A

PROJECT REPORT
ON
“CUSTOMER RELATIONSHIP MANAGMENT”
AT
KANSAI NEROLAC PAINTS LTD

Submitted in partial fulfillment of the requirements for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

SESSION (2019-20)

UNDER THE SUPERVISION OF: SUBMITTED BY:

Mrs. Sakshi MONIKA
College Roll No. 1384720014
University Roll No.

GOVERNMENT COLLEGE FOR WOMEN,

ROHTAK

1
 DECLARATION
I am Monika , a student of Sixth Semester , Bachelor of Business Administration Roll No
1384720014 of Government College for Women , under the Maharshi Dayanand University ,
Rohtak declare that the Project Report entitled on Customer Realtionship Managment at kansai
Nerolac Paints Ltd is being submitted by me is an original piece of work done by me under the
gudaince of Mrs.Sakshi . The matter presented has not been copied from any other existing report .
However , extracts of any literature which has been used for this report has been duly acknowledged
providing details of such literature in the references . Also , this Project Report has not been
submitted for the fulfillment of the requirements for the award of any other Degree or Diploma to
any other college/institution/university.

Signature…………
Monika

University Roll No: ___

University Registration No:

Dated:

Place:

Signature:

Mrs. Sakshi

Government College For Women, Rohtak

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 CONTENTS

CHAPTER TOPICS PAGE

NO
INTRODUCTION
1.1 Introduction
1.2 Meaning
1.3 Definition
1.4 Concepts and context of Relationship Management
1.4.1 External Relationship
1.4.2 Internal Relationship 1-14
I 1.4.3 Role of Internal Relationship Management
1.5 Evolution of CRM
1.6 Transactional Vs Relationship Approach
1.6.1 The key points
1.7 CRM as a Strategic Marketing Tool
1.7.1 The major areas of CRM
1.8 CRM Significance to the stake holders
1.8.1 CRM significance

UNDERSTANDING CUSTOMERS

2.1 Customer information Database

2.1.1 Customer Information
2.1.2 Information to be included in Customer Database
2.1.3 Benefits of a Customer Database
2.1.4 Developing a Customer Information Database
2.1.5 Process of Analyzing customer information database

2.2 Customer Profile Analysis

2.2.1 Components of Customer profile
2.2.2 Changing Shoppers Demography
2.2.3 Changes in Shoppers Value and Life Style

2.3 Factors influencing Customer Expectation of Service

2.4 Customer Perception Analysis 15-27
II 2.4.1 Perception
2.4.2 Factors influencing Customer Perception Analysis
2.4.3 Strategies for influencing customer perception
2.5 Customer Behaviour
2.5.1 Customer behavior in relationship perspective
2.5.2 Factors influencing consumer behavior

2.6 Individual behavior

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 2.7 Group Customer
2.8 Customer Lifetime Value
2.9 Selection of Profitable customer segments

CRM STRUCTURES
3.1 Elements of CRM
3.2 CRM Process
3.3 Strategies for Customer Acquisition
3.5.2 Strategies for prevention of Defection

3.4 Customer Retention

28-38
3.4.1 Strategies for customer Retention
III

3.5. Customer Defection

3.5.1 Types of Defection

3.6 Models of CRM

3.7 CRM Implementation Roadmap

CRM PLANNING AND IMPLEMENTATION

4.1 Strategic CRM planning process

4.2Organizational and Industrial impact;

4.3Success factors of ERP Implementation
4.3.1 Key success factors
4.4 Failure factors of ERP Implementation.

4.2 CRM Implementation

4.3 CRM Tools
4.3.1 Strategic CRM
4.3.2 Technology and implementation
4.3.3 Mobile business for the enterprise
4.3.4 Sales and marketing
4.3.5 Business intelligence
4.3.6 Customer Contact Center

4.4 Analytical CRM

IV
4.4.1 Need of analytical CRM

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 4.4.2 Purpose of Analytical CRM
4.5 Operational CRM
4.5.1 Application of Operational CRM
4.6 Call center
4.6.1 Call center Management
4.6.2 History of Call center management 39-51
4.6.3 Classification of Call center Management
4.6.4 Call center Development process
4.6.5 Operational Challenges

4.7 Role of CRM Managers

TRENDS IN CRM
5.1 e-CRM Introduction
5.2 Data Warehousing
V 5.2.1Data Marts 52-65
5.2.1 Data Mining in CRM
5.4 An introduction to CRM Packages 66-70
5.5 Question and Conclusion

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UNIT-I INTRODUCTION
Definitions - Concepts and Context of Relationship Management –Evolution-Transactional Vs
Relationship Approach - CRM as a strategic marketing tool - CRM significance to the
stakeholders

1.1 INTRODUCTION

 A long term relationship with customers to nurture its stability in today‘s blooming
market.

 Customer‘s expectations are now not only limited to get best products and services, they
also need a face-to-face business in which they want to receive exactly what they demand
and in a quick time.

 CRM is a business strategy directed to understand, anticipate and respond to the needs of
an enterprise's current and potential customers in order to grow the relationship value.
 The Customer Relationship Management is the procedure that is crucial for every
business.

1.2 MEANING

• Customer Relationship Management is an upright concept or strategy to solidify relations

with customers and at the same time reducing cost and enhancing productivity and
profitability in business.

• A CRM system is implemented for small business, as well as large enterprises also as the
main goal is to assist the customers efficiently.

• The Customer Relationship Management is the procedure that is crucial for every
business. As the customer is the most important part of the business.

1.3 DEFINITION

• Parvatiyar and sheth (2001) defined CRM is a comprehensive strategy and process of
acquiring, retaining and partnering with selective customers to create superior value for
the company and the customer.

• According to Gartner‖ CRM is a business strategy designed to optimize profitability,

revenue, and customer satisfaction‖.

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 • A CRM system is not only used to deal with the existing customers but is also useful in
acquiring new customers. The process first starts with identifying a customer and
maintaining all the corresponding details into the CRM system which is also called an
‗Opportunity of Business‘. The Sales and Field representatives then try getting business
out of these customers by sophistically following up with them and converting them into
a winning deal.
• Customer Relationship Management strategies have given a new outlook to all the
suppliers and customers to keep the business going under an estimable relationship by
fulfilling mutual needs of buying and selling.

1.4 CONCEPT AND CONTEXT OF RELATIONSHIP MANAGEMENT

Customer relationship management is the technique of providing information to

prospects and customers, and collecting information about prospects and customers, that
allows us to help them evaluate and purchase products that deliver the best possible value to
them.
One-to-one marketing, and relationship marketing is to make it easier for the customer to do
business with you. Marketing and sales people have many opportunities to influence
customer purchase decisions. Until recently it was normal for these functions to be
performed separately — by different departments within a company — without acting as a
unified team. So we must understand that coordinated efforts are now being made to unify
approach

Customer Relationship Management has become a popular name for a variety of

software tools and techniques aimed at attracting and retaining customers. In general, CRM
uses a centralized database to bring marketing and sales activities together in a unified
approach to serving customers.
One-to-one marketing and relationship marketing is to make it easier for the
manufacturer to do business.

• Marketing and sales people have many opportunities to influence customer purchase
decisions by the way making smooth relationship with the customer.

• The concept of relationship management with respect to the customer, to get efficiency
(cost reduction)and responsiveness (instant delivery).

• RELATIONSHIP MANAGEMENT by an organization can be divided into two

categories

1. External relations

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 2. Internal relations

1.4.1 EXTERNAL RELATIONSHIP

• Two major external stakeholders of a business are customers and suppliers.

Customer relations: customer relations can be defined as the process by which

companies promote customer satisfaction and loyalty.

• It involves managing communications with customers, particularly customer‘s questions

and complaints and solving their disputes.

• The ultimate goal of customer relations program is to build long term relationships.

• Building a strong reputation for the brand and company.

Supplier relations: All companies tries to build a strong relationship with their suppliers.

• Supplier relationships are different from simple purchasing transactions in several ways.
There can be a sense of commitment to the supplier.

• Eg: vendor (seller) sells certain items to the buyer for several times then he thinks that he
will come for a next time purchase.

1.4.2 INTERNAL RELATIONSHIP

• It is an integrative process with in a system for fostering positive working relationship in

a developmental way in a climate cooperation and achievement.

• Internal relationship is an ongoing process that occurs strictly within a company or

organization.

• Internal relationship helps to motivate and empower employees at all levels of

management and its consistently deliver a satisfying customer experience.

• Features of internal relationship management

• Customer commitment is earned in a social contract

• There is a open ideas for mutual gain.

• Close partnership between suppliers and customers.

• Customers are viewed as individual people and so are value providers.

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 • Continuous interaction and dialogue between suppliers and customers.

• Focuses on discovering, creating and responding to customer needs.

• Relationships are viewed as enterprise assets.

