3.09 PPT Relationship Management


Nov 20, 2013 (4 years and 7 months ago)


Indicator 3.09

Understand the nature of customer
relationship management to show its
contributions to a company.


Customer relationship management (CRM)

Strategies, processes, and policies used by businesses
to build, maintain, and maximize the long
term value
of customer relationships

Helps businesses to understand and respond to
customers’ changing needs

Emphasizes positive, meaningful, and long
communication and interaction with customers

Involves the collection of customer information to
draw conclusions about the customer’s needs and
wants as well as predict the customer’s loyalty and
value in the future

Explain goals of customer relationship
management (CRM)

To maximize the value and effectiveness of all customer touch points

Touch points: All the opportunities that businesses have to connect with
customers and reinforce their brand value

To provide outstanding service to customers

To maximize customer satisfaction

To attract and retain loyal customers

To cultivate and maintain positive, profitable relationships with customers

To develop individualized relationships with customers

To gather and track information about customers for use in business

To understand customers and their needs so that these needs can be
fulfilled in a manner satisfactory to customers and businesses

To develop products that meet or exceed customer expectations

To increase business profit

To develop a competitive advantage

Describe common CRM processes

Campaign management (usually conducted by the marketing

Targeting prospective customers

Distributing promotional materials to targeted prospects

Tracking response to promotional materials

Generating leads for sales

Sales management (sometimes divided into lead management,
offer management, and contract management)

Recording lead information

Qualifying leads

Prioritizing leads

Contacting leads

Making sales

Describe common CRM processes

Service management

Providing after
sales services, such as:

Maintenance and repair services

Warranties and guarantees

Retaining customers

Complaint management

Receiving customer complaints

Resolving customer problems

Communicating customer complaints to the organization

Retaining customers

Discuss the use of customer
information in customer relationship


By gathering and organizing customer
information, a business can better determine
and fulfill its customers’ needs and wants.

Customer information is also used to identify
the most profitable, loyal customers. After
identifying these customers, the business may
provide higher, better service to these
customers to maintain their loyalty and
increase their profitability.

Discuss the nature of customer
relationships in today’s society

Because customers now have so many
different choices in the marketplace, they
have become more selective about whom
they do business with. When given the choice
to do business with one of two businesses
that sell nearly identical products at similar
prices, customers often choose to purchase
from the business that offers better customer
service. As a result, customers’ expectations
for customer service are higher.

Describe the role of customer experience
management (CEM) in customer
relationship management (CRM).

The business world has become increasingly focused on the
customer versus the product.

Many businesses have adopted customer
centric attitudes
and strategies.

centric strategy: A plan of action used by businesses
that shifts the focus from businesses and their products to
customers and their needs

An important component of CRM is customer experience
management (CEM).

Customer experience management (CEM): Strategies,
processes, and policies used by businesses to meet or exceed
customer expectations for service and to provide customers
with outstanding experiences/interactions at every touch point
throughout their business transactions

Explain the impact of organizational
structure on customer relationship


The organization should be structured so that
customers have “seamless,” easy interactions with the

To ensure that customers have “seamless” interactions
with the company, all customer information must be
available in one location to all employees who require
it (usually using CRM technology).

Companies with superior customer relationship
management processes are much more likely to be
organized according to customer segment or group.

Discuss the role of corporate culture in
customer relationship management

For customer relationship management to be
successful, it must be supported by the
corporate culture (i.e., the values, beliefs, and
encouraged behaviors in an organization).

Senior executives must believe and
demonstrate that building and maintaining
customer relationships is a corporate priority.

Discuss the role of corporate culture in
customer relationship management

Corporate values must be understood and
embraced by all employees.

Employee incentives, such as prizes and
bonuses, can help ensure that employees
embrace CRM strategies and processes.

Also, employees must be given leeway to do
what is necessary to satisfy customers.

Discuss the importance of formulating a
CRM strategy prior to implementing

CRM processes and tools.

Each company should design a unique CRM strategy that
directly addresses its needs, organization, and customers.

An important step in developing a CRM strategy is
identifying the objectives/goals of the CRM program (e.g.,
to increase customer retention, to improve product
offerings, etc.).

Before implementing CRM processes and tools, each
company must determine which members of its
organization will be involved in CRM so that these
individuals can be trained.

CRM technology and tools should be selected after
determining the company’s CRM strategy, objectives, and
program participants.

Discuss the relationship of customer
relationship management and

business process management

Customer relationship management and business process
management work together to satisfy customers.

Business process management: A type of management that
focuses on the design and improvement of business
processes (including CRM processes) to make them as
efficient and effective as possible; strives to align business
processes with customers’ needs and wants

Business process management ensures that CRM processes
meet the needs, wants, and expectations of customers,
while CRM processes can gather customer information that
can be used to ensure that business processes are designed
with the end user

the customer

in mind.

Describe the relationship of customer
relationship management and

continuous improvement

Continuous improvement: The activity of
regularly updating one’s processes for better

After developing a CRM strategy and
implementing CRM processes, continuous
improvement must occur to ensure that:

Company values remain in line with the CRM

CRM processes remain effective

Explain ways in which customer
relationship management can

benefit a business

Increased customer satisfaction and loyalty

More customers and customer referrals

Reduced costs

Fewer complaints

Lower employee stress levels

Increased access to customer information (for
use in business

term profitability


Informed consent


Describe the importance of trust in
customer/business relationships

Discuss loyalty issues in
customer/business relationships

Describe ethical issues related to the
collection of customer information

Explain situations in which
employees/departments involved in customer
relationship management may be reluctant to
share customer information with each other

Discuss ethical issues related to the sale of
customer information to third parties

Discuss the impact of poor/unethical
privacy practices on customer relationships


Client intelligence



Relationship mapping




Explain the difference between customer
relationship management technology and
customer relationship management

Describe types of customer
relationship management tools

CRM Applications


Data warehouses

Discuss customer relationship
management software approaches




Sales force automation

Explain types of data

commonly stored in a CRM system

Contact data

Demographic data

Transactional data

Relationship data

Discuss the benefits and drawbacks
associated with CRM technology

Explain how CRM technology can be used
to create a “single view” of a customer

Explain the importance of cleansing,
standardizing, and updating data in a CRM
data warehouse