Chapter 11 for Business Information Systems

Customer Analytics

Involves gathering, classifying, comparing, and studying customer data to identify buying trends, at-risk customers, and potential future opportunities

Sales analytics

Involves gathering, classifying, comparing, and studying company sales data to analyze product cycles, sales pipelines, and competitive intelligence.

Uplift modeling

A form of predictive analytics for marketing campaigns that attempts to identify target markets or people who could be convinced to buy products.

RFM formula

Recency, frequency, and monetary value.

Recency

How recently a customer purchased items?

Frequency

How frequently a customer purchases items?

Monetary value

The monetary value of each customer purchase.

Reporting, Analyzing, and Predicting

What are the 3 phases of CRM

CRM reporting technologies

Help organizations identify their customers across other application. Deals with customer identification—asking what happened: What is the total revenue by customer? How many units did we make? What were total sales by product? How many customers do we have? What are the current inventory levels?

CRM analysis technologies

Help organizations segment their customers into categories such as best and worst customers. Customer segmentation —> Asking Why it Happened: Why did sales not meet forecasts? Why was production so low? Why did we not sell as many units as previous years? Who are our customers? Why was revenue so high? Why are inventory levels low?

CRM predicting technologies

Help organizations make predictions regarding customer behavior such as which customers are at risk of leaving. Ex: What customers are at risk of leaving? Which products will our customers buy? Who are the best customers for a marketing campaign? How do we reach our customers? What will sales be this year? How much inventory do we need to preorder?

Number of prospective customers; number of new customers; number of retained customers; number of open leads; number of sales calls; number of sales calls per lead; amount of new revenue; amount of recurring revenue; number of proposals given

Common Sales Metrics

Cases closed same-day; number of cases handled by agent; number of service calls; average number of service requests by type; average time to resolution; average number of service calls per day; percentage compliance with service-level agreement; percentage of service renewals; and customer satisfaction level.

Common Customer Service Metrics

Number of marketing campaigns, new customer retention rates, number of responses by marketing campaign, number of purchases by marketing campaign, revenue generated by marketing campaign, cost per interaction by marketing campaign; number of new customers acquired by marketing campaign; customer retention rate; and number of new leads by product.

Common Marketing Metrics

Operational and Analytical

2 primary components of CRM Strategy

Operational CRM

Supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers. Ex: Sales systems, Marketing Systems, and Customer Support systems.

Analytical CRM

Supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. Ex: Data warehouse and data mining.

List generator, campaign management, cross-selling and up-selling.

What are the 4 operational CRM technologies?

Sales Management, Contact Management, and Opportunity Management

What are the 3 sales-operational CRM technologies?

Contact center, Web-Based Self-Service, Call Scripting

What are the three customer service — operational CRM technologies?

List generator

Compile customer information from a variety of sources and segment it for different marketing campaigns. Ex: Website visits, questionnaires, surveys, marketing mailers, etc.

Campaign management systems

Guides users through marketing campaigns by performing such tasks as campaign definition, planning, scheduling, segmentation, and success analysis.

Cross-selling

Selling additional products or services to an existing customer. Ex: A book and a soundtrack along with a movie.

Up-selling

Increasing the value of the sale. Ex: McDonald’s and supersizing meals.

Customer service and support (CSS)

A part of operational CRM that automates service requests, complaints, product returns, and information requests.

Opportunity generated → lead sent to salesperson → potential customer contacted → potential customer meeting → problems and solutions identified → customer sales quote generated → sales order placed → order fulfilled → customer billed

What is the sales process?

Sales force automation (SFA)

Automatically tracks all the steps in the sales process. Focuses on increasing customer satisfaction, building customer relationships, and improving product sales.

Sales management CRM systems, Contact management CRM systems, Opportunity management CRM systems

3 Primary Sales and Operational CRM technologies

Sales management CRM systems

Automates each phase of the sales process, helping individual sales representatives coordinate and organize all their accounts. Ex: Calendars, reminders for important tasks, multimedia presentations, and document generation.

Contact management CRM systems

Maintains customer contact information and identifies prospective customers for future sales, using tools such as organizational charts, detailed customer notes, and supplemental sales information. Ex: A person’s information and history that come up when the telephone rings.

Opportunity management CRM systems

Targets sales opportunities by finding new customers or companies for future sales. Ex: They determine potential customers and competitors and define selling efforts, including budgets and schedules.

Contact center (call center); Web-based self-service systems; Call scripting systems

3 primary customer service and operational CRM technologies? (;)

Contact center (call center)

A place where customer service representatives answer customer inquiries and solve problems, usually by email, chat, or phone.

First call resolution

Properly addressing the customer’s need the first time they call, thereby eliminating the need for the customer to follow up with a second call.

Web-based self-service systems

Allows customers to use the web to find answer to their questions or solutions to their problems. Ex: FedEx package tracking.

Click-to-talk

Allows customers to click a button and talk with a representative via the internet. Real-time information helps resolve problems.

Call scripting systems

Gathers product details and issues resolution information that can be automatically generated into a script for the representative to read the customer. Ex: Troubleshooting.

Automatic call distribution → Interactive Voice Response (IVR) → Predictive dialing

Contact center service flow

Automatic call distribution

Routes inbound calls to available agents.

Interactive Voice Response (IVR)

Directs customers to use touch-tone phones or keywords to navigate or provide information.

Predictive dialing

Automatically dials outbound calls and forwards answered calls to an available agent.

CRM analytics

Generate demographic, behavioral, and psychographic insights so that you are aware of the customer’s satisfaction with service, price changes, response to marketing offers, etc. Ex: Do I know my customers’ family and office members? Are they my customers as well? Is social media playing a role in influencing my customers’ behavior? Can I measure the advocacy influence of my loyal customers?

Customer segmentation

Divides a market into categories that share similar attributes such as age, location, gender, habits, and so on.

Customer Profitability (CP)

Measures the customer’s worth over a specific period of time. Historical-oriented.

Customer lifetime value (CLV)

A metric that represents the total net profit a company makes from any given customer. Future-oriented.

Chatbot

An artificial intelligence (AI) program that simulates interactive human conversation by using key precalculated user phrases and auditory or text-based signal. Ex: Basic customer service and marketing systems that frequent social networking hubs and instant messaging clients.

Intelligent virtual agent

An animated, humanlike graphical chat bot commonly displayed on website home pages and advertisement landing pages. Ex: Customer service, product information, marketing, support, sales, order placing, reservations, or other custom services.