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Customer Lifecyle Case Study: Toyota and HP

Let us raise a question - what's the primary goal of the business company? What's the common aim of all its inner units? The answer did not differ from the old times till nowadays - it's just a revenue or the go up of the prosperity possessed by its shareholders. But as the years passed, the business ideas improved, and the ways to deal with company's goals developed as well. During the years of experience smart business people understood, that there surely is something behind seeking the earnings, something more then figures and rational decisions. That something turns out to be a company's romance with customers.

Customer romance management is an idea that became very popular through the 1990s. It offered long-term changes and advantages to businesses that thought we would use it. The explanation for this is because it allowed companies to interact with their customers on a complete new level.

There are few different strategies of CRM. We are going to discuss more specifically about one - the customer lifecycle. Customer lifecycle is the habit of a person with a business over the time. A higher knowledge in this theory of CRM is a superb tool for a company to attain its goals and surpass the competition.

We have chosen this issue because we see a great need for it running a business life and it is very handy for all of us as business students to broaden our knowledge in this specific subject matter. For grounding the theory and our ideas we've chosen two different companies - HP and Toyota. HP offers other businesses with CRM decisions. We are going to disclose briefly the backdrop of HP enterprice services as a business and talk a lttle bit more specifically about their services and attitude about the value of CRM and customer lifecycle. Toyota is a multinational automaker. We will present its CRM strategy and show their practical experience of following the customers' lifecycle.

Customer lifecycle and CRM theory

As mentioned before, in this part we will briefly answer the question what is Customer Romance Management, and talk more specifically about the Customer Lifecycle.

What is Customer Relationship Management?

In few steps we can believe that Customer Marriage Management is about finding new customers, collecting info about them along the way and using that info to enhance their experience and foster long-term interactions. The focus on the client is the main feature of CRM and two are the main questions a Customer Relationship manager has to retain in mind: what exactly are the customers' needs? And do we offer programs/products in response with their needs? Customer romantic relationship management is a widely-implemented technique for managing a company's connections with customers, clients and sales prospects. It will involve using technology to organize, automate, and synchronize business functions (principally sales activities, marketing, customer support, and technical support). The overall goals are to find, catch the attention of, and win new clients, nurture and maintain those the company already has and reduce the costs of marketing and client service. Customer Romance Management designs the business business strategy including customer -user interface departments as well as other departments.

CRM is a term that is often described marketing. However, there is absolutely no complete agreement after a single description. It is because CRM can be considered from lots of perspectives. In summary, the three perspectives are:

Information Technology (IT) perspective

Business Strategy perspective

The Customer Life Cycle (CLC) perspective

Whereas our subject matter is focused on Customer lifecycle, we are going to clarify and go deeply inside only in the 3rd perspective.

Customer Life Cycle

For a much better explanation about the client Lifecycle, we want to introduce firstly the idea of something Life Circuit: PLC is the procedure of managing the complete lifecycle of something from its conception, through design and manufacture, to service and disposal.

Here is the general product lifecycle which normally comes after these 5 steps: Research & Development, Benefits, Development, Maturity and Decline. The visual (shown in illustration 1 below) shows how the sales change through the PLC.

Ilustration 1. Product Life Cycle

The PLC may also be divided in 5 stages which represent the sort of customers who employs the product through the lifecycle: innovators, early on adopters, early bulk, late majority and laggards.

So what is a Customer Lifecycle? Just like a product of a certain company, a firm itself has a lifecycle as well. It is simply the patterns of a customer with a firm over the time. Customers begin a romantic relationship with a firm, and over the time, either decide to continue this relationship, or end it.

The Customer Life Cycle (CLC) has clear similarities with the Product Life Routine (PLC). However, CLC focuses upon the creation of and delivery of life span value to the client (considering the merchandise or services that customers need throughout their lives). It really is marketing orientated somewhat than product orientated, and embodies the marketing concept. Essentially, CLC is a summary of the key phases in a customer's romantic relationship within an organization. The problem is that every corporation offer different product, rendering it impossible to draw out a single Life Cycle this is the same for each and every organization.

