CRM in Service Industry

● Understanding application of CRM in various

Service Industries.

Learning ● Application of CRM in product and service markets.

Objectives ● Improving Service Quality and Customer
Satisfaction

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● A Service is a general term that describes work supporting a business but does not
produce a tangible commodity. -International Chamber for Service Industry.

● Services sector is the lifeline for the social economic growth of a country. It is
today the largest and fastest growing sector globally, contributing more to the
global output and employing more people than any other sector.

● Currently and prospectively, with dramatic cost reduction, and speed and
reliability improvements in the transportation of people and the communication of
information, the services sector faces intensive international competition..
● https://www.youtube.com/watch?v=Zy1h49_L8ME

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 ● Increasing competition and decreasing customer
loyalty.
● Amalgamation of hardware, software, process,
applications and analytical capabilities.
Need?
● Vast scope- healthcare, hospitality, education,
banking and insurance, financial, legal, consulting,
news media, entertainment, tourism, retail sales…

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 CRM in Hospitality
● Developing CRM strategies for catering to valuable customers.
● Integrating Information and Communication Technologies (ICT).
○ Generating quality customer information
○ Designing promotional activities
○ Designing enhanced rewards programs
○ Improving use of customer data and analytics
○ Utilizing websites and online marketing channels
● Conducting CRM based Market Research for better strategies development.
● https://www.youtube.com/watch?v=NusJCVUgoww

● https://crm.org/crmland/best-hotel-crm

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CRM in Healthcare Industry

● A Healthcare CRM, also referred as Patient Relationship Management (PRM)

helps reorient healthcare focus towards meeting patients' needs.
● Communication/ Consulting Services
● Database Constructions
● Increasing efficiency of operations
● https://www.youtube.com/watch?v=6RDcRtjj0eI

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 CRM in Telecom
● Customer service is key to sales and loyalty
● Value based customer service differentiation
● Developing well define customer centric strategies to grab market share and
sustain in long run
● Competitive analysis
● Proactive Churn Mitigation
● Converting prepaid to postpaid customers
● Billing Management

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 CRM in Banking

● Customer focused, attract and retain customers

● Managing customer data
● Improved communication, services
● Effective surveys
● Providing value-added cross selling, increasing volume

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CRM in Insurance
● Customer-handling is important function for insurance brokers.
● Enhancing Customer experience, retaining customers
● Predicting customer behavior for improved sales efforts (Profiling, Modelling,
Scoring)
● Strengthening data security
● Effective collaborations
● Tracking leads efficiently
● Automation of Manual Tasks

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CRM in Airlines Industry
● Understand consumer behavior
● Managing sales, marketing and services processes
● Connecting with customers
● Managing space and time limitations
● Increasing profits and sustainable revenue growth

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 Fig: 1 CRM Model

Create a Customer Customer

Analysis
Database Selection Targeting

Relationship Privacy
Metrics
Marketing issues

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Framework for CRM- Russel S. Winer
Fig: 2 Getting More Customer Interaction

Customer Interaction
Interaction Frequency DIRECT INDIRECT
HIGH Banks Airlines
Telecom Packaged Goods
Retail Drugs

Personal Computers Furniture

Internet Autos
LOW

Infrastructure
Fig: 3 Customer Retention Programs

Frequency/Loyalty
Vestibulum congue
Programs

Vestibulum
Customer Service
congue Vestibulum
Customization
congue

Customer
Relationship
Management:
Satisfaction

Vestibulum
Rewards Programs
congue Community
Vestibulum Building
congue

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Case study 1

Hilton Hotels: Brand Differentiation through

Customer Relationship Management

● Hilton OnQ: https://www.youtube.com/watch?v=AsHNZPkHroQ

● Hilton websites: https://www.hilton.com/en/corporate/#2010s

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 Case study 2

Uber: Changing The Way The World Moves

Uber core
challenge Passenger/Rider
Driver Satisfaction Satisfaction
is
managing

● Types of Uber cars: https://www.youtube.com/watch?v=8iKgbPZh6iE

● Uber vs didi: https://www.youtube.com/watch?v=pLonmHBhnsI

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Uber: the Scale/Satisfaction cycle
which makes
drivers happy…
which attracts
more drivers…

which attracts
More Divers…
more riders…

enable uber to
create more
satisfied
passengers…

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de Baliso view

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18
 CUSTOMER
CONTACT CENTRES
Learning Objectives
• Understand the role of contact centres
• Device Strategy, Structure, Metrics for contact centres

2
• Touch (contact) points for a firm’s customers- also known as call
centers or customer interaction centres.
• Can be defined as a telephone-based shared service centre for specific
customer activities and can be used by many functions like marketing,
sales, service, support and others.

