Introducing Analytical Strategic Frameworks for CRM
At the end of this article, readers should be able to discuss analytical strategic frameworks in CRM in terms of:
- Business strategy
- Customer strategy
- Lifetime Value Analysis
- Data Repository
- It Systems
- Front Office and Back Office Applications
CRM is a management approach that seeks to create develop and enhance a relationship with carefully targeted customers CRM should be viewed as a strategic set of activities that commences with a detailed review of an organisation’s strategy and concludes with an improvement in shareholder value. The notion that competitive advantage stems from the creation of value for the customer and for the company is the key to the success of CRM. This demands that responsibility for value delivery is shared across functions and her archives.
Because CRM is a cross-functional activity. it can be difficult to withal a systematic approach. most companies today recognize that their future depends on the strength of their business relationships, and most crucially, their relationships with customers. before turning immediately to technology solutions, managers need to first consider CRM in the context of overall business strategy. CRM must actively reflect and reinforce the wider goals of the business if it is to be successful.
The strategy development process, therefore, demands a dual focus on the Organisation’s business strategy and its customer strategy
BUSINESS STRATEGY AS PART OF ANALYTICAL STRATEGIC FRAMEWORKS IN CRM
A comprehensive review of the business strategy to provide a realistic platform on which to construct the CRM strategy, as well as general recommendations for general improvement. The organisation needs to fully understand its own competencies within a competitive context in order to be able to transfer them to the customer as customer value.
CUSTOMER STRATEGY AS PART OF ANALYTICAL STRATEGIC FRAMEWORKS IN CRM
The other half of the strategy equation is deciding which customers the business wants most to attract and to keep, and which customers it would prefer to be without. While the prior review of business strategy will be instrumental in reaching a judgment on broad customer focus, consideration of customer strategy will help to refine customer selection. This will frequently require a reappraisal of the way in which customers are approached and segmented and the way in which resources are allocated.
The value creation process is concerned with transforming the outputs of the strategy development process into programmes that both extract and deliver value. The value creation process consists of three key elements:
- Determining what value the company can provide to its customers.
- Determining the value of the organisation receives from its customers.
- Successfully managing this value exchange, maximizing the lifetime value of desirable customer segments.
The value the customer receives from the supplier organisation is the total package of benefits derived from the ‘core’ product and the added value that enhance the basic features such as service and support. The aim is to create a value proposition which is superior to and more profitable than those of competitors. To determine if the value proposition is likely to result in a superior customer experience.
It is necessary to quantify the relative importance that customers place upon the various attributes of a product.
Analytical tools such as trade-off analysis can be applied to discover the importance given to each attribute by the customer.
The pursuit of customers must be based on a sound understanding of how acquisition cost very at both the segment and channel levels. In many instances, customer acquisition can be improved through insights drawn from the value proposition and the value assessment.
Research findings have also clearly linked retention to profitability while the financial implications of emphasizing customer retention to an extent greater than customer acquisition are significant, remarkably few companies have reacted to benefit from this knowledge.
Customer segment lifetime value analysis
To decide the relative amount of emphasis that should be placed on customer acquisition and customer retention, it is necessary to understand acquisition and retention economics at the segment, or better yet, a micro-segment or individual level. The key metric used to evaluate customer profit potential is customer lifetime value.
Data reposition as part of Analytical Strategic frameworks in CRM
The data repository provides a powerful corporate memory of customers, an integrated enterprise-wide data store capable of relevant data analyses. It consists of databases and a data warehouse, and where appropriate a collection of related data marts that ensure the maximum value is extracted from customer information.
IT SYSTEMS AS PART OF ANALYTICAL STRATEGIC FRAMEWORKS IN CRM
It systems refer to the computer hardware and the related software and middleware used within the organisation. It systems must be able to deliver the information needed on customers both now and in the future and to accomplish other administrative duties. The Organisation’s capacity to scale existing systems without disrupting business operations is critical.
Front Office and Back Office Applications
Front office applications are the technologies used to support all those activities that involve direct interface with customers, including sales force automation and call centre management including sales force automation and call centre management.
These applications are used to increase revenues by improving customer retention and raising sales closure rates. Back-office applications support internal administration activities and supplier relationships, involving human resources, procurement, warehouse management, logistic, software and some financial processes. The overriding concern about back and front office systems is that they are sufficiently connected and coordinated to optimize customer relations and workflow.
