CRM from the Customer Life Cycle (CLC) Perspective

The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle (PLC). However, CLC focuses upon the creation of and delivery of lifetime value to the customer i.e. looks at the products or services that customers NEED throughout their lives. It is marketing orientated rather than product orientated, and embodies the marketing concept. Essentially, CLC is a summary of the key stages in a customer's relationship with an organisation. The problem here is that every organisation's product offering is different, which makes it impossible to draw out a single Life Cycle that is the same for every organisation.

Let's consider an example from the Banking sector. HSBC has a number of products that it aims at its customers throughout their lifetime relationship with the company. Here we apply a CLC. You can start young when you want to save money. 11-15 year olds are targeted with the Livecash Account, and 16-17 year olds with the Right Track Account. Then when (or if) you begin College or University there are Student Loans, and when you qualify there are Recent Graduate Accounts.

When you begin work there are many types of current and savings account, and you may wish to buy property, and so take out a mortgage. You could take out a car loan, to buy a vehicle to get you to work. It would also be advisable to take out a pension. As you progress through your career you begin your own family, and save for your own children's education. You embark upon a number of savings plans and schemes, and ultimately HSBC offer you pension planning (you may want to insure yourself for funeral expenses - although HSBC may not offer this!).

This is how an organization such as HSBC, which is marketing orientated, can recruit and retain customers, and then extend additional products and services to them - throughout the individual's life. This is an example of a Customer Life Cycle (CLC).

Another important point is that a lifetime CLC is made up many shorter CLC's. So, for example, Volkswagen Cars retains a customer for many years and one can predict the products that meet a customers needs throughout his or her family lifetime. However the purchase of each car, will in itself be a CLC with many Customer Touch Points. The consumer may need a bigger vehicle as his or her family expands - so they visit VW's website and register.

The customer reviews models and books a test-drive with her or his local dealer. He or she decides to buy the car and arranges finance. The car is then delivered from the factory, and returns every year for its annual service. Then after three years, the customer decides to trade in his or her car, and the cycle begins again. The longer-term life cycle is simply the shorter-term life cycles viewed consecutively.

CRM Perspectives [Information Technology]

CRM is a term that is often referred to in marketing. However, there is no complete agreement upon a single definition. This is because CRM can be considered from a number of perspectives. In summary, the three perspectives are:

1. CRM from the Information Technology Perspective.

2. CRM from the Customer Life Cycle (CLC) Perspective.

3. CRM from the Business Strategy Perspective.

1. CRM from the Information Technology Perspective.

From the technology perspective, companies often buy into software that will help to achieve their business goals. For many, CRM is far more than a new software package, the renaming of traditional customer services, or an IT-based customer management system to support sales people. However, IT is vital since it underpins CRM, and has the payoffs associated with modern technology, such as speed, ease of use, power and memory, and so on. Information Technology (IT) and CRM have three key elements, namely Customer Touch Points, Applications, and Data Stores. This section is based loosely upon Raisch (2001) The e-Marketplace.

Customer Touch Points are vital since your business has a marketing orientation and focuses upon the customer and his or her current and future needs. This is the interface between your organisation and its customers. For example you buy a new car from a dealership, and you enter a showroom. The dealership is a contact point. You meet with a salesperson whom demonstrates the car. The salesperson is a contact point. You go home and look at the car manufacturer's website, and then send the company an e-mail. Both are contact points. Other contact points include 3G telephone, video conferencing, Interactive TV, telephone, and letters.

Applications are essentially the software and programmes that support the process. Incidentally, this is what some would call CRM - but we know better. Applications serve Marketing (e.g. data mining software* and permission marketing**), Sales (e.g. monitoring Customer Touch Points), and Service (e.g. customer care).

Data Stores contain data on every aspect of the customer, and the Customer Life Cycle (CLC). For example, an organisation keeps data on the products you buy, when you buy them, and where they are sent. Data is also kept on the web pages that you visit and the products that you consider, but then do not buy. Leads are stored here. Data on the life time value of individual customers is stored here, as well as details of how and when the customer was recruited, how - and for how long - individuals have been retained, and details of any products that have been extended to individuals are also stored. The data is analysed using Applications.

*Data Mining is where an organisation evaluates large Data Stores for patterns, or relationships between groups or individuals (or segments). Applications present 'patterns' in a format that can be used for marketing decision-making.

** Permission Marketing is where a customer elects to accept (or 'opt-in' to) marketing material from an organisation e.g. where you buy insurance and the vendor asks if you wish to receive further details from them, or similar organisations. It is so called because marketers need your 'permission' to market to you. Permission marketing can occur at any of the Customer Touch Points.

Needs / objectives of CRM:

1. Enable the company to identify, contact attract and acquire new customers:

CRM allows the company to focus its limited marketing resources on the most promising target markets with the highest potential value. This is typically done using the information generated by CRM application which

a) Automatically generates customer and market profiles

b) Identify and target market with high revenues

c) Generates, leads, tracks marketing campaigns across a variety of media

d) Selects appropriate contact media, plans promotions and incentives

e) Manages the proposal process through negotiations to close.

2. Obtains a better understanding of the customers- their wants and needs:

CRM applications, often used in combination with data warehousing, e-commerce applications and call centers, allow companies to gather and access information about customers buying behavior, wants in terms of products or services provided by the company. The information is used in planning and execution go marketing campaigns. It enables customers to seek products and reveal their preferences in an interactive manner.