• There is a systematic collection and dissemination of customer information (detailing and

negotiating requirements, expectations, needs, attitudes and satisfaction)

1.4.3 ROLE OF INTERNAL RELATIONSHIP MANAGEMENT

• MANAGEMENT OF CHANGE Introduction of IT & new management practices.

• BUILDING CORPORATE IMAGE:

The team develops corporate image among the employees.

• STRATEGIC INTERNAL MARKETING:

The CRM team solve an inter departmental conflict and work common benefit of the
organisation.

• Relationship between companies and customers

• Reducing marketing costs

• Better customer insights

• Life time value(LTV)

1.5 EVOLUATION OF CRM

The modern concept of customer service has its roots in the Craftsman Economy of the 1800s,
when individuals and small groups of Manufacturers competed to produce arts and crafts to
meet public Demand. Individual orders were booked for each customer and supplied
according to his/her taste and demands. The economies were small and so were the
transactions. The manufacturer was able to meet the customers on one to one basis and talk
to customer to understand the minute details. Customer care and service were highly
personalized.
But then the economics swing was setting in. The technology was increasing and so was it
difficult to cater to the individualistic needs of the customer. Gradually, the era of mass
production came in.
The advent of Mass Production in the early 20th century, followed by an explosion in
the demand for goods after World War II, increased the power of suppliers at the expense of
consumers, and thus reduced the importance of customer service. History tells us that
customer service as a concept was kept aside in the cell. The manufacturers could produce

9
what they could and these goods will find their way to customers on their own. Infect, it was
the age of demand exceeding supplies. There was no need for customer service as an activity
or as a tool for promotion or enhancement of markets. But things never remain the same for
long periods of time.

A shift in this balance began in the 1970s, as international competition increased, and
the dominance of western manufacturers was challenged, first by Japan, then by Korea, China
and other developing economies. New world emerged with these Eastern economies taking to
tremendous growth Producers responded by improving the quality of their products and
services.

They introduced to the world entirely a new concept—the concept of simplicity and
convenience and economy to the world The economic boom of the 1990s again increased the
power of suppliers who, while not completely reverting to lower standards of service, were
able to be more selective of which customers to serve, and of what levels of service to
provide.

The overall quality of customer service - in society and in specific industry- will
continue to be determined by the relative balance of power between suppliers and
consumers; it will improve as competition becomes more intense, and decline as
competition decreases. We have to assess the global situation today and derive that we are
facing a new development. Briefly, the product similarity is making it more a challenge
today than ever before, to upgrade customer services to get an edge over the competitors.

 The changes in market demand and competitive strategy forced the company to change
from transactional marketing to relationship marketing.

 Marketing mix was developed in the 1950s in order to exploit market demand. all the p‘s
of marketing helps to explore increased demand of the company‘s products and services.

 The objective of transactional approach of marketing is to sell more products and services
to maximize sales and profit.

 Increased competition and matured markets have led to the low growth. Which results in
increased pressure and corporate profitability?

 The beginning of globalization of markets, new competitions led to the greater customer
choice.

 Companies must move from a short-term transaction oriented goal to long term
relationship building goal.

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  Companies are compete successfully in domestic and global markets including
customers, distributors, employees, unions and governments.

 The term marketing domain is defined as stakeholders which have to be taken into
consideration in order to develop relationships and to achieve long-term success in the
final marketplace.

 The increased importance of relationship marketing also led to an increasing demand for
an efficient customer relationship management.

 The task of finding who your customers are?

What they exactly want and providing it seems to be a task with difficulties.

 Understanding and management of customer‘s expectations is rather a key to success in

order to be able to create satisfied customers.

 Customer knowledge is required to satisfy their customers and reach the ultimate goal of
a company.

 Create customer knowledge and the utilization of the customer relationship management
system is essential.

1.6 TRANSACTIONAL vs RELATIONSHIP APPROACH

As marketing has entered the 21st Century, a significant change is taking place in the way
companies interact with customers. The traditional view of marketing as a simple exchange
process—a concept that might be termed transaction-based marketing—is being replaced by a
different, longer-term approach.

Transactional marketing strategies focused on attracting consumers. The goal was to identify
prospects, convert them to customers, and complete sales transactions. But today‘s marketers
realize that, although it remains important, attracting new customers is truly an intermediate step
in the marketing process. Marketing efforts must focus on establishing and maintaining mutually
beneficial relationships with existing customers. These efforts must expand to include suppliers
and employees, as well.

The concept, called relationship marketing, refers to the development, growth, and
maintenance of long-term, cost-effective exchange relationships with individual customers,
suppliers, employees, and other partners for mutual benefits. It broaches the scope of external
marketing relationships to include suppliers, customers, and referral sources. In relationship
marketing, the term customer takes on a new meaning. Employees serve customers within an

11
organization as well as outside it; individual employees and their departments are customers of
and suppliers to one another.

They must apply the same high standards of customer satisfaction to inter-departmental
relationships as they do to external customer relationships. Relationship marketing recognizes
the critical importance of internal marketing to the success of external marketing plans. Programs
that improve customer service inside a company also raise productivity and staff morale,
resulting in better customer relationships outside the firm.

Relationship marketing gives a company new opportunities to gain a competitive edge by

moving customers up a loyalty hierarchy from new customers to regular purchasers, then to loyal
supporters of the company and its goods and services, and finally to advocates who not only buy
the company‘s products but recommend them to others. by converting indifferent customers into
loyal ones, companies generate repeat sales.

The cost of maintaining existing customers is far below the cost of finding new ones, and
these loyal customers are profitable ones. Effective relationship marketing relies heavily on
information technologies such as computer databases that record customers‘ tastes, price
preferences, and lifestyles along with the increase of electronic communications. This
technology helps companies become one-to-one marketers that gather customer-specific
information and provide individually customized goods and services.

The firms target their marketing programs to appropriate groups, rather than relying on
mass-marketing campaigns. Companies who study their customers‘ preferences and react
accordingly gain distinct competitive advantages.

1.6.1 THE KEY POINTS ARE AS FOLLOWS..

• Transactional marketing, which was developed in the late 1950‘s and 1960‘s.

• Transactional marketing main concept which centers on the four P‘S, was developed by
borden in 1964.

• The marketing mix has since been described as an ―infallible guide for the effective
planning and implementation of marketing strategy‖.

• The focus on transactional marketing is shifting to focus on relationship marketing.

• The firms make the market fall by providing consumer packaged goods at one extreme
and the services at the other.

• In this situation all the firms are forced to adopt from transactional to relationship
approach.

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 • Transactional marketing approach is on individual transaction and does not concern
continuous relationship with customers.

• Transactional marketing does not contain a strategic long term perspective.

• The relationship marketing focuses on continuous multiple transactions rather than

isolated individual transactions.

• It also considers customer as insiders to the business and aims to build a long term and
never-ending relationship with them.

1.7 CRM AS A STRATEGIC MARKETING TOOL

Marketing is one of the new discoveries in business management. Of late, marketing has
come to occupy significant position in the overall strategic studies. Various challenges
are emerging in marketing as well as new approaches are being made in its study to view
its different aspects of the many things it has been recently realized that customer is the
most important elements in marketing and its sustenance and retention is far more
important than any other marketing functions.CRM is one of the core area in marketing.

1.7.1 The major areas of CRM focus on:

• Generation and servicing more loyal customers.

• Expansion of customer base
• Reduction of advertising costs
• Increase in profitable customers
• Ease in introduction of new products
• Personal Information Gathering and Processing, Self-Service.
• CRM is the marketing management practice of identifying, attracting and retaining the
most valuable customer to sustain profitable growth

• CRM is the process of making and keeping customers and maximizing their profitability,
behaviors and satisfaction.

• Today customer demand open equal access, real time specialized information, convenient
access, portability, process and logistics transparency, pricing transparency, global
pricing, ability to set prices, choices of distribution channels and control over their
information.

• First time customer can become a repeat customer, thereafter a client, then an advocate
and finally one‘s partner in progress.

• Loyal customers always create a profit and also reduced operating cost, increased
purchases and give plenty of referrals.

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 • The realistic observation on customers that it costs ten times more to sell to new
customers than to sell to an existing one.

• Existing customer deliver most of the revenues.

• It‘s very important part of CRM is to identify the Most Valuable Customers (MVC) for
the success of the business.

• A small net upward migration of customers (5-10%) can deliver a dramatic improvement
in business performance.

• Marketing and sales are charged with influencing customer behavior.

• Customer success always equal to business success.

1.8 CRM SIGNIFICANCE TO STAKEHOLDERS

• Four principal stake holders play a major role in the entire process of customer
relationship management.

1. Customers

2. Employees

3. Suppliers

4. Partners

1.8.1 CRM SIGNIFICANCE

• Perpetual stream of revenue

• Positive referral creation

• Provides premium

• Helps customer retention

• Lowers cost of sale

• Helps understanding consumer behavior

• Provides opportunity to cross-sell and up-sell

• Reduces marketing time

• Channel cost rationalization

• Enables business process re-engineering.