WHAT ONLINE PORTALS ADDRESS
There are three basic categories of people who can benefit from customer-centric collaboration. These include internal enterprise users, external customers or clients, and external suppliers or partners.
A portal served as an integration point for all other channels. It is also a point of expression of the work how and business processes that defines a particular role.
One of the core benefits of collaborative CRM in any enterprise is that they support portals. Most vendors of partials support, the three scopes of portals which are employees, customer, and partners.
Each of these categories has its own portals, performing their own roles. The portals allowed the users to access the organization, it also serves as a means of integrating services, analytics and every other thing that users want to display.
Portals provide operational and analytical information and processes to a broad set of users both inside and outside the enterprise.
Some of the typical ROI benefits that are expected when an organization opens portals include:
- Increased Sales
- Print/Mail Cost Saving
- Travel Saving
- HR Benefit Enrollment
- Customer Contract Management.
The internet allows the organization to extend business processes to customers and partners in order to collaborate together in order to increase customer experience. This will help in promoting the profitability of customers through an increase in satisfied customers.
The uses of portals also encourage information dissemination among stakeholders. It helps to connect all those departments that deal with customer relations and help the enterprise to achieve the ultimate value of CRM, which is customer satisfaction and profitability.
Note: Portals focus on providing a single point of access to enterprise information assets and aggregates people, information, application and business processes.
Employee portals are collaborative CRM components that consolidate customer information gathered by sales, marketing, and service departments to deliver a complete view of the customer to the enterprise.
The employee portals help to turn every point of interaction with customers into a revenue opportunity. It gathers information from the front offices about customers and uses that information in formulation products and packages that will satisfy customers’ interest.
Employee portals facilitate targeted marketing campaigns, Creates account plan strategies, forecast new sales opportunities and rapidly respond to customer service inquiries.
Portals also allow employees to have access to the centralized database of customers which will allow them to maximize products and provide relevant information from other business applications.
This is achievable through the integration of all necessary date from the corporate website, market research, and other relevant data about customers and their behavior. It also incorporates other tools such as web collaboration, product configuration, knowledge bases, expense reporting among others in a unified portal.
You should know that information needs about customers varied from one department to the other. Employee portals can be customized to meet the need of various departments or individuals. This can help in increasing end-user productivity by shirting only that information that is relevant to the job at hand.
The objective of customer portals is to transfer the organization’s website into a sophisticated, intelligent customer interface. They seek to optimize the effectiveness of online interactions and expand customer relationships through a convenient website that can capture customer’s information.
Note: Customers’ portals enable customers and prospects to access information and obtain service quickly and independently.
Customers portals help the organization to reduce the cost of doing business and strengthen their customer relationship efforts through ti, they are able to make CRM application available online and effectively reach out to prospects and customers. They are also able to serve, themselves online.
Through customers’ portals, organization are able to capture prospects and customers’ information. It also enables the organization to conduct targeted marketing in order to increase sales opportunities.
It also gives customers the opportunity to carry out products and services research. They can research and resolve problems online in real-time. Above all, customer portals have a very essential role to play in building better customer experience.
Partner Relationship Management (PRM) is a business strategy that is meant to improve the relationship between companies and their channel partners. Partners, online portals are a business solution for organizations that do rely on an indirect channel such as partners in order to reach their final consumers.
Partner portals allow the organization to include their partners and suppliers as part of their sales team. It allowed them to share potential leads among their partners. They are able to share lead information about new sales opportunities with their partners using a rules-based routing and escalation.
Note: Sharing sales pipeline information aids in managing and monitoring of channel sales processes for improved planning and forecasting.
Online Portals features such as online catalogs handle partners requests for self-service training, literature, fulfillment enables partners to order sales and marketing collateral from the web, online product configuration empowers partners to configure custom products for customers online and online order processing allows partners to easily place orders with the enterprise over the web.
PARTNERS ONLINE PORTALS
Online product configuration
Online order processing.
At the end of this lesson, we have discovered that:
- CRM is a management approach that seeks to create and develop and enhance relationships with carefully targeted customers.
- Without a systematic approach, CRM will be very difficult.
- An organisation must focus on their business and customer strategy in order to attain CRM objective.
- Customer strategy has to do with deciding on which calibre of customers the organisation wish to attract and the best ways of attracting them.
- The pursuit of customers must be based on a sound understanding of how acquisition cost vary at both the segment and the channel levels.
- Research has also shown that the more you are able to retain your customer, the more profitable your organisation will be
- Data repository are corporate memory of customers database.
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