Bi-annual Publication of Society For Advanced Management Studies

AUTHOR
Sumith C.
Customer Relationship
Management in Retail Sector
The Mula Mantra for Success.

ABSTRACT
Increasing number of retail business customer relationship management is a basis for achieving
efficiency and leverage competitive advantage. The era changes the approach of the producer to
the customer oriented approach. Today the customer drives the organization because the freedom of
choice and availability of information that the customer can access at every time. Customer
Relationship Management pays vital role in the organization to identify the needs and wants of the
customer. Customer Relationship Management aims is to retain the prospective customer in the
brand and make them loyal to the product. Customer Relationship Management tools helps the
organization to identify and implementing the strategies to retain the customer.

1. INTRODUCTION ○
○ weapon to know more about the
customer. Customer relation management
○

As more and more brands are launched

○

is a process that aims at maximizing

○
○

and introduced in Indian retail sector, their customer satisfaction by building mutually
○
○

primary focus is to define their position beneficial long term relationship with
○
○

sharply. Their primary focus is to acquire customers. (Jagathish N Sheth, Ault

○

Parvatiyar and G Shainesh,2001)

○

customer. A marketer knows that the

○

customer acquisition is not a easy task

○

2. ROLE OF CUSTOMER
○

because of high degree of competition

○

RELATIONSHIP
○

and accessibility of information of product

○

MANAGEMENT (CRM)
○

and services. Here the role of Customer

○

In retail sector, marketers are

○

Relation Management (CRM) arises.

○

focused on customer life time value.

○

Retail industry is one of the Customer Relationship Management has a

○
○

growing industries in India moreover the vital role in retail business. The customers
○

retail industry is based on the customer

○

are mostly looking through the services

○

services. For the past few years brands

○

which the company is providing. The

○

are not spending as much to their current

○

customer can easily change their decision

○

customer than a prospective customer. or switching the preference to other. The

○
○

But the time has changed the organisation marketers’ vital role is to predict the
○

product centric approach to customer

○

customer needs before it arises in the

○

centric approach . For customer centric

○

mind of the customer. Customer

○

approach the organization wants more

○

Relationship Management (CRM) will

○

data about the customer, their needs,

○

help the customer to predict the customer

○

preference and taste, fashion and trend. preference through the customer data or
○
○

So most of the organization opting customer profile which is available in

○

customer relationship management as a

○

company.
○
○

68 Vol. 2 No. 1 / April 2007

Bi-annual Publication of Society For Advanced Management Studies

Customer relationship measure the service because the services

○
○
management helps the marketer to make are intangible in nature C.R.M tools helps

○
Acquiring a new

○
different offer of different services and to enhance the quality of the service they

○
are providing. customer cost

○
facilities to different segments of market

○
about ten times

○
customer relationship management has the Customer relationship more than

○
information about whole market trend and management opted organization provides

○
retaining an old

○
customer buying behaviour and their some offers like, sales ordering

○
customer, thus in

○
response to there product. Acquiring a processing – allows the customer to retail stores people

○
manage virtually all order types, including

○
new customer cost about ten times more use to implement

○
quotes, proposals, future orders.

○
than retaining an old customer, thus in their technology,

○
Inventory management –classifies tracks strategy and
○
retail stores people use to implement their
○ and controls all types of inventory, process, dealing
technology, strategy and process, dealing ○

including stocked and non stocked

○

with market information and changing with market

○

products and services ,spare parts, information and

○

business models, understanding customer

○

tooling and suppliers , warranties, repair changing business

○

value are the key values of the CRM.(V and return.

○

models,
○

Venkata Ramana and G Somayajulu, understanding

○

Channel partner management

2004)
○

enabling distribution partners, field customer value are

○
○

C.R.M Customer relationship representatives, regional offices and the key values of
○

the CRM
○

management help the organization to corporate head quarters to share retail

○

measure the service quality that which information to identify customer

○
○

they are providing. It is very difficult to preferences and buying behaviour.

○
○

CUSTOMER RETINTION DIAGRAM

Relationship Direct Interactive

marketing Marketing management

Customer
satisfaction

Customer Customer
empowerment Prospectus

Relationship Marketing developing in industry and should be

○
○

replaced by alternative models where

○

The term relationship marketing is

○

a very familiar term among the market. It focus is on customers and relationship
○
○

is a popular concept during the past few rather than market and product.
○
○

years and become an important. In For developing and

○
○

today’s consumer market. The marketing implementing the relationship marketing

○
○

mix approach is too limited to provide a programs the marketer should know abut
○

usable framework for accessing and the nature, strength and preference of the
○
○

Vol. 2 No. 1 / April 2007 69

 Bi-annual Publication of Society For Advanced Management Studies

market as well as customer. Adrian Payne into customer friendly market by providing

○
identifies six markets which he claims to right information to right person at right

○
Customer

○
prospectus contain relation market –internal marketing, time. The accessibility of information

○
○
the complete supplier marketing, recruitment market, forms the consumer more aware and it

○
information about referral market, customer market. tends to shift the power of the

○
○
the sensitive, time of organization to the consumer.