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UNIT-II UNDERSTANDING CUSTOMERS
Customer information Database - Customer Profile Analysis - Customer perception,
Expectations analysis - Customer behavior in relationship perspectives; Individual and
group customer’s - Customer life time value - Selection of Profitable customer segments

2.1 CUSTOMER INFORMATION DATABASE:

―The true business of the every company is to make and keep customers‖. The single most
important factor for the success of any business enterprise is the customer. Understanding the
customer needs and wants is the important factor for selling of our product and services.

2.1.1 CUSTOMER INFORMATION.

The most often used information in a CRM database is the customer information. This can
include personal information, such as contact addresses and phone numbers, as well as family
size, location, and other demographic information. Many companies also use their CRM
database to record purchase information, service calls, customer support needs, and even
warranty information. Anything relative to customer interaction can be placed in a CRM
database.

• Customer information database includes personal information, such as contact addresses,

phone numbers etc.
• It also includes family size, location and other demographic information and geographical
location.
• CRM database to record purchase information, service calls, customer support needs, and
even warranty information.
• Customer related databases might be maintained in a number functional areas; eg.
sales,marketing,logistics and accounts.
• Customer Information Database
• Databases might required quite different operational purposes
• Eg: Opportunities, campaigns,enquiries,deliveries and billing.
• Customer related data can have a current, past and future perspectives, focusing upon
current oppurtunities,historic sales or potential opportunities etc.

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 2.1.2 INFORMATION TO BE INCLUDED IN CUSTOMER DATABASE
• Contact names
• Job title and job definitions
• Demographic or psychographic information
• Name of the company
• Address
• Methods of contact
• Buying history
• Sources of lead
• Sources of sale
• Special needs of customers

2.1.3 BENEFITS OF A CUSTOMER DATABASE

By using a customer database to keep in touch with, and market to, your customers, you can:

 Increase awareness of your brand

 Enhance marketing opportunities
 Build and strengthen relationships between you and your customers
 Build trust in your products and services
 Increase your profits

2.1.4 DEVELOPING A CUSTOMER INFORMATION DATABASE

1. Define the database functions
• Strategic CRM: Data about markets, market offering, customers, channels, competitors,
performance and potential.
• Operational CRM: Customer related data to help in the everyday running of the business.
• Analytical CRM: Data to support the marketing, sales and services decisions that aim to
enhance the value created for and from the customers.

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 • Collaborative CRM: It includes two subsets of operational and analytical
purpose.(OLTP,OLAP)onlineT-transaction, A-analytical processing.

2. Define the information requirements

• Customer information fields
• Contact data
• Contact history
• Transactional history
• Current pipeline
• Opportunities: It looks forward after sales.
• Products
• Communication preferences

3. Identify the information sources

• Internal data: market size ,market segmentation, customer profile, customer acquisition
channel, competitor product and pricing, customer requirement
• External data:
a) Compiled list data:
b) Census data: obtained from govt records.
c) Modeled data generated by third parties includes variety of sources.
• Secondary and primary data:
a) Competition entries
b) Subscriptions: customer Subscribe of newsletter or magazine
c) Registrations: customers are invite to register their purchase
d)Loyalty programs

4. Select the database technology and hardware platform

• Hierarchical
• Network
• Relational: assign unique number in rows and columns and assign other data's of
marketing, service, payments and so on.

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5. Hardware Platform
5 Size of the databases :using of PC and server
6 Existing technology : using software
7 Number and location of users
8 Relational Database Management System(RDBMS)
5. Populate the database
Sourcing: obtain information from customers
Verification
Validation
1. Range validation: Does an entry lie outside the possible range for a field.
2. Missing values: Check for values that are missing in column.
3. Check against the external values: check the details with mail authority.
• De-duplication :
1. Remove the record that should be retained
2. Retain the record that should be removed
• Merge and purge &

6. Maintain the Database

• All new transactions, campaigns and communications are inserted immediately.
• Regularly re duplicates the database.
• Get customers to update their own records.(online purchase)
• Audit the subset of files every year.
• Drip-feed

2.1.5 PROCESS OF ANALYSING CUSTOMER INFORMATION DATABASE

• Extract(information)
• Clean
• Merge &
• Analyze

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2.2 CUSTOMER PROFILE
• A good method of identifying and understanding customers is to develop customer
profile.
• This approach is similar to that used in market segmentation.
• The marketers creates some basis for dividing the various customer groups.
• The marketer then develops a typical customer profile which helps to analyze and
understand consumer behavior.

2.2.1 COMPONENTS OF CUSTOMER PROFILE

• Customer profile analysis :
Customer profile that gives an indication of who might typically use their outlet.
A customer profile is affected by the macro business environment.
A customer profile is also influenced by the micro-environment, the specific business
arena in which the individual market operates.
The perspective of changing consumer profile can be very important to the marketer in
order to adequately manage the marketing mix and formulate a marketing strategy.
• Changing customer profile includes into two categories.
Changing customer demography
Changing in consumer values and life style.
2.2.2 CHANGING SHOPPER DEMOGRAPHY
• Demographics comprise selected characteristics of a population
(Age and income distribution and trends, mobility, educational attainment, home
ownership and employment status.)
The study of the population in terms of measurable aspects such as birth rate, age profile,
working pattern and occupation, total income and expenditure levels.
The changes are out of the marketer‘s control.
Some demographic changes those are likely to impact on the business.
1. Generation cohorts.
2. Age profile
3. Income and Expenditure
4. Ethnic Diversity

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5. Working patterns

1. Generational cohorts (buddies or followers)

• Those who share historical or social life experiences. These life experiences tend to
distinguish one generation from another.
• Members of the generation groups are linked through shared experiences which create a
bond tying members together in what has termed as cohorts.
• Generation cohorts includes
1. Seniors before 1946(conformity, conservatism, traditional family values, team player)
2.Baby boomers 1946-1964(experimental, individualism, free spirited, less optimistic)
3. Generation X 1965-1976 (quest of emotional security, independent, informality,
entrepreneurial)
4. Generation Y 1977-1994 (physical security and safety,patriotism, heightened fears, acceptance
of change) bal. b/w work and life style.
5. Tweens 1995 to till date (Belief in individuality, technology interpreted, fast face living)

Changing customer demography

1. Age profile (falling population of teenagers)
2. Income and Expenditure
(The changes in income brought changes in spending pattern of the consumers)
3. Ethnic Diversity (Differences in groups, culture, customs, religion etc)
4. Working patterns (The trend of more women's to enter into workplace. Increasing of working
time in work place)

2.2.3 CHANGES IN SHOPPERS VALUE AND LIFE STYLE

 Changing shopping perspective
 Changing patronage for different retail format
 Attitude towards shopping:
1. Shopping experience
2. Attitudes towards shopping time
3. Changing feelings about retailing

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 4. Reasons for buying or not buying
5. Attitude by market segment
6. Attitude towards private brand
 Impulse purchase and customer loyalty:
1. Impulse purchase
a. completely unplanned
b. Partially unplanned
C.unplanned substitution
2. Customer loyalty.

2.3 FACTORS INFLUENCING CUSTOMER EXPECTATIONS OF SERVICES

• Sources of desired service expectations (desired services Zone of tolerance adequate
service)
1. Personal needs
2. Enduring service intensifiers - desired service expectations

• Sources of Adequate service expectations

1. Transitory service intensifiers (urgent need-small purchase, doctors etc)
2. Perceived service alternatives (booking of tickets)
3. Customer‘s self perceived service roles (food service in hotel)
4. Situational factors (petrol bank, food served for marriage)
5. Predicted services (give quality service rather than predicted service)

• Sources of both desired and predicted service expectations

1. Explicit services promises (ad -we promises to customers)
2. Implicit service promises (two company charges diff. prices)
3. Word-of-mouth communication
4. Past experience (previous exposure to the focal firm‘s service )
• Managing customer expectations
• During pre-purchase phase
1. Learn what customers expect

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2. Tell customers what they can expect
3. Consistently provide the service that customers expect.
• During the service encounter
• During the post-purchase phase

2.4 CUSTOMER PERCEPTION ANALYSIS

Customer perception analysis is a value-chain assessment methodology that gives a better
understanding of one‘s interaction with customers.
Perception is a process through which the information from outsider‘s environment is
selected, received, organized and interpreted to make it meaningful.

