CRM subject Material Unit -1 to Unit -4

UNIT -1

Overview of Relationship marketing – Basis of building relationship – Types of relationship marketing –customer life cycle.

About Relationship Marketing

Relationship marketing involves developing long term relationship with customers so that they provide you with ongoing business. An organisation must exceed customer satisfaction expectations to retain and develop long term relationships with customers. Traditional transactional marketing used to focus on attracting customers for "one off sales" rather than repeat business. It takes a lot of work to persuade customers to make their first purchase with you, but if you can persuade customers to give you repeat business it will cost you less money and time. So it makes sense to keep existing customers happy!

Example

·         American Airlines – The airline maintains a comprehensive frequent flyer program that rewards customer loyalty with the promise of free flights, upgrades, and discounts.

Basis of Building Relationship

Successful businesses don't just communicate with prospects and customers for special sales. Today, making your company indispensable is a vital key to marketing success. It's a terrific way to add value, enhance your brand and position against your competition. Here are seven relationship-building strategies that will help you transform your company into a valuable resource:

1. Communicate frequently. How often do you reach out to customers? Do the bulk of your communications focus on product offers and sales? For best results, it's important to communicate frequently and vary the types of messages you send. Instead of a constant barrage of promotions, sprinkle in helpful newsletters or softer-sell messages. The exact frequency you choose will depend on your industry and even seasonality, but for many types of businesses, it's possible to combine e-mail, direct mail, phone contact and face-to-face communication to keep prospects moving through your sales cycle without burning out on your message.

2. Offer customer rewards. Customer loyalty or reward programs work well for many types of businesses, from retail to cruise and travel. The most effective programs offer graduated rewards, so the more customers spend, the more they earn. This rewards your best, most profitable clients or customers and cuts down on low-value price switchers-customers who switch from program to program to get entry-level rewards. Whenever possible, offer in-kind rewards that remind your customers of your company and its products or services.

3. Hold special events. The company-sponsored golf outing is back. With the renewed interest in retaining and up-selling current customers, company-sponsored special events are returning to the forefront. Any event that allows you and your staff to interact with your best customers is a good bet, whether it's a springtime golf outing, a summertime pool party or an early fall barbecue. Just choose the venue most appropriate for your unique customers and business.

4. Build two-way communication. When it comes to customer relations, "listening" can be every bit as important as "telling." Use every tool and opportunity to create interaction, including asking for feedback through your Web site and e-newsletters, sending customer surveys (online or offline) and providing online message boards or blogs. Customers who know they're "heard" instantly feel a rapport and a relationship with your company.

5. Enhance your customer service. Do you have a dedicated staff or channel for resolving customer problems quickly and effectively? How about online customer assistance? One of the best ways to add value and stand out from the competition is to have superior customer service. Customers often make choices between parity products and services based on the perceived "customer experience." This is what they can expect to receive in the way of support from your company after a sale is closed. Top-flight customer service on all sales will help you build repeat business, create positive word-of-mouth and increase sales from new customers as a result.

6. Launch multicultural programs. It may be time to add a multilingual component to your marketing program. For example, you might offer a Spanish-language translation of your Web site or use ethnic print and broadcast media to reach niche markets. Ethnic audiences will appreciate marketing communications in their own languages. Bilingual customer service will also go a long way toward helping your company build relationships with minority groups.

7. Visit the trenches. For many entrepreneurs, particularly those selling products and services to other businesses, it's important to go beyond standard sales calls and off-the-shelf marketing tools in order to build relationships with top customers or clients. When was the last time you spent hours, or even a full day, with a customer-not your sales staff, but you, the head of your company? There's no better way to really understand the challenges your customers face and the ways you can help meet them than to occasionally get out in the trenches. Try it. You'll find it can be a real eye-opener and a great way to cement lasting relationships.

Types of Relationship Marketing

Thus, there are five different levels identified for relationship marketing thereby improving customer service and customer satisfaction. These five levels of relationship marketing are as follows

1 – Basic Marketing – The salesperson sells to the final customers. This is also known as direct sales.

2 – Reactive Marketing – The sales person sells the product and encourages the customer to call for any comments or enquiries.

3 – Accountable Marketing – The sales person calls the customers to ensure whether the product is working as per satisfaction and if there is any problem in the product. Furthermore he also asks the customer for any suggestions / feedback to improve the service / product. Thus he is taking responsibility for the sale.

4 – Proactive marketing – The company works continuously with its large customers to help improve performance. This is especially seen in financial companies wherein the movement in the financial market induces the company to make changes regularly. However at the same time, these financial companies have to take care of their customers as well. Thus they take regular feedback from their large customers thereby developing their products accordingly.

5 – Partnership Marketing – The company works continuously with its large customers to improve its performance. An example would include General Electric which has stationed Engineers to its third party service centers to improve overall performance. Thus even in partnerships GE is ensuring optimal relationship development with the parent brand.

Customer Life Cycle

In customer relationship management (CRM), customer life cycle is a term used to describe the progression of steps a customer goes through when considering, purchasing, using, and maintaining loyalty to a product or service. Marketing analysts Jim Sterne and Matt Cutler have developed a matrix that breaks the customer life cycle into five distinct steps: reach, acquisition, conversion, retention, and loyalty. 

Let’s see what progression of steps a customer goes through when he decides to purchase, use and maintain loyalty towards a brand or a product.

