Information Systems Increases Revenue
According to a research project completed by CFO Research Services, a Senior Vice President of a large U. S-based global services firm stated, “The CFO should always allow IT organization to innovate, to experiment, and [should] understand that there is financial risk associated with innovation. Not every IT investment will have an ROI, but allowing IT to be thought leaders is imperative in today’s evolving technology landscape. ” Therefore, technology and IT is central to building relationships with customers’ thereby increasing revenue for the company.
The research project also noted that business intelligence, mobility, and cloud computing will be the most important technologies for business over the next three years. Using technology is difficult in today because it is constantly evolving. According to the research conducted by CFO Research Services, it states that “old models based on enterprise silos are giving way to a new hybrid – business technology – as IT organizations, finance functions, and business operations alike acknowledge you can’t have one without the other.
By increasing the integration of advance technology to its fullest potential a company can accurately and effectively meet the customer’s needs and operate efficiently, thereby increase revenue. In order for companies to build relationships with their customers they must be able to gain the customers trust. According to Jean-Pierre Lauzier of Jean-Pierre Lauzier Communications, “trust is based on a feeling, in impression or a perception – meaning something intangible – and is not based on anything rational or logical.
Studies have shown that 15% of a customer’s trust in [a company] comes from the [company’s] technical competency, and 85% from the [company’s] human qualities… To build trust it must be natural and authentic. ” In order for a company to effectively build trust with a customer they have to make the customer feel that they know them and are sincerely interested in helping them. One great way for a company to do this is through the use of Customer Relationship Management software (CRM). According to Dr.
Ruth N Bolton, “CRM is a strategic approach concerned with creating improved shareholder value through the development of appropriate relationships with key customers and customer segments. CRM unites the potential of relationship marketing strategies and IT [information technology] to create profitable, long-term relationships with customers and other key stakeholders. CRM provides enhanced opportunities to use data and information to both understand customers and co-create value with them.
This requires a cross-functional integration of processes, people, operations and marketing capabilities that is enabled through information, technology and applications. ” Therefore it is the CRM system that makes it possible for a company to effectively and efficiently communicate with any number of customers so that each customer feels unique. At a high level companies interact with their customer in four ways: Strategic Marketing, Pricing and Revenue Optimization, Tactical Marketing, and Customer Experience Management.
Successful companies are efficient and effective in all four categories. Customer Relationship Management software make this possible. CRM provide detailed information about a customer’s interactions with the company as well as analytical information geared to enable the company to successfully provide tactical marketing and enhance the customer experience. They do this by allowing a company to track and record all of the customer’s interaction with the company so that the company can customize their interaction with the customer based on the customer’s previous behavior.
According to a Computerworld survey in 1996, companies implement CRM systems in order to 1) increase customer retention, 2) respond to competitive pressures and 3) improve customer service. CRM systems are able to also reduce company costs by reducing employees time spent with customers by eliminating repetitive tasks that might be required if the company did not have a CRM system.
For example, when a customer is transferred from one customer service representative to another the CRM system would transfer all customer information and conversation notes so that the employee does not have to waste time asking all the same questions that the first representative asked before being able to attempt to help the customer. However, CRM’s primary focus is to create higher revenue by helping companies build a larger percentage of loyal customers through the use of building trust and relationships with their current and future customers.
Acquiring new customers is extremely costly for a company. Surveys have shown that it could cost a company six times more to acquire a new customer than to keep a current customer. Not only that, but if a company is able to build a loyal customer base those loyal customers are worth much more than their own personal purchase volume. A loyal customer is likely to share their experience with others about companies that they are very loyal to and have a close relationship with.
Therefore, the company is able to acquire repeat sales to the current customer and able to obtain new customers without any additional cost required to try to attract a new sales and customers. In addition, it has also been shown that it is 16 times easier to sell to an existing customer than it is to sell to a new prospective customer. Therefore, CRM systems recognize the long-run value in potential and current customers. Building customer relationships also require companies to communicate effectively with customers in a multitude of different methods.
In today’s environment people are constantly connected and on the go. Companies need to be able to meet the customer’s needs when and how the customer want their needs met. Therefore, it is imperative for companies to offer multiple avenues for customers to communicate with them. Some of those methods include the ways for the older generation such as via the telephone and letters know now days as “snail mail”. However new technology methods are now being required such as through the company’s website, e-mail, and Social Customer Relationship Management system (SCRM).
According to Chris Bucholtz of CRM Outsiders, Social Customer Relationship Management is “the response of businesses to the advent of social media and the eager adoption of the new communications channels by B2B [Business to Business] and B2C [Business to Customer] buyers alike. It creates a new environment for customer conversations, a new opportunity to learn about customers, and a new opportunity to engage, build peer-to-peer relationships and strengthen brand perception. ” He goes on to state that SCRM is more of a strategy than a process or product. It can include many different technology platforms and tools.
CRM is the foundation of SCRM and not a replacement for CRM. A company must have a good CRM in place in order to effectively utilize SCRM. According to Bucholtz, the definition of Social CRM “is a philosophy and a business strategy, supported by a technology platform, business rules, workflow, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.