○
Direct Marketing

○
purchase etc.

○
customer Direct marketing means direct Customer Prospects

○
○
prospectus contain communication of face to face i.e., person Customer prospectus enables to

○
○
complete to person. Direct marketing provides locate areas with ideal demographic

○
information about

○
complete information about the brands characteristics for targeting new costumer.

○
the consumer.

○
and the product and disclosing how the Costumer prospectus contain the

○
product will care the customers need and complete information about the sensitive,

○
○
wands. The role of the direct marketing is time of purchase etc. customer prospectus

○
○
to make the customer loyal to the product contain complete information about the

○
○
and brand. If the company deals with the consumer. It helps the maker to identify

○
○
sales of the FMCG products, the mass prospects having similar characteristics

○
○
communication is needed to service the and to form market segment on the basis
○
information of the product to he customer. ○
○
○
of demography and geography.
Interactive Management Customer prospectus helps the
○

organization in test marketing to a new

○

Interactive management is a
○

target market. Geography information

○

process to help the people having

○

system is to allow the client to get a better

○

complexity of problem to take a decision

○

from the alternatives. the roles of visual understanding of their customer and
○
○

interactive management is to work as well to take market decision, customer

○
○

informed people who take good decision analysis, competitor’s location and many
○

other factors. Customer prospectus helps

○

after the evaluation of the alternative and

○

the organization to target the marketing

○

guide the customer for wise decision.

○

campaigns to the right customer through

○

Customer Empowerment
○

right way. The customer can also enjoy

○

Customer empowerment where

○

with these tools because they are getting

○

the customer decides his/her choice by the the product which they will make them
○
○

mode of communication and also the price satisfied.

○
○

of the product and desire service that the

○

organization providing. Now the 3. DATA BASE

○
○

customers are deciding the product by The system of storing complete

○
○

two factors one is the lost and other is data of the customer or making the
○
○

quality of service. customer profile by the organizational

○
○

Now the customer is driving the itself. The aspects of CRM help to collect
○
○

organization because of the availability of the information by various ways. C.R.M

○

provides support to front office including

○

information. The customer can access the

○

sales, marketing and services. Each

○

complete information on his fingertips

○

through the different tools of CRM or interaction with the customer is generally
○
○

CRM technologies. Information added to a customer history and staff of

○
○

technology drastically changed the market the company can retrieve the data which
○
○

70 Vol. 2 No. 1 / April 2007

Bi-annual Publication of Society For Advanced Management Studies

CRM WORKING DIAGRAM

The information
KNOWLEDGE CUSTOMER collected by sales
DATA BASE
MANAGEMENT TARGETING executive is critical
and understand the
changes taking
place in the sales
life cycle, since
LOYALTY CRM TOOLS they are the one in
touch with the
customer, they are
○
are in data warehouse. All information us ○
4. KNOWLEDGE one who know
stored in data warehouse is updated MANAGEMENT
○

immediately the
○

dynamically when new data is entered and

○

Knowledge management helps the customer needs or

○

facilitate business analysis. Adoption of organization to gain and understand from desire of the
○
○

the Customer Relation Management its own experience. Knowledge customer.

○
○

requires some data about the market, the management implementation also protects
○

firm, current customer segment,

○

intellectual asset from decay and provides

○

demographic distribution, customer flexibility. Customer relation starts from

○
○

personal details, customer past and the depth knowledge of the customer,
○
○

present buying behaviour. Likes and their habits and the ir needs by analyzing
○

dislikes of the customer, etc. (Jagathish N

○

their effective behaviour and attribute.

○

Sheth, Ault Parvatiyar and G Shainesh, CRM applies this knowledge and
○
○

2004) customer interactions are the two pillars of

○
○

The advantage is that every one successful implementation of CRM.

