DEFINITION OF CRM

Customer relationship management (CRM) is a term that refers to practices, strategies and
technologies that companies use to manage and analyze customer interactions and data
throughout the customer lifecycle, with the goal of improving business relationships with
customers, assisting in customer retention and driving sales growth. CRM systems are
designed to compile information on customers across different channels -- or points of
contact between the customer and the company -- which could include the company's
website, telephone, live chat, direct mail, marketing materials and social media. CRM
systems can also give customer-facing staff detailed information on customers' personal
information, purchase history, buying preferences and concerns.

KEY CRM PRINCIPLE

1. Differentiate Customers

All customers are not equal; recognize and reward best customers disproportionately.
Understanding each customer becomes particularly important. And the same customers
reaction to a cellular company operator may be quite different as compared to a car dealer.
Besides for the same product or the service not all customers can be treated alike and CRM
needs to differentiate between a high value customer and a low value customer.

1. What CRM needs to understand while differentiating customer is:

2. Sensitivities, Tastes, Preferences and Personalities
3. Lifestyle and age
4. Culture Background and education
5. Physical and psychological characteristics

1.) Differentiating Offerings

 Low value customer requiring high value customer offerings.

 Low value customer with potential to become high value in near future.
 High value customer requiring high value service.
  High value customer requiring low value service.

2.) Keeping Existing Customers

Grading customers from very satisfied to very disappointed should help the organization in
improving its customer satisfactions levels and scores. As the satisfaction level for each
customer improves, so shall the customer retention with the organization.

3.) Maximizing Life time value

Exploit up-selling and cross-selling potential. By identifying life stage and life event trigger
points by customer, marketers can maximize share of purchase potential. Thus the single
adults shall require anew car stereo and as he grows into a married couple his needs grow
into appliances.

4) Increase Loyalty

Loyal customers are more profitable. Any company will like its mindshare status to
improve from being an advocate. Company has to invest in terms of its product and service
offerings to its customers. It has to innovate and meet the very needs of its
clients/customers so that they remain as advocates on the loyalty curve. Referral sales
invariably are low cost high margin sale

Features of a Good CRM Program:

A good CRM program of the firm can improve its customer

service by facilitating communication in followings ways:

(1) Offering product information, product usage information and technical support through

the web and offer means round the clock.

(2) Offering services in keeping with the requirement and expectations of each individual

customer.
(3) Providing a speedy mechanism for the purpose of managing and scheduling follow up

sales and calls in order to analyze the post purchase cognitive dissonance, the probability of

repurchase, number of time of repurchases and frequency of repurchases.

(4) Developing and effective system to track all possible points of contact between the firm

and the customer in an integrated manner.

(5) Locating the potential problems well in advance even before such problems arise

(6) Facilitating the adoption of a user friendly mechanism for registering the complaints for

the customers to prevent customer dissatisfaction.

(7) Suggesting a speedy mechanism for correcting services deficiencies, which may lead to

higher customer dissatisfaction

(8) Ensuring the maximum utilization of IT-enabled services for offering customers the best

and timely services.

(9) Providing a mechanism for improving efficiency and effectiveness in customer service,

and for managing and scheduling maintenance, repair and all going support.

TOOLS FOR CRM

1.) Customer database

A good customer information system should consist of a regular flow of information,

systematic collection of information that is properly evaluated and compared against
different points in time, and it has sufficient depth to understand the customer and
accurately anticipate their behavioural patterns in future. The customer databases help the
company to plan, implement, and monitor customer contact. Customer relationships are
increasingly sustained by information systems. Companies are increasingly adding data
from a variety of resources to their databases. Customer data strategy should focus on
processes to manage customer acquisitions, retention, and development.
2.) Call Centre