3. Defines the appropriate product and service offering and match it to the unique needs of the customer:

CRM provides customization and personalization capabilities that gives customers the power to view the enterprise in a way that they can relate to, there by making it easier for them to do business with it. This includes configuration, pricing, quotation, catalog and personal generation capabilities that harness the power of Internet while ensuring the flexibility to respond quickly to changing technical and business conditions.

4. Manages and optimizes company’s sales cycle:

The productivity of the sale process is increased by accurating the contracting process and improving revenue velocity. This is accompanied to capabilities such as online order entry, credit card processing, tax calculations, auctions, billing, order status and payment processing. CRM solutions also include tools, which provide the ability to communicate important information from supply chain modules to the customer interface in real time. These tools can help in determining feasibility, profitability and delivery dates, while understanding the constraints of the entire supply production and logistics chain across multiple channels and enterprises.

5. Increases retention of existing customers through improved sales, service and support:

CRM applications document all post –close service and support related interaction with customers, record customer requests and collect feedback from variety of communication channels and use the information to anticipate the demand for service and technical assistance and maximize customer satisfaction and retention while maximizing customer service staff. The goal is to ensure greater customer loyalty. CRM provides capabilities for providing online support information, online product registration to an electronic help desk, self service support logging and tracking and integration with call centres.

6. Identifies Cross selling and up selling opportunities:

CRM can help in identifying opportunities for cross selling and up selling of higher value added services to the existing customers, based on their past purchasing behaviour.

Definition of CRM:

Customer Relationship Management (CRM) is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value and strong relationship with customers.

A commonly cited definition of CRM is that of CRM (UK) Ltd (2002), as follows:

“Customer Relationship Management is the establishment, development, maintenance and optimisation of long-term mutually valuable relationships between consumers and organizations”.

CRM is neither a product, nor service but a business strategy to learn more about customer behaviour and requirements in order to create long term relationship with them. CRM involves use of technology in attracting new and profitable customers while forming tighter bonds with existing one.

Managerial Skills

Manager:

Manager is a person who undertake the tasks and function of managing at any level, in any kind of enterprise.

Managerial Skills:

There are four skills of managers are expected to have ability of:

(1)Technical skills: Technical skills that reflect both an understanding of and a proficiency in a specialized field. For example, a manager may have technical skills in accounting, finance, engineering, manufacturing, or computer science.

(2)Human Skills: Human skills are skills associated with manager’s ability to work well with others, both as a member of a group and as a leader who gets things done through other.

(3)Concept Skills: Conceptual skills related to the ability to visualize the organization as a whole,
discern interrelationships among organizational parts, and understand how the organization fits into the wider context of the industry, community, and world. Conceptual skills, coupled with technical skills, human skills and knowledge base, are important ingredients in organizational performance.

(4) Design Skills: It is the ability to solve the problems in ways that will benefit the enterprise. Managers must be able to solve the problems.

Skills of management at different levels.

The Skills vary at different levels they are as follows:
Top management ---------------Concept and design Skills.
Middle management ------------Human Skills.
Supervisor’s --------------------Technical skills.

Management Definition

“Management is an art of knowing what do you want to do and then seeing that is is done in the best and cheapest way.”-F. W. Taylor

“To manage is to forecast, to plan, to organize, to command to co-ordinate and control". by Henry Fayol

“Management is a distinct process consisting of planning, organizing, actuating and controlling performance t determine and accomplish the objectives by the use of people and resources,”by george R. Terry

“Management is the creation and maintenance of internal environment is an enterprise where individuals working in groups can perform efficiently and effectively toward the attainment of group goals. It is an art of getting the work done through and with people in formally organized groups". by Koontz and O’Donnel

Office — Meaning and Objectives

If you visit a firm, school or hospital you will find that a number of activities are being performed, such as letters received, dispatched, typing, photocopying, word processing, filing, handling of office machines etc. The place where all such activities are performed is known as office. Thus office is a service department of an organization, which is connected with the handling of records and provision of various services like typing, duplicating, mailing, filing, handling office machine s , keeping records , drafting , using information, handling money and other miscellaneous activities.

Definition of office

Some of the popular definitions of office are as follows:

• ‘‘Office is a place where clerical operations are carried on’’.—Denyer, J.C.

• ‘‘Office is a unit where relevant records for the purpose of control, planning and efficient management of the organization are prepared, handled and preserved. It provides facilities for internal and external communication and coordinates activities of different departments of the organization’’. —Littlefield, Rachel and Caruth.

The above definitions highlight the following characteristics—

• collecting information
• processing information
• storing information
• coordinating information
• distributing information

Therefore, an office may be defined as a place where all the activities concerned with collecting, processing, storing and distributing information for efficient and effective management of an organisation are carried out. In every modern organisation, be it a business concern or a Government department, there has to be an office. It is essential for the efficient management of the organisation.

Objectives of an office

The main objectives of an office are as follows:

1. Aid to Management: The office provides aid to management in performing the following functions:

(a) Direction: Direction and guidance of management to various sections and departments are issued through the office.

(b) Communication: The office serves as a communication channel between different parts of the organisation. It handles mail.

(c) Planning: The office helps management in planning for smooth functioning and progress of the organisation b y providing necessary information and data.

(d) Coordination: The office also facilitates co-ordination by maintaining links among departments.

2. Preserving Records: The office maintains necessary books and records of the organisation.

3. Providing Information: It provides the right kind of information to management at the right time.

4. Providing Office Services: It provides clerical and secretarial services to different executives.

5. Distribution of work: The office distributes the work among various employees and identifies their duties and functions.

6. Selection and Appointment: It also handles selection and appointment of employees. In short, the office is an important and indispensable part of every organisation.