2.4.1 PERCEPTION
According to kolasa,‖ perception is selection and organization of materials which stems from
the outside environment at one time or the other to provide the meaningful entity we
experience.‖
According to Robbins, "perception may be defined as a process by which individuals
organize and interpret their sensory impressions in order to give meaning to their
environment.‖

2.4. 2 FACTORS INFLUENCING CUSTOMERS PERCEPTION ANALYSIS

1. Exposure- attention(ad)
2. Interpretations (It involves making sense out of stimulus)
3. Relevance –several other factors (substitute)
4. Surprising stimuli
5. Subliminal stimuli
6. Selective perception process
7. Selective Exposure
8. Selective Attention
9. Selective Comprehension
10. Selective Retention

2.4.3 STRATEGIES FOR INFLUENCING CUSTOMER PERCEPTION

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1. Measure and manage customer satisfaction and service quality
2. Aim for customer quality and satisfaction in every service encounter-zero defects
3. Plan for effective recovery
4. Facilitate adaptability and flexibility
5. Encourage spontaneity
6. Help employees with problem customers
7. Reflect evidence of service
8. Enhance customer perception of quality and value through pricing.

2.5 CUSTOMER BEHAVIOR

Customer or consumer behavior is the study of how individuals make decisions to spend their
valuable resources (Time,money,effort) on consumption-related items. It includes what they
buy it, why they buy it, where they buy it, how often they buy it, and how often they use it.
According to belch and belch ‖consumer behavior is the process and activities people engage
in when searching for, selecting, purchasing, using, evaluating and disposing of products and
services so as to satisfy their needs and desires.

2.5.1 CUSTOMER BEHAVIOR IN RELATIONSHIP PERSPECTIVE

1. Understanding customer is the central part of the marketing process to know why a customer
or buyer makes a purchase.
2. Without such an understanding, business will find it hard to respond to the customer‘s needs
and wants.
3. Some business still produces the product without knowing the importance of the customer.
4. Organization clearly understands the benefits wanted by customers, reasons for purchase, re-
purchase etc.
5. Importance of customer behavior
6. Production policies
7. Price policies
8. Decision regarding channel of distribution
9. Decision regarding sales promotion
10. Exploiting market opportunities
11. Customers do not always act or react predictably.

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12. Consumers preferences are changing and becoming highly diversified.
13. Rapid introduction of new products
14. Implementing the ―marketing concept‖

2.5.2 FACTORS INFLUENCING CONSUMER BEHAVIOR

15. Psychological factors
1. Motivation
2. Perception
3. Learning
4. Beliefs and attitude
• Personal Factors
1. Age and Life cycle stage
2. Occupation
3. Life style
4. Personality and self concept
• Cultural factors
1. Culture
2. Sub culture
3. Social class
• Social factors
1. Refernce groups
2. Family
3. Roles and status
• Buying role of a customer
• Initiator
• Influencer
• Decider
• Gatekeeper

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 • Buyer
• User

Buying decision of customers

• What to buy?
• How much to buy?
• Where to buy?
• When to buy?
• How to buy?

2.6 INDIVIDUAL CUSTOMER

• The term consumer, end user, individual buyer and individual user refer to the same, a
buyer who buys product and services for end use.
• Understanding their need, want, value expectation and service expectations are the way to
win this market by product and services which a firm is offering.
Individual customer decision making process/Buying process
• Problem recognition
• Pre-purchase information research
1. Personal service
2. Commercial sources
3. Public sources
4. Experimental sources
• Evaluation of alternatives:
1. Evaluative criteria
2. Beliefs
3. Attitudes
4. Intensions
• Purchase decisions
• Post-purchase behavior
1. Post-purchase satisfaction

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2. Post-purchase action
3. Post-purchase use and disposal

2.7 GROUP CUSTOMERS

• Group customer are referred as industrial market which consists of all the individuals or
organizations who acquire goods and services that enter into the production of other
products or services that are sold, rented or supplied to others.
• Organizations establish the need for purchased products and services, and identify,
evaluate and choose among alternatives brands and suppliers.
Group customer decision making process/Buying process
• Problem recognition
• General need Description
• Product specification
• Supplier Search
• Proposal solicitation
• Supplier selection
• Purchase Routine selection
• Post purchase evaluation

2.8 CUSTOMER LIFE TIME VALUE

• Customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV)
is the net present value of the cash flows attributed to the relationship with a customer.
• The use of customer lifetime value as a marketing metric tends to place greater emphasis
on customer service and long-term customer satisfaction, rather than on maximizing
short-term sales.
• Building Profitable Customer-Centric Strategies: Maximizing Profit Potential
• Our high-impact processes for becoming more customer-centric and creating innovative
strategies will be valuable only if we can effectively deliver on these profitably.

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2.9. SELECTION OF PROFITABLE CUSTOMER PROFITABILITY
• We first understand the key factors that will drive profitability for customer insight
initiatives.
• During the innovation stage, the objective was to creatively generate new sources for
capturing intelligence from customers and creating insight that could enhance the way we
communicate and sell to customers.
• As you learn more from customers about their needs and preferences, you have the
opportunity to better target your marketing messages, offers and channels, which
ultimately leads to reduced marketing expenses and increased conversion rates.

• Customer life time value

The key factors that will drive the profitability of customer insight initiatives include these:
• Reaching high-value customers and prospects
• Capturing intelligence on a critical mass of customers to justify the fixed costs of setting
up and managing the program
• Generating incremental profits from increased sales to new customers, higher customer
retention, selling more to existing customers or winning back lost customers
• Reducing costs of delivering solutions and servicing customers
• Capturing intelligence cost-effectively
• Building the ability to influence customer profitability over time

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UNIT – III CRM STRUCTURES 9

Elements of CRM – CRM Process – Strategies for Customer acquisition – Retention and
Prevention of defection – Models of CRM – CRM road map for business applications.

3.1 ELEMENTS OF CRM:

When your company communicates with your customers the process can involve many different
people within both organizations using a variety of different methods. The main tool that is used
is an order that is communicated by your customer to your sales department. However this is
only one of many communications that should be managed. To ensure that your company can
provide the best customer service experience possible the use of customer relationship
management (CRM) software should be considered.

• CUSTOMER KNOWLEDGE

The customer service function in your company represents the front office functions that
interact with your customers. These are the business processes that allow your company
to sell products and services to your customers, communicate with your customers with
regards marketing and dealing with the after sales service requirements of your
customers. Each interaction with the customer is recorded and stored within the CRM
software where it can be retrieved by other employees if needed.

• RELATIONSHIP STRATEGY

• COMMUNICATION

• INDIVIDUAL VALUE PROPOSITION

• SALES FORCE AUTOMATION

• The company‘s sales department is constantly looking for sales opportunities with
existing and new customers. The sales force automation functionality of CRM software
allows the sales teams to record each contact with customers, the details of the contact
and if follow up is required. This can provide a sales force with greater efficiencies as
there is little chance for duplication of effort. The ability for employees outside of the
sales team to have access to this data ensures that they have the most recent contact

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 information with customers. This is important when customers contact employees outside
of the sales team so that customers are given the best level of customer service.

• CAMPAIGN MANAGEMENT

• The sales team approach prospective customers in the hope of winning new business. The
approach taken by the sales team is often focused in a campaign, where a group of
specific customers are targeted based on a set of criteria. These customers will receive
targeted marketing materials and often special pricing or terms are offered as an
inducement. CRM software is used to record the campaign details, customer responses
and analysis performed as part of the campaign.

3.2 CRM PROCESS

• The formation process of CRM refers to the decisions regarding initiation of relational
activities for a firm with respect to a specific group of customers or to an individual
customer with whom the company wishes to engage in a cooperative or collaborative
relationship.

• It is important that a company be able to identify and differentiate individual customers.

In the formation process, there are three important decision areas: defining the purpose
(or objectives) of engaging in CRM; selecting parties (or customer partners) for
appropriate CRM programs; and developing programs (or relational activity schemes) for
relationship engagement with the customer.

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 CRM PROCESS
CRM PROCESS FIGURE 1

• THREE STEPS OF CRM PROCESS

1.Acquisition :

It comprises enquiry, interaction, exchange, co-ordination and adaptation.

2.Customer Interaction Management

3.Customer Retention

• Customer Acquisition

• Customer acquisition is a broad term that is used to identify the process and procedures
used to locate, qualify, and ultimately secure the business of new customers.

• Customer retention effort is to identify and quality potential customers.

• Inputs for Acquisition

• The purpose of customer acquisition an organization is likely to focus its attention on the
following

1. The suspects

2. The enquiries

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3. The lapsed customers

4. The former customers

5. The competitors customers

6. The competitors lapsed customer‘s

7. The competitor‘s enquiries

8. The competitors former customers

9. The referrals

10. The existing customers

3.3 STRATEGIES FOR CUSTOMER ACQUISITION

1. FOCUSED APPROACH:

a) Knower
b) Preferer
c) Indifferent
d) Rejecters

2. PROVIDING A WIN-WIN PLATFORM

3. INTITATE FORUM FOR COMMUNICATION

4. ATTEMPT TO MINIMIZE ―FUD‖ (Fear,Uncertainity,Doubts)

5. PROJECTION OF BENEFITS AND NOT PRODUCTS

6. CONTEXTUAL APPLICATION

7. FOCUS ON DECISION PROCESS

3.4 CUSTOMER RETENTION

Customer retention is the activity that a selling organization undertakes in order to reduce
customer defections.