• Reaching a customer: This involves getting a potential customer’s attention. In order to reach to the potential customers, marketers will have to create ample awareness about their product in the market. When a customer has a buying interest in a particular product type, then brand should be able to catch the customer’s eye in order to be considered. With the growing trends in technological advancements creating an online presence and creating the digital identity of a brand becomes important.

 • Acquiring a customer: This involves making the customer aware of the marketers’ services and offerings. In order to bring the customer into the marketers influence sphere, the quality of the product and his marketing skills should steal the show. If the marketer lacks quality offerings and skills, chances are that the customer will bounce to another competing brand and might never return.

• Converting a customer: This includes impressing the customer, to the extent that he turns into a paying customer. To convert a potential customer into a paying one, the marketer has to provide the customer what he is looking at. If a customer decides to buy a product, the marketer should provide the opportunity to the customer to make the purchase there and then. In the case of online purchase, there should be clarity in the pricing and shipping rates on the marketer’s website. In case the marketer doesn’t wish to introduce online buying then there should be a provision of offline buying within the consumer’s reach, or providing the customer a toll free number so the customer can order offline. The conversion paths should be straight forward and immediately achievable.

• Retaining a customer: When a marketer is successful in creating a loyal customer who willing to repurchase the products and if he could convert a one time buyer into a repetitive buyer, then the marketer has managed to achieve success. Selling a product to a customer is not sufficient; it is important to build a relationship with the customers in such a way that the customer acquires a lifetime value from the purchase. After making a purchase a customer undergoes rationalization. The assurance that he has made the right purchase will make him come back again to the same marketer.

 • Building Customer loyalty: Loyalty toward the brand is achieved when a customer is satisfied with the product or service and has joined the cycle. When a customer is advocating a particular product, there is no better effective marketing activity than that. How can a marketer make each of his customers as brand ambassador? If a customer gains satisfaction, joyful and fulfilling experiences after using the product then certainly he will be suggesting the product to everyone else.

Unit – II

CRM – Overview and evolution of the concept – CRM and Relationship marketing – CRM strategy – importance of customer divisibility in CRM

What is CRM ?

A CRM system is a business tool that allows you to manage all your customers, partners and prospects information all in one place. The Sales Cloud (Salesforce.com’s CRM system) is a secure cloud based CRM system that can help every part of your business get a 360 degree view of your customer.

For example, it helps:

·         sales teams close deals faster

·         marketing manage campaigns and track lead generation

·         service call centres reduce the time to resolve customer complaints

Definition

Paul Greenberg, the Author of CRM at the Speed of Light, has his own classic definition about CRM:

“CRM is philosophy and a business strategy, supported by a system and a technology, designed to improve human interactions in a business environment. It is also a continuing business initiative that demands a dynamic, ongoing strategy of customer engagement”.

Scott Hornstein, the Principal of Hornstein Associates, defines CRM as:

“CRM is the delivery of customer care as a strategic product, with measurement and reward focused on generating happier customers that stay longer and buy more”.

Evolution of CRM

Evolution CRM - Customer Relationship Management encompasses the methodologies, software, and communication capabilities that help organisations to structure and manage their customer relationships and interactions, with the objective of increasing customer satisfaction with the organisations' products or services.

Evolution CRM is the foundation for adoption of a customer-centric business strategy, which can drive changes in functional roles in the company, demand re-engineering of your work processes, which is supported, not driven, by CRM technology.

Evolution CRM provides the business strategy, process, culture, and technology to enable organisations to optimise revenue and increase shareholder value through better understanding the needs of customers.

Evolution CRM technology can bring significant benefits to the improvement of relationships with customers, and assist with streamlining business processes.

One of the greatest challenges facing business today remains how to access, manage and distribute the business information locked away in their corporate databases and secreted in the minds of their employees - intellectual capital. As the world moves from an industrial society to an information society, the value and volume of corporate information is growing exponentially.

For organisations that are unable to rationalise the problem, the outlook is bleak - loss of vision, agility, and eventual paralysis will ensue.

Evolution CRM with tools to help users manage data and information, sorts the useful from the useless in order to make rapid and accurate decisions to achieve the goal of competitive advantage.

Evolution customer management solutions expand the definition of CRM to include all of the business processes and associated systems that touch a customer.

Our collaborative commerce CRM application is a customer orientated, modular, B2B solution for optimising your marketing, sales, planning, fulfilment, delivery and service.

It recognises that billing and delivery are every bit as important as sales force automation in terms of the overall customer experience.

CRM and Relationship Marketing

Customer relationship management (CRM) is an approach to managing a company’s interaction with current and future customers. The CRM approach tries to analyze data about customers' history with a company, in order to better improve business relationships with customers, specifically focusing on retaining customers, in order to drive sales growth. One important aspect of the CRM approach is the systems of CRM that compile information from a range of different channels, including a company’s website, telephone, email, live chat, marketing materials, social media, and more. Through the CRM approach and the systems used to facilitate CRM, businesses learn more about their target audiences and how to best cater to their needs. However, the adoption of the CRM approach may also occasionally lead to favouritism within an audience of consumers, leading to dissatisfaction among customers and defeating the purpose of CRM.

Relationship Marketing

Relationship marketing was first defined as a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions.

As a practice, relationship marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages.

With the growth of the internet and mobile platforms, relationship marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels. This includes tools for managing relationships with customers that goes beyond simple demographic and customer service data. Relationship marketing extends to include inbound marketing efforts, (a combination of search optimization and strategic content), PR, social media and application development.