Manpower

Information Elements Telecommunication

Technology

Process
Management

3
The contact cycle

4
Source: © QCi Assessment Ltd 2004.
 Telephone
sales

Information
Service
supply

Making and
Making an
evaluating
appointment
contacts
Possible
contacts

Fund-raising
Entertainment
drives

Market
Credit Control
Research Source: Huijen (1997)

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Determining the service level
Fig: Impact of quality on satisfaction
• Availability
• Quality

The Three Cs:

• Convenience
• Consistency
• Cordiality

• Additional: Channel
-(Roncororni 2001)

Source: Call Centre Magazine, no.

6 5 (1999).
Key Performance Indicators-Cleveland and Mayben (1999)
• Average value of a call;
• customer satisfaction;
• availability;
• percentage of abandonment;
• costs per call;
• errors and work that must be redone;
• scheduled personnel versus practice;
• schedule discipline;
• average handling time (AHT).

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Requirements for an effective CC
• Channel Integration
• Competent Agents
• Maintaining costs: Synchronous vs Asynchronous Channel Calls
VIOP,
Telephone

Cost to Chat
operate

E-mail

Self-service

Asynchoronous Type of Communication Synchoronous

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Services provided by CC
• Medical Transcription, Data Entry and other Transliteration services
• Data Entry
• Revenue Accounting
• Insurance Claim Processing
• Customer Interaction
• Outbound Calls
• Expert Advisory

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Dell Computers: Field Service for Corporate Clients
• Dell Service website: https://www.dell.com/en-in/lp/services-and-support?~ck=mn
• Dell technical support website: https://www.dell.com/en-in
• Making Dell Computers: https://www.youtube.com/watch?v=iF1oMTEEKLk

Fig: Service call process flow

Customer Problem is Fix problem

Follow-up
Places call diagnosed onsite

To whom? By whom? By whom? By whom?

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CRM IN DIGITAL WORLD
Learning Objectives
• Understanding the use of Internet communications channels and
technologies to enhance CRM.
• Understanding the impact of Digital media platforms communications
on CRM.
• Design CRM program which has an important online dimension.

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Social media Landscapes
• Not long ago, social media did exist, now it’s a multi-billion dollar
global industry
• Global active social media users in January 2017 estimated to be over
2.7 billion (Digital in 2017 Global Overview report) or 37% global
penetration
• Global active mobile users: 34% or 2.5 billion active users
• As of June 2017, Facebook: 1.23 billion users logging on daily. Keep
in Mind the population of world: 7.5 billion people
• 16% of the world’s population has access to internet, of which 14% is
using Facebook.
3
Social media Landscapes
Blogs,
Online Interaction micro-blogs, social
networking

Wikis, social
Collaboration bookmarking,
social news

Photo sharing,
Social Media Multimedia Video sharing,
Livecasting

Virtual World,
Entertainment
online gaming

Product reviews,
Reviews
user forums, Q&As

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WOM conversations about Brands
Indirect Variables
WOM Receiver’s
Purchase
Intensions
Conversation
Properties
WOM Channel
Social Tie Strength
WOM Valence Direct Variables

Brand Properties
Brand Equity
Brand Interestingness
Additional Covariates
WOM Giver WOM Receiver
*Gives advice *Receives advice WOM Receiver’s
about a brand about a brand Retransmission
Intensions
Offline = face to face or telephone/ Online = email, text message, blog or Twitter
Strong Social Tie = spouse/partner, family, and friend
Weak Social Tie = coworker, acquaintance, and stranger
Interestingness = level at which people would tend to find the brand interesting or uninteresting to talk about with others

