CHAPTER 1

INTRODUCTION

1.1CUSTOMER SATISFACTION

Customer satisfaction, a business term, is a measure of how products and

services supplied by a company meet or surpass customer expectation. It is seen
as a key performance indicator within business and is part of the four
perspectives of a Balanced Scorecard.

In a competitive marketplace where businesses compete for customers,

customer satisfaction is seen as a key differentiator and increasingly has become
a key element of business strategy.

There is a substantial body of empirical literature that establishes the benefits of

customer satisfaction for firms.

MEASURING CUSTOMER SATISFACTION

Organizations are increasingly interested in retaining existing customers while

targeting non-customers; measuring customer satisfaction provides an indication
of how successful the organization is at providing products and/or services to the
marketplace.

Customer satisfaction is an ambiguous and abstract concept and the actual

manifestation of the state of satisfaction will vary from person to person and
product/service to product/service. The state of satisfaction depends on a
number of both psychological and physical variables which correlate with
satisfaction behaviors such as return and recommend rate. The level of
satisfaction can also vary depending on other options the customer may have
and other products against which the customer can compare the organization's
products.

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Because satisfaction is basically a psychological state, care should be taken in
the effort of quantitative measurement, although a large quantity of research in
this area has recently been developed. Work done by Berry (Bart Allen) and
Brodeur between 1990 and 1998 defined ten 'Quality Values' which influence
satisfaction behavior, further expanded by Berry in 2002 and known as the ten
domains of satisfaction. These ten domains of satisfaction include: Quality,
Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental
Teamwork, Front line Service Behaviors, Commitment to the Customer and
Innovation. These factors are emphasized for continuous improvement and
organizational change measurement and are most often utilized to develop the
architecture for satisfaction measurement as an integrated model. Work done by
Parasuraman, Zeithaml and Berry (Leonard L) between 1985 and 1988 provides
the basis for the measurement of customer satisfaction with a service by using
the gap between the customer's expectation of performance and their perceived
experience of performance. This provides the measurer with a satisfaction "gap"
which is objective and quantitative in nature. Work done by Cronin and Taylor
propose the "confirmation/disconfirmation" theory of combining the "gap"
described by Parasuraman, Zeithaml and Berry as two different measures
(perception and expectation of performance) into a single measurement of
performance according to expectation. According to Garbrand, customer
satisfaction equals perception of performance divided by expectation of
performance.

[4]
The usual measures of customer satisfaction involve a survey with a set of
statements using a Likert Technique or scale. The customer is asked to evaluate
each statement and in term of their perception and expectation of performance of
the organization being measured.

METHODOLOGIES

American Customer Satisfaction Index (ACSI) is a scientific standard of customer

satisfaction. Academic research has shown that the national ACSI score is a

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strong predictor of Gross Domestic Product (GDP) growth, and an even stronger
predictor of Personal Consumption Expenditure (PCE) growth. On the
microeconomic level, research has shown that ACSI data predicts stock market
performance, both for market indices and for individually traded companies.
Increasing ACSI scores has been shown to predict loyalty, word-of-mouth
recommendations, and purchase behavior. The ACSI measures customer
satisfaction annually for more than 200 companies in 43 industries and 10
economic sectors. In addition to quarterly reports, the ACSI methodology can be
applied to private sector companies and government agencies in order to
improve loyalty and purchase intent. Two companies have been licensed to apply
the methodology of the ACSI for both the private and public sector: CFI Group,
Inc.applies the methodology of the ACSI offline, and Foresee Results applies the
ACSI to websites and other online initiatives

The Kano model is a theory of product development and customer satisfaction

developed in the 1980s by Professor Noriaki Kano that classifies customer
preferences into five categories: Attractive, One-Dimensional, Must-Be,
Indifferent, Reverse. The Kano model offers some insight into the product
attributes which are perceived to be important to customers. Kano also produced
a methodology for mapping consumer responses to questionnaires onto his
model.

SERVQUAL or RATER is a service-quality framework that has been incorporated

into customer-satisfaction surveys (e.g., the revised Norwegian Customer
Satisfaction Barometer to indicate the gap between customer expectations and
experience.

J.D. Power and Associates provides another measure of customer satisfaction,

known for its top-box approach and automotive industry rankings. J.D. Power
and Associates' marketing research consists primarily of consumer surveys and
is publicly known for the value of its product awards.