CRM Strategy

Here are the seven key steps to establish and manage a preventive collections strategy alongside your current customer relationship management practices: 

1. Choose the right people 

Screen agents for collections, with a customer care skill sets up-front. Identify individuals capable of serving as “universal” agents, able to handle virtually any issue – from standard customer care issues to past-due collections. Then, match top performers in each area to specific clients. 

Universal agents can easily be identified by their customer service skills and a thick skin required for past-due collections. Simply put, you can teach a collections agent how to handle customer care, but customer care agents rarely have the skills needed to manage collections calls. 

2. Provide up-front and ongoing training 

Once identified, universal agents should receive special training. They must have the empathy, bridging and negotiation skills needed to open and close a customer care issue and negotiate and resolve a past-due billing issue – often during the same call.  

A certain amount of ongoing training is required. Agents must be kept abreast of the latest client offers. They must know how to change a customer’s payment due date, offer credits, or waive a service fee.  

If the customer recently lost a job, the universal agent must be able to show empathy and offer payment alternatives. 

3. Control customer service quality and performance 

With customer data and payment habits on their screen the moment the call comes in, universal agents can deliver a quality customer experience by offering empathy and sympathy – while remaining firm enough to meet the client’s collection targets.  

Statistics prove that empathy and the ability to offer alternative arrangements – as opposed to the traditional, bottom-line collections call enhances customer satisfaction/loyalty and increases the likelihood of receiving payment.  

4. Leverage customer data to build prevention strategies 

When a customer gets his or her paycheck, every company wants to be paid first. By having the individual’s payment history on-screen at the outset, the universal agent is better able to negotiate. They may offer suggestions like: “Can we change the due date to better fit your needs?”  

After incorporating a more conversational, sympathetic approach, our clients experienced a twelve percent lift in payments. Though a friendly, caring approach increased the handle time, it also delivered superior financial results. 

5. Provide access to all customer contact channels 

More and more consumers and business people are using non-traditional means for communications. Communicate in the medium of their choice. Employing a multi-channel approach, the preventive collections program can leverage or combine voice communications with other direct contact channels, including direct mail, chat and email. 

6. Deliver global consistency

Implement and enforce a set of operating standards for all customer care and collection interactions throughout your operation. This will ensure equally trained agents with reliable service to your clients around the world. 

This program is derived from a set of highly defined standards developed from global call center experience over the past 20-plus years. It delivers universal agents with consistent skill levels, regardless of where they’re located. 

7. Provide motivation and incentives

Every client has different needs. When it comes to motivating and incenting universal agents, there are a variety of client-specific compensation models. Earnings and incentives can be based on cure, liquidation and collection rate measurements.  

With this strategy, agents are able to engage late-paying customers and gradually move them away from the collections process, in some cases permanently. Identifying and resolving past-due issues before the customer reaches the collections stage is a proven way to enhance the bottom line.

 Unit –III

Sales force Automation –Contact management – Concept – Enterprise Marketing Management – Core beliefs – CRM in India.

About Sales Force Automation

Sales force automation (SFA) software is a type of program that automates business tasks such as inventory control, sales processing, and tracking of customer interactions, as well as analyzing sales forecasts and performance. Businesses may have a custom version developed specifically for their needs, or choose from among the increasing number of sales automation software products, such as Interact Commerce's ACT! and Gold Mine Software's Gold Mine. Sales automation software is sometimes called sales automation software, and sometimes called customer relations management ( CRM ) software.

SFA packages typically include a Web-ready database, an e-mail package, and customizable template s. A three-tiered architecture is typically used to separate the database, server, and application to reduce programming demands on clients. A module-based design is generally used, to allow users to customize the package to suit their needs.

Simple about Sales Force Automation

Sales force automation: Also known as sales force management, sales force automation is meant to prevent duplicate efforts between a salesperson and a customer. A CRM system can help achieve this by automatically tracking all contact and follow-ups between both sides.

Contact Management

People often times confuse Contact Management Systems with Customer Relationship Management (CRM). Although similar, the two systems are indeed different. In simple terms, the difference lies in the amount of sales representatives an organization has. An organization that has many sales representatives targeting a single job role would normally be using a CRM. This type of an organization has a many-to-many interaction model. In contrast, an organization, which has a sales interaction model of one-to-many, would normally prefer a Contact Management System.

A contact manager is a software program that allows users to easily store and find contact information, such as telephone numbers, addresses, and names. In other words, a CMS can help businesses overcome the challenges associated with inconsistency and information fragmentation. A contact management software package can greatly enhance the effectiveness of all types of contact interactions. It also can help in regards to: marketing operations, productivity of sales cycles, and service delivery by enabling the creation of reliable, real-time information about both current and prospective customers that, most importantly, is easy to access. Departments within the organization that deal with customers on a daily basis such as sales, marketing, customer service, help desks, etc. are able to collaborate together and coordinate cross-function activities.