○

Industry analysis estimate and proven that

○

can access the information in a consistent

○

the fact that 80% of an organization

○

way. The information collected by sales

○

revenues come from 20% of its customer,

○

executive is critical and understand the

○

it become imperative to design CRM

changes taking place in the sales life cycle,
○

solution keeping in mind these most

○

since they are the one in touch with the

○

valuable customer and to leverage 80%

○

customer, they are one who know

○

non structured data of about 20%of these

○

immediately the customer needs or desire

○

most valuable customer. (J. N Sheth,

○

of the customer.
Ault Parvatiyar and G Shainesh,2001)
○
○

The roles of the information are

○

5. CUSTOMER TARGETING
○

analysis of customer behaviour, risk

○

Customer targeting means the

○

management, design of customer

○

campaign, design and execution of identification of the customer in the

○
○

targeted market campaign. Collecting of segments of marketing. CRM gives the

○
○

information become more tailored in the right way for identification target market
○
○

business and more accurate for the by the help of the data of the customer
○
○

customer prediction, the tools to capturing which are available in the organization.
○

the customer information are Government Customer profile which is used by the
○
○

reports, Private Reports, trade reports, company helps the marketer to design,
○
○

point of sale, employees, focus group. develop and implement the market
○
○

(Kristin Anderson, 2002) strategy. Mass marketing approach such

○
○

Vol. 2 No. 1 / April 2007 71

 Bi-annual Publication of Society For Advanced Management Studies

as television, radio or print media are the cost and improving the service and

○
○
useful for generating awareness and ensure the loyalty. Operational CRM,

○
The objective is to

○
reduce the cost achieving other communication objectives. where customer directly contact the

○
○
and improving With the help of the customer profile the company. This is also known as Front-

○
○
the service and marketer is able to identify and find out office services. The tool means the point

○
ensure the the mode of the communication which is where, the point where the right Omer is

○
○
loyalty. most effectively in market. CRM helps identified, the right offers has been

○
Operational

○
initiatives in Indian retailing are designed created, the right time... (V Venkata

○
CRM, where

○
to help retailers meet the improved Ramana and G Somayajulu, 2004)

○
customer directly

○
targeted marketing effectiveness of Present customer Relationship
contact the

○
seasonal programs and promotion,

○
company. This is Management solution varies from one

○
forecasting where the average has the

○
also known as solution to another. After analyzing of the

○
Front- office difference to the inventory and present situation by the staff they do make

○
○
services. understanding which or how much to put some offering such as - Service center,

○
○
in a particular store.( V Venkata Ramana Tele marketing, Internet marketing,

○
and G Somayajulu ,2004)

○
Service interaction centre, Customer

○
○
6. CRM TOOLS development, Product and brand

○
management.
○
CRM is the process of maximizing ○
○

the customer satisfaction by building 7. LOYALTY

○
○

mutually beneficial long term relationship The development of the loyalty

○
○

with the customer. CRM process involves building and sustaining

○
○

framework having three primary relationship with customer, which leads to

○

components management technologies-;

○

repeat purchase of products or services

○

analytical or performance management

○

over a period of time. A loyal customer

○

technology, collaborative technologies and

○

base allows companies to devote their

○

operational management technologies. energies to the business matters.

○
○

These three types of CRM helps the Customer can choose to stay with a firm,
○
○

organization to retain existing customer, whether this continue is defined as a

○

attract, acquire, recognize new

○

relationship or not, or they increase the

○

opportunities, product meet customer

○

number of purchase, or they can do both.

○

requirement, improved customer Effective customer relationship

○
○

satisfaction, improved revenue and management will leads a customer to be

○
○

reduced cost.(Mukesh Chaturvedi and loyal to that brand. There are two reaction
○

Abhinav Chaturvedi, 2004)

○

of satisfaction i.e. satisfied but disloyal, the

○
○

Analytical CRM is also known as reasons are entrepreneur customer,

○
○

back office or strategic CRM pattern pressure from competitors and outdated
○

from various customer touch points and supplies, the second is un satisfied but
○
○

provides analysis of the data to help the loyal because lack of options, improved
○
○

customer service. Collaborative CRM suppliers, customer inertia.(R K

○
○

covers the direct interaction with the Sugandhi,2004)

○
○

customers. This type of CRM includes

○

8. SIGNIFICANCE OF CRM
variety of different types of channels such
○
○

as internet, e-mail, automated phone like Early decades almost all the
○
○

voice response. The objective is to reduce companies followed product–centric

○
○

72 Vol. 2 No. 1 / April 2007

Bi-annual Publication of Society For Advanced Management Studies

approach to the business. Product–centric valued customer, most growable customer

○
○
approach is mainly concentrate in market and below zero customer. Implementation

○
CRM helps the

○
campaigns rather tan customers’ of CRM – the marketer can know more

○
organization to

○
knowledge. In product – centric approach about the nature and strength of their

○
find out the

○
to business if a customer wants something, relation with the customers and they can potential buyers

○
it is customer to have to make effort to improve the relationships. The success of

○
and their needs

○
find out and get it. Soon the companies the company will depend upon how well

○
and wants and

○
realized that it took more advertising and they can predict the customer needs. maintain

○
○
reducing the cost to retain customer. CRM is the concept of customers’ life relationships. The

