2. Customer relationship management (CRM)
• CRM concerns the relationship between the organization and its customers
• A customer-centric focus
– Customer relationships have become a company’s most valued asset
– Every company’s strategy should be to find and retain the most profitable
customers possible (Pareto's Law - 20% of customers account for 80% of
your turnover / profits)
• CRM focuses on fact that not all customers are equally important
• Therefore, relationships should be built with customers that are likely to
provide value for services
• Building relationships with customers that will provide little value could
result in a loss of time, staff and financial resources
CRM – Examples
- Casinos - Jewelry Shops
- Banks (flags on large amounts) - Buying book on the internet (Amazon.com)
3. CRM
• The three phases in which CRM help to support the relationship between a
business and its customers are:
• Acquire: a CRM can help a business in acquiring new customers through excellent
contact management, direct marketing, selling and fulfillment (e.g. people call Just
Dial for numbers)
• Enhance: a web-enabled CRM combined with customer service tools offers
customers excellent service from a team of trained and skilled sales and service
specialists, which offers customers the convenience of one-stop shopping (cell
phone service providers like Vodaphone offering schemes for movies every
Tuesday, movie theaters offering tickets, first citizens get first preview of the sale
goods)
• Retain: CRM software and databases enable a business to identify and reward its
loyal customers and further develop its targeted marketing and relationship
marketing initiatives (e.g. Hyper city / food bazar – discuss retail industry, Airlines
have FFP)
4. What is CRM?
• Managing the full range of the customer relationship involves
– Providing customer-facing employees with a single, complete view of every
customer at every touch point and across all channels
– Providing the customer with a single, complete view of the company and its
extended channels
Large businesses with multiple product divisions sometimes have single clients
that buy products across the company. However with separate sales and support
teams for each division, client data is entered over and over by different teams
and one particular sales team may have no idea as to what other purchases the
client may have made. A CRM solution with a centralized database allows
everyone in the company to access all available data on a particular customer
which enhances cross-selling opportunities, reduces repetition and allows for a
more informed sales and support team.
E.g. if user has bought a house using home loan the same bank shall share this
data with its insurance agents for home insurance, life insurance, selling petro
cards to car loan customers
6. Contact and Account Management
• CRM helps sales, marketing, and service professionals capture and track
relevant data about
– Every past and planned contact with prospects and customers
– Other business and life cycle events of customers
• Data are captured through customer touch points
– Telephone, fax, e-mail
– Websites, retail stores (give example of diapers), kiosks
– Personal contact
Example: Property exhibition collects phone no's of people who visit it
7. Sales
• A CRM system provides sales reps with the tools and data resources they
need to
– Support and manage their sales activities (e.g. Onida)
– Optimize cross- and up-selling
Cross Selling: An Wholesale mobile retailer suggesting a customer to choose
a network/carrier after one purchases a mobile, mobile and mobile cover
Up-selling: selling an extended service contract for an appliance, suggesting
a customer purchase more RAM or a larger hard drive when servicing his or
her computer, selling luxury finishing on a vehicle
• CRM also provides the means to check on a customer’s account status and
history before scheduling a sales call (e.g. ICICI direct calls customers having
shares more than 10 lakhs worth in their account for portfolio management)
8. Marketing and Fulfillment
• CRM systems help with direct marketing campaigns by automatic such tasks as
– Qualifying leads for targeted marketing
– Scheduling and tracking mailings
– Capturing and managing responses
– Analyzing the business value of the campaign
– Fulfilling responses and requests
• Perhaps the quintessential role of CRM software is to make it easier to market to
existing and prospective customers. A pet supplies company that sells via mail
order found that sending out catalogues to their internal Excel contact list is
unprofitable and does not reach all of the firm's previous and prospective
customers. The CRM solution the company installed made it easier for all staff
members to enter the details and preferences of every single customer including
those who have enquired but not as yet ordered. This has enabled the pet supplies
company to send a vastly more targeted catalogue maillot to a broader set of
contacts.