The illustration below shows the course of the relationship between customer and supplier:

Ilustration 2

Due to the graph, there are four stages in a person lifecycle: exploration, expansion, saturation and decrease. During the Exploration phase the client starts to see the guarantees made during communication for the first time; the level of satisfaction is relatively low, the customer have no experience about the merchandise and the assistance provided by the provider and the turning costs remain low in this stage. Through the Growth stage there usually is a pointed rise in buys; the client now knows the advantages made available from the supplier, satisfactions with goods and services increase; the distributor is reviewed more because of its performance than for its reputation or image. The Saturation phase is seen as a the highest volume of purchases and the highest degree of determination (function of satisfaction, elegance and switching costs); the connection has taken shape. Satisfaction continues to be increasing in all the aspects therefore do the trust. The appeal of the relationship enhances and the moving over costs increase slightly. The Decline phase starts as soon as the number of transactions starts to drop; This phase can occur anytime (even following the exploration stage); the most typical reason is the decrease in the need for the merchandise and services provide by the suppliers.

At any point in this Lifecycle, the client is either becoming more or less likely to continue preserving a romantic relationship with a business, and shows this possibility through their interactions to you.

If an organization gathers data from these interactions, it may use this data to forecast where in fact the customer is in his Lifecycle (is the client becoming more or less more likely to maintain a romance?) If a company can predict where in fact the customers are in the Lifecycle, it can increase ones Profits on return (ROI) by focusing on customers probably to buy, endeavoring to "save" customers who have declining interest, rather than throwing away money on customers unlikely to continue marriage.

Toyota Case

Toyota Motors Company, commonly known simply as Toyota, is a multinational automaker headquartered in Toyota City, Japan. The company founded by Kiichiro Toyoda in 1937 has snatched the subject of world's greatest automaker from General Motors in 2008 for the very first time in 77 years. TMC labor force across the world is approximately 320. 590 people (total in affiliated companies in 2009 2009).

Toyota is also known by has revolutionized the motor vehicle creation with the "Just-in-Time" system, the quality of its products and the healthy romance with the stakeholders. These aspects have made Toyota a research within the automotive manufacturing environment and its personal methodology over the clients over the last years seems keeping Toyota's brand in the spotlight of the motor vehicle business.

A huge part of the success of Toyota is credited by the obsession with its customers. Beyond the processing strategy it is needed to be mindful about the non-manufacturing environment. Everything Toyota does indeed is performed with customers at heart and it is clear to all staff that totally satisfied customers will be the source of good results. It made TMC develop the Trim CRM in response to the growing volume of customer information accumulated at the countless touch-points through the customer lifecycle.

The Lean CRM allows Toyota to sense changes in individual customers' behaviour, pursuing their current lifecycle status and responding in ways to increases customer satisfaction. It has empowered Toyota to forecast what customer desires even prior to the customer is aware of he needs it, to market significantly more vehicles, with a shorter trade routine and higher repurchase rate (over 60%), at significantly lower costs.

CUSTOMER PULL

By knowing how ordinarily a typical customer use to replace his vehicle, Toyota's process books how different touch-points over customer lifecycle are shipped and how employees should respond to customer-initiated touch-points and deliver Toyota-initiated ones.

The process starts when the client is considering buying a fresh vehicle. It is a job to the marketing office to guide these prospective customers to the Toyota website and collect just as much information as you possibly can. The process of requesting information is an exemplory case of "customer pull", where the company responds right to the customer. It's the first contact of which the client becomes recognized to Toyota, and it activates a determine if Toyota already recognizes the client. The accumulated data about the client provides information to control how future touch-points compared to that customer will be shipped.

TOYOTA PUSH

What Toyota already knows about the prospective customer will regulate how Toyota communicates get back customer. Vehicle information which is sent out is tailored to the potential customer's known personal preferences. Toyota could even offer a customized offer or pre-approved credit to the possible customer.

Where the potential customer is not recently known, Low fat CRM uses statistical models and data analysis to find out which models will tend to be most attractive to each possible customer, as well as the sort of information each person is likely to value.

At the moment the customer purchases a new Toyota vehicle and enters the ownership lifecycle, Toyota keep aiming to sense customer to take and keep maintaining a talk with the business across the years. At this way, you'll be able to offer the right product at the right instant to the clients.

It is this combo of move and thrust that tutorials each customer step by step during the customer lifecycle and toward the customer's next purchase. It's the backbone of the life time conversation between the customer and Toyota.

