The Role of a CRM Specialist in Driving Business Success in the USA

Privacy and data protection are major concerns to legislators around the world. Customers are increasingly concerned about the amount of information commercial organizations have about them, and the uses to which that information is put. In fact, consumers are not aware of just how much information is available to companies. When you use the Internet, small programmes called cookies are downloaded onto your hard disk from the sites you visit. A 

very small number of websites obtain permission from their site visitors prior to the download; most do not. There have been two major responses to the privacy concerns of customers. The fi rst is self-regulation by companies and associations. For example, a number of companies publish their privacy policies and make a commercial virtue out of their transparency. Professional bodies in fi elds such as direct marketing, advertising and market 

research have adopted codes of practice that members must abide by. The second response has been legislation. In 1980, the Organization for Economic Cooperation and Development (OECD) developed a set of principles that has served the foundation for personal data protection legislation around the world. 16 These principles are voluntary guidelines that member nations can use when framing laws to protect individuals against abuses by data 

The principles are as follows The USA

has not adopted these legislative standards, but in order to enable US companies to do business with EU organizations, the US Commerce Department has devised a set of ‘ Safe Harbor ’ principles. US organizations in the Safe Harbor are assumed to adhere to seven principles regarding notice (as in notifi cation, above), choice, onward transfer (disclosure to third parties), security, data integrity, access and enforcement (accountability). US companies 

obtain Safe Harbor refuge by voluntarily certifying that they adhere to these principles. This enables data transfers to be made to the USA. Two areas of difference between the EU Directive and these Safe Harbor principles are in access and enforcement. The Safe Harbor wording for access is weaker. The Safe Harbor principle states that ‘ individuals must have 

reasonable access to personal information about them that an organization holds, and to be able to correct or amend the information where it is inaccurate ’ . The enforcement principle is unclear about sanctions should a company breach the standard and it allows no possibility of enforcement by government agencies. In the USA, there is a tendency to rely on self-

Regulation by individual or associated

companies, rather than legislation at state or federal level. For example, the World-Wide Web Consortium (W3C) has developed a Platform for Privacy Preferences (P3P) standard for improving privacy protection in e-commerce. This comprises three major elements:In this chapter you’ve read about the development, management and use of customerrelated databases. CRM cannot deliver its promised benefi ts without appropriate customer-related 

data. Customer-related data are used for strategic, operational, analytical and collaborative CRM purposes. Customer-related databases need to be constructed with a very clear idea of the applications for which the data are needed. These applications range across the full territory of CRM strategy development and implementation. Customer-related data can be used to answer strategic questions such as ‘Which customers should we serve? ’ and tactical 

questions such as ‘What is the best day to communicate with a given customer? ’ We described a six-step approach to developing a high quality customer-related database, consisting of defi ning the database functions, establishing the information requirements, identifying the information sources, selecting the database technology and hardware platform, populating and maintaining the database. We saw how compiled list data, census data and 

Modelled data can be imported 

to enhance the basic data available in company-maintained databases, most of which adopt the standard relational architecture. Data integration from disparate databases is often a barrier to the delivery of desired CRM outcomes. Attached to the front end of many databases are data mining systems that allow users to make sense of the data. We ended by looking at data warehouses, data marts and privacy issues.The term portfolio is often used in the 

context of investments to describe the collection of assets owned by an individual or institution. Each asset is managed differently according to its role in the owner’s investment strategy. Portfolio has a parallel meaning in the context of customers. A customer portfolio can be defi ned as follows: A customer portfolio is the collection of mutually exclusive customer groups that comprise a business’s entire customer base. In other words, a company’s 

customer portfolio is made up of customers clustered on the basis of one or more strategically important variables. Each customer is assigned to just one cluster in the portfolio. At one extreme, all customers can be treated as identical; at the other, each customer is treated as unique. Most companies are positioned somewhere between these extremes. One of strategic CRMs fundamental principles is that not all customers can, or should, be managed in the same way, unless it makes strategic sense to do so. Customers not only have different 

Conclusion

needs, preferences and expectations, but also different revenue and cost profi les, and therefore should be managed in different ways. For example, in the B2B context, some customers might be offered customized product and face-to-face account management; others might be offered standardized product and web-based self-service. If the second group were to be offered the same product options and service levels as the fi rst, they might end 

being value-destroyers rather than value-creators for the company. Customer portfolio management (CPM) aims to optimize business performance – whether that means sales growth, enhanced customer profi tability, or something else – across the entire customer base. It doesthis by offering differentiated value propositions to different segments of customers. For example, the UK-based NatWest Bank manages its business customers on a 

portfolio basis. It has split customers into three segments based upon their size, lifetime value and creditworthiness. As Figure 5.1 shows, each cluster in the portfolio is treated to a different value proposition. When companies deliver tiered service levels such as these, they face a number of questions. Should the tiering be based upon current or future customer value? How should the sales and service support vary across tiers? How can customer expectations 

be managed to avoid the problem of low tier customers resenting not being offered high tier service? What criteria should be employed when shifting customers up and down the hierarchy? Finally, does the cost of managing this additional complexity pay off in customer outcomes such as enhanced retention levels, or fi nancial outcomes such as additional revenues and profi tThe customer in a B2B context is different from a customer in the