Customer Relationship

Management
 What is CRM ?

• 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.

• CRM system provides a well defined platform

for all business units to interact with their
clients and fulfil all their needs and demands
very effectively and to build long-term
relationship.
• It is a model for managing a company’s
interactions with current and future
customers. It involves using technology to
organize, automate, and synchronize sales,
marketing, customer service and technical
support.
• It is a new business philosophy based on trust
and value
• It provides selling organisations with the
platform to obtain a competitive advantage by
embracing customer needs and building
value-driven long-term relationships.
• An ideal CRM system :
• A centralized collection all data sources under an
organization and provides an atomistic real time
vision of customer information.
• vast and significant, but it be can implemented
for small business, as well as large enterprises
also as the main goal is to assist the customers
efficiently.
• piles up this information centrally, examines it
and then makes it addressable within all the
departments.
• 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.
• 1980s: Database marketing emerges.
• 1980s: Database helped larger organizations
rather then small who only got survey type info.
• 1990s: CRM appears as a two-way
communication device.
• 1990s: CRM leads to programs such as frequent
flyer miles and bonus points on credit cards.
• 2000s: Internet has helped expand from stagnant
database and allows off-site information storage.
• 2000s: Used most frequently in financial services,
high tech corporations
• The outgrowth in origin of CRM as a strategic approach is a result of some of the
following important perspectives:

• The belief that customers are the real assets and not just the people in the
audience.
• The maturation of one-to-one transaction advent.
• Extensive use of software and technologies to maintain useful information and
no manual labour.
• The realization of the benefits of utilizing information proactively and not
reactively.
• The change of business view to relationship approach rather than transactional
approach.
• The approach of concentrating more on customer values rather than
concentrating on how the product is delivered to the customer.
• The approach of focusing on customer satisfaction and loyalty rather than
focusing self satisfaction and profit.
• The acceptance of the fact that using high end technologies and software the
cost can radically be decreased without compromising on quality and service
of products.
• The increasing tendency to retain existing customers and trying to get more
and more business out of them.
• The realization that the traditional trends of marketing and selling are
increasingly fading out in the current economic scenario.
 Determinants of CRM
Trust
• The willingness to rely on the ability, integrity, and
motivation of
• one company to serve the needs of the other company as
agreed
• upon implicitly and explicitly.

Value
• The ability of a selling organisation to satisfy the needs of
the
• customer at a comparatively lower cost or higher benefit
than
• that offered by competitors and measured in monetary,
• temporal, functional and psychological terms.
 Determinants of CRM

In addition to trust and value, :