CUSTOMER DNA

Just as a real DNA influences how a person behave in determined environment, Customer DNA affects how each touch-point between Toyota and the customer is completed. It defines the relationship that Toyota and its own customers will carry across the years and how each touch-point will be confronted. The touch-point lead to, the touch-point delivery process, past or succeeding touch-points, the tasks and responsibilities included and the business enterprise rules that control how the touch-point is carried out are all covered within the touch-point meaning. The ultimate way to implement the touch-points - which will depend on of person's Customer DNA - is assigned as soon as the customer is diagnosed.

Using the Unica Affiniun Plan Management System (CMS) is possible to Toyota to manage the variability of customers, the unique touch-points and their implementation. This process automatically reviews the data about each customer and decides whether a touch-point should be trigged. If more than one touch-point is suitable at the same time, it also makes a decision which one has top priority and what should eventually the other.

Similarly, if the client requests information about a new model, the need will automatically bring about an assessment process to identify the best touch-point and which touch-points should be triggered as a follow-up.

INCREASING SALES AND Consistency, AT LOWER COST

This Trim CRM way has been developed in close co-operation with one of Toyota's Western sales companies and its traders and has been piloted in touch-points through the customer lifecycle. Checking a recently available before and after marketing campaign it is available a 70 percent reduction of non-target customers being mailed, an 80 percent decrease in campaign costs, a 50 percent reduction in advertising campaign development time and a 60 percent increase in campaign ROI. In other words, the Lean CRM methodology has enabled Toyota to market a lot more vehicles, with a shorter trade cycle and an increased repurchase rate, at significantly lower cost.

This strategy of getting close the customer corresponding his lifecycle will contribute between $5 million and $10 million (in U. S. dollars) of additional income every year to the sales company. And in addition, Toyota shows clearly that Low fat CRM really provides benefits for customers as well as for itself despite the doubts about the operation of lean key points developed in manufacturing to sales and marketing. Since it was said in the beginning, Toyota recognizes that its success count of total customer satisfaction and staff will not save efforts to reach this goal. Formularbeginn

HP Business Services

Nowadays increasingly more successful companies are trying to put into action CRM strategies to be able to build the customer loyalty. In order to increase your companies CRM strategy you can use the services of certain venture service companies, such as HP enterprice service. We will disclose briefly the background of Horsepower enterprice services as an organization and talk more specifically about their services for enterprices.

HP Venture Services (HP Sera) is the global business and technology services section of Hewlett Packard's HP Enterprise Business strategic business unit. It provides enterprices with CRM alternatives, which help to support the clients through the entire customer life circuit. It was made by the combo of HP's legacy services talking to business and the integration of purchased Electronic Data Systems, which possessed described the outsourcing business when it was proven in 1962 by H. Ross Perot.

As the word runs, "all customers aren't created equal. " Some are without doubt more valuable than others and signify a reliable way to obtain profitable revenue, while some do not justify the expense of attracting or keeping them. And then there are all those other diverse segments of customers anywhere in the middle. As HP ES states, an organization must address the unique needs and personal preferences of all participants of the customer sections as they undergo the different levels of the client life pattern. Each company is therefore challenged to strike a fragile balance in operating its business: minimize the price of attracting, retaining and rewarding their best customers and improve the client experience from Marketing through Sales to Customer Service to create loyal and satisfied customers and advocates.

Companies who achieve this balance are rewarded with profitable expansion and increased market show. For those who struggle with this, HP Customer Romantic relationship Management (CRM) Services provides a proven method of get - and surpass - the competition.

As shown in an image below, the clients progress through the steps of the life cycle (inner blue) as they build relationships an organization through the various interaction channels they choose (grey). Successful companies support each life cycle step with reciprocating front office functions (green) to enhance the customer experience.

Ilustration 3

For over 30 years, Horsepower Ha sido has been efficiently designing and delivering to clients around the world CRM solutions which range from customer-facing businesses management, contact center technology management, and global fulfillment and logistics. The company's solutions are based on this comprehensive suite of offerings:

1. Contact Middle Outsourcing Services

Contact Centre Outsourcing Services is an instrument which provides anyone to reached benefits such as development, cost reduction, increased customer retention, and mitigated risk.

Ilustration 4

HP has more than 30 years of Contact middle experience which facilitates whole customer life cycle.

