Introduction to Customer Relationship Management (CRM)

Posted on May 16, 2024 in Other subjects

Chapter 1: Introduction to CRM

1. What is CRM?

Customer Relationship Management (CRM) is the process of managing all interactions and data a company has with its leads, customers, partners, and suppliers. It is an integrated approach to:

  • Identify
  • Acquire
  • Retain customers

A customer-oriented strategy involves collecting and using customer data to develop:

  • More value for customers (added value)
  • More information for a more competitive strategy

2. What is Marketing?

Marketing is the process by which companies create value for potential and existing customers, resulting in strong customer relationships that capture value in return.

3. Our Challenges

  • Customers want personalization.
  • Digital marketing is key.
  • Marketing tools are readily available.
  • Everyone is a content creator.

4. How to Be Relevant to Customers: The Pain Point

You need knowledge. You need data.

5. Types of CRM

  • Strategic: A careful plan, customer-oriented and based on data-driven insights to identify, acquire, and retain customers.
  • Operational: Automation of selling, marketing, and service processes based on customer data.
  • Analytical: The process of transforming customer data into insights.

Chapter 2: Understanding Relationships Using CRM

1. CRM and Interactions

CRM is the process of managing all interactions and keeping data a company has with its leads and customers.

“For every action, there is an equal and opposite reaction…”

2. Relationship Definition

Interactive episodes between parties over time. Episodes have a beginning and an end, are nameable, and are composed of interactions.

Example:

  • Episode: Golf competition
  • Parties: Golf resort/players
  • Beginning: First communication
  • End: Satisfaction survey
  • Name of episode: Golf competition
  • Interactions: …

3. Relationship Attributes

  • Trust: It appears through the episodes and their interactions. As parties learn more about each other, risk and doubts are reduced. Trust has been described as the glue that holds a relationship together.
  • Commitment: It appears after an ongoing relationship with another is so important as to warrant maximum effort to maintain it.
  • Satisfaction
  • Mutual Goals
  • Remember…

6. Customer Lifetime Value (CLV)

What does it mean? How does this figure help us?

  1. CAC Estimation
  2. Communication Budget Plan
  3. Investment
  4. Report: Manager or shareholders

Customer Lifetime Value (CLV): CLV is not about how much you can extract from customers. It is about how much value you provide back to customers during their lifetime.

Customer Experience (CX): CX is everything related to a business that affects a customer’s perception and feeling about it.

Chapter 3: Using Marketing Information Systems (MIS)

3. Using Marketing Information System (MIS)

What is it?

All the technology that gathers, stores, analyzes, and distributes marketing data to the managers and teams that need it.

What type of information do we have?

  • Transactional: Types of payment, currency, channels, credit card number, bank account number, price…
  • Behavioral data: How customers interact with your products (country, hotel, products, extra services…)
  • Declaratory: Personal details (profiles and likes), contact details, preferences…

How do we connect systems?

  • Webservice: A network-based resource that fulfills a specific task between applications.
  • API (Application Programming Interface): An interface that allows you to build on the data of another application.
    There’s overlap between the two: all web services are APIs, but not all APIs are web services…

Chapter 4: Customer Acquisition Cost (CAC)

4. Customer Acquisition Cost (CAC)

How to Measure Customer Acquisition?

CAC = MC / CA

*MC = marketing costs *CA = customers acquired

In recent years, the cost of acquiring new customers has increased by over 50%. Loyalty is essential. And remember CLV > CAC.

How to struggle with your customer acquisition cost? You can always do better!

How…?

  1. Improving your website conversion efforts (UX, usability)
  2. Boost the value of your current customers (CLV)
  3. Adjust and optimize your customer acquisition strategy
  4. Building trust in your target audience

Chapter 5: Retention and Loyalty Programs

1. Concepts

Action = Retention

Customer retention is the prolongation of relationships with customers over the long term.