A call centre is a centralized office used for the purpose of receiving and transmitting a
large volume of requests by telephone. A call centre is operated by a company to administer
incoming product support or information inquiries from customers. Outgoing calls for
telemarketing, clientele, and debt collection are also made. In addition to a call centre,
collective handling of letters, faxes, and e-mails at one location is known as a contact
centre. A call centre is often operated through an extensive open workspace, with work
stations that include a computer, a telephone set/ headset connected to a telecom switch,
and one or more supervisor stations. It can be independently operated or networked with
additional centres, often linked to a corporate computer network, including mainframes,
microcomputers and LANs.Increasingly, the voice and data pathways into the centre are
linked through a set of new technologies called computer technology integration (city)Most
major businesses use call centres to interact with their customers. Examples include utility
companies, mail order catalogue firms, and customer supports for computer hardware and
software. Some businesses even service internal functions through call centres. Examples of
this include help desk and sales supports.

3.) Systems Integration

While CRM solutions are front office automation solutions, ERP is back office automation
solution. An ERP helps in automating business functions of production, finance, inventory,
order fulfilment and human resource giving an integrated view of business, whereas CRM
automates the relationship with customer covering contact and opportunity management,
marketing and product knowledge, sales force management, sales forecasting, customer
order processing and fulfilment, delivery, installation, pre-sale and post-sale services and
complaint handling by providing an integrated view of the customer.

It is necessary that the two systems integrate with each other and complement information
as well as business workflow. Therefore, CRM and ERP are complementary.

This integration of CRM with ERP helps companies to provide faster customer service
through an enabled network, which can direct all customer queries and issues through
appropriate channels to the right place for speedy resolution.

This will help the company in tracking and correcting the product problems reported by
customers by feeding this information into the R&D operations via ERP.
 4.) Data Mining for CRM: Some Relevant Issues

Data Mining is an important enable for CRM. Advances in data storage and processing
technologies have made it possible today to store very large amounts of data in what are
called data warehouses and then use data mining tools to extract relevant information.

Data mining helps in the process of understanding a customer by providing the necessary
information and facilitates informed decision-making.

HOW TO IMPLEMENT CRM

The implementation of a customer relationship management (CRM) solution is best treated
as a six-stage process, moving from collecting information about their customers and
processing it to using that information to improve their marketing and the customer
experience.

Stage 1 - Collecting information

The priority should be to capture the information customer need to identify their customers
and categories their behavior. Those businesses with a website and online customer service
have an advantage as customers can enter and maintain their own details when they buy.

Stage 2 - Storing information

The most effective way to store and manage their customer information is in a relational
database - a centralized customer database that will allow customer to run all their systems
from the same source, ensuring that everyone uses up-to-date information.

Stage 3 - Accessing information

With information collected and stored centrally, the next stage is to make this information
available to staff in the most useful format.

Stage 4 - Analyzing customer behavior

 Using data mining tools in spreadsheet programs, which analyze data to identify patterns or
relationships, customer can begin to profile customers and develop sales strategies.

Stage 5 - Marketing more effectively

Many businesses find that a small percentage of their customers generate a high percentage
of their profits. Using CRM to gain a better understanding of their customers' needs, desires
and self-perception, customer can reward and target theirmost valuable customers.

Stage 6 - Enhancing the customer experience

Just as a small group of customers are the most profitable, a small number of complaining
customers often take up a disproportionate amount of staff time. If their problems can be
identified and resolved quickly, customer staff will have more time for other customers.

LITERATURE REVIEW

Customer Relationship Management (CRM) has become one of the most dynamic
technology topics of the millennium. According to Chen and Popovich (2003), CRM is not
a concept that is really new but rather due to current development and advances in
information and enterprise software technology, it has assumed practical importance. The
root of CRM is relationship marketing, which has the objective of improving the long-term
profitability of customers by moving away from product-centric marketing.