9. Customer Service and Support
• A CRM system gives service reps real-time access to the same database used
by sales and marketing
– Requests for service are created, assigned, and managed
– Call center software routes calls to agents (e.g. IVR shall route call to the
right agent e.g. Hilton)
– Help desk software provides service data and suggestions for solving
problems (e.g. bank IVR provides certain details like account balance
after user authorization)
• Web-based self-service enables customers to access personalized support
information
10. Retention and Loyalty Programs
• It costs 6 times more to sell to a new customer
• An unhappy customer will tell 8-10 others (e.g. Dominos – 30 mins)
• Boosting customer retention by 5 percent can boost profits by 85 percent
• The odds of selling to an existing customer are 50 percent; a new one 15
percent
• About 70 percent of customers will do business with the company again if a
problem is quickly taken care of
• Enhancing and optimizing customer retention and loyalty is a primary
objective of CRM
• Identify, reward, and market to the most loyal and profitable customers
• Evaluate targeted marketing and relationship programs
• Examples: Shoppers Stop, Hypercity, Jet Airways, Tesco
11. Benefits of CRM
• Benefits of CRM
– Identify and target the best customers
– Real-time customization and personalization of products and services
– Track when and how a customer contacts the company
– Provide a consistent customer experience
– Provide superior service and support across all customer contact points
12. CRM Failures
• Business benefits of CRM are not guaranteed
– 50 percent of CRM projects did not produce promised results
– 20 percent damaged customer relationships
• Reasons for failure
– Lack of understanding and preparation
– Not solving business process problems first
– No participation on part of business stakeholders involved (e.g. Gevity HR
installed Oracle CRM software which helped users solve problems online
without an operator. Employees felt threatened and discouraged
customers from using the system)
– Example: Monster.com installed a CRM software that was very slow in
getting customers data so employees stopped using the same
13. Trends in CRM
• Operational CRM
– Supports customer interaction with greater convenience through a variety
of channels like phone, fax, e-mail and mobile (e.g. mobile banking,
ICICI bank has online chat, Jaslok hospital)
– Synchronizes customer interactions consistently across all channels
– Makes the company easier to do business with
14. Trends in CRM
• Analytical CRM
– Extracts in-depth customer history, preferences, and profitability from
databases
– Allows prediction of customer value and behavior
– Allows forecast of demand
– Helps tailor information and offers to customer needs
Example: women aged 55-65 is the fastest growing segment on facebook
15. Trends in CRM
• Collaborative CRM
– Easy collaboration with customers, suppliers, and partners
– Improves efficiency and integration throughout supply chain
– Greater responsiveness to customer needs through outside sourcing of
products and services
– use technology to build bridges between departments
For example, feedback from a technical support center can enlighten
marketers about specific services and product features clients are asking for.
Reps, in their turn, want to be able to pursue these opportunities without
the burden of re-entering records and contact data into a separate SFA
system.
16. Trends in CRM
• Portal-based CRM
– Provides users with tools and information that fit their needs
– Empowers employees to respond to customer demands more quickly
– Helps reps become truly customer-faced
– Provides instant access to all internal and external customer information
17.
18.
19. Harrah's CRM Strategy
• This case gives a detailed account of customer relationship management (CRM)
initiatives pursued by Harrah's Entertainment Incorporated, a leading casino
entertainment company in the US.
• It explains the various elements of Harrah's CRM strategy and how each element
contributed to the overall success of the strategy.
• The late 1990s witnessed a rapid expansion of casinos, especially in Las Vegas and
Atlantic City, New Jersey due to relaxations in the US State and Federal gaming
laws.
• New laws had legalized gaming on riverboats and this led to intense rivalry
between casino operators who started spending millions of dollars in opening new
extravagant properties that featured shopping malls and hotels in order to attract
customers.
• Harrah’s is the World’s largest provider of branded casino entertainment, it had
business interests in casinos, food & beverages and hotel rooms, there were 4
million square feet of casino space, 40,000 hotel rooms, 100,000 employees , and
Operated 21 casinos across the country.
• Harrah's decided to follow a different approach as it realized that about 90 percent
of its revenues came from its casino business and not from associated ventures.
20. Harrah's 1
• Instead of opening lavish properties, Harrah's initiated a customer relationship
management (CRM) program that aimed at developing long-term relationships
with its customers that would enable the company to capture a bigger market
share in the gaming business.
• Harrah's discovered that its customers spent only 36% of their annual gaming
budget at the company. It realized that increasing customer spends would
translate into significant increase in revenues.
• At the heart of Harrah's CRM program was a loyalty program called Total Rewards
that rewarded customers in order to stimulate loyalty.
• The Total Rewards program was aimed at gathering information about customers
and using it to customize the company's marketing programs for each customer.
• Customers who enrolled in the Total Rewards program were given an electronic
card, which they inserted into the machines they played on.
