CHAPTER 11
1.Describe customer relationship management and its role in supporting business operations.
CRM
is a means of managing all aspects of a customer's relationship with an
organization to increase customer loyalty and retention and an
organization's profitability.
The role of CRM in supporting business operations are:
-allows an organization to gain insights into customers' shopping and buying behaviors.
-A
CRM system consists of a historical view and analysis of all the
acquired or to be acquired customers. This helps in reduced searching
and correlating customers and to foresee customer needs effectively and
increase business.
-CRM
contains each and every bit of details of a customer, hence it is very
easy for track a customer accordingly and can be used to determine which
customer can be profitable and which not.
-In
CRM system, customers are grouped according to different aspects
according to the type of business they do or according to physical
location and are allocated to different customer managers often called
as account managers. This helps in focusing and concentrating on each
and every customer separately.
-A
CRM system is not only used to deal with the existing customers but is
also useful in acquiring new customers. The process first starts with
identifying a customer and maintaining all the corresponding details
into the CRM system which is also called an ‘Opportunity of Business’.
The Sales and Field representatives then try getting business out of
these customers by sophistical following up with them and converting
them into a winning deal. All this is very easily and efficiently done
by an integrated CRM system.
-The
strongest aspect of Customer Relationship Management is that it is very
cost-effective. The advantage of decently implemented CRM system is
that there is very less need of paper and manual work which requires
lesser staff to manage and lesser resources to deal with. The
technologies used in implementing a CRM system are also very cheap and
smooth as compared to the traditional way of business.
-All
the details in CRM system is kept centralized which is available
anytime on fingertips. This reduces the process time and increases
productivity.
-Efficiently
dealing with all the customers and providing them what they actually
need increases the customer satisfaction. This increases the chance of
getting more business which ultimately enhances turnover and profit.
-If
the customer is satisfied they will always be loyal to you and will
remain in business forever resulting in increasing customer base and
ultimately enhancing net growth of business.
2.Identify the benefits and challenges of CRM.
The benefits of CRM are :
1.Storing data centrally creates a company-wide user network
CRM
focuses the whole company on the customer. All areas and departments –
from Sales, Marketing, Customer Service, Accounting, the Switchboard,
through to Management – use one standard, centralized CRM solution.
Depending on their individual rights, employees can access information
in other departments, enabling them to work together effectively and
efficiently. This results in structured, automated process throughout
the company.
2.Customer
dossiers provide all the information
Customer dossiers
are the foundation of professional customer care. They provide you with
a 360 degree view of all your customer's information: appointments,
tasks, telephone notes, correspondence, sales opportunities, complaints,
orders, delivery notes and projects. The result: your employees are
always well informed and can always provide professional advice and make
informed decisions.
3.Customer knowledge reveals potential for development Knowing what customers and the market
want is essential for further developing products and improving
services. Customer profiles provide the best source of information,
whether in sales or customer service. Multidimensional analysis
highlights correlations and is used to identify potential for further
development
4.Efficient
and motivated employees provide the best service
Acceptance
among employees and consistent focus on the customer are the key to the
successful deployment of a CRM system. Those who use a software
solution to keep up to date on their customers, perform routine tasks
more efficiently, make informed decisions and delegate tasks to
specialists, have more fun at work and are more motivated. Customers can
sense it – they appreciate friendly, competent staff.
5.Communicative measures depend on customer value
Demands
and potential vary from customer to customer and they therefore require
personalized interaction. This interaction depends on the customer's
value to the company. Customers are segmented according to their value
and the appropriate marketing and service measures are then agreed on.
This enables your sales force to operate more efficiently, recommend the
right product at the right time, and up- and cross-sell, thereby
achieving better results. This way no sales opportunities are missed.
The challenges of CRM are :
1.The
expensive costs that occur when implementing the system. It is a huge
investment to maintain a customer database. The additional expense comes
from the money needed for the computer hardware, software, and
personnel that is needed to maintain it. These exorbitant costs can lead
to a negative vibe within the company and can result in a CRM
collapse.
2.Inadequate
focus on objectives. This typically occurs after the CRM system is
implemented. When hard times hit, the organization may lose sight of its
goals and eventually steer away from the clearly laid out objectives.
Goals may get interchanged
and ultimately lose their original importance.
3.The
insufficient resources. Organizations start lessening their budgets for
the current phase in order to handle the initial exorbitant costs.
Organizations tend to fail at utilizing the necessary resources for
success and that can result in failure.
4.Inappropriate
metrics also cause a dilemma in a CRM system. Organizations constantly
fail to use the right metrics. Failure to chose the right method of
measurement is a main reason of why this system may not work. Different
metrics implement different goals.
Question 1
Why is it important for any company to use CRM strategies to manage customer information?
-will provide better customer service.
-it will increase customers cost revenue.
-customer can make call centers more efficient.
-it will help sales staff close deals faster with customers.
-company will identify cross sell products more effectively.
Question 2
If
the virtual world is the first point of contact between a company and
its customers, how might that transform the entire shopping experience?
It will be positive and negative effects for both parties.
Positive side :
-it more easy to make conversation and transaction.
-the communication will be more effective because customer can face to face with seller.
-the customers can give comments or critics in front of the virtual tools.
Negative side:
- higher cost in maintenance.
- customers will not know or difficult to determine the actual products.
- if having problem in machine technician it will be difficult to making conversation.