Successful customer retention starts with the first contact an organization has with a
customer and continues throughout the entire lifetime of a relationship.

A company‘s ability to attract and retain new customers, is not only related to its product or
services, but strongly related to the way it services its existing customers and the reputation it
creates within and across the marketplace.

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 Customer Retention Programs : Figure: 3.2

3.4.1 STRATEGIES FOR CUSTOMER RETENTIONS

1. PEOPLE

2. PRODUCT

3. PROCESS

4. ORGANISATION

5. SETTING SATISFACTORY SERVICE STANDARDS

6. CONCENTRATION ON COMPETITORS

7. CUSTOMER ANALYSIS

8. COST ANALYSIS

9. CONCENTRATION ON THE PAYING ABILITY OF CUSTOMERS

10. KNOWLEDGE ON PURCHASE BEHAVIOUR PATTERN

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11. DIFFERENCIATION IN PRICES AND QUALITY STANDARDS

12. FOCUS ON REDUCING DISSATISFACTION

13. ATTENTION ON CHANGING REQUIREMENT OF CUSTOMERS

14. CONCENTRATION ON PERFORMANCE

15. TRAINING TO SUPPLY CHAIN EMPLOYEES

16. EMPOWERMENT TO SERVICE PROVIDERS

17. INCENTIVIZING SERVICE PROVIDERS

18. AUGMENTING INTANGIBLE BENEFITS

19. VISIT TO THE POINT OF USAGE OF THE PRODUCT

20. DEVELOP PARTNERSHIP WITH CUSTOMERS

21. ORGANIZING CUSTOMER CLUBS

22. RELATIONSHIP BASED PRICING SCHEMES

23. EFFECTIVE CUSTOMER COMMUNICATION SYSTEM

24. CUSTOMER COMPLIANT MONITORING CELL

25. DEVELOPING CUSTOMER SATISFACTION INDEX

26. FOCUS ON PREVENTIVE ACTIONS

27. CONCENTRATION ON CUSTOMER SATISFACTION RESEARCH

28. FOCUS ON FOCUS GROUP

29. BUILDING SWITCHING BARRIERS

3.5 CUSTOMER DEFECTION

Customer defection is the rate at which customers defect or stop the usage of products of a
company. business with high defection rate, would be losing their existing customers.

In order to overcome this they use another term of customer retention, in simple words its to
retain or prevent the existing customers to defect the product.

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3.5.1 TYPES OF DEFECTION

 PRICE DEFECTORS
 PRODUCT DEFECTORS
 SERVICE DEFECTORS
 MARKET DEFECTORS
 TECHNOLOGICAL DEFECTORS
 ORGANISATIONAL DEFECTORS

3.5.2 STRATEGIES FOR PREVENTION OF DEFECTION

Every customer that you keep represents at least three that you don’t have to attract.
Numerous research studies indicate that the cost of acquiring a new customer usually runs from
two to four times the annual cost of keeping an existing customer. Obviously, an effective
customer retention strategy translates into profits.

It has been estimated that most companies spend about 98 percent of their time reacting to
problems and less than 2 percent preventing them. The first, most important, way to prevent
customer defections is to identify and define each problem from the customer‘s vantage point.
This blog suggests several ways to retain customers once you understand the problems and their
ramifications.

Superior service and database management provide your best defense against customer
defections. Service provides the opportunity to solve customer problems and build partnerships;
the database serves as a vehicle to personalize customer communication and enhance your
relationships. The Key Points Are

4 ANALYZE CUSTOMER DEFECTIONS AND MONITOR DECLINING ACCOUNTS

5 ADDRESS KEY CHURN DRIVERS

6 IMPLEMENT EFFECTIVE COMPLAINT-HANDLING AND SERVICE RECOVERY

PROCEDURES

7 INCREASE SWITCHING COSTS.

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3.6 MODELS OF CRM

• IDIC MODEL:

I- IDENTIFY

D – DIFFENCIATE

I – INTERACT

C - CUSTOMIZE

• Qci MODEL : Figure:3.3

• CRM Value chain Figure:3.4

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• Payne‘s Five-process model : Figure:3.5

• Gartner Competency model : Figure:3.6

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3.7 CRM IMPLEMENTATION ROADMAP

A CRM Roadmap is a strategic plan that identifies how a company can meet and exceed its
customers‘ needs. This includes, but is not limited to, assessing how the sales, marketing,
and service entities work together to:
1) Gain insight from their customers
2) Produce valuable offerings/products (for example, personalized product); and 3)
Provide the ultimate customer experience.
Developing a CRM Roadmap involves aligning an organization‘s business strategy with its
prioritized CRM capabilities. For example, if a company‘s business strategy is to develop
products faster to gain unique market positioning, the capabilities that the company needs to
master should be aligned with that strategy,
and might include:
• Leveraging customer information from the service process (for example, integrating customer
feedback during service calls with the marketing department).

37
• Effectively managing product mix (measure success by campaign).
• Effectively managing sales channel strategy (eliminate conflict between distribution channels).
So how do companies know which CRM capabilities they have, and which they‘ll need to realize
their strategic goal? Below are the eight primary steps (which have been used across industries,
including financial services, electronics and high-tech, consumer products, manufacturing, etc.)
to follow when developing a CRM Roadmap.

• SCENARIO ANALYSIS

• PURPOSE AND OBJECTIVES

• BUSINESS PLANNING

• PROCESS DESIGN

a.Technology and vendor selection

B.Solution development

C.Implementation

D. Measurement

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 UNIT – IV CRM PLANNING AND IMPLEMENTATION 9
Strategic CRM planning process – Implementation issues – CRM Tools- Analytical CRM
– Operational CRM-Call center management – Role of CRM Managers.

4.1 STRATEGIC CRM PLANNING PROCESS:

• Defining the business objectives.

• Understanding CRM Three dimensions (people, process, IT)

• Using a structured approach to manage CRM

• Identifying both corporate and customer needs

• Using customer needs to re-engineer business processes

• Selecting technology based on business needs and functionality

• Ensuring systems development is business led

• Ensuring actionable measures of customer performance

• Actively managing culture and change, win buy in

• Using a phased implementation strategy

4.2 CRM IMPLEMENTATION (PHASES)

• Develop the CRM Strategy

• Build CRM Project foundations

• Need specifications and partner selection

• Project implementation

• Performance evaluation

1. Develop the CRM Strategy

• Situational analysis

• Customer or segments

• Market offering

• Channels of distribution

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• Commencing the CRM education

• Developing CRM vision

• Setting priorities

• Goals and objectives

• Identifying the people,process,and technology requirement

• Develop a business case

2. Build CRM Project foundations

• Identify stakeholders

• Establishing the governance structure

• Identify the change management needs

• Identify the project management needs

• Identifying the criteria success factors

• Developing a risk management plan

3. Need specifications and partner selection

• Process mapping and refinement

• Data reviewing and gap analysis

• Hosted or On-premise CRM

• Calling for proposals

• Invite potential partners

• Revised technology need identification

• Asset the proposals and select one or more partners

4.Project Implementation

• Refining project plan

• Identifying the technology customization needs

• Prototype design,test,modify,and roll out.

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 5.Performance Evaluation

• Project outcomes

• Business outcomes

• Implementation issues

• Poor planning

• Poor Integration

• Towards a solution

7.3 CRM TOOLS

7.3.2 STRATEGIC CRM

7.3.3 TECHNOLOGY AND IMPLEMENTATION
7.3.4 MOBLIE BUSINESS FOR THE ENTERPRISE
8.3.2 SALES AND MARKETING
8.3.3 BUSINESS INTELIGENCE
8.3.4 CUSTOMER CONTACT CENTER