• Customers who agreed to join the Total Gold program had to fill a membership
form through which Harrah's obtained data such as their name, address and
telephone number, games they played while in their casino, total amount spent on
gaming and on which games
21. Harrah's 2
• Total Rewards lets customer earn Reward Credits every time they play with their
Total Rewards card at participating casinos
• Total rewards program members receive points on based on amount they spend at
Harrah’s facilities
• Reward Credit balance can be used towards hotel stays, dinner comps, spa visits,
and more!
• Customer can earn Reward Credits when playing slots, table games, and other
games at nearly 40 casinos across the United States and Canada.
• He can also earn Reward Credits for his entertainment purchases at participating
outlets and participating locations.
• He needs to keep his card inserted at the slot machines the entire time he plays,
hand it to the cashier when making entertainment purchases, or hand it to the
dealer when playing table games.
• Every time customer uses the card points are added and more these points more
the benefits customer gets
• From the moment a customer checks in to the hotel or registers with the casino's
loyalty scheme data relating to that individual becomes gold dust and is analyzed
and segmented in countless ways
22. Harrah's 2
• Total rewards form basis for 2 part CRM process. First the company uses Total
rewards to collect information about its customers. This makes it important to
identify its most valuable customers and fine tune its market offerings to its
most important customers.
• Casino gambling has become one of the most popular forms of entertainment
today and this industry still continues to grow even now
• With the appearance of online casino gambling, this kind of entertainment
grew even more in popularity since it also offers casino free gambling in its
online form.
• Some of the benefits given by Harrah’s to its premium members are 10%
discount at participating gift shops, Discount when you book a cruise
vacation, Special Birthday Offer, Exclusive gift every year, Free tournament
entry and hotel stay, Tickets to shows in Las Vegas, Complimentary Room
Guarantee with 48 hours notice, Annual Celebration Dinner, 15% discount on
all regularly priced merchandise in the Total Rewards Merchandise Catalog
and so on
23. Harrah's 3
• 250,000 customers come through our doors every day and to give each of
them the sense of a personalized experience relies heavily upon technology
• So complex is the technological back end to the loyalty card schemes there's
hardly an industry which hasn't come to Harrah's to find out how they do it
• Three years ago less than 60 per cent of visitors used their loyalty scheme,
now it is well over 80 per cent.
• Effective mailshots, marketing, hospitality and the tailoring of special offers
all hinges on the data which is stored within the CRM systems.
• Harrah's CRM has delivered 389 % ROI, year-on-year.
• Effective CRM at Harrah’s creates an environment in which customers feel
valued and believe they are getting a tailored experience
• Casinos are all alike. Most customers can’t distinguish in terms of slot
machines, game tables, restaurants, and hotel rooms in different casinos
• Customers might go to the Mirage to see the Volcano erupting or go to Steve
Wynn's new place to see the flowers. They may even throw a few quarters
into a machine while they are there but they will come back to Harrah's
24. Harrah's Mobile Initiative
• Their new mobile initiative is fairly straightforward.
• Total Rewards guests staying at a Harrah’s property are invited to opt-in
through on site promotional collateral.
• Once opted into the program, Harrah’s can begin texting offers to the
customer
• The offers vary, from free parking offers to entertainment tickets. Once the
user receives an offer he can redeem the offer via an on-site self service SMS
scanner –that authenticates the text message and provides the reward.
• One of the examples used to describe the program, was an initiative to get
rid of unsold seats for a show. When excess seats are available, a text
message is sent to Total Rewards customers. The offers are based on
location (meaning the customer is currently staying in the vicinity of the
resort and time, therefore the customer is reached when and where it is
relevant-when the member is at a casino property. The participant is already
fully engaged in the brand experience (visiting a Harrah’s property) so, by
adding a mobile Harrah’s is able to add a “real-time” reward dimension to
their existing rewards platform.
25. Harrah's Mobile Initiative 1
• What makes the mobile CRM program novel is also what makes it intelligent–
not forcing the customer to open themselves up to a barrage of marketing
messages, but instead preventing unused inventory from going to waste by
giving something of value to its most important customers
The supermarket chain, Tescos, offers loyalty cards to its customers. When customers use the loyalty cards during pay transactions for goods, details of the purchases are stored in a database which enables Tescos to keep track of all the purchases that their customers make. At regular intervals, Tescos sends its customers money saving coupons by post for the products that the customers have bought in the past. The aim of this is to encourage customers to continually return to Tescos to do their shopping
In this regard, players like MGM, Caesars and Mandalay resorts were concentrating on building replicas of the Eiffel Towers, volcanoes and sinking ships in order to lure customers