Enterprise Marketing Management

Enterprise marketing management (EMM) is a type of software that is used to provide, monitor and maintain a promotional structure across a large organization. Enterprise marketing management software provides a single platform that serves all of a business's marketing needs, including:

• Campaign management across all channels (social media, Web, mobile, traditional)
• Customer experience management (pre-sale research, post-sale follow up, and so on)
• Analysis of campaigns, including conversions and other important factors
• Management of marketing resources (budgets, people and so on)

CRM in India ("CRM Market in India 2013" report from Business Wire)

The new report, CRM Market in India', states that over the years CRM has evolved from point solution to 360 degree enterprise-wide initiative in India. As of now, CRM implementation in India is mainly focused on marketing & campaign management. CRM market is witnessing a steady growth with an increasing trend of expenditure on CRM across the world. In India, on-premise solutions have higher traction than cloud solutions unlike developed nations such as United States and United Kingdom.

In terms of process & function CRM can be broadly categorized in four segments - Operation CRM, Analytical CRM, Sales Intelligence CRM and Collaborative CRM. CRM modules cater to three essential areas of customer relationship leading to customer retention and acquisition. CRM is easy to implement, integrate & use and it offers remote access, multi-channel interaction, analytical operation, campaign management tools in a customized interface as required by the client.

Large presence of SMBs in India has proven to be highly beneficial for CRM vendors. CRM adoption by SMBs is facilitated by both private players and government activities while the barriers to adoption are mostly internal.

CRM adoption is driven by enhancement of customer care operations and achievement of global standards. Further cost reduction capability of CRM and availability of technologically sound personnel are also catalyzing CRM adoption. However, high cost associated with CRM solutions and low awareness regarding its advantages hinders its implementation.

Transparency is at the forefront of the changing CRM landscape. India is becoming a promising market for mobile CRM owing to skyrocketing adoption trend in mobile devices. Social CRM offers open-ended interaction amongst employees & numerous consumers in the social networks. Cloud Computing is catching up with the on-premise ICT solutions, especially Software-as-a-Service (SaaS). Despite a rise in implementation of CRM in the Indian industries there exists further scope for growth.

The list of below Companies  are using CRM software wildly

Public Companies

- Amdocs Ltd.

Private Companies

- Adobe Systems India Pvt. Ltd.

- CDC Software India Pvt. Ltd.

- Cegedim Software India Pvt. Ltd.

- IBM India Pvt. Ltd.

- Kallos Solutions Pvt. Ltd.

- PK4 Software Technologies Pvt. Ltd.

- Microsoft Corporation (India) Pvt. Ltd.

- Oracle Software India Pvt. Ltd.

- Sage Software India Pvt. Ltd.

- Salesforce.com India Pvt. Ltd.

- SAP India Pvt. Ltd.

- Talisma Corporation Pvt. Ltd.

UNIT –IV

Value chain – concept – Integration Business Management – Benchmarks and Metrics – culture change – alignment with customer eco system – Vendor selection

Value Chain

About Value Chain

VCM was introduced in the mid-1980s by Michael Porter, a business strategy authority and longtime Harvard Business School professor. VCM has evolved into a universally applied business management strategy, and is a powerful strategic planning tool that extends from organizations to distribution and supply networks.

Definition for Value Chain

Value chain management (VCM) is a strategic business analysis tool used for the seamless integration and collaboration of value chain components and resources. VCM focuses on minimizing resources and accessing value at each chain level, resulting in optimal process integration, decreased inventories, better products and enhanced customer satisfaction.

VCM requires the following components: 

• Integrated chain strategy, planning and scheduling
• An efficient supply chain
• Full and interdependent chain resource management and optimization
• Integrated customer insight data and information

Integration Business Management

Business integration Management are used to cross-train management and employees, reduce ineffective communication and cut supplier costs. As you analyze your company operations, think of the different ways you can integrate processes to save the company time and money. Integration helps to streamline your operations and can reduce overhead as well as personnel costs by reducing the need for additional staff and the resources they use.

Simple Meaning for Integration Business Planning

Integrated Business Planning is a planning process that integrates across two or more functions in a business or government entity referred to as an enterprise to maximize financial value.

The specific functional areas in a company as well as the industry domain associated with the company defines the specific type of IBP process. Examples of IBP processes are:
->Sales and Operations Planning
->Healthcare Analytics
->Strategic Corporate Performance Management
->Planning and scheduling across multiple plants in a factory

The key requirement for IBP is that two or more functional process areas must be involved and maximizing (optimizing) of financial value should be done.

Corporate executives, business unit heads and planning managers use IBP to evaluate plans and activities based on the economic impact of each consideration.

Bench Marking

Standard, or a set of standards, used as a point of reference for evaluating performance or level of quality. Benchmarks may be drawn from a firm's own experience, from the experience of other firms in the industry, or from legal requirements such as environmental regulations.
Benchmarking occurs across all types of companies, including private, public, non-profit, and for-profit, as well as industries e.g., technology, education, and manufacturing. Many companies have positions or offices in the company that are in charge of benchmarking. Some of the positions include:

• Institutional researcher
• Information officer
• Data analyst
• Consultant
• Business analyst
• Market researcher

Companies use benchmarking as a way to help become more competitive. By looking at how other companies are doing, they can identify areas where they are underperforming. Companies are also able to identify ways that can improve their own operations without having to recreate the wheel. They are able to accelerate the process of change because they have models from other companies in their industry to help guide their changes.

Types of Bench Marking

Best practices- This is a benchmark report where companies choose to look at a company or companies that they aspire to be like. By choosing companies that are on the leading edge of the industry, they can identify best practices that help improve their own company.

Peer benchmarking- This is a benchmark report where companies choose to look at other businesses very similar to themselves. This allows companies to make sure they are staying competitive with similar businesses.