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Other research and consulting firms have customer satisfaction solutions as well.
These include A.T. Kearney's Customer Satisfaction Audit process[6], which
incorporates the Stages of Excellence framework and which helps define a
company’s status against eight critically identified dimens

IMPROVING CUSTOMER SATISFACTION

Published standards exist to help organizations develop their current levels of

customer satisfaction. The International Customer Service Institute (TICSI) has
released The International Customer Service Standard (TICSS). TICSS enables
organizations to focus their attention on delivering excellence in the management
of customer service, whilst at the same time providing recognition of success
through a 3rd Party registration scheme. TICSS focuses an organization’s
attention on delivering increased customer satisfaction by helping the
organization through a Service Quality Model.

TICSS Service Quality Model uses the 5 P's - Policy, Processes, People,
Premises, Product/Services, as well as performance measurement. The
implementation of a customer service standard should lead to higher levels of
customer satisfaction, which in turn influences customer retention and customer
loyalty.

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 CUSTOMER SATISFACTION RESEARCH

Customer satisfaction research is that area of marketing research which focuses

on customers' perceptions with their shopping or purchase experience.

Many firms are interested in understanding what their customers thought about
their shopping or purchase experience, because finding new customers is
generally more costly and difficult that servicing existing or repeat customers.

Many people are familiar with "business to customer" (B2C) or retail-level

research, but there are also many "business to business" (B2B) or wholesale-
level projects commissioned as well.

TYPES OF RESEARCH

DESCRIPTIVE OR DOCUMENTARY RESEARCH

Many customer satisfaction studies are intentionally or unintentionally only

"descriptive" in nature because they simply provide a snapshot in time of
customer attitudes. If the study instrument is administered to groups of
customers periodically, then a descriptive picture of customer satisfaction
through time can be developed (this is a type of "tracking" study).

INFERENTIAL OR MODELS-BASED RESEARCH

Beyond documentary types of work are studies that attempt to provide an

understanding of why customers have the perceptions they do and what may be
done to change those perceptions. While models-based studies also provide
snapshots of customer attitudes, the results of these studies are more powerful
because they present the firm with recommendations on how to improve
customer satisfaction. Frequently, these studies also provide firms with a
prioritization of the various recommended actions. Inferential studies can also be
conducted as tracking studies. When this is done, the firm can gain insight into

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how the drivers of customer satisfaction are changing in addition to documenting
the levels and areas of customer satisfaction.

METHODS

QUANTITATIVE RESEARCH STUDIES

Quantitative studies allow a firm to develop an understanding of the "big picture"

of their customers' experiences based upon a relatively small number of
interviews. This "sample" of the firm's customers must be carefully designed and
drawn if the results of the study are to be considered representative of the
customer population as a whole. In most cases, the results of quantitative studies
are based upon the responses of a relatively "large" number of interviews.
Depending upon the size of the population and the amount of segmentation
desired, "large" can be as few as 50 responses or range from several hundred to
thousands of interviews. Mail-based, telephone-based, and (more recently)
Internet-based surveys and related data collection methods.

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QUALITATIVE RESEARCH STUDIES

Qualitative studies are used by firms to provide a more detailed and/or

unconstrained understanding of customer experiences. In most cases, the results
of qualitative studies are based upon dozens of interviews. Qualitative studies
are not designed to provide insights that are projectable to the customer
population: qualitative studies are used for initial exploration of experiences and
topics or to probe more deeply the reasons behind customer perceptions. Focus
groups (group depth interviews) and "one-on-ones" (individual depth interviews)
are common examples of qualitative studies.

CUSTOMER SATISFACTION IN 7 STEPS

1. Encourage Face-To-Face Dealings

This is the most daunting and downright scary part of interacting with a customer.
If you're not used to this sort of thing it can be a pretty nerve-wracking
experience. Rest assured, though, it does get easier over time. It's important to
meet your customers face to face at least once or even twice during the course
of a project.

My experience has shown that a client finds it easier to relate to and work with
someone they've actually met in person, rather than a voice on the phone or
someone typing into an email or messenger program. When you do meet them,
be calm, confident and above all, take time to ask them what they need. i believe
that if a potential client spends over half the meeting doing the talking, you're well
on your way to a sale.

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2. Respond to Messages Promptly & Keep Your Clients Informed

This goes without saying really. We all know how annoying it is to wait days for a
response to an email or phone call. It might not always be practical to deal with
all customers' queries within the space of a few hours, but at least email or call
them back and let them know you've received their message and you'll contact
them about it as soon as possible. Even if you're not able to solve a problem right
away, let the customer know you're working on it.