4.3.1 STRATEGIC CRM

1. BUSINESS CASE

2. CUSTOMER KNOWLEDGE

3. CUSTOMER LOYALTY

4. CUSTOMER RETENTION

5. CUSTOMER SATISFACTION

6. DIRECTION

7. LEADERSHIP

8. MASTER PLAN

9. METRICES OR MEASUREMENT

10. PEOPLE &PROCESS

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11. ROI

12. STRATEGY & SUCCESS

13. TECHNOLOGY

14. TOP MANAGEMENT

15. TRENDS

16. VISION

4.3.2. TECHNOLOGY & IMPLEMENTATION

1. ENTERPRISE ARCHITECTURE AND APPLICATION

2. CRM –INDUCED CULTURE CHANGE

3. MIGRATIONMANAGEMENT

4. KNOWLEDGE BASED UTILIZATION

5. APPLICATION SERVERS

6. SYSTEM INTEGERATERS

7. PLANNING AND INVESTICATING

8. IMPLEMENTATION AND DEPLOYMENT

9. CHANGE MANAGEMENT

10. MAINTAINING AND UPGRADING

4.3.3. MOBILE BUSINESS FOR THE ENTERPRISE

1. DELIVERY TECHNOLOGY

2. DISPLAY TECHNOLOGY

3. FIELD FORCE AUTOMATION

4. INPUT TECHNOLOGY AND DEVICES

5. MOBILE COMMERCE

6. MOBILE ENTERPRISE

7. MOBILE OPERATING SYSTEM

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 8. WIDE AREA NETWORK

9. WIRELESS APPLICATION SERVICE PROVIDER

10. WIRELESS DEVICES

4.3.4. SALES AND MARKETING

1. ENTERPRISE RELATIONSHIP MANAGEMENT(ERM)

2. E-SALES

3. LEAD QUALIFICATION

4. OPERATIONAL CRM

5. PARTNER RELATIONSHIP MANAGEMENT

6. REPEAT BUSINESS

7. SALES FORCE AUTOMATION

8. ANALYTICAL CRM

9. CUSTOMER PROFILEING AND SEGEMENTATION

10. E-MARKETING AUTOMATION

11. LEAD QUALIFICATION in sales

12. PERSONALISATION

4.3.5. BUSINESS INTELIGENCE

1 ANALYTICAL PROCESS

2 CUSTOMER INTELLIGENCE SYSTEM

3 CUSTOMER SCORING

4 DATA CLEANING

5 DATA MINING

6 DATA WAREHOUSE

7 FILTERING AND HOUSE HOLDING

8 INFORMATION DATABASE

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9 LEGAMART

10 METAMART

11 OPERATIONAL SYSTEM OR DATABASE

4.3.6 CUSTOMER CONTACT CENTER

1 CALL CENTER AND HELP DESK

2 CUSTOMER INTERACTIVE CENTER

3 CUSTOMER RETENTION

4 CUSTOMER SUPPORT

5 E-SERVICE SYSTEM

6 LIVE SUPPORT AND SERVICE

7 ON-LINE SUPPORT AND SERVICE

4.4 ANALYTICAL CRM

1 Analytical CRM may be defined as a decision support system that is targeted to helping
senior executives ,marketing, sales and customer support personnel to better understand and
capitalize upon their customer needs, the company‘s interaction with the customer and the
customer buying cycle.

2 Analytical CRM consist of applications that enable business to analyze relevant data in
order to achieve a more meaningful and profitable interaction with the customer.

3 It uses customer data for analysis, modeling and evaluation to create a mutual relationship
between company and its customers.

4 It helps to better understanding of customer behavior.

5 The analytical CRM solution enable the effective management of a customer relationship.
Analysis of customer data can a company begin to understand bahaviours,identify buying
patterns and trends and discover casual relationship.

Key features of Analytical CRM

• It integrates and inheriting all this data into a central repository knowledge base with an
overall organization view.

44
• It combines and interacts the value of customers with strategic business management of
organization and value of stakeholders.

• It determines, develops and analyze inclusive set of rules and analytical methods to scale
and optimize relationship with customers by analyzing and resolving of all questions.

4.4.1 NEED OF ANALYTICAL CRM

• CUSTOMER ACQUISITION

• CUSTOMER ATTRITION(slow destruction)

• TIME UNTIL ATTRITION

• REVENUE DOLLAR MODEL

• CUSTOMER UPGRADE

4.4.2 PURPOSE OF ANALYTICAL CRM

• Design and execution of targeted marketing campaigns to optimize marketing

effectiveness.

• Design and execution of specific customer campaigns, including customer

acquition,cross selling, up- selling, retention.

• Analysis of customer behavior to aid product and service decision making.

• Management decisions

• Prediction of the probability of customer defection

• Analytical CRM generally makes heavy use of data mining.

• Importance of analytical CRM

• Make more profitable customer by providing high value services.

• Retaining profitable customer through sophisticated analysis.

• Addressing individual customer needs and efficiently improving the relationship with
new and existing customer.

• Improves customer satisfaction and loyalty.

• Find and explore useful knowledge in large customer database.

• It helps in classifying customers, predicting customer behavior.

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 • Steps in analytical CRM process

Step:1 Problem formulation

• Segmentation of clients

• Acquisition analysis

• Relation analysis

• Channel or approach analysis.

Step:2 preparation

Step:3 Definitive analysis

• Statistical techniques

• Data mining

• Machine learning techniques

Step:4 Visualizing

4.5 OPERATIONAL CRM

• OPERATIONAL CRM involves the areas where direct customer contact occurs. These
interactions are referred to as customer touch points.

• Company maximize the process of gathering and understanding customer information

from all touch points.( eg: call centers, point of sales, web etc.)

• Touch point classification:

1. Face to Face touch points: sales/service/channel/events/stores/promotions

2. Database-Driven Touch-points: telephone/e-mail/mail/SMS/Fax/loyalty cards/ATM‘s.

3. Mass Media: Advertising /public relations/Website.

4.5.1 APPLICATION OF OPERATIONAL CRM

1. MARKETING AUTOMATION: It is automatically focused on automating

marketing processes. In marketing campaign management involves marketers to use customer
specific information to determine, evaluate and develop communication that are targeted to
customers in individual as well as multi level or multi channel environment.

46
 Campaigns developed to communicate customers individually are easy and involves unique
and direct communication.

2. SALES FORCE AUTOMATION:

The main part of CRM is not only deal with existing customer. It also try to acquire new
customers also. The process starts with identification of customers, maintaining all
correspondence details into the CRM system.

This process includes generation of lead and qualifying those leads into prospects.
Business people following up the customer continuously and convert them into a winning deal.
Automation of selling process is effectively handle by salesforce automation, which automates
all the methodologies or sales cycle.

3. SERVICE AUTOMATION-
It deals with managing organizations service. The actual interaction with the customers
such as contact, direct sales, direct mail, call center , web sites and blogs etc.. are
examples of operational CRM.

Each interactions with the customer can be collected to the client database
generally known as customers history.

This helps to assess a clear view of customer needs such as products owned, prior
support calls etc.

Basis of the information, if e customer required the customer can easily be

contacted at the right time at the right place.

• CUSTOMER SERVICE AND OPERATIONAL CRM

4.6 CALL CENTER:

A call center is one of the best asserts a customer driven organization can have becoz
maintaining a high level of customer support is critical to obtaining and retaining customers.

Contact centers also track customer call history along with problem resolution.

• WEB BASED SELF SERVICE – This service allow customers to use the web to find
answers to their questions or solutions to their problems. Example, FedEx courier service
, Gas Booking System, E-Ticketing.

• CALL SCRIPTING – This system helps to assess organizational databases that track
similar issues or questions and automatically generate a details to the CSR (Customer
Service Representatives) who can then relay them to the customer. Example, Frequently
Asked Questions.

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4.6.1 CALL CENTER MANAGEMENT

A call center is a place that encourages customers to make calls in order to facilitate their easy
usage of the product/service offered by the organization. All calls from customers regarding their
queries, problems, suggestions are entertained.

It consists of a group of personnel that are specifically trained in handling inbound and outbound
customer calls thus catering to customer service needs.
A center is a place where a number of people handle the incoming as well as outgoing telephone
conversations of a varied nature with their customers.

Call centers are undergoing major development. Companies are becoming customer oriented
instead of product oriented and are investing in CRM. CRM (Customer Relationship
Management ) being the customer centred strategy of the decade and finding its roots in
customer satisfaction and customer focus, has started to play a very prominent role in the call
center sector. How has it achieved this? Call centers are finding that implementing this strategy
brings them vast benefits. For example the high potential that call center CRM software has in
collecting vital customer data and storing it. This data is entirely essential to the call center and is
utilized in its day to day activities. It helps them possess a clearer view of the customer being
handled and enables them to give the right answers to customer queries, problems etc. Knowing
the customer, his preferences, his purchase history etc all contribute significantly to the better
handling of the customer.

A few features available in this system.

1. Automatic call distribution

2. Interactive voice response ( IVR) – Cellular Service,#1,#2,#3,#9.

3. Predictive Dialing.

4.6.2 HISTORY OF THE CALL CENTER INDUSTRY

• The history of the call center was begins in USA in 1874. (Alexander Graham Bell
introduced the voice over wires).

• May 1877, first telephone pattern was introduced and 6 telephone connections were in
use.

• Nov 1877, over 3000 phones were being connected through wires for homes and business
use. During this period, the first call center was created as individual rang operators, who
is manually connected their calls through a switch board with a required party.

48
 • In 1880, the number of phones in use had claimed to 1,33,000. It become more difficult
for new or temporary operators to have the knowledge of how and where all the phone
lines are connected.