SWOT- This is a type of benchmarking report where companies gather data by looking at strengths, weaknesses, opportunities, and threats to help understand their climate.

Collaborative benchmarking- This is benchmarking as a part of a group. Many industries have associations they can join e.g., The Association of Information Technology Professionals, and The National Education Association. These collaborative associations allow for members to provide information to the association. The association can then provide benchmarking and best practice reports for the membership.

Process of Bench Marking

The following six step would followed while bench marking

Step one: Determining benchmark focus - During this phase, the company determines the specifics of the research project. (e.g., which companies will they include in the research, and what types of metrics they will compare).

Step two: Planning and research - During this phase, the company puts the resources together to implement the project e.g., develop surveys, seek cooperation from other companies, and find databases already available.

Step three: Gathering data - During this phase, the data is collected through the methodology determined in the planning and research phase.

Step four: Analysis - After gathering the data, the company uses statistical techniques to examine and create the findings.

Step five: Recommendations - After analyzing the data and areas where the company can improve, recommendations are developed.

Step six: Implementation - After reviewing recommendations, the company implements those that are feasible.

Advantages of Benchmarking

o    The main advantage of benchmarking is that it brings the focus to the areas which should be given special attention. This is how it sets the base for improvement. It forces the organization to adopt change, the other name of which is progress.

o    While conducting this exercise, a company is discovers various new ideas and way of working. It gets a feel of the strategy adopted by its competitors.

o    Improvement based on the past performance of the company is not the right measure. Comparison with competitors is required because survival has to be fought with these rivals. This is what exactly benchmarking provides.

Limitations of Benchmarking

o    Benchmarking simply helps you to spot areas which need improvement. It does not contribute in solving the issues in hand. Benchmarking can just be the first of many steps to improve a company’s performance.

o    Benchmarking simply compares the numbers. It does not take into account the micro and macro factors that led to your competitor or industry leader succeed or fail.

Culture

Meaning of Culture

The values and behaviours that contribute to the unique social and psychological environment of an organisation.

Organisational culture includes and organization’s expectations, philosophy, and values that hold it together, and is expressed in its self-image, inner workings, interactions with the outside world, and future expecatations. It is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid. Also called corporate culture, it’s shown in

1. The ways the organization conducts its business, treats its employees, customers, and the wider community.

2. The extent to which freedom is allowed in decision making, developing  new ideas, and personal expression.

3. How power and information flow through its hierarchy, and

4. How committed employees are towards collective objective.

It affects the organization’s productivity and performance, and provides guidelines on customer care and service, product quality and safety, attendance and punctually, and concern for the environment.

Implementing Cultural Change

·         Step 1 – Evaluate your current culture and performance: 1) Define your 1-3 critical performance priorities – e.g. growth, profitability, customer satisfaction, etc.; 2) identify your 3-5 value/behavior strengths and 3) identify no more than 1-3 value/behavior weaknesses that are holding back your organization from achieving its full potential with the performance priorities you defined.

·         Step 2 – Clarify your initial vision: Define your vision for improving results with only one or two of the performance priorities from step No. 1 and how you will build a culture advantage by leveraging the value/behavior strengths and improving the weaknesses. Clearly communicate how you will work together to improve the weak areas since they are holding your organization back from supporting your purpose and stakeholders.

·         Step 3 – Clarify values and expected behaviors: Define supporting expected behaviors for the 1-3 weaknesses that you identified in step #1. These behaviors would be consistently exhibited in your organization if you were “living your values.” People interpret values from their own perspective so define expected behaviors like Zappos, The Container Store, and others.

·         Step 4 – Clarify strategic priorities: Define and clearly share the 3-5 actionable strategic priorities that your organization will focus on to support the 1-2 performance priorities included in your initial vision from the Define steps. If the performance priority is growth, will it be achieved through new products or services, revised sales strategies, growth with current customers, or other strategies. Employees want and need to understand the big picture.

·         Step 5 – Engage your team in defining SMART goals: Engage your organization and utilize extensive feedback and prioritization to define the objectives that support each strategic priority. These goals need defined in a way to support the expected behaviors for the 1-2 weaknesses you identified from the Define steps. For example, if accountability is a weakness, goals should include more disciplined plans, measures, reviews, recognition, and other approaches to support the behavior you need. Goals also need translated to all levels in larger organizations so people understand how work on their goals and measures impacts the broader organization.

·         Step 6 – Clarify and track key measures: Identify a small number of overall measures that support the one or two top performance priorities from the Define steps. It may help to have one highly visible “unifying metric” even if some employees don’t directly influence it.

·         Step 7 – Maintain a management system for priorities and goals: Most organizations have a system to track or monitor the status of priorities and goals. These reviews need adjusted to focus additional time and attention on the top performance priorities and value/behavior shifts identified in the Define steps. The focus must be on results and supporting the behavior shift through recognition, coaching, removing barriers, etc.

·         Step 8 – Manage communication habits and routines: Transparent, genuine and consistent communication is needed about your performance improvement journey and the role of culture so all employees feel part of the process. Regularly scheduled sessions with two-way communication and extensive informal approaches are needed to emphasize expected behaviors and results. Use these sessions to clarify plans, answer questions, expose rumors and reduce drama.

·         Step 9 – Build motivation throughout the process: Feedback and recognition are critical to the process. Share and celebrate progress in a transparent manner as a standard part of regular communication activities. Confront reality when improvements don’t go as planned and re-engage your team to prioritize adjustments.