A good example of this is my Web host. They've had some trouble with server
hardware which has caused a fair bit of downtime lately. At every step along the
way I was emailed and told exactly what was going on, why things were going
wrong, and how long it would be before they were working again. They also
apologised repeatedly, which was nice. Now if they server had just gone down
with no explanation I think I'd have been pretty annoyed and may have moved
my business elsewhere. But because they took time to keep me informed, it
didn't seem so bad, and I at least knew they were doing something about the
problems. That to me is a prime example of customer service.

3. Be Friendly and Approachable

A fellow SitePointer once told me that you can hear a smile through the phone.
This is very true. It's very important to be friendly, courteous and to make your
clients feel like you're their friend and you're there to help them out. There will be
times when you want to beat your clients over the head repeatedly with a blunt
object - it happens to all of us. It's vital that you keep a clear head, respond to
your clients' wishes as best you can, and at all times remain polite and
courteous.

4. Have a Clearly-Defined Customer Service Policy

This may not be too important when you're just starting out, but a clearly defined
customer service policy is going to save you a lot of time and effort in the long

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run. If a customer has a problem, what should they do? If the first option doesn't
work, then what? Should they contact different people for billing and technical
enquiries? If they're not satisfied with any aspect of your customer service, who
should they tell?

There's nothing more annoying for a client than being passed from person to
person, or not knowing who to turn to. Making sure they know exactly what to do
at each stage of their enquiry should be of utmost importance. So make sure
your customer service policy is present on your site -- and anywhere else it may
be useful.

5. Attention to Detail (also known as 'The Little Niceties')

Have you ever received a Happy Birthday email or card from a company you
were a client of? Have you ever had a personalised sign-up confirmation email
for a service that you could tell was typed from scratch? These little niceties can
be time consuming and aren't always cost effective, but remember to do them.

Even if it's as small as sending a Happy Holidays email to all your customers, it's
something. It shows you care; it shows there are real people on the other end of
that screen or telephone; and most importantly, it makes the customer feel
welcomed, wanted and valued.

6. Anticipate Your Client's Needs & Go Out Of Your Way to Help

Them Out

Sometimes this is easier said than done! However, achieving this supreme level
of understanding with your clients will do wonders for your working relationship.

Take this as an example: you're working on the front-end for your client's exciting
new ecommerce endeavour. You have all the images, originals and files backed
up on your desktop computer and the site is going really well. During a meeting
with your client he/she happens to mention a hard-copy brochure their internal

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marketing people are developing. As if by magic, a couple of weeks later a CD-
ROM arrives on their doorstep complete with high resolution versions of all the
images you've used on the site. A note accompanies it which reads:

"Hi, you mentioned a hard-copy brochure you were working on and I wanted to
provide you with large-scale copies of the graphics I've used on the site.
Hopefully you'll be able to make use of some in your brochure."

Your client is heartily impressed, and remarks to his colleagues and friends how
very helpful and considerate his Web designers are. Meanwhile, in your office,
you lay back in your chair drinking your 7th cup of coffee that morning, safe in the
knowledge this happy customer will send several referrals your way.

7. Honour Your Promises

It's possible this is the most important point in this article. The simple message:
when you promise something, deliver. The most common example here is project
delivery dates.

Clients don't like to be disappointed. Sometimes, something may not get done, or
you might miss a deadline through no fault of your own. Projects can be late,
technology can fail and sub-contractors don't always deliver on time. In this case
a quick apology and assurance it'll be ready ASAP wouldn't go amiss.

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 2.THE CUSTOMER FOCUS

Customer service training for companies who want to create a stronger service
culture that builds loyal relationships with their customers and a better
environment for their employees.

Welcome to The Customer Focus website. The programs focus on customer

service training, and were created to help develop a mindset dedicated to
delivering outstanding customer service to both external and internal customers.
A by-product of this customer service training program is that it helps build
employee loyalty and a better working environment.

The fundamental purpose of a business is to satisfy customer/client needs at a

profit. Your company can only benefit from a strong customer service culture.
Satisfied customers are converted to loyal customers. More sales come from
existing customers. You customers become your advocates, creating excellent
word of mouth advertising. And, much more. The bottom line is increased
revenue.

Shep Hyken, the creator of The Customer Focus programs, has been working
with companies in the area of customer service and loyalty since 1983. It has
taken years to develop the content that goes into The Customer Focus programs.
The concepts, strategies and exercises are facilitated by professional trainers
that have been approved to present the programs. The Customer Focus is a
process that will require the commitment and dedication of every employee in a
company.

Click here to learn more about what The Customer Focus is all about. Or, call us
at (314)692-2200 and have a short conversation with us. Within ten minutes we
will determine if The Customer Focus program is right for you and/or your
organization.

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What is The Customer Focus?