Bose (2002) noted that CRM was invented because the customers differ in their preferences
and purchasing habits . If all customers were alike, there will be little need for CRM. As a
result, understanding customer drivers and customer profitability, firms can better tailor
their offerings to maximize the overall value of their customer portfolio (Chen and
Popovich) . The attention CRM is currently receiving across businesses is due to the fact
that the marketing environment of today is highly saturated and more competitive (Chou et
al, 2002).
Chenand Popovich (2003) argued that CRM is a complicated application which mines
customer data, which has been retrieved from all the touch points of the customer, which
then creates and enable the organization to have complete view of the customers. The result
is that firms are able to uncover and determine the right type of customers and predicting
trend of their future purchases. The modern customer relationship management concept was
shaped and influenced by the theories of total quality management (Gummesson) and by
new technological paradigms (Zineldin, 2000). There is however, a perceived lack of clarity
in the definition of customer relationship management, although all accepted definitions are
sharing approximately the same basic concepts: customer relationships, customer
management, marketing strategy, customer retention, personalization (Zineldin 2000).
However, while academics debate the subtitles of various definitions, the practitioners have
developed a wealth of applicative papers analysing the concrete challenges and
opportunities of implementing the systems (Bacuvier et al. 2001). CRM in some firms is
considered as a technology solution, considering of individual databases and sales force
automation tools and sales and marketing functions so as to improve targeting effort.

Peppers and Rogers (1999) argued that other organizations view CRM as a tool, which has
been particularly designed for one-to-one customer communications, which is the function
of sales, call centres or the marketing departments. In term of information technology (IT),
CRM means an enterprise –wide integration of technologies working together such as data
warehouse, web site, and intranet/extranet, phone support system, accounting, sales,
marketing and production. Kotler (2000) assured that CRM uses IT to gather data, which
can then be used to develop information acquired to create a more personal interaction with
the customer. In the long-term, it produces a method of continuous analysis and
reinforcement in order to enhance customer’s lifetime value with firms.

Goldenberg (2000) believes that CRM is not merely technology applications for marketing,
sales and services but rather when it is successfully implemented ; it enables firms to have
cross functional , customer-driven , technology-integrated business process management
strategy that maximises relationships. Chin et al (2003) stated that that due to many
technological solutions available for CRM automation, it is often misconstrued as a piece of
technology. But they maintained that in recent times many companies have realized the
strategic importance of CRM, and as a result, it is becoming a business value-effort rather
than technology- centric effort. Using information technology as an enabler, CRM strategy
 leverages key functional areas to maximize profitability of customer interactions Chen and
Popovich, (2003). It has been recognized that technological advancements and innovations ,
keen competitive marketing environment , coupled with the internet are main drivers of
present and future customer profitability which makes it possible to appropriately and
proportionately allocate firm’s resources to all functional areas that affect customer
relationship Chou et al ,( 2003).

SIGNIFICANCE OF THE STUDY

Customer is their first priority. Because it is only for the customers the product is made and
only they can be the final users. If a business produces a variety of products with great quality
but does not get customer base, they will be running in losses in no time and they will have to
shut down. Thus, Customers are actually the King..! If a customer is happy, the business can
prosper, but if they are not there is no possibility for the business to survive. Thus, to
differentiate or stand out in the market, Customer Relationship Management (CRM) is the
main area which demands attention.

The following points prove the need to invest in CRM:

1. Increased Sales

With the introduction of CRM, the business develops healthy relations with the customers.
As they receive advice based on their preferences, they are easily convinced to buy the
product or use the service which ultimately leads to increase in sales for the business as a
whole.

2. Elevated Customer Satisfaction

Great marketing techniques prove to the customer that they are our prime focus and as they
get personal attention and all their issues are addressed directly they feel satisfied and thus
they do not think of switching over in any scenario. CRM can be useful in such scenario. It
helps your support team to track the customer queries. Also, it is helpful for customers as
well to generate and track the status of their query.
 3. CRM for Enhanced Communication

In the absence of CRM, there used to be issues where a specific employee used to handle a
customer and in case of this employee’s unavailability, the customer had to explain all the
matter to someone new. A Fresh start was to be done. But now, with the presence of CRM,
the whole Customer Data is on Cloud and there can never be any pauses or gaps due to the
absence of an employee. Thus, the communication becomes very simple and effective and the
process hassle-free.