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Impact of eWOM on Brands

Influence of
Measuring ROI
WOM
Influence of a
Purchase &
Customer
Retransmission

Predicting
Brand Sales
Future Purchase
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WOM Content

Neutral WOM conversations

Mixed WOM includes brand
typically contain strictly
sentiment with both positive
informational content about a
and negative elements.
brand

WOM Valence is the primary influence on

purchase and retransmission intentions

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Creating a Successful Social Media Campaign-
A Seven-Step Influencing Framework

Step Seven
Reap the
Step Six Rewards
Campaign Products &
Step Five Services through the
Recruit the Influencers
Step Four Influencers
Locate all the
Step Three Influencers
Identify Factors of
Step Two the Influencers
Identify the
Step One Influencers
Monitor the
Conversations

Source: V. Kumar and Rohan Mirchandani (2012), "Increasing the ROI of

social media marketing," MIT Sloan Management Review, 54 (1), 55-61.

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Measuring the Influence of Social Media Users
• First, the CIE (Customer Influence Effect) is determined by taking into
consideration three essential components regarding a WOM instance.
▪ Whether there is a connection between two users
▪ If there is, was the receiver aware of the WOM message being spread?
▪ If yes, did the receiver spread the message to other users?
• In other words, CIE refers to the net spread of an instance of WOM attributable
to an individual user in a (social) network.
▪ Second, to link the influence of an individual to the monetary value contributed,
the customer influence value (CIV) metric was developed.
▪ Customer Influence Value refers to the monetary value of customers’ influence on
other acquired customers and prospects

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Conceptual Approach to Measure CIV

Organizational data pertaining to:

User data pertaining to:
• Degree to which the WOM is responsible for every
• The network he/she belongs to
receiver to make a purchase in a specific industry
• The message shared/spread by the user
• The contribution margin of the receiver when the
• The overall message characteristics
purchase is made

Stickiness Index (SI): Stickiness Index is

measured as what percentage of the total
conversation an individual has that would be
related to the category of interest.

The spread of influence between users

is determined by: Customer Customer
• The presence of a WOM channel Influence Influence Value
• The reach of the WOM instance Effect (CIE) (CIV)
• The further spread of the WOM instance

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Catalina in the Digital Age
• Catalina offer: https://www.youtube.com/watch?v=RKvq-kRlVSk
• https://www.livingrichwithcoupons.com/

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Catalina’s Closed Loop System

Shopper “Big”
Data
Validation
Feedback
Program Promotional Program Results
Recommended Implemented in
Retailers
Analytical
Skills and
Knowledge

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Catalina’s Value for its Clients
CPG 500 Brands “Lift” (Discounts)

Catalina

Retailers 35,000 End Consumers Deals

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 Table: Comparison of Traditional and Emerging Channels for Serving Coupons
CPM Redeem Targeting Subsidization estimates
Rate
Traditional
FSI $10 0.5% Minimal, based on exposure to 70%
the delivery media
Direct Mail $300 3.2% Demographics (House value,
zip code)
Magazines $33 2.5% Demographics (Topic interest)
Retailer Circular 3% Store-based demographics
Catalina (Checkout) $130 6.9% Individual behavior, past “very little”
purchases, past deal
responsiveness
Emerging
Print-At-Home Catalina: $ 80 14.2% None Likely to be high
Tier 1: $50 (determined by
Tier 2: $10 shopper’s list)
Mobile $3 ? Search Behavior (currently)
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How to Ensure Profitability in Social Coupon Campaigns?
• Customer acquisition does not always lead to profits
• Even though new customers lead to an increase in the customer base, the loss
incurred by the business in “acquiring” them (through deep discounts) far
outweighs the benefits of having them
• Can explore up-selling and/or cross-selling
• Deep discounts could become dearer to businesses
• One-time deep discount is not a permanent discount. Customers will not be
ready to pay a higher price the next time.
• Can launch coupons that are valid only on “lean” business days
• Social coupons can cannibalize revenue from existing customers
• Existing customers could also use the coupons! Also encourages deal-seeking
behavior among existing customers.
• Businesses could offer coupons only to prospects, and not to existing
customers
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CHALLENGES IN CRM
IMPLEMENTATION
Learning Objectives
•Understanding various challenges including Technological
and Organizational challenges in implementing CRM.
 Customer Privacy
• Customer privacy can be defined as “the power of the individual to personally control
information about oneself.” This includes control over the collection, storage, usage,
and release of personal information.
For successful CRM, the firm must ensure a constant flow of up-to-date information
about customers’ buying habits and individual needs.