• Customer Focus is about getting input from the customer far in advance of
the sale - perhaps even before the product or service is designed.
• Customer Focus is about getting all employees to look at their job through
the eyes of the customer.
• Customer Focus is about adding value at all levels of the organization -
not just sales and customer service.
• Customer Focus is NOT customer service...let us show you why Customer
Service is NOT a Competitive advantage in today's marketplace and why
Customer Focus IS...
• .“This workshop gave me skills I can use in every aspect of my job. It will
make me a better employee and I will focus more on customers internally
and externally.”

The Customer Focus (TCF) programs are powerful customer service training
workshops. There are several options to consider.
The most popular option is to bring TCF direct to your company in the form of a
four-part workshop series or one-day seminar. However, all of the TCF
programs have similar results – to create and sustain a culture that gets every
employee to recognize the value of providing excellent customer service to both
internal and external customers.

The success of the TCF program is based on continuity of information flowing to

the participant over an extended period of time. With the exception of the one-
day workshop, most of the TCF programs consist of four “classroom” sessions
with simple, yet effective, exercises/homework in between each session. These
sessions will inspire, motivate and educate. Following the sessions, including the
one-day workshop, there will be at least six months of weekly
tips and articles that reinforce the overall message of customer and internal
service. In addition, we can help you create a simple program that recognizes
participation and success. This gives longevity to the program and the feeling

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that even though the “classroom” sessions are over, the customer service
training continues.

Throughout the sessions the participants will learn to understand their role in the
company’s overall customer service and customer loyalty strategy. They will
completely understand how their department and individual responsibilities
impact the customer.
Participants will become aware of the many opportunities they have to make
positive impressions (Moments of Magic™) with both their outside and internal
customers.
Participants will learn to enhance the experience that both customers and fellow
employees have with the company.

One of the by-products of the TCF sessions is a stronger sense of teamwork and
cooperation between employees and departments.

Participants will develop a mindset that will help solve problems and complaints
for both outside and internal customers. They will help save defecting customers
as they learn how to turn Moments of Misery™ into Moments of Magic™.

The bottom line is that participants will, through specific techniques and
awareness, help to raise the bar on the company’s overall customer service
strategies. The program will help create and sustain a culture that gets every
employee to recognize the value of providing excellent service to both internal
and external customers. This is customer service training at its best!

OPERATING WITH A CUSTOMER FOCUS

In every type of organization whether large or small, it is necessary to

ensure that the customer is kept happy and satisfied. Customers are the people
necessary for a business to survive. Figuring out what customers want and how
to give it to them in a cost effective way ensures success for your business. It is

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important to know your customers so that you can seek out similarities and use
these traits to market to specific groups. Some common groupings could be
based on age, amount they are willing to spend, and how far they are located
from your business, etc.

There are different types of marketing strategies and theory that can be
utilized to target specific customers. However, keep in mind that there are costs
involved in keeping every customer happy. There needs to be a balance to make
sure that the efforts provide a payoff. At what point are your efforts useless? Are
you coming on too strong and scaring customers away? You may be able and
willing to spend more time with large volume customers or customers who are
purchasing big ticket services or products. However, do not leave others out. A
mixture of trial, error, and planning can provide the right strategy for your
business.

How we deal with and treat people has a big reflection on your business
and how others perceive you. You want to get along well in the business
community. A few additional steps can retain a customer the next time they need
to use your business again and attract new customers. Extra attention can
convince a customer to refer you to a friend. Providing more useful products to a
customer for a better price can attract new customers. A good name, honest
reputation, and friendly employees can make a big difference.

Keep in mind that a bad image or experience may do more harm than a
good experience creates benefits. When consumers are unhappy they tend to be
more vocal. They tell their family and friends about their unpleasant experiences.
If you make one member of a large family upset, you will probably never get to
serve their family members. This is why it is particularly important to have a
method to deal with grievances and complaints. Customers may also perceive a
negative experience for other factors. Consider how a customer would feel if your
business was not clean and if there were unorganized objects or papers lying
around your business.

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 Selections that you allow your customers to purchase from should give
them enough choice and quality to be useful. Do you offer a variety? Do different
products go together or are they stuck with one brand or type? Are products and
services bundled to benefit the customer, or to force them into unnecessary
purchases?

When using the Internet to connect with the customer, make sure that it is
in a useful manner. Almost all businesses have web pages containing assorted
information. The Internet is also used as advertising. Keep in mind that Internet
content can be seen by all customer segments and should be tailored in such a
manner. Many businesses use the Internet for placing orders and sales. Make
sure to provide contact information, a place for feedback, and helpful information.
Use the web as a tool, not a sole devise for reaching or dealing with customers.