• Understand customer needs and problems;
• Meet their commitments;
• Make sure that the customer is always told
the truth (must be honest);
• Have a passionate interest in establishing and
retaining a long-term relationship.
 Features of CRM
• Customers Needs
• Customers Response
• Customer Satisfaction
• Customer Loyalty
• Customer Retention
• Customer Complaints
• Customer Service
 Customers Needs
• An organization can never assume what
actually a customer needs. Hence it is
extremely important to interview a customer
about all the likes and dislikes so that the
actual needs can be ascertained and
prioritized. Without modulating the actual
needs it is arduous to serve the customer
effectively and maintain a long-term deal.
 Customers Response
• Customer response is the reaction by the organization
to the queries and activities of the customer.
• Dealing with these queries intelligently is very
important as small misunderstandings could convey
unalike perceptions.
• Success totally depends on the understanding and
interpreting these queries and then working out to
provide the best solution.
• During this situation if the supplier wins to satisfy the
customer by properly answering to his queries, he
succeeds in explicating a professional and emotional
relationship with him.
 Customer Satisfaction
• Customer satisfaction is the measure of how the
needs and responses are collaborated and
delivered to excel customer expectation.
• In today’s competitive business marketplace,
customer satisfaction is an important
performance exponent and basic differentiator of
business strategies.
• Hence, the more is customer satisfaction; more is
the business and the bonding with customer.
 Customer Loyalty
• Customer loyalty is the tendency of the customer to
remain in business with a particular supplier and buy
the products regularly.
• This is usually seen when a customer is very much
satisfied by the supplier and re-visits the organization
for business deals, or when he is tended towards re-
buying a particular product or brand over times by that
supplier.
• To continue the customer loyalty the most important
aspect an organization should focus on is customer
satisfaction. Hence, customer loyalty is an influencing
aspect of CRM and is always crucial for business
success.
 Customer Retention
• Customer retention is a strategic process to keep
or retain the existing customers and not letting
them to diverge or defect to other suppliers or
organization for business.
• Usually a loyal customer is tended towards
sticking to a particular brand or product as far as
his basic needs continue to be properly fulfilled.
• He does not opt for taking a risk in going for a
new product.
• More is the possibility to retain customers the
more is the probability of net growth of business.
 Customer Complaints
• Always there exists a challenge for suppliers to deal with
complaints raised by customers. Normally raising a
complaint indicates the act of dissatisfaction of the
customer.
• There can be several reasons for a customer to launch a
complaint. A genuine reason can also exist due to which the
customer is dissatisfied but sometimes complaints are
launched due to some sort of misunderstanding in
analysing and interpreting the conditions of the deal
provided by the supplier regarding any product or service.
• Handling these complaints to ultimate satisfaction of the
customer is substantial for any organization and hence it is
essential for them to have predefined set of process in CRM
to deal with these complaints and efficiently resolve it in no
time.
 Customer Service
• In an organization Customer Service is the process of
delivering information and services regarding all the
products and brands.
• Customer satisfaction depends on quality of service
provided to him by the supplier.
• The organization has not only to elaborate and clarify
the details of the services to be provided to the
customer but also to abide with the conditions as well.
• If the quality and trend of service go beyond
customer’s expectation, the organization is supposed
to have a good business with customers.
 Importance
• CRM system consists of a historical view and analysis of all the acquired
or to be acquired customers. This helps in reduced searching and
correlating customers and to foresee customer needs effectively and
increase business.
• CRM contains each and every bit of details of a customer, hence it is very
easy for track a customer accordingly and can be used to determine which
customer can be profitable and which not.
• In CRM system, customers are grouped according to different aspects
according to the type of business they do or according to physical location
and are allocated to different customer managers often called as account
managers. This helps in focusing and concentrating on each and every
customer separately.
• 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. All this is very easily and efficiently done by an
integrated CRM system.
• The strongest aspect of Customer Relationship Management is that
it is very cost-effective. The advantage of decently implemented
CRM system is that there is very less need of paper and manual
work which requires lesser staff to manage and lesser resources to
deal with. The technologies used in implementing a CRM system
are also very cheap and smooth as compared to the traditional way
of business.
• All the details in CRM system is kept centralized which is available
anytime on fingertips. This reduces the process time and increases
productivity.
• Efficiently dealing with all the customers and providing them what
they actually need increases the customer satisfaction. This
increases the chance of getting more business which ultimately
enhances turnover and profit.
• If the customer is satisfied they will always be loyal to you and will
remain in business forever resulting in increasing customer base
and ultimately enhancing net growth of business.
 Stages of CRM
• The Pre-relationship Stage: The event that
triggers a buyer to seek a new business partner.
• The Early Stage: Experience is accumulated
between the buyer and seller although a great
degree of uncertainty and distance exists.
• The Development Stage: Increased levels of
transactions lead to a higher degree of
commitment and the distance is reduced to a
social exchange.
• The Long-term Stage: Characterised by the
companies’ mutual importance to each other.
• The Final Stage :The interaction between the
companies becomes institutionalized.
• Direct functions: (are the basic requirements of
a company that are necessary to survive in the
competitive marketplace)
Profit;
Volume; and
Safeguard

• Indirect functions: (are the actions necessary to

convince the customer to participate in various
marketing activities).
 Innovation:
 Market; and
 Access.
 value propositions
Company/Produ Target Benefits Price Value
ct Customers Proposition
Perdue (chicken) Quality Tenderness 10 per cent More tender,
conscious premium golden chicken
consumers of at a moderate
chicken price premium
Volvo (station Safety conscious Durability and 20 per cent The safest, most
wagon) “upscale” safety premium durable station
families wagon your
family can travel
in at a significant
price premium

Domino’s (pizza) Convenience– Delivery speed 15 per cent A good pizza,

minded pizza and good quality premium delivered hot to
lovers your door within
30 minutes of
ordering, at a
moderate price
premium
 Checking Value proposition
 Is the target customer clearly identified?
 Are the customer benefits explicit, specific, measurable and
distinctive?
 Is the price, relative to competition, explicitly stated?
 Is the value proposition clearly superior for the target
customer (superior benefits, lower price or both)?
 Do we have, or can we build, the skills to deliver it?
 Can we deliver it at a cost that permits an adequate profit?
 Is it viable and sustainable in the light of competitors and
their capabilities?
 Is it the best of several value propositions we considered?
 Are there any impending discontinuities (in technology,
customer habits, regulation, market growth, etc) that could
change our position?
 Is the value proposition clear and simple?
 Types of CRM
Types of CRM Dominant characteristics