If customers feel they are losing control over their personal information, they will
begin to feel concern about their privacy.

CUSTOMER PRIVACY CONCERNS

Serious obstacles for the efficiency of a company’s CRM practices.

(reluctance to disclose information, reactance due to intrusiveness)
Drivers of Customer Privacy Concerns
Two main drivers of customer privacy concerns:
▪ Internal, company-related drivers
▪ External drivers
Internal Drivers of Customer Privacy Concerns External Drivers of Customer Privacy Concerns

Collection Control Awareness Internet Public Governmental

Technology
Media Regulations

Errors Unauthorized
Improper Access
Secondary Use

Customer Privacy
Concerns
Malhotra, Kim, & Agarwal, 2004
Internal Drivers of Customer Privacy Concerns
• Collection – Amount and way in which personal information is collected

• Control – Degree of control over personal information

• Awareness – Understanding of established conditions and actual practices

• Errors – Protections against errors in personal information

• Improper Access – Access of unauthorized parties to personal information

• Unauthorized – Usage of personal information for unauthorized purposes

Secondary Use
External Drivers of Customer Privacy Concerns
INTERNET
Ways to collect customer information online:
• Customers voluntarily enter personal information, such as their name, address, and credit
card number, into databases.
• Information on customers’ online behavior is collected using cookies and click-stream
technology, which require more or less explicit consent (“opt-in” or “soft opt-in”).
• Covert data collection (e.g., cross-device tracking)

CUSTOMER PRIVACY CONCERNS

• PewResearch Center: 86% of American internet users take measures to prevent companies
from tracking them online. 64% believe the government should do more to regulate
advertisers.
TECHNOLOGY
• Mobile and smart phones (esp. location-based services)
• Eroding distinction between public and private space
• Risk of oversharing
• Near-field communication and Radio frequency identification technology
• Track shopping routes of consumers with NFC to use for recommendations in the future
• Action threat – Track products with hidden tags without the consumer’s consent
• Association threat – Create comprehensive customer profiles by linking the customer to the
tagged item (infer brand or item preferences)
• Location threat – Locate consumers after they leave the retail store.

CUSTOMER PRIVACY CONCERNS

PUBLIC MEDIA
• Increased media coverage of customer privacy issues

• Especially through diffusion of social networks

• Massive coverage of NSA’s PRISM leaks
• Fast spread of privacy breaches or other negative news via online platforms like Twitter and
Facebook.

INCREASED CUSTOMER AWARENESS OF PRIVACY ISSUES

CUSTOMER PRIVACY CONCERNS

GOVERNMENT REGULATIONS
• Perceived lack of business policy or governmental regulation
• Extent to which governments (mis)use personal information
• e.g., closed-circuit television surveillance in Great Britain

CUSTOMER PRIVACY CONCERNS

Customer Privacy Protective Responses
• Information Provision
• Refusal – Refusal to give out information
• Misrepresentation – Disclosure of falsified information

• Private Action
• Removal – Information boycotts, removal of information
• Word-of-Mouth – Voicing negative comments to friends/relatives

• Public Action
• Complaining directly to Companies – Opportunity for companies to solve the
issue
• Complaining directly to Third Party – Large audience, organizations like FTC.
Consequences of Privacy Protective Responses
Loss of Trust and Brand
Integrity
Customer Privacy Concerns

Protective Responses
Decreased Sales

Customer Privacy
Decreased in Data Quality

Increased costs dues to

privacy protection

Ethical dilemma
Hubspot and Motion AI: Chatbot-Enabled CRM
• What are bots: https://www.youtube.com/watch?v=wL7-PoiBiKM
• https://www.youtube.com/watch?v=dx9k2S_gkqU