CRM

Customer Relationship
Management

Dr. Uğur Oral

Chapter 11
Measuring Customer
Relations
 • Customers are the most important part of
business.. Only satisfied customers will be
Customer interested in buying. They will also refer
other customers to buy. By measuring
Relationship customer satisfaction a business can
Measurement maintain a quality and long term relationship
with customers and secure their future
business and financial assets.
Why we measure
customer satisfaction?
• For businesses, profiting
from a customer for long
periods of time is more
important than gaining new
customers. It is necessary to
understand customer
satisfaction and to make a
analysis by measuring
customer lifetime value.
Should we do
customer
relations
measurement
 • Building relationship with customers in
Is it important current market trends is the most important
to build aspect that an organization should focus on.
Today distinction and eminence are the most
customer sustainable approaches for which developing
good relationship with customers. Building
relationships? relationship with consumers increase on
customer loyalty.
 How should • We should listen to the problems of the
customer with sincere attention and make the
we create customer feel special with various campaigns
and get a lifetime profit from them. In this way,
customer our continuity and profibility will be higher than
satisfaction? gaining new customers.
•Measuring customer relationships is of great
importance for customer-oriented businesses.
All measurement systems used to manage a
business today must be such that they
determine the expectations and demands of
the customer. In customer-focused businesses,
customer value should be a priority.
•Correct measurement can only be
achieved with the right standards. For this
reason, the targets of CRM measurement
should be clearly defined and applied in
appropriate standards.

Responses to the answers to these questions will

guide businesses in this respect:
✓ Which criteria and performance indicators
should be used to properly reflect
performance standards in the CRM process?
✓ How should these measures and performance
indicators be linked?
✓ What opportunities do these links bring about
better results through better management of
CRM within the organization?
In this context, businesses 1) Strategic measures:
consider four basiccategories. Measures the success of the
organization's strategic
approach to CRM. In this way,
the use of marketing knowledge
in developing business strategy
and the role of CRM in
positioning the organization in
the market are determined.
Examples can be given such as
whether the vision and goals of
the enterprises are sufficiently
customer-oriented.
In this context, businesses
consider four basiccategories. 2) Customer measures: It
measures the value conveyed
to the customer by the
organization and the value of
this customer to the
organization. In this context,
customer satisfaction and
customer retention levels,
customer acquisition cost and
customer lifetime value are key
performance indicators.
•3. Operational measures:It measures
both human and process performance.
Humanitarian measures include staff
development, remuneration, training
and career development. Accordingly,
the retention success of the employee,
productivity, employee satisfaction, and
performance target are evaluated. It
includes process metrics, customer
service levels, supplier performance
goals, product and service improvement
goals.
4. Output measures:
•It measures the effectiveness of CRM
on corporate performance by
calculating the value conveyed to each
of the stakeholders, shareholders and
employees. Value is determined by
customer satisfaction, increased
profitability, reduced transaction costs,
employee retention and productivity.
• Techniques commonly used by
businesses are as follows:
✓ Focus group meetings
✓ Advisory panels
✓ Critical incident technique
✓ Customer relations survey
✓ Benchmarking
✓ Balanced scorecard
Focus group discussions:
•These are interviews with small
groups of participants in order to
determine the opinions, feelings
and expectations of the
participants on a certain subject.
This technique is widely used in
measuring CRM. It is carried out
in order to determine the
opinions and suggestions of
customers on customer relations,
and important non-quantitative
information is obtained in terms
of customer relations.
Focus Grup Discussions
• An intensive exchange of ideas should be made
between customer groups in Focus group meetings.
The deficiencies of the company or the product are
clearly expressed and solutions are found for these
problems. The aim in focus group measurement
should be to understand customers with different
ideas and thus ensure customer satisfaction in the
future.
Advantages of focus group meetings:
✓ An intense brainstorm
✓ Learning the experiences of the participants
✓ Saving time due to shorter duration than individual interviews

