This document provides an introduction to customer relationship management (CRM). It discusses key CRM concepts like understanding customers, touch points of interaction, and market segmentation. It emphasizes the importance of customer retention and measuring customer satisfaction. It also covers challenges like dealing with unhappy customers and adopting new technologies. The overall message is that CRM involves strategically managing all customer interactions to improve relationships and business outcomes.
2. Welcome!
Everyone can can understand CRM since we are all
customers at times.
CRM is one of the most lucrative areas with billions
of dollars spent.
A good CRM focus is often the difference between
success and failure.
You can use many of these ideas to improve your
life and increase your work successes.
I’ve done it, and I believe in it.
3. Initial Vocabulary
CRM – Customer Relationship Management
Let’s jump right in and…
deepen your understanding,
show some real life complexities,
give you a scope and vision
4. Introduce yourselves
Turn around and introduce yourselves to
your neighbors behind you
Ask them what other words they might use to
mean a customer?
Ask them the difference between a customer and
a client?
Can the roles change with customers?
5. What customer?
Is a ‘client’ the same as ‘customer’ ?
Different people use different words.
Sometimes they mean the same thing, sometimes not.
Homonyms and synonyms.
Good starting point is to collect all the words used
for customer and build a common vocabulary.
It improves efficiency and understanding when
people use the same words to mean the same thing.
At a minimum, it will expand your understanding
of the customer idea
Microsoft
PowerPoint Presentation
8. Tree Swing – discussion points
of marketing - add unnecessary value, add complexity, bells and whistles, embellish, put
their own mark onto things, fanciful, impractical, untested, untried, creativity for
creativity's sake, subjective not objective, theoretical not practical, clever ideas, think they
know what's best for the customers even if the survey feedback is utterly clear, fail to
consult with engineering, production and anyone else in the organisation.
of management - cost-conscious, process-led rather than output-aware, failure to
understand and interpret real issues and implications, failure to ask questions, committee
decisions produce impractical solutions, removed from reality, detached from customers
and front-line staff, failure to consult with users and functional departments.
of engineering - technical interpretation rather than practical, unconcerned with aesthetics
and ergonomics, consideration stops after the 'can we build it?' stage, lack of consultation
with specifiers and user representatives, meets specification but doesn't work properly,
inappropriate materials and absence of styling.
of manufacturing - production specification over-rides design considerations, a law unto
themselves, you get what you're given, any colour you like as long as it's black, detached
from users, specifiers, designers, and everyone else except other manufacturing staff,
unconcerned with usability or functionality, certainly unconcerned with bells and whistles
and added value, totally focused on production efficiency, cost and time, lack of liaison
with all other departments.
of customers - if only we'd listened, understood, and checked with them once in a while...
9. What Is “CRM”
Customer Relationship Management
Becoming a common and important concept in
many industries
Beyond mere ‘Contact Management’
Knowing the customer and the Touch points
Single undertaking view of customers
Most industries have CRM software to help sales
process, on-going service, and even accounting
10. The Value of CRM
Gain more control in interaction with customers
Manage expectations better
Increase trust
Competitive advantage
Provide products that better serve customers
Understand what customers really want
Understand the nature of customer service
11. Customer Definitions
External Customers
- Customers we do business with outside our organization.
Internal Customers
- The people we work with throughout our organization.
Customer Attributes
- Characteristics that allow customers to be categorized
according to demographic, psychographic, or firmographic
information.
12. Demographic Information
Characteristics such as:
age sex
income ZIP code
marital status occupation
education household size
stage in the family life- mobility patterns
cycle ethnic background
home ownership religion
13. Psychographic Information
lifestyles culture
modes of living social class
needs family influences
motives hobbies
attitudes political affiliation
reference groups etc.
14. Firmographic Information
Characteristics about a company such as:
how many employees they have;
the kind of business they are in;
whether they are retail, wholesale, or a service
provider;
their hours of operation
15. Why Is Excellent Customer
Service so Rare?
Customer service is rare because it requires
two things that the average person and
organization are unwilling to commit to:
Spending money
Taking action
16.
17. The Five Needs of Every Customer
1. Service
2. Price
3. Quality
4. Action
5. Appreciation
18. From the Customer’s Perspective
What Is Customer Service?
- Anything we do for the customer that enhances the customer
experience.
What is Customer Satisfaction?
- The customer’s overall feeling of contentment with an interaction.
What is Customer Expectations?
- Customer’s personal vision of the result that is based on their
experience.
What is Customer Perceptions?
- The way customer’s see something based on their experience
19. Levels of Expectations
Primary expectations: the customer’s most
basic requirements of an interaction.