Strategic It is core and customer business centric strategy that aims

at winning and keeping profitable customers

Operational Focuses on the automation of customer –facing processes

such as selling, marketing and customer service

Analytical Is the process through which organizations transform

customer related data into actionable insights for either
strategic or tactical purpose
 Strategic CRM
• Development of customer centric business culture
dedicated to winning and keeping customers by creating
and delivering value better than competitors.
• Major business orientations:
• Product orientation:
• Believes that customers choose products with best quality
performance and design.
• believes that if they have a superior product customers will
automatically like it as well.
• They over specify or over engineer so often costly products.
• Highly innovative or entrepreneur
• Mostly works with startups
 Production
• The focus for the business is to reduce costs through
mass production.
• Seek to offer customers best value for money
• believes that the "economies of scale" generated by
mass production will reduce costs and maximise
profits.
• Strive to keep operating costs low , standardized offers
• Focus their innovation on supply chain optimization
and simplification
• Serve customers who want ‘good enough’, low priced
products and services.
 Sales orientated
• A sales orientated company's focus is simple; make the
product, and then sell it to the target market.
• Basic assumption that if invested heavily on
promotions advertisings customers will buy.
• This type of orientation involves the organisation
making what they think the customer needs or likes
without relevant research.
• However as we know sales usually aren't this simple.
An effective marketing strategy requires market and
marketing research, prior to product development and
finally an effective promotion strategy.
 Market
• A market orientated company puts the customer
at the "heart" of the business; all activities in the
organisation are based around the customer.
• The customer is truly king!.
• A market orientated organisation endeavours to
understand customer needs and wants, then
implements marketing strategy based on their
market research; from product development
through to product sales.
• It collects, disseminates and uses customer and
competitive information to develop better value
propositions
• It is a continuous learning firm
 Operational
• streamlines the business process that includes
Sales automation, Marketing automation and
Service automation.
• Aim is to automate and integrate the service
functions
• Main purpose is to generate leads, convert
them into contacts, capture all required
details and provide service throughout
customer lifecycle.
Sales Automation:
• helps an organization to automate sales process.
• Main purpose of sales automation is to set standard within organization to
acquire new customers and deal with existing customers.
• It organizes information in such a way that the business can meet customers’
needs and increase sales more efficiently and effectively.
• It includes various CRM sales modules like lead management, contact
management, Quote-to-Order management, sales forecasting.
Marketing Automation:
• Main purpose of marketing automation is to find out the best way to offer
products and approach potential customers.
• Major module in marketing automation is campaign management.
• It enables business to decide effective channel/s (like emails, phone calls, face
to face meeting, ads on social media) to reach up to potentials customers.
Service Automation:
• Service automation enables business to retain customers by providing best
quality of service and building strong relationship.
• It includes issue management to fix customers’ problems, customer call
management to handle incoming/outgoing calls, service label management to
monitor quality of service based on key performance indicators.
 Analytical CRM
• Analytical CRM helps top management,
marketing, sales and support personnel to
determine the better way to serve customers.
• Data analysis is the main function of this type of
CRM application.
• It analyses customer data, coming from various
touch points, to get better insights about current
status of an organization.
• It helps top management to take better decision,
marketing executives to understand the campaign
effectiveness, sales executives to increase sales
and support personnel to improve quality of
support and build strong customer relationship.
 Features of Analytical CRM:

• Gather customer’s information, coming from

different channels and analyse data in a
structured way
• Help organization to set business
methodology in Sales, Marketing and Support
to improve customer relationship and loyalty
• Improve the CRM system effectiveness and
analyse key performance indicators, set by
business
 Misunderstandings about CRM
• IT is mealy a database management
• It is a marketing process
• It is an IT issue
• It is about loyalty schemes
• Can be implemented in any company
 THE IDIC Model
• Developed by Peppers and Rogers (2004)
• companies should take four actions in order to build closer
one-to-one relationships with customers:

• Identifying who the companies’ customers are and building a

deep understanding of them.

• Differentiating their customers in order to identify which

amongst them have most value now and which offer most for
the future.

• Interacting with them in order to ensure that companies

understand customer expectations and their relationships
with other suppliers or brands.

• Customizing the offer and communications to ensure that

the expectations of customers are met.
CRM Value Chain Model
The Payne’s Five Forces Model