In order for employees to work well with customers, the whole overall
culture should be oriented in acceptable means of dealing with customers. It
might also be of benefit to allow employees to have the authority to remedy
solutions with the customer. Establish a formal complaint policy that employees
can follow. Ensure that enough people are aware of the problem so that it can be
dealt with. When a problem is dealt with quickly, it becomes less of a problem.
Allow all workers to know how their work directly or indirectly plays a role in
serving the customer. Have behind the scenes employees work with customers,
or talk to those that come into direct contact with them every day. Share
feedback from customers all throughout your organization. Do not leave some of
your organization in the dark.

There are many ways of gaining customer feedback and feelings. Most
customers who are angry or extremely pleased will be the ones who volunteer
information. This may skew the overall results in the perception of your business.
When you gather information, consider how situations affect consumers
differently. Be willing to compensate respondents for the revelation of personal
information. Realize that some customers may not be fully honest. Many
individuals do not like to share bad news or they are afraid of severing

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relationships. Information can be gathered by comments that are over heard or
surveys. For more general feedback, consider having a focus group that uses
various consumers and provides for a more open discussion. The customer
should not have to conform to your service or product. You should strive to fit
their needs.

Customer Focus Research

What make one document more customer focused than another document?
Doindividuals perceive customer focus differently? Do individuals with
differentcultural backgrounds, different training, or different work experience
perceivecustomer focus differently?

Before I answer those questions, I need to define style versus tone in a

document.Style refers to the choices that the writer makes. Tone is the impact on
the reader. Style choices include word choice, sentence structure and length,
organization, graphics, and the page and document design. Customer focus is an
element of tone; it’s the impact of your style choices on the reader. So we are
really asking: What style choices should I make as a writer or speaker, to give my
document or presentation a customer-focused tone?

To determine what prompts readers to see one document as being customer

focused, I asked individuals to rank the customer focus of five documents. The
base document was a two-page executive summary for a sales proposal. For
each of the five documents, the appearance and content were the same while
the organization and the writing varied. In other words, the objective of the
experiment was to determine what style choices affected the perceived customer
focus of a document. To date, more than 2000 individuals from 26 different
countries have ranked the customer focus of these five documents. The results
have been consistent across cultures:

1st 70% ranked the same document as most customer focused

2nd 70% ranked the same document as least customer focused

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3rd The composite ordinal ranking was consistent across groups and cultures

4th Most participants could cite only one or two aspects of the writing to support
their ranking

3.HINDU BUSINESS LINE

XYLO ON A ROLL WITH M&M’S NEW CUSTOMER FOCUS

Sales in January and February cross 4,000 unit

Mumbai, March 5 The Mahindra Xylo has started off with a bang with combined
sales in January and February crossing 4,000 units.

This has been the best piece of news to Mahindra & Mahindra especially when
mid-size cars costing over Rs 5 lakh are not finding enough buyers in the current
economic slowdown. The Xylo, though a multipurpose vehicle (MPV), has been
targeted at the sedan customer.

Clearly, the company had done its homework well as evident from what Vice-
Chairman and Managing Director of M&M, Mr Anand Mahindra, told Business
Line at the time of its launch. “The Xylo has showcased the lessons we have had
ever since we made the Scorpio and what you see is evidence of this learning
curve. It has taken customer-centricity to another level,” he said.
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What intrigued Mr Mahindra was the interest in the Xylo created upfront by the
Web. “It is clear that Indian auto companies need to be more Web-savvy than
what we have in the past. Americans, for instance, shop for a vehicle extensively
on the Web before they buy it,” he said.

M&M was, of course, aware that the vehicle was being launched at a time when
the slowdown was beginning to hurt consumers. “There is never a right or perfect
time,” he said.

The President of M&M’s automotive sector, Dr Pawan Goenka, said the most
triumphant aspect about the Xylo journey was that since the time of the Scorpio,
nearly 70 per cent of the people had moved on to other companies.

“Yet, all the lessons of the Scorpio percolated down to the Xylo which means that
the process of knowledge management, documentation and keeping key people
to ensure product continuity worked well,” he said.

To that extent, the problems encountered in the Scorpio were eventually ironed
out and taken care of in the Xylo. As Dr Goenka put it, “Scorpio was more of
‘Let’s go do it’ without any knowledge of the customer and more to do with a
product. Here, in the Xylo, the primary focus was the customer and we designed
the interior first. Even though our outside package is not so big, the inside is as
spacious as any other vehicle.”