HP Contact Centre Outsourcing Services ensures the management and operation of your outbound and inbound contact centers handling high value, complex customer relationships. Whether embedded in an industry-specific solution or standalone, company's contact centre services support customers with multiple stations for words and non-voice interactions throughout the whole customer life circuit from marketing to sales to service.

2. CRM Managed Services

CRM Managed Services is a general hosted and managed contact middle infrastructure service that allows clients to virtualize their telephony and contact centre systems and springboard off end-of-life and disparate systems surroundings to circumstances of the art, world class, stable and secure system.

3. Consumer Direct Services

Consumer Direct Services is a tool with which you can offer an end-to-end solution that helps the circulation of information from order to delivery. The HP Company uses this tool for wanting to keep it customer.

Hewlett-Packard Company captures customer intelligence, handles sales and service questions, works together with sales requests and warehouses, and distributes products for direct-to-consumer companies around the globe.

It is also possible that company integrates online, catalog, immediate marketing and other stations a smooth environment to offer a single view of your visitors. Plus, irrespective of where going or how fast you move, Horsepower has the level to grow along.

4. Software Publishing Services

Software Publishing Services offers a complete business control solution for logistics of software publishing and distribution. As it is discussed earlier, HP has about 30 years of experience in delivering full product lifecycle management services, so that it offers the most state-of-the-art solutions in the program posting industry today.

The company provides a fully designed solution which includes end-to-end order processing and fulfillment from service delivery centers. HP also performs contact centers, circulation centers, repayment centers and technology centers on a worldwide basis.

Key Features of HP Software Posting Services include:

Software system replication and fulfillment (CDs, documents and licenses)

Physical software package fulfillment and electric software syndication (ESD) services

Training materials/set printing and fulfillment

Documentation printing and fulfillment (marketing guarantee printing and fulfillment)

Physical fulfillment

Global facilities

Kitting

Strong inventory management/controls

Electronic fulfillment

5. Warrantee Services

Warranty Services provides a extensive, Web-based solution for reliable, real-time warrantee cases management. HP services include claim processing, extended guarantee management, parts order and traffic monitoring, service effectiveness confirming, swap stock management, and RMA creation and traffic monitoring.

HP CRM offerings addresses your critical customer-related business final results. Moreover, by exploiting the synergies of HP's customer analytics services, you can refine your customer segmentation schemes and use predictive analytics to fine tune marketing promotions and cross-sell deals and offers to the most receptive customers. These powerful CRM alternatives enable you to:

Refocus critical and scare resources from tactical businesses issues and toward more strategic business opportunities

Increase revenues and accelerate progress through improved mix- and up-selling predicated on optimized segmentation and personalized treatment

Improve customer satisfaction, retention and share of wallet

Enhance brand identification and equity

Reduce functional costs and capital avoidance

Scale your business up or down to meet fluctuating business demands

Better manage end-of-life or disparate contact centre technology environments promoting in-house and/or multiple outsource providers.

Conclusion

Nowadays modern and successful companies have the ability to see beyond simple means of seeking the income and become creative in building a relationship with its customers. As one can see from the Toyota case, which we had taken as an example, this way of thinking and concentrating on customer marriage management is an advantageous method for creating a clever strategy. Following the customers lifecycle is becoming more and more convenient tool of CRM. If a company can anticipate where in fact the customers are in the Lifecycle, it can increase ones Return on Investment (ROI) and climb the profit.

We described the HP services to show, that CRM can be provided as something and we've been basically grounding the theory with the situation of Toyota, which is following the customer lifecycle very carefully and gaining success.

During the process of working on this survey we elevated ourselves an objective, which was to grow our knowledge in an exceedingly interesting and helpful topic. Successfully, by the end we can say we truly come to our goal with a help of literature research, successful work, and good team.

Literature

http://www. toyota. com/

http://www. toyota-global. com

http://www. customerthink. com/article/lean_crm_toyota_strategy_that_works

http://www. helium. com/items/1869467-a-look-at-toyotas-customer-retention-strategies

http://www. washingtonpost. com/wp-dyn/content/article/2009/01/21/AR2009012101216. html

http://h10134. www1. horsepower. com/services/contactcenteroutsourcing/

http://www. jimnovo. com/CRM-Lifecycles. htm

http://marketingteacher. com/lesson-store/lesson-customer-life-cycle. html

''Customer Relationship Management", Ed Peelen, Prentice Hall, 2005

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