• First ever 24 hours call centers was an inbound customer service and sales center set-up
by pan American world airlines in1956.

• In 1967 AT&T introduced 800 toll free lines that gave customers a way of contacting
businesses at no cost to themselves.

• In recent times call centers was flourished because industries such as

travel,hospitality,banking,and catalog shopping have found value in the concept.

• They are utilized to provide superior customer service and increase sales to maximize
market share.

• Call center service depends on three factors like- speed, quality and efficiency.

The main objectives are

1. Customer satisfaction

2. Business process analysis

3. Employee development and welfare

4. Increase in revenue

5. Analyzing future trends

6. Cost reduction.

4.6.3 CLASSIFICATION OF CALL CENTERS

1. Inbound / Outbound

2. International / Domestic

3. In-house / Out-Sourced

4.6.4 CALL CENTER DEVELOPMENT PROCESS

1. Select a Location for the call center where there is an educated work force.

2. Select the underlying technology component.

3. Decide which channels to support on the call center.

49
 ( Mail, Chat, Web Forms, Text Chat, VOIP)

4. Select the software solution,that meet requirements and will integrate with existing systems.

5. Integrate system when feasible.

6. Determine service level agreement and business processes.

7. High and retain staff.

8. Finalize the budget

9. Establish measurement and performance processes.

10. Establish on – going policies for training and updating CSR.

4.6.5 OPERATIONAL CHALLENGES

1. Trained man power

2. Government regulations

3. Commitment to quality

4.7 ROLE OF CRM MANAGERS

Role of CRM manager in planning and implementation

1 Developing CRM Programs

2 Direction

3 Listening

4 Conflict resolution

5 Positive image

6 Follow through

7 Administrative duties

8 Coaching sessions

9 Customer interaction

10 Communication

11 Reporting to senior management

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Responsibilities:

1. Measurable increase in customer satisfaction measures

- Maintain or increase recurring revenue from their customers
- Develop/maintain referenceable customers
- Decrease in Executive level escalations from assigned customers.
2. Acts as Customer Advocate within the organization

- Develops in-depth knowledge of the customer's goals and strategy as it relates to the
product/service being used, assists the customer in reaching those goals, and
communicates those goals internally to help drive product/service decisions.

- A single contact/escalation point for cross product/cross functional issues

- Holds customer accountable for maintaining contracted levels of training/staffing/etc.

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UNIT – V TRENDS IN CRM 9

e- CRM Solutions – Data Warehousing – Data mining for CRM – an introduction to CRM
software packages.

Customer Relationship Management (CRM)

– Focuses on providing and maintaining quality service for customers, by
effectively communicating and delivering products, services, information and
solutions to address customer problems, wants and needs
– Can include:
• Call handling (the maintenance of outbound and inbound calls from
customers and service representatives)
• Sales tracking (the tracking and recording of all sales made)
• Transaction support (the technology and personnel used for conducting
business transactions)

5.1e-CRM INTRODUCTION
• e-CRM is the application of CRM to an e-business‘ strategy
– Includes the personalization and customization of customers‘ experiences and
interactions with the e-business
• Relationship between merchant and customers is distant
• Less expensive to keep customers than to acquire new ones
• Repeat customers have higher lifetime value than one-time buyers
– A customer‘s lifetime value is the expected amount of profit derived from a
customer over a designated length of time
• Evaluate the potential to profit from a customer
• Tracking and Analyzing Data
• Employ tracking devices
– Personalize each visitor‘s experience
– Find trends in customer use
– Measure the effectiveness of a Web site over time
– ID cards

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 • An ID card enables information to be sent to your computer from a Web
site such as the numerical address of your PC on the Internet, your
browser and your operating system

 Click-through banner advertisements

• Click-through advertisements enable visitors to view a service or product
by clicking the advertisement
• Advertisers can learn what sites generate sales
• Tracking and Analyzing Data
– Web Bugs, or clear GIFs
• A type of image file embedded in an image on the screen
• Site owners allow companies, especially advertising companies, to hide
these information-collecting programs on various parts of their sites
• Every time a user requests a page with a Web bug on it, the Web bug
sends a request to the Web bug‘s company‘s server, which then tracks
where the user goes on the Web.
– Log-file analysis
– Data mining
– Customer registration
– Cookies
• Log-File Analysis
• When visiting a site, you are submitting a request for information from the site‘s server
and the request is recorded in a log file
– Log files consist of data generated by site visits, including each visitor‘s location,
IP address, time of visit, frequency of visits and other information
– Log-file analysis organizes and summarizes the information contained in the log
files
• Can be used to determine the number of unique visitors
• Can show the Web-site traffic effects of changing a Web site or
advertising campaign
• Customer Registration
– Requiring visitors to fill out a form with personal information that is then used to
create a profile

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 – Recommended when it will provide a benefit to the customer
– When customers log on using usernames and passwords, their actions can be
tracked and stored in a database
• Require only minimum information
• Give customers an incentive to register
– Free-trial run or a free demonstration to familiarize the user
• After customer registration, send an e-mail including customer usernames and welcoming
them to your Web site

• Cookies
– A text file stored by a Web site on an individual‘s personal computer that allows a
site to track the actions of a
– Information collected is intended to be an anonymous account of log-on times, the
length of stay at the site, purchases made on the site, the site previously visited
and the site visited next
– Does not interact with other information stored on the system
– Can only be read by the host that sets them on a person‘s computer
• Cookies Benefits
– Record passwords for returning visitors
– Keep track of shopping-cart materials
– Register preferences
– Assist companies in address target markets with greater accuracy
• Negatives
– Customer privacy
– Can be misleading to site that places cookie on a computer
• Different people may use the same computer to surf the Web, and the
cookie will not be able to differentiate the users
• Personalization
– Uses information from tracking, mining and data analysis to customize a person‘s
interactions with a company‘s products, services, Web site and employees
• Allaire, Blaze Software, NetGenesis and Personify

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 • Establish relationships that improve each time visitors return to site
• Customers may enjoy individual attention and become more loyal
• Personalization
Collaborative filtering
– Compares ratings of a present user‘s interests and decisions with those of past
users to offer content relative to the present user‘s interests
Rules-based personalization
– The delivery of personalized content based on the subjection of a user‘s profile to
set rules or assumptions

Intelligent Agents
– A program that can be used on the Web to assist a user in the completion of a
specified task, including searching for information and automating tasks
• Can be used as personalization mechanisms by providing content related to the user‘s
interests
• Can observe Web-surfing habits and purchasing behavior to recommend new products to
buy or sites to visit
• Can help e-businesses offer a level of customer service similar to person-to-person
interaction

Personalization vs. Privacy

• Some people feel personalization represents invasion of privacy and others may not be
aware that data is being collected and personalization is occurring at a site
• Marketers must be discrete about the way they use personal information gained from data
research
Personalization Consortium
– An alliance of major Web sites attempting to accommodate those individuals who
prefer to have their Web experiences tailored
– Released a study suggesting that most users actually prefer to have their
information stored and actions tracked

Contact Centers
• Traditional call centers house customer-service representatives who can be reached by an
800 number
• Call center, e-contact center or multimedia contact center

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 – Purpose is the same—to provide a personal customer service experience that is
individualized to each customer‘s needs and questions
– Allow customers with Internet access to contact customer service representatives
through e-mail, online text chatting or real-time voice communications
• Integration of all customer service functions
• Change the culture of customer service representatives
– More technically knowledgeable to handle all forms of contact
– Provide a highly personalized experience that satisfies customers
• New forms of contact can decrease costs
• Outsource contact center services
– May be appropriate if a company cannot afford to implement a contact center due
to the costs of equipment, office space, service representatives and technical
support.
– Stream International, Inc. Sitel Corporation and TeleTech

e-Mail
• E-mail can provide a less expensive customer service solution
– Customers can use e-mail to ask questions or comment on your company‘s
services or products
• Only appropriate if you have resources to handle demands
• Customers may be not be willing to wait long for an e-mail reply
• Ideally, a response to a customer‘s e-mail inquiry should be completed within forty-eight
hours
• Brightware RightNow Technologies , Servicesoft and Delano

Online Text Chatting

– Provides a real-time form of communication between customers and service

representatives
• Service representatives may be able to handle more than one text chat at a time
• Customers can continue to view the Web site as they chat with a service representative