What’s a Customer Ecosystem?

A customer ecosystem is a business network that’s aligned to help customers get things done—both the things they want to accomplish and the things they want to manage.

What makes a customer ecosystem valuable to customers is that:

• It contains everything that customers need to be successful in a particular endeavor.

• Customers can add new activities as they discover new ways to simplify, streamline, and transform how they reach their goals.

• The ecosystem attracts new suppliers and partners to the network to support customers’ changing activities and needs.

• It’s driven by customers’ needs and goals and optimized to achieve customers’ success metrics, for example: to meet targets and deadlines, save time, reduce the number of steps, save money, have the peace of mind that everything is on track, recover from the unexpected within acceptable thresholds, build trust.

How Customer Ecosystem helps the Organisation ?

Our Customer Ecosystem helps your entire organization visualize the total customer experience across every touch point between your customers and your organization.

• How do customers perceive your industry.
• How do your customers perceive your company within that industry.
• How do they discover you.
• Why do they buy.
• What are their obstacles to purchase.
• Who/what are their influencers.

Utilizing this map, your organization can begin to understand the most important factors from your customers’ perspective: where your company excels, succeeds or fails through the lens of your customers’ needs.

Uses of Ecosystem Map to:

• Understand the experience of different groups of customers
• Improve efficiency and remove inconsistencies in the customer’s experience
• Identify a more seamless experience across businesses, functional silos and channels
• Design a new customer experience
• Assess the impact of wider internal developments on the customer’s experience
• Establish development priorities
• Develop cross business alignment across the company
• Improve your single overall measure of customer experience

Then you can begin to adapt processes to exceed customer expectations and reap the rewards of a Customer Experience organization.

Why Are Customer Ecosystems “The Next Big Thing”?

Today, investors and business execs are breathlessly excited about social media platforms like Facebook. Every investor wants to be in on the next Facebook. But not every company is going to be lucky enough to build a brand and a franchise like Facebook, or Google, or Amazon. Yet, most really visionary companies could create an attractive customer ecosystem that increases the value of their brand and the loyalty of their customers and partners.

Customers Need and Value Them. Once you succeed in developing and delivering a set of truly useful tools that help customers do something they care a lot about, they’ll prefer your approach to getting things done. They’ll tell their friends, family, and colleagues. You’ll gain customers’ loyalty as you deepen your brand experience and the importance of your brand to their lives.

They Are Viral, Sustainable, and Mutually Profitable. Customer ecosystems act as magnets. The easier it is for customers to do things in and around your brand, the more they also value tools and resources from others that play well together and that help them do everything they care about, including the things that aren’t in your sweet spot. As you co-evolve your branded tools to address more and more of your customers’ changing needs, you’ll find more and more kinds of players, experts, stakeholders, and partners whose help customers value. These partner relationships are often more than marketing partnerships; there’s usually a win/win sharing of information around the customer’s context, what they’re doing, and what they need along the way. Often the partners in the ecosystem use the tools you’ve developed to help customers manage their stuff and get things done. Everyone benefits as customers achieve their goals, partners make money by providing what customers need at just the right time, and you all gain a much clearer picture of what’s going on and what new patterns and needs are emerging.

But Investment Is High and Failure Is Easy

It’s easy to come close to having a customer ecosystem but to miss by a mile if you don’t understand what makes them successful and sustainable. Building the framework for a successful customer ecosystem can be a costly and time-consuming undertaking. Don’t expect to be able to do this in a year or two. It takes vision, patience, and persistence.

WHAT ARE THE CHARACTERISTICS OF A SUCCESSFUL CUSTOMER ECOSYSTEM?

Six Secrets to Success

Whenever you design a product or service to satisfy customers’ important unmet needs, you’re likely to hit a home run. Designing the framework and business model for a customer ecosystem is no different. As long as you’re addressing critical unmet needs for a target group of customers that is large enough and where the total opportunity (for the customers, for you, and for partners) is large enough, it’s probably worth the investment.

Having watched a number of visionary leaders design and evolve their own customer ecosystems, we’ve identified six critical things that are common to each of these successful initiatives.

What Are the Six Critical Success Factors for a Viable Customer Ecosystem?

1. Help customers achieve and/or manage something they care about.

2. Design for specific target audiences.

3. Provide a “secret sauce” that transforms customers’ ability to get things done.

4. Attract partners & suppliers who can contribute to these customers’ success.

5. Align the entire ecosystem to meet customers’ success metrics.

6. Embed, co-brand, and be ubiquitous so customers will encounter and use your secret sauce no matter what their starting point is.

Vendors

DEFINITION of 'Vendor'

The party in the supply chain that makes goods and services available to companies or consumers. The term vendor is typically used to describe the entity that is paid for the goods that are provided, rather than the manufacturer of the goods. A vendor, however, can operate both as the supplier of goods (seller) and the manufacturer. 

Vendors Rating

It makes no difference what business you are in, suppliers and vendors play a key role in your company's success. Having a formalized system in place to track and evaluate supplier and vendor performance is essential to the smooth operation and profitability of your company.  