According to him, the Xylo has actually made M&M a company “which was not
entirely sure of itself to a more confident, upbeat entity”. Plans on product
development, capacity and market penetration “came together well”. The top
priority now was not to look at “ambitious targets but a practical financial
breakeven given the condition of the market”.

GLOBAL FOCUS

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Mr Mahindra reiterated that the company would not change focus from its core
business of utility-vehicles comprising pick-ups, MPVs or SUVs (sport-utility
vehicles). “We will get ecosystem benefits by virtue of alliances as in the case of
heavy trucks with ITEC of the US and passenger cars with Renault (the first was
with Ford),” he said.

According to him, what the company was using “to yank itself to the next level of
technology” was its entry into the US later this year with a new Scorpio.

“It is the world’s largest market, despite the fact that it is on the backfoot now,
and has consumers with the highest propensity to spend. It is a market that is
migrating interestingly towards compact, fuel-efficient and clean diesel SUVs. We
are hopeful of finding a niche and are using our entry there to really improve our
product in terms of technology capabilities,” he said.

Dr Goenka echoed a similar sentiment. “The US is the next big move for us and it
is like launching a new product. It is a Scorpio that is different in terms of the
seats, brakes, airbags, engine, transmission etc but with the same body,” he
said.

This global focus is now the rule, rather than the exception, at M&M. “Quite
unlike the Scorpio, when we made the Xylo, we did it with one eye on the world
to make sure it is compatible with all the markets we are in. We are no longer a
parochial player when we create new products and the ones in the pipeline will
display that characteristic in even greater measure in that they are all global
products,” Mr Mahindra said.

Incidentally, South Africa will be the starting point for the Xylo followed by other
markets such as Latin America and, possibly, Egypt.

4.CUSTOMER RELATIONSHIP MANAGEMENT

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CRM (customer relationship management) is an information industry term for
methodologies, software, and usually Internet capabilities that help an enterprise
manage customer relationships in an organized way. For example, an enterprise
might build a database about its customers that described relationships in
sufficient detail so that management, salespeople, people providing service, and
perhaps the customer directly could access information, match customer needs
with product plans and offerings, remind customers of service requirements,
know what other products a customer had purchased, and so forth.

According to one industry view, CRM consists of:

• Helping an enterprise to enable its marketing departments to identify and

target their best customers, manage marketing campaigns with clear goals
and objectives, and generate quality leads for the sales team.

• Assisting the organization to improve telesales, account, and sales

management by optimizing information shared by multiple employees, and
streamlining existing processes (for example, taking orders using mobile
devices)

• Allowing the formation of individualized relationships with customers, with

the aim of improving customer satisfaction and maximizing profits;
identifying the most profitable customers and providing them the highest
level of service.

• Providing employees with the information and processes necessary to

know their customers, understand their needs, and effectively build
relationships between the company, its customer base, and distribution
partners.

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CRM--Customer Relationship Management--has entered the mainstream.
Despite the uncertainty of the economy, CRM is being thrust into corporate
budgets and talked about as a critical initiative by hundreds of Fortune 1,000 and
tens of thousands of other companies. It has gone from being an important edge
in the business world to a necessary tool for survival. The notion of the customer
as king or queen is once again the rule. How you treat this is a mission-critical
business issue.

But, what is CRM and how does it change the way companies do business? The
changes in the world have been so dynamic and so dramatic that the path isnt
necessarily all that obvious. How CRM impacts that business path is a continuing
source of debate in the world of corporate management.

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 5.BOOKS

DEFINITION:

“CRM deals with long term mutually beneficial relationship among consumers,
companies and other stakeholder.”

“CRM is a well defined series of functions, skills, processes and technologies

which together will allow companies to more profitable manage customer as
Tangible assets”

“CRM is a new technology enabled way to do business that revives a simple, old
– fashioned notion: keep pleasing customers and they will keep coming back”.

BENEFITS OF CRM

The benefits of customer relationship management are considered are abound. It

allows organizations not only to retain customers, but enables more effective
marketing, creates intelligent opportunities for cross selling and opens up the
possibility of rapid introduction of new brands and products. To be able to deliver
these benefits, organizations must be able to customize their product offering,
optimize price, integrate products and services and services and deliver the
services as promised and demanded by the customer base.

Keeping the customer happy is obviously one way of ensuring that they stay with
the organization. However, by maintaining an overall relationship with the
customer, companies are able to unlock the potential of their customer base and
maximize the contribution to their business. Whilst the value of customer
relationship management has

Been identified by organizations, the full implications and benefits are yet to be.
Those

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Responsible for delivery are perhaps the most informed about these strategic
benefits yet the transformation is a long – drawn – out process.