Secondary expectations: expectations based
on our previous experiences that are
enhancements to our primary expectations.
20. Reputation Management
The process of identifying how a
company is perceived and establishing
an action plan to correct, maintain, or
enhance the company’s reputation.
21. A Company with a Good Reputation
Is very responsive to customers
Is a company you can trust
Delivers on its promises to customers
Provides excellent value to customers
Has excellent communications
Is ethical and honest
Conducts business in a human/caring way
Has excellent top management
Is able to adapt to changes in the industry
Is a technological leader in the industry
Is committed to the environment
22. Techniques for Exceeding
Customers’ Expectations
Become familiar with your customers.
Ask your customers what their expectations
are.
Tell your customers what they can expect.
Live up to their expectations.
Maintain consistency.
23. Credibility
Made up of the combination of our current
knowledge, reputation, and professionalism.
24. Tips for Cultivating Credibility
Practice consistency
Keep your word
Develop your expertise
Become a teammate with your co-workers
Show your dedication to customers
Treat all of your customers and co-workers with the
same high level of respect
Apologize if you are wrong
Remember that credibility is much harder to regain
than it is to keep
25. Discussion
What are some examples of customer service?
What are some issues about customer service?
26.
27.
28. New Trends in Customer Service
Accessibility for the customer
Immediacy of response
Feedback from customer to customer service
provider
Outsourcing of all or part of customer service
functions
Non-traditional examples of customer service
29. Cost of Losing a Customer
We lose the current dollars that our business
relationship created.
We lose the jobs that our clients provide.
We may suffer from a loss of reputation.
We may lose the intangible variable of
future business.
30. Customer Intelligence
The process of gathering information;
building a historical database; and
developing an understanding of current,
potential, and lapsed customers.
31. Sources of
Customer Intelligence
Method by which customers choose to
conduct business
Time of day that customers have questions
Depth of their expected interactions
Purchasing patterns
Expectations
32. Methods of Communication
Listening: The ability to hear and understand what the
speaker is saying.
Writing: Communicating by using the written word so
that others can understand the intended message.
Talking: Speaking, using words and terminology that
others can comprehend.
Reading: The ability to look at and comprehend the
written word.
Non-verbal communication: Tone and inflection of voice,
facial expressions, posture, and eye contact. Nonverbal
communication can contradict the message conveyed
through another method of communication.
33. Challenging Customers
Those customers with problems, questions,
fears, and personalities that require us to
work to achieve true communication.
34. Discussion Questions
What are some characteristics
of challenging customers?
How do avoid creating
challenging customers?
37. Empathy
The ability to understand what someone is
experiencing and to take action to assist in
resolving the situation.
38. Responsibility Check
Assessing a situation and determining who
should have responsibility and who really
does have the responsibility.
39. What To Do When You Are Wrong
Review the situation.
Observe the customer’s reaction.
Admit the mistake.
Apologize for your actions or error.
Find a solution and implement it.
40. Six Superb Ways to Cope with
Challenging Customers
1. Listen
2. Ask questions
3. Show empathy
4. Solve the problem
5. Follow up
6. End on a positive note
41. Payoffs of Coping with
Challenging Customers
By learning to cope with challenging
customers, we become more effective
and efficient assets to our company and
the job that we were hired to perform!
46. Customer Lifetime Value
The net present value of the profits a
customer generates over the average
customer life.
47. Determining the Need for
Customer Relationship Program
Is customer retention your primary management objective?
Is customer satisfaction measured and assessed regularly?
Is there a constant effort to enhance customer satisfaction?
Do you measure quality standards and communicate results with
your employees?
Do you train and retrain your customer service providers?
Do you have employee turnover problems?
How much do you spend to keep current customers?
What is your current cost for acquiring a customer?
What is your average annual customer dollar value?
What is your current customer defection rate?
How do you get lost customers back?
Do you constantly deliver what you promise to your customers?
48. Guidelines for Establishing a
Customer-Relationship Program
1. Examine who your customers are and what
specific needs they have.
2. Identify specific objectives to be realized by the
program.
3. Create a manageable program of customer
retention.
4. Create a culture that stimulates customer interest.
5. Determine a timetable for evaluation.
49. Sources of Information to
Measure Customer Satisfaction
Informal surveys
Comment cards
Verbal comments
Historical data (point of sale)
Sales
Corporate generated surveys
Discussions with internal customers
Focus groups
Toll-free phone numbers
Customer intelligence information
50.
51. What Measurement of Satisfaction
Means to Your Business
Customer relationships are deepened
Customers know that we are
interested in them and their wants
Improved product and service
offerings
Customer retention
52. What Today’s Customers
Expect
Availability: Services designed to meet the
customer’s schedule.
