1. Chapter 11
Achieving Customer Intimacy
Through Customer Relationship
Management
9.1
© 2010 by Prentice Hall

2. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
What is customer relationship management?
 Knowing the customer
•
In large businesses, too many customers and too
many ways customers interact with firm
 Customer relationship management (CRM) systems
•
•
Consolidate and analyze customer data
•
Distribute customer information to various systems
and customer touch points across enterprise
•
9.2
Capture and integrate customer data from all over
the organization
Provide single enterprise view of customers
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3. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
Customer Relationship Management (CRM)
CRM systems examine
customers from a
multifaceted
perspective. These
systems use a set of
integrated applications
to address all aspects
of the customer
relationship, including
customer
service, sales, and
marketing.
Figure 9-7
9.3
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4. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
CRM software packages
•
More comprehensive packages have modules for:
1) Partner relationship management (PRM)
2) Employee relationship management (ERM)
•
Most packages have modules for
1) Sales force automation (SFA): Sales prospect and contact
information, and sales quote generation capabilities; etc.
2) Customer service: Assigning and managing customer service
requests; Web-based self-service capabilities; etc.
3) Marketing: Capturing prospect and customer data, scheduling
and tracking direct-marketing mailings or e-mail; etc.
9.4
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5. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
How CRM Systems Support Marketing
Customer
relationship
management
software provides a
single point for users
to manage and
evaluate marketing
campaigns across
multiple
channels, including
e-mail, direct
mail, telephone, the
Web, and wireless
messages.
Figure 9-8
9.5
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6. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
Customer Relationship Management Helps Chase Card
Services Manage Customer Calls
Read the Interactive Session: Organizations
and then discuss the following questions:
• What functions of customer relationship management
systems are illustrated in this case?
• Why is the call center so important for Chase Card
Services? How could Chase’s call centers help it
improve relationships with customers?
9.6
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7. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
Customer Relationship Management Helps Chase Card
Services Manage Customer Calls (cont.)
•
•
How did using Enkata improve operational performance
and decision making? Give examples.
•
9.7
Describe the problem at Chase call centers. What
management, organization, or technology factors
contributed to the problem?
What management, organization, or technology factors
would have to be considered in implementing the
Enkata solution?
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8. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
CRM Software Capabilities
The major CRM
software products
support business
processes in
sales, service, and
marketing, integratin
g customer
information from
many different
sources. Included
are support for both
the operational and
analytical aspects of
CRM.
9.8
Figure 9-9
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9. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
Customer Loyalty Management Process Map
Figure 9-10
This process map shows how a best practice for promoting customer
loyalty through customer service would be modeled by customer
relationship management software. The CRM software helps firms
identify high-value customers for preferential treatment.
9.9
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10. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
Operational CRM:
• Customer-facing applications such as sales force
automation, call center and customer service
support, and marketing automation
 Analytical CRM:
• Analyze customer data output from operational
CRM applications
• Based on data warehouses populated by
operational CRM systems and customer touch
points
• Customer lifetime value (CLTV)
9.10
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11. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
Analytical CRM Data Warehouse
Figure 9-11
Analytical CRM
uses a customer
data warehouse
and tools to
analyze customer
data collected
from the firm’s
customer touch
points and from
other sources.
9.11
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12. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems
Business value of customer relationship
management
•
Increased customer satisfaction
•
Reduced direct-marketing costs
•
More effective marketing
•
Lower costs for customer acquisition/retention
•
Increased sales revenue
•
Reduced churn rate
•
Churn rate:
•
•
9.12
Number of customers who stop using or purchasing
products or services from a company.
Indicator of growth or decline of firm’s customer base
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13. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Enterprise Applications: New Opportunities and Challenges
Enterprise application challenges

Highly expensive to purchase and implement enterprise
applications – total cost may be 4 to 5 times the price of
software

Requires fundamental changes
•
Technology changes
•
Business processes changes
•
Organizational changes


9.13
Incurs switching costs, dependence on software vendors
Requires data standardization, management, cleansing
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14. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Enterprise Applications: New Opportunities and Challenges
Next generation enterprise applications
•
•
•
•
9.14
Enterprise solutions / suites:
• Replacing stand-alone enterprise, CRM, SCM
systems
• Make these applications more flexible, Webenabled, integrated with other systems
Open-source and on-demand applications
• SaaS, Salesforce.com
Service platform: Integrates multiple applications to
deliver a seamless experience for all parties
• Order-to-cash process
Portals:
• Increasingly, new services delivered through portals
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15. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Enterprise Applications: New Opportunities and Challenges
Figure 9-12
Order-to-Cash Service
Order-to-cash is a
composite
process that
integrates data
from individual
enterprise
systems and
legacy financial
applications. The
process must be
modeled and
translated into a
software system
using application
integration tools.
9.15
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16. END
9.16
© 2010 by Prentice Hall

17. 7 ELEVEN
Through making transactions and
conditions in general easier and
more user friendly for both
customers and suppliers, the
intimacy of the firm and
customer/supplier will increase.
This offers great incentive for both
customer and supplier to continue
doing business with the firm. The
example, 7-Eleven store has
information systems that provide
such superior customer service
and network reliability.
9.17
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18. Over time, the company moved away from its roots,
losing touch with customers along the way. It had no
means of knowing what sold in each store and allowed
vendors to decide what to stock on its shelves.
In 2004, 7-Eleven installed Hewlett-Packard servers and
networking switches in all its U.S. stores to implement a
Retail Information System. This system collects data
from point-of-sale terminals in every store about each
purchase made daily by its six million U.S customers and
transmits the information in real time to a 7-terabyte
Oracle database operated by Electronic Data Systems
(EDS).
9.18
© 2010 by Prentice Hall

19. Management uses this information to identify sales trends,
improve product assortment, eliminate slow-moving products
from inventory, and increase same-store sales by stocking
products that are high in demand. Insights gleaned from the
data also help 7-Eleven develop new products such as its freshfood offerings that attract new customers and increase
transaction size.
The system consolidates these orders and transmits them to 7Eleven’s suppliers. Orders are consolidated four times daily,
one for each U.S. time zone in which 7-Eleven stores operate. 7Eleven’s orders for fresh food items are aggregated at 7-Eleven
headquarters and transmitted to fresh food suppliers and
bakeries for preparation and delivery the next day.
9.19
© 2010 by Prentice Hall