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ITM 309

Customer Relationship Management

Dr. Frederick Rodammer Michigan State University

Eli Broad College of BusinessRodammer@bus.msu.edu

November 10, 2008

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Today’s Learning Objectives

• Understand the CRM technologies used by sales departments, customer service departments, and marketing departments

• Discuss Ritz-Carlton Case• Identify the primary forces driving the explosive

growth of customer relationship management• Summarize the best practices for implementing

customer relationship management systems• Compare CRM, SRM, PRM, and ERM

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CLOSING CASE THREERitz-Carlton

• What are the two different types of CRM and how has the Ritz-Carlton used them to become a world-class customer-service business?

• Explain ERM and describe how the Ritz-Carlton could use it to increase efficiency in its business.

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Customer RelationshipManagement: Definition

The use of information technology to create a cross-functional enterprise system that integrates and automates many of the customer-serving processes in sales, marketing, and customer services that interact with a company’s customers

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Operational and Analytical CRM

• Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers

• Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers

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USING IT TO DRIVE ANALYTICAL CRM

• Analytical CRM information examples1. Give customers more of what they want

2. Value their time

3. Overdeliver

4. Contact frequently

5. Generate a trustworthy mailing list

6. Follow up

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Using IT to Drive Operational CRM

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Marketing and Operational CRM

• Three marketing operational CRM technologies:

1. List generator – compiles customer information from a variety of sources and segment the information for different marketing campaigns

2. Campaign management system – guides users through marketing campaigns

3. Cross-selling and up-selling• Cross-selling – selling additional products or

services• Up-selling – increasing the value of the sale

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CRM EXPLOSIVE GROWTH

CRM Business Drivers

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CRM SUCCESS FACTORS

• CRM success factors include:1. Clearly communicate the CRM strategy

2. Define information needs and flows

3. Build an integrated view of the customer

4. Implement in iterations

5. Scalability for organizational growth

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CRM Failures

• Lack of understanding and preparation

• Rely on CRM to solve business problem without first developing the business process changes and change management programs that are required

• CRM projects implemented without the participation of the business stakeholders involved

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CURRENT TRENDS: SRM, PRM, AND ERM

• Current trends include:– Supplier relationship management (SRM) –

focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection

– Partner relationship management (PRM) – focuses on keeping vendors satisfied by managing alliance partner and reseller relationship that provide customers with the optimal sales channel

– Employee relationship management (ERM) – provides employees with a subset of CRM applications available through a Web browser

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FUTURE CRM TRENDS

• CRM future trends include:– CRM applications will change from employee-only

tools to tools used by suppliers, partners, and even customers

– CRM will continue to be a major strategic focus for companies

– CRM applications will continue to adapt wireless capabilities supporting mobile sales and mobile customers

– CRM suites will incorporate PRM and SRM modules

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ITM 309 Homework

• Assignment #5 due November 19-20

• Read Baltzan - Chapter 10