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    Customer Relationship Management: Chapter 01: The Nature of CRM

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    sachanihitesh1029
    The document provides an overview of customer relationship management (CRM). It defines CRM as compiling customer information to analyze and take actions to manage customer relationships over the long term. The document outlines potential benefits and costs of CRM systems for organizations and customers. It also discusses key CRM concepts such as lifetime customer value and the importance of customer retention for increasing profits.

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    Customer Relationship Management: Chapter 01: The Nature of CRM

    Uploaded by

    sachanihitesh1029
    2K views14 pages
    The document provides an overview of customer relationship management (CRM). It defines CRM as compiling customer information to analyze and take actions to manage customer relationships over the long term. The document outlines potential benefits and costs of CRM systems for organizations and customers. It also discusses key CRM concepts such as lifetime customer value and the importance of customer retention for increasing profits.

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    The Nature of CRM

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    The document provides an overview of customer relationship management (CRM). It defines CRM as compiling customer information to analyze and take actions to manage customer relationships over the long term. The document outlines potential benefits and costs of CRM systems for organizations and customers. It also discusses key CRM concepts such as lifetime customer value and the importance of customer retention for increasing profits.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    2K views14 pages

    Customer Relationship Management: Chapter 01: The Nature of CRM

    Uploaded by

    sachanihitesh1029
    The document provides an overview of customer relationship management (CRM). It defines CRM as compiling customer information to analyze and take actions to manage customer relationships over the long term. The document outlines potential benefits and costs of CRM systems for organizations and customers. It also discusses key CRM concepts such as lifetime customer value and the importance of customer retention for increasing profits.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 14

    Customer Relationship Management

    Chapter 01: The Nature of CRM

    By Group 04
    The agenda of the presentation

     Concept of Relationship Management


     CRM
     CRM System as a Hub of Applied Learning
     Potential Returns of CRM Systems
     Potential Benefits of CRM Systems to the
    Organization
     Potential Costs of CRM Systems to the
    Organization
     Potential Benefits of CRM Systems for
    Customers
     Potential Costs of CRM Systems for Customers
     Lifetime value of the relationship
    Concept of RM

     Communicates the idea that a major goal of a


    business enterprise is to engage in interaction with
    customers over the long term.
    CRM

    Process of compiling information:


     An organization tries to compile all the information
    about their customers so that they can manage the
    relationships with their customers properly.
    Two dimensions: analysis and action:
     After compiling of the information they analyze them
    and take proper actions.
    Extended use of IT:
     Now a days most of the big organizations make
    extensive use of I.T. for maintaining proper C.R.M.
    relationships
    CRM System as a Hub of Applied
    Learning
    Potential Returns of CRM System
    Potential Benefits of CRM Systems to the
    Organization

     Customers Retention:
     If an organizations maintains CRM in an effective
    manner it helps them to retain customers and
    thereby reducing there costs significantly.
     Share of Wallet:
     It means an organization after retaining its
    customers tries sell them as many products as they
    can which they have under their umbrella.
     Cross Selling and Up Selling
     Cross sell is when customer comes up to buy
    something and we sell completely a different
    product (not similar).
     Up sell is when customer comes to buy something
    and we sell the similar product but expensive one.
    Potential Costs of CRM Systems to the
    Organization

     Significant investment in the IT Infrastructure:


     With significant increase in customer base an
    organization needs to implement a proper I.T
    infrastructure in place so that they can manage their
    customers efficiently. For this they need to make
    significant investment for the I.T. infrastructure.
     Price of Process Change:
     Switching from the normal habituated process to the
    modern I.T. systems both the customers and the
    employees of an organization takes time to change.
    If the said changes are not done in an effective
    manner all the investments made may go haywire.
    Potential Benefits of CRM Systems for
    Customers

     Continuity:
     If there is an effective CRM an customer will continue doing
    business with the organization. Thus the customer need not
    have to such for too many alternatives if all its need are
    fulfilled under a single umbrella.
     Contact Point:
     Through a contact point a customer can interact with the
    organization and thus get their queries fulfilled.
     Personalization:
     With huge customer bases organizations now a days use
    CRM software to personalize with their customers. Through
    this they come to know about customers purchasing routine
    and thus make tailor made offerings to their customers.
    Potential Costs of CRM Systems for
    Customers

     Loss of Privacy:
     Since the organizations want to give personalized
    service to their clients they all want to access all the
    details of their customers like bank a/c no etc. this
    leads inevitable loss of privacy for the customers.

     Opportunity Costs:
     When customer turns loyal towards a particular
    organization they usually do look at the offers made
    by other organizations. Thus by turning loyal they
    may miss a good opportunity provided by other
    similar organizations.
    Lifetime value of the relationship
    Why CRM?

    The impact of a 5% increase in retention rates


     It is 6-7 times more expensive
    to gain a new customer than Industry Increase in profits
    retain an existing customer Advertising Agency 95%
    (Harvard Business Review) life-insurance company 90%
    branck bank deposits 85%
     Customers become more
    publishing 85%
    precarious
    auto service 81%
     A 5% increase in customer auto/home insurance 80%
    retention can increase profits credit card 75%
    60-100% proved customer industrial brokerage 50%
    retention industrial distribution 45%
    industrial laundry 45%
     Data as on 2007
    office-building management 40%
    Source: The Loyalty Effect (Harvard Business School Press)
    By Frederick Reichhek
    Market Situation of CRM

    CRM Failure
    Domestic CRM Market Transition (license)

    CAGR:13.5% unit: billion won • 75% of CRM projects that do not deliver
    58 measurable ROI will have failed because of
    poor business executive decision-making
    39.9
    45.7
    • ½ of the companies got worse performance
    35.3 34.9 36.4
    tasks, ¼ of companies which implement
    CRM system didn’t get improvement of
    tasks,.
    Source: Gartner Group, Insight Technology Group report

    20 02 2003 2004 2005 2006 2007

    Source :http://www.krgweb.com
    CRM Failure Reasons

    Sin One : Failing to Plan


     CRM Market is getting bigger but, Sin Two : Failing To Establish Outcomes
    companies should pay too much cost Sin Three : Excluding the Human Factor
    and time to implement CRM. Sin Four : Automating Flawed Processes
    Also, the CRM system does not Sin Five : Ignoring Constraints
    guarantee higher performance Sin Six : Disregarding Politics
    Sin Seven : Choosing the Wrong Vendor

    Source: interview of Gartner Research’s Beth Eisenfeld with CRMDaily


    Some of the Popular Software available in
    the market

     Microsoft Dynamics CRM Solution


     Oracle CRM
     Intelestream
     Kayako
     Incontact
     GoldMine
     EpesiBIm
     Siebel CRM

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