Commercial contexts of CRM
CRM is practised in a wide variety of commercial contexts, which present a range of different customer relationship management problems.
For example, here we are considering 4 contexts: banks, automobile manufacturers, high-tech companies and consumer goods manufacturers.
Banks deal with a large number of individual retail customers. Banks want CRM for its analytical capability to help them manage customer defection (churn) rates and to enhance cross-sell performance. Data mining techniques can be used to identify which customers are likely to defect, what can be done to win them back, which customers are hot prospects for cross-sell offers, and how best to communicate those offers. Banks want to win a greater share of customer spend (share of wallet) on financial services. In terms of operational CRM, many banks have been transferring service into contact centres and online in an effort to reduce costs, in the face of considerable resistance from some customer segments.
Automobile manufacturers sell through distributor/dealer networks. They have little contact with the end-user owner or driver. They use CRM for its ability to help them develop better and more profitable relationships with their distribution networks. Being physically disconnected from drivers, they have built websites that enable them to interact with these end-users. This has improved their knowledge of customer requirements. Ultimately, they hope CRM will enable them to win a greater share of end-user spend across the car purchase, maintenance and replacement cycle.
High-tech companies manufacture complex products that are generally sold by partner organizations. For example, small innovative software developers have traditionally partnered with companies such as IBM to obtain distribution and sales. However, companies like Dell have innovated channels. They go direct-to-customer (DTC). CRM helps these DTC companies to collect customer information, segment their customer base, automate their sales processes with product configurator software and deliver their customer service online. They have also developed automated relationships with suppliers so that they carry no or low levels of inventory, which are replenished frequently in rapid response to order patterns.
Consumer goods manufacturers deal with the retail trade. They use CRM to help them develop profitable relationships with retailers. CRM helps them understand costs-to-serve and customer profitability. Key account management practices are applied to strategically significant customers. IT-enabled purchasing processes deliver higher levels of accuracy in stock replenishment. Manufacturers
can run CRM-enabled marketing campaigns which are highly cost-effective.
Reference: CRM by Francis Buttle
For example, here we are considering 4 contexts: banks, automobile manufacturers, high-tech companies and consumer goods manufacturers.
Banks deal with a large number of individual retail customers. Banks want CRM for its analytical capability to help them manage customer defection (churn) rates and to enhance cross-sell performance. Data mining techniques can be used to identify which customers are likely to defect, what can be done to win them back, which customers are hot prospects for cross-sell offers, and how best to communicate those offers. Banks want to win a greater share of customer spend (share of wallet) on financial services. In terms of operational CRM, many banks have been transferring service into contact centres and online in an effort to reduce costs, in the face of considerable resistance from some customer segments.
Automobile manufacturers sell through distributor/dealer networks. They have little contact with the end-user owner or driver. They use CRM for its ability to help them develop better and more profitable relationships with their distribution networks. Being physically disconnected from drivers, they have built websites that enable them to interact with these end-users. This has improved their knowledge of customer requirements. Ultimately, they hope CRM will enable them to win a greater share of end-user spend across the car purchase, maintenance and replacement cycle.
High-tech companies manufacture complex products that are generally sold by partner organizations. For example, small innovative software developers have traditionally partnered with companies such as IBM to obtain distribution and sales. However, companies like Dell have innovated channels. They go direct-to-customer (DTC). CRM helps these DTC companies to collect customer information, segment their customer base, automate their sales processes with product configurator software and deliver their customer service online. They have also developed automated relationships with suppliers so that they carry no or low levels of inventory, which are replenished frequently in rapid response to order patterns.
Consumer goods manufacturers deal with the retail trade. They use CRM to help them develop profitable relationships with retailers. CRM helps them understand costs-to-serve and customer profitability. Key account management practices are applied to strategically significant customers. IT-enabled purchasing processes deliver higher levels of accuracy in stock replenishment. Manufacturers
can run CRM-enabled marketing campaigns which are highly cost-effective.
Reference: CRM by Francis Buttle
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