The strategic benefits of customer relationship management allow companies to

reduce the cost of customer acquisition and give established players the ability to
react like a new market entrant. the very people they are battling against.
Ironically these are increased and the potential of customers can be then
capitalized through cross selling of other products and services. It is important to
understand the key benefits of CRM for most companies. These benefits
generally fall into three categories: cost savings, revenue enhancement, and
strategic impact.

IMPORTANCE OF CRM

LOWER COST OF MARKETING: as products manufactured with the help of

CRM techniques the customers will accept it and they will also a good
relationship will be maintained with the customers and thus more and more
money will not be wasted in advertising and promotions.

DECREASED COST FOR CUSTOMER: as the marketing expenses of a firm will

decrease in long run, firms can offer the same product at a bit low cost, which will
be in the benefit of the customers.

COMMON GROWTH FOR MARKETERS AND CUSTOMERS: CRM will help

customers to identify the right product that will suit them; also the marketers will
know about their target audience and will not waste their time.

CRM focuses on the relationship

Successful organizations use three steps to build customer relationships:

• Determine mutually satisfying goals between organization and customers

• Establish and maintain customer rapport

• Produce positive feelings in the organization and the customers

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CRM conditions

The organization and the customers both have sets of conditions to consider
when building the relationship, such as wants and needs of both parties;

• Organizations need to make a profit to survive and grow

• Customers want good service, a quality product and an acceptable price

Why do organizations undertake CRM?

CRM is a new concept to many organizations. If it's new to you, here's why most
forward-thinking organizations devote lot of energy and resources to the set up
and management of a CRM capability.

How CRM impacts on the organization

CRM can have a major impact on an organization through:

• shifting the focus from product to customer

• streamlining the offer to what the customer requires, not want the organization
can make

• highlighting competencies required for an effective CRM process

Why does the organization need CRM?

The ultimate purpose of CRM, like any organizational initiative, is to increase

profit. In the case of CRM this is achieved mainly by providing a better service to
your customers than your competitors. CRM not only improves the service to
customers though; a good CRM capability will also reduce costs, wastage, and
complaints (although you may see some increase initially, simply because you
hear about things that without CRM would have stayed hidden). Effective CRM
also reduces staff stress, because attrition - a major cause of stress - reduces as
services and relationships improve. CRM enables instant market research as
well: opening the lines of communications with your customers gives you direct

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constant market reaction to your products, services and performance, far better
than any market survey. Good CRM also helps you grow your business:
customers stay with you longer; customer churn rates reduce; referrals to new
customers increase from increasing numbers of satisfied customers; demand
reduces on fire-fighting and trouble-shooting staff, and overall the organization's
service flows and teams work more efficiently and more happily.

Features of good CRM

The old viewpoint in industry was: 'Here's what we can make - who wants to buy
our product?'

The new viewpoint in industry is:

• 'what exactly do our customers want and need?' and

• 'what do we need to do to be able to produce and deliver it to our customers?'

This is a significant change of paradigm and a quantum leap in terms of how we

look at our business activity.

What do customers want?

Most obviously, and this is the extent of many suppliers' perceptions, customers
want cost-effective products or services that deliver required benefits to them.
(Benefits are what the products or services do for the customers.) Note that any
single product or service can deliver different benefits to different customers. It's
important to look at things from the customer's perspective even at this level.

More significantly however, customers want to have their needs satisfied.

Customers' needs are distinctly different to and far broader than a product or
service, and the features and benefits encompassed. Customers' needs
generally extend to issues far beyond the suppliers' proposition, and will often
include the buying-selling process (prior to providing anything), the way that
communications are handled, and the nature of the customer-supplier
relationship.
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Managing customers

Why manage customers? Customers are the usual source of income for an
organization. (If not then they will certainly leverage your income, as in the case
of readers of a free publication which is funded by advertising. As such there are
two types of customers: the readers and the advertisers).

Customers are also an exceptional source of information - information which is

vital to enable a business to succeed; ie., giving customers what they want.

Managing customers entails:

• knowing what customers want and need - which enables you to focus your
production and service efforts

• knowing which products or customers have most growth potential - which enables
you to focus on developing highest potential

• knowing which products or customers are most or least profitable - which enables
you to focus on maximising profit

• knowing which customers will be advocates and supporters - which enables you
to provide references, case studies, and to safely test new products and services

Achieving good CRM

Achieving effective Customer Relationship Management requires many

organizations to adopt a new perspective. Consider the following:

• Traditional customer service is something you 'do to' the customer

• Modern customer relationship management is 'done with' the customer

The second statement is emphasises the big differences between conventional

traditional customer service, and the modern progressive CRM approach.