Successful companies embrace their suppliers and vendors, viewing them as partners in helping to grow the business. Making sure that this is a mutually beneficial partnership will impact the price you are negotiating today and the quality of service you get in future, says Dennis Wright, a management consultant from the SCORE Orange County office. If a supplier/vendor is a key part or service to your operation invite that supplier or vendor to strategic meetings that involve the product they work with. 
A common mistake companies make is to have a combative relationship with their suppliers and vendors. 'That is the opposite of what you want to do,' says Drew Greenblatt, president of Baltimore-based Marlin Steel Wire Products, which makes custom stainless steel metal baskets, brackets and other parts. 'A lot of companies will actually have an adversarial relationship where they hire purchasing people who have on brass knuckles and try to beat up on vendors to get better prices or better terms.' That is a very shortsighted way to do business, according to Wright and Greenblatt.
Instead of getting stuck on price, focus on quality of service. A vendor can have the lowest price and the lowest quality of work, too. Your goal is understand what value-add is a given vendor bringing to your company. Your business should have a system in place for evaluating, selecting and then reevaluating the suppliers and vendors it works with. 

Here are seven tips and tools you'll need to effectively rate your suppliers and vendors, track their performance, and ultimately increase your company's overall productivity. 

1. Establish Performance Indicators
At the onset of the vendor relationship you have to determine what characteristics a vendor needs to have, demonstrate, or maintain to continue doing business with your company. Create specific performance criteria for tracking and evaluating your suppliers and vendors on a regular basis—monthly, quarterly, and/or annually. Considerations include size of the company, number of certifications, quality management systems, complaint history, and financial stability. For instance, you might consider if they have a documented procedure for the product or service they provide? 'We look at a couple of driving metrics to evaluate how good our vendors are,' says Greenblatt, 'including percentages of on-time performance, number of times we received a quality part or product, and how quickly the vendor responded to requests for quotes.' 
Your own processes and needs will dictate what criteria you apply. For a business owner who is looking for a shipping company, the biggest concerns might revolve around what is that supplier's on time delivery track record, how many trucks they own, how many accidents have their drivers reported, and what certifications do they hold.
A basic consideration for every business owner should be whether the supplier has a quality management system in place. 'This doesn't just apply to manufacturing but any business including service providers,' explains Miriam Boudreaux, president of Mireaux Management Solutions, a Houston-based consulting that specializes in the implementation of quality management systems. 'It's really about if the supplier has a certain set of procedures in place that its people are expected to follow. Is there a system for handling complaints or problems? Are there corrective or preventive actions?' Such standards will be addressed if the vendor is ISO certified.
2. Classify Multiple Suppliers and Vendors 
If you have a huge number of suppliers and vendors and you intend to craft a survey to evaluate them, it will be cumbersome to apply the same survey to each and every one, says Boudreaux. It is better to separate suppliers into levels (1, 2, and 3) based on how critical they are, she advises. Decide the classification that is best for you and evaluate suppliers according to the effect they have on your product or service in order of importance, Boudreaux adds. 
Marlin Steel exports wire baskets and forms all around the world including Japan, Columbia and China. Greenblatt points to the fact that 'about 80 percent of my vendors do 20 percent of my dollar amount of work and about 20 percent of my vendors do 80 percent of my activity.' 
By divvying up suppliers into two categories such as critical and non-critical or primary and secondary, you can devote more time to measuring the performance of your critical suppliers.

3. Devise an Evaluation Method 
There are common techniques for rating a supplier's performance including evaluation forms, surveys, system metrics, and software applications. Marlin Steel tracks vendor performance using a customized program he created in QuickBooks Enterprise Solutions accounting software, the Manufacturing & Wholesale edition. 
You can craft a survey where you ask your own employees to answer questions and to rate suppliers and vendors. You can review how many corrective actions you had to issue a supplier or vendor, how many products you had to scrap or return because the supplier or vendor failed to meet specifications, or how many customer complaints you received due to a bad part or service from a vendor. You also can monitor suppliers and vendors by doing an audit periodically. The bottom line is that you need to generate measurements or reports at the onset of the purchase and throughout the course of the supplier and vendor relationship. 

'We did vendor reviews where we would bring them together offsite at a hotel with our IT and procurement people,' says Wright, who in his last business life for eight years was vice president and director of procurement for a large global engineering company. At the point he retired, the company had 100 plus suppliers and vendors ranging from Microsoft to United Airlines to a small staffing agency. 'We would line them up. So, at 9 in the morning AT&T would be making a presentation to our group. When AT&T finished and left the room they would find the Verizon salespeople standing in the lobby waiting for their turn,' Wright explains. 'We created a little competition amongst vendors.' 
Wright says periodic vendor reviews would also entail a discussion about what the company had been buying, how much it had been buying, what did that vendor have on the shelf or working on for push out six months or a year down the road and did it represent a significant improvement over what had been previously purchased, and what were competitors buying from a particular vendor.

4. Determine Who's Calling the Shots 
Once you establish the criteria for evaluating suppliers and vendors, who in your company will be responsible for reviewing the data. It depends on how much resources you have to dedicate to evaluating your suppliers, says Boudreaux. 'You may want to assign one person or a team with this task.' For instance, selecting and evaluating level 1 suppliers and vendors, might require the chief financial officer or someone from the finance department along with the president and representatives from purchasing, operations, and engineering or IT. With level 2 and 3 suppliers and vendors, it may be the purchasing or procurement officer who approves the supplier or vendor list and monitors performance. 
'I always made sure that the user group was involved in the process. The individuals who were using the product or service were very active in the process from the very beginning—at the point of selection,' Wright says.

