ESSENTIALS of CRM A Guide to Customer Relationship Management Bryan Bergeron

Transcription

1 ESSENTIALS of CRM A Guide to Customer Relationship Management Bryan Bergeron

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3 ESSENTIALS of CRM

4 Essentials Series The Essentials Series was created for busy business advisory and corporate professionals.the books in this series were designed so that these busy professionals can quickly acquire knowledge and skills in core business areas. Each book provides need-to-have fundamentals for those professionals who must: Get up to speed quickly, because they have been promoted to a new position or have broadened their responsibility scope. Manage a new functional area. Brush up on new developments in their area of responsibility. Add more value to their company or clients. Other books in this series include: Essentials of Accounts Payable, Mary S. L. Schaeffer Essentials of Capacity Management, Reginald Tomas Yu-Lee Essentials of Corporate Performance Management, George T. Friedlob, Lydia Schleifer, and Franklin J. Plewa For more information on any of the above titles, please visit

5 ESSENTIALS of CRM A Guide to Customer Relationship Management Bryan Bergeron

6 Copyright 2002 by John Wiley & Sons, Inc., New York. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) , fax (978) Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 605 Third Avenue, New York, NY , (212) , fax (212) , PERMREQ@WILEY.COM. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. This title is also available in print as ISBN Some content that appears in the print version of this book may not be available in this electronic edition. For more information about Wiley products, visit our web site at

7 To Miriam Goodman

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9 Contents 1 Overview 1 2 The Customer 15 3 The Corporation 37 4 Technology 63 5 ecrm Evaluating Solutions Economics of CRM Getting There 179 Further Reading 209 Glossary 213 Index 217 vii

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11 Preface Every company is involved in customer relationship management (CRM) even if only in an ad hoc manner and every CEO should be familiar with the techniques and technologies at his or her disposal. To this end, the goal of this book is to provide the reader with exposure to these techniques and technologies of CRM. Specifically, the Essentials of CRM explores examples of customer relationship management that work and those that don t with the help of easyto-understand vignettes. The book assumes an intelligent executivelevel reader who may be unaware of the particular vernacular of the customer service field or not know how to recognize a superior CRM formula. The reader will come to appreciate the many uses of CRM, from actively developing a following of profitable customers to turning nonprofitable customers away in cost-saving maneuvers. Reader Return on Investment After reading the following chapters you will be able to: Understand CRM from historical, economic, technical, and customer perspectives (i.e., the genesis of CRM, how to calculate ROI, the technologies available, and how to evaluate customer satisfaction with the methods chosen for implementation). Understand the significance of CRM on the company s bottom line, both long- and short-term. ix

12 Preface Understand how CRM professionals work and think, including why customer service representatives tend to be the lowest paid staff on the corporate payroll. Use a set of specific recommendations to establish and manage a CRM effort. Understand the technologies, including their tradeoffs, that can be used to implement a CRM service. Appreciate best practices what works, why it works, and how to evaluate a successful CRM effort. Organization of This Book This book is organized into modular topics related to CRM. It is divided into the following chapters: Chapter 1: Overview. The first chapter of this book provides an overview of the key concepts involved in CRM. Chapter 2:The Customer. This chapter covers CRM from the customer s perspective.topics include customer expectations, loyalty, touch points, The Loyalty Effect, and customer behavior. Chapter 3:The Corporation. Taking the perspective of the corporation, this chapter explores the internal jobs, processes, and technology issues faced by businesses involved in a CRM effort. Topics include crafting a comprehensive view of the customer, employee incentives, corporate culture, rewarding employee performance, and strategic partnerships and alliances. Chapter 4:Technology. This chapter explores the many technologies available for CRM and how the appropriate technology can be used to leverage human resources in a company. Topics include customer profiling, data warehousing, pervasive computing, and security systems. Chapter 5: ecrm. With the advent of the Web, CRM has taken on a new meaning. As described in this chapter, the ease with which x

13 Preface large volumes of data can be captured from online transactions and the technologies available to analyze this data are changing the face of CRM. Topics include the Web and E-commerce, customer tracking, customer support surrogates, and real-time CRM. Chapter 6: Evaluating Solutions. This chapter explores how the various approaches to CRM can be evaluated. Topics range from the effectiveness of the various technologies available for CRM to the effect of specific CRM processes on price, customer expectations, and customer service. Chapter 7: Economics of CRM. Exploring the possibilities of CRM costs money. This chapter looks at the financial outlay for various approaches to CRM, as well as the expected ROI that can reasonably be expected from each approach. Topics include Web initiatives, technology-assisted CRM, ROI, and economic timelines. Chapter 8: Getting There. The final chapter provides some concrete examples of the resources, time, and costs involved in embarking on a practical CRM effort. Topics range from the implementation challenges, the economy, and risk management to working with vendors. Further Reading. This appendix lists some of the more relevant works in the area of CRM, at a level appropriate to a CEO or upperlevel CRM manager. How to Use This Book For those new to CRM, the best way to tackle the subject is to simply read through each chapter sequentially; however, because each chapter is written as a stand-alone module, readers interested in, for example, Web-based CRM strategies, can go directly to Chapter 5, ecrm. Throughout the book, In the Real World sections provide real-world examples of how CRM is being used to improve the bottom line and provide insight into customer behavior. Similarly, a Tips xi

14 Preface & Techniques section in each chapter offers concrete steps that the reader can take to benefit from a CRM initiative. Key terms are highlighted and defined throughout the book, as well as available in the Glossary at the end of the book. In addition, readers who want to delve deeper into the business, technical, or cultural aspects of CRM are encouraged to consult the list of books and publications listed in the Further Reading section. xii

15 Acknowledgments Creating a book on relationships is a team effort that requires the focused cooperation of a variety of experts, each with their own focus and areas of contribution. In this regard, I would like to thank my enduring editorial associate, Miriam Goodman, an accomplished artist in traditional as well as digital media, and a poet, teacher, photographer, and author. Among other things, Miriam was responsible for adding a spark of life to the flesh of this book. To my readers, reviewers, and researchers; Rosalind Bergeron, my sister, business partner, and attorney in Silicon Valley; and Ron Rouse, Software System Specialist in Educational Computing at Harvard Medical School, for their time, inspiration, and constructive criticism. Finally, special thanks to my editor at John Wiley & Sons, Sheck Cho, for his insight and encouragement. xiii