Response = Loyalty

Customer loyalty is a customer’s willingness to return to a company to conduct business repeatedly.

Customer retention management is the process of maintaining relationships with your current customers to delight them long after they purchase your product or service.

The prime targets:

  1. Profitable customers
  2. Those who have high CLV
  3. Those who have the greatest strategic value to the company (Luxury)

2. How to Retain and Keep Loyal Customers?

Step 1: Delight

  1. Customer Value: Customer value is the perception of the balance between benefits received (product or service) and its cost. It is essential to understand and meet customer expectations to ensure their satisfaction.
  2. Creating an effective customer experience: This involves creating more than your customers expect.
  3. Customer Loyalty: Customer loyalty is typically due to the delightful and remarkable experiences they have with that brand.

Step 2: Retention Strategy

  1. Create a relationship: Build customer engagement based on a higher intensity of participation and plan a communications calendar.
  2. Gather and Store Data (MIS)
  3. Know your customer (Data Analysis and Customer Feedback)

3. Loyalty Programs Tools

  • Points
    • Strengths: Planning, customer understanding…
    • Weaknesses: Accrued liability (passive, financial audit)…
  • Discounts
    • Strengths: Customer understanding, instant, no liability…
    • Weaknesses: Image, customer future requests…
  • Rebates
    • Strengths: Easy to manage
    • Weaknesses: Emotional connection, image
  • Privileges
    • Strengths: Privileges lead to loyalty, customer understanding…
    • Weaknesses: Other customers can feel insignificant…

4. Loyalty KPIs – Customer Retention Rate

Customer Retention Rate (CRR): CRR is the percentage of customers staying with you over time.

Customer Churn Rate: Customer churn rate is the percentage of customers that have been lost over a specific period. In other words, these are the customers that have stopped making purchases.

Warnings:

  • Reduced RFM scores
  • Problems with website log-in
  • Non-response to a carefully targeted offer
  • Reduced levels of satisfaction (survey)
  • Complaints
  • Too many questions about services
  • Canceling subscription

Chapter 6: CRM Solutions and Data Analysis

4. What is Salesforce?

Salesforce is a CRM solution that gives all your sales department a single, shared view of every customer.

You can manage your business from anywhere and connect with your team thanks to the Salesforce Mobile App. Log calls, respond to hot leads, work deals, and monitor the health of your business no matter where you are.

Products: Sales, service, marketing, e-commerce, analytics, integrations, customer 360°…

5. What is Zoho One CRM?

Zoho One CRM is an online sales CRM software that manages your sales, marketing, and support in one CRM platform.

Zoho Corporation is an Indian software company with headquarters in Chennai. The company was founded in 1996.

It is an integrated system, a unified suite of applications, a workplace to transform business activities into connected activities.

Event-based marketing occurs when an event triggers a communication or offer (open or not an email).

6. What is HubSpot?

HubSpot is an American developer and marketer of software products for inbound marketing, sales, and customer service. It was founded by Brian Halligan and Dharmesh Shah in 2006. HubSpot has 100K customers in 120 countries. Revenue in 2020: $883 million.

1. What is Data Analysis?

Data analysis is the process through which organizations transform customer-related data into insights (for strategic or tactical purposes). Its process phases are:

  1. Problem formulation or goals
  2. Selection of data/target
  3. Data cleaning
  4. Data transformation (ETL)
  5. Data enrichment
  6. Data mining/Statistical Analysis
  7. Visualization and Evaluation

2. Analysis Data Sources

  1. Primary Data Bases, collected for the first time. Secondary Data Base, already collected, and stored in other systems of the CRM. External or Internal DB.

  2. Data Warehouse (DWH) are large amounts of operational and historical customer- related data.

    Data Marts are filtered version of the DWH, customized for use in a particular

    department: marketing, sales…

  3. Big Data includes structured, and no structured data on the cloud, including social

    media, mobile data… Remember, in Luxury, Big Data not always is useful.