The disadvantages of the

technique are:
✓ Less opportunity for each
participant to speak than
one-on-one meetings.
✓ Some participants are
reluctant to discuss some
topics in the group.
✓ The risk of one or more
participants affecting other
participants
Advisory panels:
•Panel is the transfer of the
necessary information to the
participants about a certain
subject by experts in a
certain time period.
Customers and customer
groups with certain
characteristics participate in
the advisory panels. Panels
of inquiring customers
contribute to business
managers during CRM
measurement.
Advisory panels
• It is the transfer of necessary information
about a specific subject to the participants
by experts within a certain period of time.
• Choosing the customers and employees to
attend the panel well makes us more aware
of the people attending that meeting.
• The participation of people with different
views is important for people to exchange
ideas and creates results that will ensure
customer satisfaction.
•Continuous panel: In these panels,
the participants regularly prepare
reports on the determined topics. The
most important advantage of this
panel is that it is possible to obtain
continuous information. The agenda
of the meeting consists of issues
related to customer service strategy. In
this context, issues such as media
habits and purchasing behavior can be
given as examples. Membership of this
panel is long term.Members are
replaced by rotation and order.
•Discontinuous panel: Although
similar reports are made in these
panels, the group meets once in this
panel and the members leave at the
end.
•The following process should be followed while
carrying out the advisory panel:
• Determining the subject to be informed
• Determination of customer and participating
business managers who will form the panel
• Determining the content and organization of the
meeting
• Conducting the panel at the specified place and
time
•Making the data ready for analysis, analyzing and
interpreting the data within the framework of the
suggestions made to the problems based on the
minutes.
• Submitting the results obtained from the analysis to
the management by transforming them into reports.
• Informing employees and customers about
practices
• Announcement of the topics of the panel studies in
annual reports.
Critical incident technique;
•This technique is used to evaluate
the behavior of employees or
customers in the face of events that
could be considered critical. The
collection of data is not bound by
strict rules and consists of certain
stages. These stages are:
•1)Clear descriptions of events and
behaviors are determined as events,
•2)Critical events are defined as
those that cause the activity to
diverge from its general purpose or
make it contribute.
•3)Events are classified into
categories by collecting data from
appropriate managers, employees
and customers.
• Critical incident
technique
• 1)Clear descriptions of events
and behaviors are determined
as events,
• 2)Critical events are defined
as those that cause the
activity to diverge from its
general purpose or make it
contribute.
• 3)Events are classified into
categories by collecting data
from appropriate managers,
employees and customers.
Customer relations survey:
•Businesses use the survey technique at
certain time intervals in order to
determine the satisfaction level of the
customers while applying CRM. With the
survey technique, while determining the
satisfaction level of their customers, they
also obtain information about the factors
that the customer is not satisfied with
the business. It carries out a number of
regulatory activities in line with this
information
• Businesses have developed customer satisfaction
measurement programs to ensure continuous
improvement in the context of customer relations.
The questionnaire is also an essential part of this
program. The surveys organized for customer
relations include quantitative measurements as well
as qualitative measurements.
Businesses that want to determine customer
satisfaction determine their strategy according to the
following stages.
•Determination of goals: It can set goals such as
being close to the customer, following continuous
development, making customer-oriented
developments, determining competitive advantages
and weaknesses.
• Development of the research design: The issues
regarding how the research will be carried out are
clarified. For example, what will be the data collection
method, with whom, when, where will be
interviewed, which analysis technique will be used,
etc.
• Identifying the features: What are the features
that are important to the customer are determined.
• The design of the survey form: The questionnaire
form should be developed in a way that allows the
customers to show their attitudes correctly.
•The design of the sampling plan: The
characteristics of the customers to whom
the study will be carried out and the
number of customers are determined. In
some studies, all customers are taken
into account, while in some cases, a
selection is made according to various
methods.
• Pre-test: With this stage, all phases of
the program are tested on a small group
of customers.
• Obtaining data: After the pre-test,
the full implementation process has
started and information is collected at
this stage.
•Data analysis: The obtained data are
processed into various programs and
various analysis techniques are applied.
Distribution, mean, regression,
correlation, factor analysis can be
counted among these analysis
techniques.
•Use of data: The information obtained
after the analysis of the data is
presented to the management in a
report so that they can make the right
decisions.
• The most commonly used method in the
application of the questionnaire is a questionnaire
by letter and telephone. Since there are points
where these methods are superior and weak, the
method to be preferred should be chosen
carefully.
•Questionnaires used during CRM
measurement; can be evaluated as
internal CRM and external CRM.
•Internal CRM measurement; It is
carried out for effective management,
employee- oriented culture and
behaviors, technological competence,
employee satisfaction, cooperation /
communication and processes.
•On the other hand, external CRM
survey; is customer interaction focused.
•Benchmarking is the way
businesses investigate best
practices and adapt these
practices to themselves.
•Businesses make a real
difference in performance by
identifying the best practices
that will contribute to
performance development
•Businesses make a real
change in performance by
identifying best practices
that will contribute to
performance improvement.
Benchmarking provides the
following advantages:
•Continuous improvement
process,
• Learning from others
•Adapting what has been learned
from other businesses to their
own organization
•To meet the demands and
expectations of customers in the
current and future periods
• Being a leader in the market,
•To provide a permanent
competitive advantage for the
business in the market.
•Businesses must perform certain
applications sequentially in order to
benchmark. These can be listed as
follows
• Priority areas for improvement are
determined.
• The best practices in the areas to be
improved are put forward.
• Best practice results are evaluated.
•In addition to the differences in the
areas to be improved, if the differences
are improved, the targets that will
provide improvement are determined.
• The results obtained are applied to the
areas to be improved.
• Improvement works are continued
until they reach perfection.
 •In the Balanced Scorecard
Balanced application, the vision and strategies
of the company are determined first,
Scorecard and then the determined targets are
created with the balanced scorecard.
•The created goals are shared within
the organization. After sharing,
financial and non-financial goals are
set by planning and setting goals.
Whether the results are achieved is
examined. Finally, a shared vision is
set forth with strategic feedback and
learning. In short, it is a
management tool used to turn
company strategies into action. The
relationships of perspectives with
each other are created with the help
of strategy maps.
•Balanced Scorecard structure
consists of 4 perspectives.
✓ Financial Perspective
✓ Customer Perspective
✓ Internal Processes Perspective
✓Learning and Development
Perspective
•Each of these 4 four perspectives
seek answers to the following
questions:
✓Financial Perspective: How should
we look to our shareholders for
financial success?
✓Customer Perspective: How
should we look to our customers to
realize our vision?
✓Internal Process Perspective: How
should we organize our processes
to satisfy our customers and
shareholders?
✓Learning and Development
Perspective: How should we
preserve our ability to change and
develop in order to reach our
vision?