Chapter 11

• customer relationship management: a customer-focused and customer-driven organization strategy.

  organizations concentrate on customers' requirements for products and services and then provide high-quality responsive customer experience
• customer churn: an organization losing a percentage of customers over time
• CRM policies share two basic elements:

  1. company must identify the many types of customer touch points
  2. it needs to consolidate data about each customer
• omni-channel marketing: an approach to customers that creates a seamless experience regardless of the channel used
• collaborative CRM systems: provide effective and efficient interactive communication with the customer throughout the entire organization
• customer identity management: a marketing technology that shows the whole view of a customer across an organization
• operational CRM systems: the component of CRM that supports the front office business processes that directly interact with customers
• front-office processes: directly interact with customers; sales, marketing, service
• Operational CRM systems benefits:

  • efficient, personalized marketing, sales, and service
  • 360 view of each customer
  • the ability of sales and service employees to access a complete history of customer interaction with the organization
• CRM tools can accomplish:

  • improve sales
  • individualized relationships with customers, improving customer satisfaction
  • identify most profitable customers
  • provide employees with the information and processes necessary to know their customers
• customer-facing CRM applications: an organization's sales, service, and customer interaction representatives interact directly with customers
• customer interaction centres: a place where customers can interact with the business and its products through multiple channels
• salesforce automation: the component of an operational CRM system that automatically records all of the components in a sales transaction process
• salesforce automation:

  • contact management system - tracks all communication between company and customer
  • sales lead tracking system - potential customers or customers who have purchased related processes
  • sales forecasting system: source of information regarding products and services
• purchasing profile: a snapshot of a consumer's buying habits that may lead to additional sales through cross-selling, upselling, and bundling
• cross-selling: marketing of additional related products to customers based on previous purchase
• upselling: provide customers with the opportunity to purchase related products or services of greater value in place of the customer's initial product or service
• bundling: combining multiple services into a single package, usually at a lower price
• campaign management applications: help organizations plan campaigns that send the right messages to the right people through the right channels
• loyalty programs: recognize customers who repeatedly use a vendor's products or services

  • high frequency of repeat purchases
  • limited product customization for each customer
• analytical CRM systems: provide business intelligence by analyzing customer behaviour and perceptions
• on-demand CRM system: hosted by an external vendor in the vendor's data centre. spares the organization the costs associated with purchasing the system

  • utility computing
  • software-as-a-service
• mobile CRM systems: an interactive system that enables an organization to conduct communications related to sales, marketing, and customer service activities through a mobile medium for the purpose of building and maintaining relationships with customers
• open-source CRM system: CRM software whose source code is available to developers and users
• social CRM: the use of social media technology and services to enable organizations to engage their customers in collaborative conversation in order to provide mutually beneficial value in a trusted and transparent manner
• real-time CRM systems: help organizations to respond to customer product searches, requests, complaints, comments, ratings, reviews, and recommendations in near time
• supply chain: the flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to end customers
• supply chain visibility: refers to the ability of all organizations within a supply chain to access or view relevant data on purchased materials as these materials move through their suppliers' production processes and transportation networks to their receiving docks
• supply chain segments:

  • upstream - sourcing from external suppliers
  • internal - packaging, assembly, or manufacturing
  • downstream - distribution
• flows in the supply chain:

  • material flows - raw materials, supplies
  • information flows - demand, shipments, orders, returns, schedules
  • financial flows - money transfers, payments, credit card information
• supply chain management: improve the processes a company uses to acquire the raw materials it needs to produce a product or service and then deliver it to its customers
• components of supply chain management:

  • plan - managing resources to meet customer demand
  • source - choose suppliers
  • make - production, testing, packaging
  • deliver - coordinate the receipt of customer orders, network of warehouses, select carriers
  • return
• interorganizational information system: information flows among two or more organizations
• interorganizational information systems allow partners to:

  • reduce cost
  • improve quality
  • efficiency
  • eliminate paper processing
  • make the transfer and process of information easier for users
• push model: production process begins with a forecast which predicts which products customers will want and in what quantities
• pull model: the production process begins with a customer order. the company only produces what the customers want
• problems in the supply chain:

  • poor customer services
  • poor quality products
  • high inventory costs
  • revenue loss
• the problems in a supply chain arise from two sources:

  1. uncertainties
  2. the need to coordinate multiple activities, internal units, and business partners
• demand forecast: demand for a product can be influenced by numerous factors such as competition, price, weather conditions, technological developments, overall economic conditions, and customers' general confidence
• the bullwhip effect: erratic shifts in orders up and down the supply chain. the variables that affect customer demand can become magnified when they are viewed through the eyes of managers at each link in the supply chain. stockpiling can occur when firms try to anticipate future demand.