4. Cost Effective

Implementing CRM strategies is not an easy task. A lot of resources are utilized such as
money, time and employees. Various techniques would have been considered and then
analyzing the cost-benefits for CRM. The initial investment for CRM would be considered as
too high but the benefits are even higher in which makes it cost effective in the long run.

5. Automation of Daily Tasks

Achieving the sales targets is not an easy task. Numerous activities form part of a single sale.
Once a sale is done it’s not just that a product is gone and money comes in. Various
documents, invoice, etc. are to be generated and then a single transaction is completed. We
can imagine the level of these routine activities as there are too many sales in a single day.
With the integration of CRM, all these things can be done automatically. The sales team can
focus on bringing in more customers instead of worrying about the daily tasks.

OBJECTIVES OF THE STUDY

The goal of a CRM is to create a better customer experience. When your customers have a
good sales experience, you are more likely to experience an increase in sales as a result. To
get the most out of your CRM, you must have a clear set of goals and objectives. The top five
CRM goals to keep in mind include:

 improving business efficiency

 improving customer satisfaction
 expanding your customer base
 enhancing your sales and
 supporting teams
 building long-term relationships

1) Improve business efficiency

CRM platforms can help you eliminate day-to-day redundancies when it comes to customer
relationships. Your CRM platform collects and organizes customer data that allows you to
easily determine which stage of the purchasing process each customer is in, as well as other
key information such as demographics, interests, etc. With this information, you can create
and send targeted marketing material out in batches to customers based on this data.

2) Improve customer satisfaction

Happy customers become loyal customers that also contribute to free word-of-mouth
advertising. A quality CRM allows you to make customer satisfaction a primary goal through
areas such as increased direct engagement, social networking engagement, automated
surveys, and much more.

3) Expand customer base

Lead generation is a critical component of every successful business. A CRM platform allows
you to track, manage, and improve the quality of your leads. In addition, a good CRM can
help identify actions that are converting those leads into potential clients, allowing your
business to fast-track your sales process and increase your customer base.

4) Enhance sales and support teams

A quality CRM not only benefits your bottom line, but it helps to support your sales and
support teams by making it easier for them to build and nurture lead and client relationships.
For example, you know that lead follow-up in a timely manner is essential to convert. With
CRM lead tracking, you can assign tasks and your team can record leads and progress for
each opportunity through the sales pipeline. Every member has full visibility to closely
monitor all new leads to ensure no follow-up is missed.

5) Build long-term relationships

Using a CRM platform gives you and your team the ability to identify, prioritize, and
implement activities that have the most significant impact on your customer relationships for
the long term. Your CRM can help you track and implement actions such as customer
referrals and loyalty programs.

Need for CRM

One of the main reasons, often cited for business failure is because they
are bad at managing people, both in terms of the staff they employee and
the customers they have. In business, effective communication, both with
staff and customers is key to success.

However, this can be difficult and often there are gaps in knowledge which
mean that effective and relevant communication can become near on
impossible. However, through implementing a CRM system, all forms of
communication and therefore knowledge can be significantly improved.

So What is Customer Relationship Management and how does it work?

CRM is a combination of business strategy, software and business

processes which when implemented correctly bring significant tangible
benefits to companies of all types and sizes, regardless of sector.

Essentially, Customer Relationship Management (CRM) is a way of

improving business efficiency. It centralizes company and contact
information and tracks all activities and communications. CRM is all about
building and strengthening customer relationships to keep them coming
back, while helping the organisation gain new customers. CRM systems
streamline internal business processes by effectively integrating
marketing, sales and customer service functions.

Correctly deployed a CRM system will provide one centralised

database and therefore:
(a) Improve communications

(b) Improve customer service

(c) Improve the sales process and, marketing management

(d) Ensure greater customer loyalty

LIMITATION OF STUDY

 Project is without limitations and it becomes essential to figure out the various
constraints that I underwent during the study. The following points in this direction would
add to my total deliberations:-

 People were not ready to fill in the questionnaire

 Many of the surveyed people did not reply all the questions.

 The time period given for study was very limited.

 The sample size was very small.