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 – Allows the service representative to see what the customers are looking at as they
pose their questions
• ―Instantaneous‖
– If representatives are busy with many chat sessions, customer may experience
delay in responses
• Can lose the dynamics of human communication
• The meaning of a message may be misinterpreted
• FaceTime Communications, CLICKiCHAT and LivePersonSM
• Voice Communications
• Internet provides another channel for human-to-human voice communication
• Voice over Internet Protocol (VoIP)
– VoIP products and applications allow people to communicate with speech over
the Internet
• Internet telephony allows people to make phone calls over the Internet
– Quality of transmission yet to match regular telephone
– Many companies are using PC-to-phone communication because it is of higher
– quality than PC-to-PC
• A person speaks from a computer to another person who responds through
another computer
• PC-to-phone (computer-to-phone) voice communication
– Allows a visitor to a Web site to continue browsing while talking to a customer-
service representative over the Internet
– Allows dial-up Internet users who have only one phone line to chat with a CSR
without having to disconnect from the Internet
– HearMe, RealCall, Web Call Back and ITXC
• Wizard
– Software program that walks you through the steps needed to complete a task on
your computer

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Sales-Force Automation
– Assists companies in the sales process, including maintaining and discovering
leads, managing contacts and other sales-force activities
– Can lighten the administrative load on the sales force
– Important information about products and customers can be accessed in real time,
allowing salespeople to keep current on company and client information
• Customers may want human contact at some point throughout the purchasing process,
especially with higher-priced items
• Salesforce.com, Sales.com Sales Logix and Clarify
• Business-to-Business e-CRM
• Key to (B2B) e-commerce is effective (CRM)
• When selling to another business, you may be selling to someone who is not the direct
user of your product
– Ask your contact to speak with the end users
• Developing good partner relationship management (PRM) includes increasing efficiency
in operations and processes between a business and its partners
– Partners can include resellers, distributors and businesses that improve your
product or service
– Integrating systems to combine selling, buying and marketing operations of
partners will streamline processes and provide technical conformity
– ChannelWave Software, Inc., Allegis and Partnerware
• Complete e-CRM Solutions
• Solutions, software or services that use and integrate all the tools of CRM provide a
single view of a customer
– Costs include the price of the software or service itself, the integration into the
current system, the maintenance of the system and employing the service
representatives
– Solutions will continue to become more efficient
• E.piphany
• eGain
• Siebel Systems

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 • Kana Communications
• Oracle Systems

5.2 DATA WAREHOUSING

• Data Warehouse is the extension of database
• Data warehouse is the main repository of customer‘s data
• Data in the data warehouse are processed (i.e., EFL) therefore is more integrated and
consistent .
• While the information in the database tends to be real-time, the information in the data
warehouse can be updated regularly.
• While database focuses on automating the process of collecting and customers
information, data warehouse looks more at assisting managers in performing more
advanced analysis and thus making better decisions.

What is Data warehousing?

A series of analytical tools works with data stored in databases to find patterns and insights for
helping managers and employees make better decisions to improve organizational performance.

5.2.1. DATA MARTS

• DATA MARTS
• Companies often build enterprise-wide data warehouses, where a central data warehouse
serves the entire organization, or they create smaller, decentralized warehouses called
data marts.
• A data mart is a subset of a data warehouse in which a summarized or highly focused
portion of the customers data is placed in a separate database for a specific population of
users.
• For example, a company might develop marketing and sales data marts to deal with
customer info.
• A data mart typically focuses on a single subject area or line of business, so it usually
can be constructed more rapidly and at lower cost than an enterprise-wide data
warehouse.
• However, complexity, costs, and management problems will rise if an organization
creates too many data marts.

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• Sourcing, Acquisition, Cleanup and Transformation Tools
• The functionality includes:
– Removing unwanted data from operational databases
– Converting to common data names and definitions
– Calculating summaries and derived data
– Establishing defaults for missing data
– Accommodating source data definition changes
• The data sourcing, cleanup, extract, transformation and migration tools have to deal with
some significant issues, as follows:
– Database heterogeneity.
– Data heterogeneity

• Metadata
• Metadata is data about data that describes the data warehouse.
• It is used for building, maintaining, managing, and using the data warehouse.
• Metadata can be classified into the following:
– Technical metadata
– Business metadata
– Data warehouse operational information such as data history (snapshots,
versions), ownership, extract audit trail, usage data
• The non-trivial extraction of novel, implicit, and actionable knowledge from large
datasets.
– Extremely large datasets
– Discovery of the non-obvious
– Useful knowledge that can improve processes
– Cannot be done manually
• Technology to enable data exploration, data analysis, and data visualization of very large
databases at a high level of abstraction, without a specific hypothesis in mind.
• Sophisticated data search capability that uses statistical algorithms to discover patterns
and correlations in data.

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 • Data Mining is a step of Knowledge Discovery in Databases (KDD) Process
– Data Warehousing
– Data Selection
– Data Preprocessing
– Data Transformation
– Data Mining
– Interpretation/Evaluation
• Data Mining is sometimes referred to as KDD and DM and KDD tend to be used as
synonyms
• Data Mining Evaluation
• Data Mining is Not …
• Data warehousing
• SQL / Ad Hoc Queries / Reporting
• Software Agents
• Online Analytical Processing (OLAP)
• Data Visualization
• Data Mining Applications

5.3. DATA MINING IN CRM:

• Customer Life Cycle
– The stages in the relationship between a customer and a business
• Key stages in the customer lifecycle
– Prospects: people who are not yet customers but are in the target market
– Responders: prospects who show an interest in a product or service
– Active Customers: people who are currently using the product or service
– Former Customers: may be ―bad‖ customers who did not pay their bills or who
incurred high costs
• It‘s important to know life cycle events (e.g. retirement)

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 • Customer Life Cycle
• What marketers want: Increasing customer revenue and customer profitability
– Up-sell
– Cross-sell
– Keeping the customers for a longer period of time
• Solution: Applying data mining
• DM helps to
– Determine the behavior surrounding a particular lifecycle event
– Find other people in similar life stages and determine which customers are
following similar behavior patterns

5.4 AN INTRODUCTION TO CRM PACKAGES

• Organizations expect a lot from today‘s Enterprise Applications Systems - and rightly so.
The market trends have been driving this and the environment which is influencing the
scenario of single ERP vendor, less customization, more frequent upgrades, integrated
modules, web services, vendor consolidation and outsourced support and hosting etc. Our
solutions revolve around the Organizations‘ requirements to:
• Standardize processes and Domain-specific Customizations
• Integrated Operations and Application Management, Integrated Helpdesk and
infrastructure services
• De risk through discrete application outsourcing
• Reporting and analysis of business performance
• An introduction to CRM packages
• Our Enterprise Resource Planning Solutions, extend to all realms of business
• Forecasting and Budgeting
• Post Mergers and Acquisition IT integration
• Financial Reporting and Analysis
• Governance and Compliance
• Risk Management
• Accounts Receivable and Dispute Management Process

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 • We take cognizance of the following areas of concern while proposing an ERP
implementation solution to our customers.

Oracle
• Oracle is the leader in the CRM field. The company currently offers 50 CRM
applications that are able to provide for all the customer service requirements of small,
medium and large industries.
• Oracle provides CRM applications that aid the organization through improved business
processes. What does Oracle have to offer? The answer is accurate information. In
addition to that the functionality it offers is just as important.
• It manages to provide excellent support for all departments within the organization like
customer support and added services .
SAP
• SAP was established in 1972 and is now a leader in the provision of business solutions
for all types of industries. It is a CRM software vendor that caters to businesses
worldwide and currently serves more than 32,000 customers. SAP has a presence in more
than 50 countries. It is the world's largest business software company. It is the world's
third-largest independent software provider overall and employs more than 35,000
people.

They are able to provide excellent customer service and support. It boasts of having the
Knowledge, Experience, and Technology that is needed to optimize Business efficiency.
It manages to provide a range of solutions that cater to every aspect of the business.

The benefits from SAP are:

• Better efficiency
• Cost reduction
• Better performance
• Adaptability to business environment
• Overall Growth
• SAP
• SAP offers several solutions for Customer Relationship Management and is able to
deliver customer-centric solutions that revolve around each customer. It helps the
organization to support the various departments like marketing, sales, and service and
provides them with good analytics as well as excellent interaction capabilities.

SAP CRM supports the customer-related processes and deals with all customer-related

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 activities across all departments. It sources and gathers together all customer data in the
organization in order to facilitate better decisions. It enables company's address their
business needs adequately, manages to achi`eve the business objectives and reaps the
required return on investment.

e-Commerce
• Fingent provides Full lifecycle IT services for ecommerce and e-business to address
supply side and buy side needs of retailers and consumer product manufacturers. Our
eCommerce CoE has capabilities in providing SOA based integrated back end e-
Business solutions, Web 2.0 technologies and creating a multichannel buying experience
through a robust Multichannel framework.
• E-Commerce Functional components: Order Management, Catalog Transaction
Reporting, Business Intelligence
• B2C: Personalization, Live Chat, Community, email Marketing Social Networking
• B2B: Collaboration, Product Information Management, Customer Web Store, Promotions
Management
• Design & Blue Print, Application Development & Integration, Application Management,
• User Interface & Web site Response time optimization Infrastructure: 24x7 support,
Managed hosting services, PCI compliance.

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Question and Answer