Your relationships with customers should be ongoing, cooperative, and built for
the long term.

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Organizations who have many transitory relationships with customers
consequently have to spend a lot of money on finding new customers.

The cost of keeping existing customers is a tiny fraction of the cost of acquiring
new customers.

Focus On Building Relationships

The essential CRM focus of any organization should be on developing core

competencies, and an overall strategy of building customer relationships. In this
way, all efforts in the organization can be aligned to:

• Customers and the culture of exceeding of customer expectation

• Understanding and managing the people impact on the culture of the

organization

• Customers being recognised and treated as partners

• The value of relationship-building being valued

• Service being seen as a value-adding activity

• Reward and recognition being based on customer focus ie., 'going the
extra mile'

• Evidence of corporate support for service activity

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 6.JOURNAL

FOCUS ON CUSTOMER RELATIONSHIP

Do you know your customers? Probably not as well as you think. Customer
relationship management, or CRM, helps focus your business on the folks that
butter your bread.

Part mantra, part software CRM includes a wide range of tools designed to
understand and serve both prospective and existing customers more effectively.
At first glance, this may seem like an additional unnecessary expense with little
return. However, taking a customer-centered focus should be able to boost your
revenue, lower your overall expenses, or achieve both goals.

CRM applications can be grouped into a few large buckets. Sales force
automation tools help track your pool of prospects as they move from interested
leads to paying customers. This includes software that forwards incoming leads
and tracks interactions with prospects. Armed with such information, you can
better forecast your expected revenue, understand your sales cycle, and
evaluate the effectiveness of your salespeople.

Customer support automation improves the process of handling customers so

you can better satisfy them while minimizing your costs. Whether you support
your customers through a call center, in-person, or online, a wide variety of
applications exists. They range from live online help, searchable knowledge
bases to look up answers to previously asked questions, and case tracking to
ensure no inquiry gets lost.

Finally, marketing automation tools help track the effectiveness of your various
advertising or marketing efforts. These tools track the expenses from activities
like trade shows, mailings, and advertising and compares them to the sales that
were generated and attributable to these efforts. While it may be a less than

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perfect measure in some cases, trying to determine the return on investment for
these efforts is a terrific discipline that can only improve any company.

The good news is that CRM has finally come downstream with vendors offering
packages designed for small businesses. However, make sure to take the time to
evaluate whether the software is truly built to size or simply a large suit cut small.
To ensure the best fit, look for CRM that specializes in the need you want
addressed.

CRM products can still be pricey. Do not be surprised to see price tags in the
$3,000 to $5,000 range. Prices can easily escalate into the tens of thousands of
dollars and even higher for more complex implementations.

To make it easier on the budget and for companies without in-house technical
support, hosted CRM applications do exist. Pricing ranges from $50 to $150 per
month per user. If you are testing the CRM waters for the first time, this can be a
great way to cut your teeth without having to invest the months it can take to get
a system actually integrated into your system.

In a world where fewer and fewer customer interactions actually take place in
person, implementing CRM technology can be an excellent way to provide a
more personalized touch when working with your customers.

7.1 CONCLUSION

From above it can be concluded that all the business enter prices are focusing on
customer satisfaction and developing themselves as customer focused
enterprises which are aimed at providing improved features for the same amount
or same features for reduced cost to meet their expectations or to exceed their
expectations. In present scenario business enter prices are focused more on
customer retention rather then acquiring new customers which can be possible
only through customer focus and production

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 CHAPTER 3
POWERPOINT SLIDES

4.1 SLIDES

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 BIBLIOGRAPHY

INTERNET

http://www.google.co.in/search?
hl=en&defl=en&q=define:Customer+satisfaction&ei=Q4z5StGLAYjU7AOvp6CNC
g&sa=X&oi=glossary_definition&ct=title&ved=0CAkQkAE

http://www.mindtools.com/pages/article/newCDV_94.htm

http://ww3.harvardbusiness.org/corporate/solution-by-topic-mainpage/by-topic-
customer-focus.html

JOURNALS

Birmingham Business Journal, Friday, April 26, 2002, FOCUS ON CUSTOMER

RELATIONSHIP, Mie-Yun Lee, Vol. 12, No. 22, 2002, (p 82-110)

BOOKS

Customer Relationship Management, V.Venkata Ramana & G.Somayajulu,

First Edition.

HINDU BUSINESS LINES

Xylo On A Roll With M&M’s New Customer Focus, March 7.Page No.18.

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