5. Maintain Good Relationships 
Consider your suppliers and vendors as part of the team and treat them as such. Communicate often and openly. Technology is great but don't overlook the personal touch of a phone conversation or face to face meetings, says Greenblatt. Also, avoid supplier and vendor conflicts by paying on time or at least honestly addressing late payment issues and talking with your supplier or vendor about it. Be upfront and transparent with suppliers and vendors. Make sure they understand your needs and expectations. 

'To improve our relationship and communication with our vendors, we added a page to all of our print materials (drawings) calling out exactly how we are going to package things,' adds Greenblatt. 'So, if it is going to be two layers of bubble wrap or an extra layer of padding between each part so that there is no scratching. We go through that level of detail so that we are not disappointed when parts come in.'

6. Decide When to Issue a Red Flag 
As you monitor a supplier's performance, you have to decide when to praise them and when to issue a read flag, says Boudreaux. Show appreciation for a job well done; give a supplier additional business because of excellent performance. 'A bad supplier will provide you with mediocre or poor products and services and cause a problem with your customers,' adds Boudreaux. 
You can drop a supplier for poor performance but strategically it is better to retain your vendors and not to flip around all of the time to replace them. By giving a warning, you give the supplier or vendor an opportunity to correct the problem. Use data that you have collected like on-time delivery rate, return rate, and number of supplier corrective actions to work with your suppliers, says Boudreaux. 'This process is not just about reviewing your suppliers but helping them to improve their performance.'

7. Cut Loose Weak Links 
No one of course should tolerate ongoing bad service. There may come a time when you have to let go of an underperforming supplier or vendor. 'We fired a vendor that was really cheap but was not meeting the ship dates. They were also non-responsive to complaints. They cut corners and handed in shoddy paperwork,' Greenblatt cites an example. 
'We give a warning and then put them on notice or a short leash before we cut ties completely,' he explains. 'We will call the vendor and give them an opportunity to correct the situation. We will send them digital pictures, e-mails, and quality reports. So, there is no mystery when there is a challenge or an issue.' 
The relationship with your supplier is a business partnership, says Wright, and if both parties are working to make sure that the partnership is a success it will be a success. In the long run, having a win-win supplier and vendor relationship will be a competitive advantage.

Steps in Selection Vendor

Selecting a technology vendor is probably one of the most important tasks that an IT leader will undertake. It can be a complicated and emotional process if you don’t have the right team of people who have the knowledge and expertise to undergo a successful selection process.

Below are  7 steps to successful vendor selection:

Step 1: Define and analyze your business requirements

What is your organization asking a third party to provide?  Assemble an evaluation team that is knowledgeable in the vendor selection process and has a clear understanding of what the business is all about. The evaluation team should be able to:

·         Define the product, material or service that is needed

·         Define the Technical and Business Requirements

·         Define the Vendor Requirements (i.e. the features you are looking for in a vendor), and

·         Publish a Requirements Document

Tip: Collect as much information as possible. Identify and interview stakeholders and users, review existing internal materials such as reports, and statistics. Gather technical information including standards and descriptions of the current technical environment.

Step 2: Identify third party vendor candidates

After the evaluation team has published a requirements document it must now compile a list of possible vendors. Taking into account the number of vendors that you’ve found, you should send each one a Request for Information (RFI) and conduct a team evaluation process.  A short list of vendors is then created.

Tip: For suggestions, check with analysts like Gartner and Forrester or consult trade groups in in your industry. 

Step 3: Develop evaluation criteria (with weighting)

Construct an evaluation model that weighs a requirement against its value and priority. For example, if the vendor meets a requirement with a score of 7 (on a scale of 1 to 10) and the priority of that requirement is 5 (on a scale of 1 to 5), then the response can be scored by 35. This helps to amplify the differences among vendors.

 Step 4: Conduct Vendor Briefings

Once your team has developed evaluation criteria with weighting and further narrowed down possible vendor candidates, it’s time to set up an initial meeting with each potential vendor to discuss stated requirements and ensure a common understanding.

 Step 5: Evaluate Vendors and schedule demos

After completion of vendor briefings, your team should be better equipped to evaluate potential vendors. Selected vendors should provide a solution overview to your current business and technological requirements, fees, benefits derived from using a particular vendor, etc.  In addition, vendors are requested to provide a “demo” to showcase the capabilities of their solution. Demos are a valuable way to get more information and also evaluate intangible aspects of a vendor.

Tip: Reference Checks – It is critical to check the vendor’s references as a part of your evaluation process. Site visits are also strongly recommended.

 Step 6: Complete vendor selection

Primary and Secondary Options – At the conclusion of your evaluation process, your team will identify a primary option (your winner) and a secondary alternative.

Tip: While you are in the negotiation process, keep in mind your secondary options as they serve as your best alternative if your negotiation falls through.

 Step 7: Complete contracting with vendor

Contracting – Identify a clear set of objectives, deliverables, timeframes, and budgets for your project with the vendor. Make sure these are clearly written in the terms of the contract. One of the most important factors in the vendor selection process is to develop a contract negotiation strategy. A successful contract negotiation simply means that both parties will search for positives that will benefit the two parties in every aspect while they achieve a fair and equitable deal.

Tips: Be clear about all the important prerequisites, terms and conditions of the contract. Don’t forget to provide precise information on what goods and/or services you want the vendor to provide. Vendor’s compensation should be clearly stated; the total cost, the schedule for payment and financing terms. There should also be acknowledgement of the following: Effective dates/Renewal dates/Completion dates/Termination dates.