contains financial detail used for accounts receivable balance information, payment aging, interest charges, collections, insurance, and financial analysis.
Web Systems.
◾ More and more of today’s forward-looking companies provide their customers with easy to use Web sites. Effectively constructed Web sites enable customers to visit catalogs, enter orders, review pricing, configure orders, participate in auctions, and perform a host of self-service functions from order status review to online learning.
Marketing.
◾ The ability to communicate product, brand, service, and company information is at the heart of customer management. Marketing’s role is to identify the wants and needs of the customer, determine which target mar-kets the business can best serve, decide on the appropriate mix of products, services, and programs to offer these markets, and generally motivate the organization to continuously focus on optimal customer service. In addition, marketing is concerned with identifying what value each customer expects to
Customers
EBS
ApplicationsCRM Web
systems Service
External data Analytics
Marketing
Figure 5.1 CRM management sphere.
receive from the company’s products and services, what are the firm’s selling, campaign, and pricing strategies, and how to generate profits by ensuring customer satisfaction.
External Data.
◾ The ability to sustain competitive leadership requires the con-tinuous unfolding of collaborative relationships both within the organization and across resellers, suppliers, and channel support partners. Information from these internal and network nodes are critical in devising everything from promotional/product bundling, financing, and packaging design, to fulfillment, merchandising, and transportation.
CRM Applications.
◾ CRM technology can be separated into three segments.
The first, operations CRM, consists of the traditional functions of customer service, ordering, invoicing/billing, and sales statistics found in the EBS backbone. This also includes e-CRM Internet-driven applications like portals and exchanges, e-mail, EDI, SFA, and wireless customer management. The second, collaborative CRM, focuses on channel spanning functions such as forecasting and process design. The third segment, analytical CRM, consists in the capture, storage, extraction, reporting, and analysis of historical cus-tomer data.
Analytics.
◾ Effective management of the customer requires a way to access accu-rate and timely business intelligence. Information can come from sales activities and can include databases containing customer prospecting, product lists, and payment data. It can also come from marketing and can include information such as sales revenues, customer segmentation, campaign responses, and pro-motions history. Finally, information used for analysis and reporting can come from service and can consist of customer contacts, support request incidents, and survey responses. Business intelligence, or as some say, data warehousing, however, is not the same thing as CRM. The difference, according to Dyche [6], is that CRM “integrates information with business action.” The goal of CRM analytics is to deploy the ability to act on the data and analysis mined from customer and marketing repositories to improve business processes so that they are more customer-centric.
Service.
◾ The last component in the cluster of CRM functions is CSM. Being able to efficiently and effectively respond to the customer after the sale is critical in keeping current customers and acquiring new ones. Whether they are termed contact centers, CIC, or customer care centers, companies have increasingly come to realize that the strength of their support functions is instrumental in enriching their customer relationships. Recently, Internet and other communications technologies have been applied to the service function in the form of automated contact centers, computer telephony integration, CTI Web-based self-service, cyberagents, and electronic service surveys.
The goal of CRM is to provide a 360-degree view of the customer. The cluster of CRM components attempts to provide companies with an understanding of who
their customers really are, what they value in a business relationship, what solutions they wish to buy, and how they want to interact in the sales and service process. An accurate and intimate knowledge of each customer’s behavior, preferences, and sales history will significantly assist businesses move their customers from being simply buyers of goods and services to loyal partners who keep coming back for more to value chain collaborators who see their suppliers as the primary contact node in an integrated, seamless channel focused on total customer satisfaction.