○
○
Customers drive the company from time value by making a good relation with customer can

○
product–centric approach to customer– the potential buyers and the company can change preference
○
○ at any time
centric approach for getting maximum ○
able to communicate the right message to
because of high
○

satisfaction by fulfilling the needs of the attract and retain the right customers at
○

growth of
○

customers that the customers early right time. CRM is the understanding of
○

competition in the
demanded. segment relationship and ability to
○

market.
○

generate action plan to help the staff

○

By the help of Customer

○

working in different segments of device to

○

Relationship Management tools the

○

company retains the customers and plan maximize benefits to the customer. (R
○
○

assures their loyalty. To maintain the K Sugandhi, 2004) Customer

○

Relationship Management helps to assess

○

loyalty is the biggest challenge in the

○

all information to customers touch point.

○

organization. On an average a company

○

has only 5% to 20% profitability in a CRM gives all the customers to

○
○

successful sale to a new prospect but access the information about the product
○
○

60% to 70% profitability of selling again and services. Information Technology

○
○

to active customers. An effective CRM comes into picture to manage the relations
○
○

results in maximizing business and profits in a mannered way. Impact of technology

○

throughout the customer life cycle. (R K in globalization is helping to reduce the

○
○

Sugandhi, 2004) distance between producers and end

○
○

CRM helps the organization to users. Application of technology changes

○
○

find out the potential buyers and their whole scenario of getting information
○
○

needs and wants and maintain about the products and services.
○

Technology induces all the equipments,

○

relationships. The customer can change

○

software and communication links the

○

preference at any time because of high

○

organization follows for improving the

○

growth of competition in the market.

○

CRM helps the company to anticipate the process. The most widely used tools are-
○
○

needs and wants of the customers before a) Electronic Point of Sale (EPOS)
○
○

it arises. b) Sale Force Automation

○
○

Customer Relationship
○

c) Customer Service Help Desk

○

Management improves interaction and

○

d) Call centers
○

lasting relationship with each and every

○

e) System Integration
○

customer. Through the different aspects of

○
○

customer relationship Management the Customer Relationship

○

organization can easily get the data of Management keeps the customer data in a
○
○

different types of customers, viz., most manageable manner.

○
○

Vol. 2 No. 1 / April 2007 73

 Bi-annual Publication of Society For Advanced Management Studies

CRM is the bridge from customer organization used to retain the customer

○
○
to the company and from company to the loyalty. For an organization customer

○
The customer

○
data which customers. It provides equal importance retention is the big and difficult task. The

○
○
available in the to every department in the organization. It company gets more profitability in sales to

○
○
organization is very needed for implementation of the existing customer than the new

○
makes the CRM to get reliable knowledge of customer. Customer Relationship

○
○
company the customers and their needs from various Management helps the company to

○
○
marketer right surveys and data warehouses. CRM predict the customers’ needs before it

○
way at right time.

○
applies this knowledge for developing the arises in the customer. The customer data

○
Customer

○
marketing strategy and creating and which available in the organization makes

○
satisfaction is the
maintaining relationships with the the company the marketer right way at

○
backbone of the

○
customers. Customer relations and right time. Customer satisfaction is the

○
loyalty of the

○
customer knowledge are the two pillars of backbone of the loyalty of the customer.

○
customer.

○
CRM implementation. The company is trying to make the

○
○
customer to satisfy. Customer

○
9. CONCLUSION

○
Relationship Management tools enhances

○
Customer Relationship the company to interact with the customer

○
○
Management is the device which the in effective way.
○
○

REFERENCES
1. Jagathish N Sheth, Alut parvatiyar, G Shainesh Customer Relationship Management
Tata MC Graw-hill (2001).
2. Mohamed, H. Peeru and Sagadevan Customer Relationship Management VIKAS
Publication New Delhi.
3. Times Multimedia Times multimedia Mumbai.
4. V Venkata Ramana and Somayajulu Customer Relationship Management, EXCEL,
Books New Delhi.
5. Kristin Anderson Tata MC Graw-hill (2002).
6. Mukesh Chaturvedi and Abihav Chaturvedi Customer Relationship Management
EXCEL BOOKS New Delhi
7. R K Sugandhi customer Relationship Management New Delhi International private
limited (2004)
8. Colin Comb, Glas Caledonian University Journal of Knowledge management
practice August 2004.
9. Andrew L S Gol University of south Australia Journal of Knowledge management
Practice, February 2005.
10. Moez Limayem City University of Hong Kong JCMC July 2004 The impact of
customer relationship management on customer loyalty.
11. Darlene D Richard The customer response management Tata mc Graw-hill, 2004

74 Vol. 2 No. 1 / April 2007