Notes on Chapter 11: Customer Relationship Management and Supply Chain Management

Introduction

• Discussion about Customer Relationship Management (CRM) and Supply Chain Management (SCM)
• Importance of information systems in managing customer relationships
• Overview of operational CRM and its various types
• Supply chain management and its IT support

Customer Relationship Management (CRM)

Purpose of CRM

• Helps firms manage relationships with customers
• Stores customer information:
  • Customer identity
  • Purchase history
  • General information
• Key considerations:
  • Customer age (duration of relationship)
  • Customer value (amount purchased)

Personal Marketing

• Goal: Forming close relationships with customers
• Most applicable in sales roles with fewer clients
• Aim for customer intimacy (not personal intimacy)

CRM Process

• Customer types:
  • High-value repeat customers
  • Potential customers (not yet bought)
• Strategies to maintain customer satisfaction and reduce churn:
  • Support and resell efforts
  • Customer touchpoints (ways to contact customers)

Customer Touch Points

• Various ways to reach customers:
  • Mailing information
  • Phone calls
  • Instant messaging
  • Website interactions
  • Chatbot technology
  • Social media campaigns

Consequences of Poor CRM

• Potential issues:
  • Customer churn (loss of customers)
  • Customer dissatisfaction
  • Reputational damage (intangible asset)

Data Management

• Importance of data consolidation
• Avoid storing duplicate information to reduce costs
• Maintaining accurate records and removing organizational silos

Operational CRM

Focus

• Front office operations affecting customer interaction:
  • Sales team
  • Marketing team
  • Service team

Benefits

• Personalized marketing approach
• 360-degree view of customers
• Access to past purchases and competitor data
• Potential for increased sales and profits

Customer Facing Applications

• Customer interaction centers (similar to call centers)
• Salesforce automation
• Potential sales leads included in the system

Customer Touching Applications

• Direct interactions with the system
• Examples:
  • Ecommerce (eCRM: electronic CRM)
  • Self-help options and FAQs

Additional CRM Types

• Mobile CRM
• Open Source CRM
• Social CRM (includes social media components)

Supply Chain Management (SCM)

Key Components

• Supply chain visibility: Information flow between parties
• Inventory velocity: Speed of inventory changes

Generic Supply Chain Example

• Upstream and downstream information flow
  • Manufacturer -> Tier 1 Suppliers -> Tier 2 Suppliers -> Tier 3 Suppliers -> Retailers -> Customers
• Examples of suppliers in automotive and electronics industries

Supply Chain Management Process

1. Plan: Anticipate demand
2. Source: Obtain materials
3. Make: Assemble products
4. Deliver: Distribute to retailers
5. Service: Handle returns and post-sale service

Goals of SCM

• Reducing transactional costs using information systems
• Enhancing information quality and efficiency
• Eliminating paper records

Solutions for SCM

• Vertical integration: Control multiple supply chain elements
• Just-in-time inventory: Minimize excess materials
• Vendor-managed inventory: Responsibility of vendors to manage stock

IT Solutions in SCM

• Electronic Data Interchange (EDI): Data exchange across organizations
• Extranet vs. Portal:
  • Extranet: Network for sharing files
  • Portal: Website for information access

Conclusion

• Summary of CRM and SCM discussions
• Upcoming class will include examples and further exploration of supply chains
• Apologies for cancellation of previous class