Accessibility: When the customer needs to
talk, the provider can be reached.
Accountability: Customers prefer quick and
accurate answers to service questions.
53. Steps for Introducing New
Technologies
Prepare your staff.
Train supervisors and team leaders first and get
them to buy in.
Develop a group of “change champions.”
Sell your vision.
Praise successful use of the new technology.
Resist the temptation to complain.
Celebrate small successes.
Avoid the “shelfware syndrome.”
54. A Working Definition…
“The Plan and Practice of managing the lifetime
relationship with your customer.”
“The Plan”: Every successful endeavor requires
proper planning. Successful CRM rarely happens
by chance. Many organizations jump to
implementation w/o proper planning.
“The Practice”: Systematic implementation of
your plans. Should produce measurable results.
Should be evaluated and refined over time.
55. A Few Basic CRM Concepts…
Touch Points
Each time your company interacts with a
customer is a touch point.
Can you name a few Touch Points for hotel guest?
56. Guest Touch Points
First Call/Internet Visit
Pre-arrival
Check-In/Check-Out
Post stay thank you
Newsletters, Interest Lists
All marketing materials
57. Touch Points
Are they planned? Managed? Documented?
Are all “touchers” properly trained? Enroll
your complete staff in the vision.
Any way to increase the effectiveness of the
touch?
Any way to increase the number of touches?
58. A Few Basic CRM Concepts…
Market Segmentation
Do you treat all of your guests the same?
Are they?
Consider the difference between a guest that stays once
ever in a 2 bedroom cottage and a guest that has stayed
each of the last 10 years in a 6 bedroom home
We shouldn’t treat the one-timer badly, they may
come back many more times
We should realize that the higher value guest deserves
the best that we can offer.
59. Market Segmentation Examples
Saks Fifth Avenue
High value customers ($2000/yr) are routed to
special CSR’s.
The calls are routed such that a high value
customer is connected to a CSR in one second or
less.
Could we coin a new acronym here:
HVG – High Value Guest?
60. General Statistics
The average business never hears from 96% of its unhappy
customers,
91% never come back
Those people will tell a minimum of 4 other people,
Getting a repeat customer from this group is 1 in 11,
Dissatisfied customers may tell 9-10 people about their
experience,
For every positive they tell 4-5 people,
For every complaint received the average business in fact has 26
customers with the similar concern,
61. General Statistics…
Of the customers who register a complaint, as many as 70%
will do business again with your organization if the
complaint is resolved effectively,
This figure goes up to 95% if the complaint has been
resolved quickly,
40% of complaints are the result from customer mistakes or
incorrect expectations,
A complaint that is handled efficiently is actually better than
no complaint at all,
Customers who complain and get satisfactory results are
8% more loyal than if no complaint at all,
62. Why customers quit - how to win
customers and keep them for life
1% die
3% move away
5% develop other friendships
9% leave for competitive reasons
14% are dissatisfied
68% quit because of an attitude of
indifference
63. Operational &Analytical
CRM
Operational CRM: effective and efficient use and
management of people, process and technology
Analytical CRM: the measurement of people, process and
technology
71. CRM means Dealing with the
People Aspect of the Project
If the word “excellence” is to be applicable in the future, it
requires a redefinition. Excellent companies don’t believe in
excellence – only in constant improvement and change. Excellent
companies will know how to cherish chaos and thrive on change.
-- Tom Peters, Thriving on Chaos
75. Qualifying Prospects for
Relationship Building
High
Use a non Build a strong
customized and lasting
approach relationship
Opportunities
for adding value
Seek better Focus on
opportunities loyalty-building
elsewhere program
Low
Low Potential profitability of customer High
76. Customer Lifetime Value
R = annual revenue received from a loyal customer
I = the relevant interest rate or opportunity cost of money per period
N = the number of periods in which a customer makes purchases
77. Customer Lifetime Value
Go to www.benchmarkportal.com
to download the excel spreadsheet
to calculate Customer Life time Value
79. CRM Misconceptions
CRM is the solution that will solve a
company’s customer problems
CRM is the Internet
CRM means scoring and measuring customer
value
CRM is a sales person productivity tool
80. CRM Summary
CRM is the strategic use of information,
processes, technology and people to manage
the customer’s relationship with a company’s
(marketing, sales, services and support)
across the entire customer cycle.
The Plan and Practice of managing the
lifetime relationship with your customer
81. CRM Summary
CRM focuses on strategic impact rather than
operational impact
CRM is a total discipline
CRM includes all functions that directly
touch the customer throughout their entire
lifetime with a company