This definition simply states that it is about people (customers) interacting with people (businesses) and not people (customers) interacting with machines. Due to new technology and people having unique styles of communication, SCRM is about businesses using social media in order to best meet the needs of the customers in the best style of communication for each unique customer. Social media comprises of various online technology tools and can include: text, audio, video, podcasts, and various social media channels such as Facebook, Twitter, YouTube, LinkedIn, and Google+.
Social Media can increase revenue and growth of a company by 60% versus only 8% for companies that do not use social media, according to Daya Baran on PRWeb. com. The article goes on to state that “consumers are spending more time and conducting more business online and businesses that have incorporated social media are reaping the benefits as they are gaining visibility with the consumer across the entire online purchase cycle. Social media technologies are fundamentally changing the sales, marketing and operations process.
It is redefining the way businesses acquire customers, generate leads, creates competitive differentiation, customer response, branding and manage crisis. ” Therefore, Social CRM’s aim is to enhance the customer’s experience and relationship thereby building loyalty with the company. And as we have already discussed, a customer’s loyalty is worth much more than their customers’ individual value thus increasing revenue for the company. Another customer relationship building mechanism is Customer Experience Management.
The e-zine, Customer Experience Exchange, states that companies sometime have a hard time seeing what they look like in the customer’s eyes therefore companies have to invest in technology tools to inject that accurate outside-in view from customers. In the past, companies spent much effort on ensuring the share holders were happy rather than customers. Now with new social media outlets customers are able to make themselves heard to companies much easier than ever before. Take for example the recent backlash that millions of Bank of America customers showed when Bank of America announced they were going to implement a new $5. 0 debit card fee.
Never before have we seen customers be able to so quickly pull together and force big corporations to think twice before acting. Bank of America was in jeopardy of losing over 300,000 customers if they did not listen closely. Another company that needed to listen to their customers was Netflix. Netflix issued a price increase of 60% to subscribers that wanted both online streaming of movies and home DVD’s. This cause Netflix to lose more than 200,000 subscribers which in turn made Netflix CEO offer a public apology to customers and eliminate their original plan of separating the two companies.
With all this being said, it can be seen how imperative it is to a company to be able to attentively listen to their customers. Without an attentive ear and without a company being focused on Customer Experience Management, a company will have difficulty growing and increasing revenue. Anna Fiorentino, of Customer Experience Exchange stated that in order to develop the best customer experience through CEM systems companies not only need to listen as shown in the Bank of America and Netflix examples, but they must also measure and monitor customer conversations and feedback.
Through the use of CRM systems a company is able to analyze customer satisfaction. She stated that Coca Cola, Inc. established a customer reward system called My Coke Rewards. This system enables Coca Cola, Inc. the ability to not only listen to their customers but to also measure customer satisfaction and “deliver real time results creating value for its members as well as internal and external partners. ” Kaitlyn Dennihy a strategist at Engauge, the social media agency of record for My Coke Rewards states, “Measurement is key.
Translating business goals into measurable actions within social has allowed us to track the impact of our communities as well as manage and exceed expectations for the social space. Every content piece in social must include a call to action for the user that can be measured.
My Coke Rewards provides insight into areas such as customer service, product merchandising and exclusivity. ” ING Direct, an online-centric bank that is part of Netherlands-based ING, also believes that meeting customer needs is the basis for creating a thriving social media campaign. ING Direct was able to increase their evenue by listening to online consumer conversations with the help of a program called Radian6. Radian6 is a social media monitoring platform that allows companies the ability to know what’s being said about their brands, industries and competitors online, but to also help them measure, analyze and report on their social CRM efforts. There are many tools on the market now that provide business the ability to obtain statistical information on company website visitors, Google analytics for summarizing search trends, as well as the ability to summarize searches for tweets known as text mining.
Radian6 tells companies such as ING Direct who is saying what and whether customers are communicating through a news site or blog and what percentage of influence the customer will have on the company based on web traffic. Gloria Chik, social media lead at ING Direct stated, “If we get a client complaint, it’s been fantastic to get a full profile of that person. ” Companies should be prudent in privacy issues when handling confidential client financial information, making sure to look at each client complaint or compliment individually.
No matter what method companies use to track return on investment on Customer Relationship Management, one thing is certain, business must focus on providing excellent customer satisfaction and when faced with unsatisfied customers they must listen. Without satisfied customers a company will have a much more difficult and sometimes impossible climb toward growth and increased revenue. In todays technologically advance world business must constantly be evolving in order to meet the customers’ needs.
No longer are businesses able to simply dictate what customers will pay for a product or service. With the today’s generation companies must be diligent in building strong lasting relationships with their customers. Business should look at their customers’ relationships like a marriage. Just as in a marriage a couple must communicate and listen to each other so should a business communicate and listen to their customers. When a company does this they will be able to reap the rewards by having increased revenue and growth.
In order to reap these rewards companies must effectively utilize a CRM system and also incorporate SCRM as well as a myriad of other platforms such as mobile apps, mobile websites, QR Codes and much more. By utilizing technology business are able to develop stronger customer relationships by knowing the customer better. Research Comments When I started this research project I struggled at first trying to find enough information on the subject I had chosen. However, once I got started and finally developed an outline and thought process as to what I was going to talk about, I was able to find all kinds of information.
Some of the websites listed below were uncovered during the research phase but not necessarily used. Some of the websites were not used because I found the information redundant and others had to be eliminated due to the need for limiting material so that it did not go over the stated maximum for the paper.