Assignment 1

Option b): How can CRM create a competitive

advantage?

INTRODUCTION TO 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.
An ideal CRM system is a centralized collection all data sources
under an organization and provides an atomistic real time vision
of customer information.
Usually an organization consists of various departments which
predominantly have access to customers information either
directly or indirectly. A CRM system piles up this information
centrally, examines it and then makes it addressable within all the
departments.
Example:
International call center which uses a CRM tool called abc
and is integrated with a phone and a computer system or laptop.
Now this system automatically perceives which customer is
calling. Before the executive attends the phone the CRM system
brings forth the customer details on the computer or laptop
screen and also indicates what the opportunity of deals is with
that particular customer, what the customer had already
purchased or ordered in past and what is the probability of buying
in future.
Not only this, it can also highlight what all products best suit this
customer. For finance department it may show the information
regarding the current balance and for accounting department

it may pop out the information regarding the recent purchases by

the customer. All these pieces of data are stored in the CRM
database and are available as and when it is needed.
According to above example, CRM system provides a well
defined platform for all business units to interact with their clients
and fulfill all their needs and demands very effectively and to
build long-term relationship.
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.

Features of CRM
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 todays
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 analyzing 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 customers expectation, the organization
is supposed to have a good business with customers.

CRM creating an competitive advantage

In the recent years, due to the existence of
innumerable companies, it has become quite difficult to gain
advantage in competitiveness. Considering the fact that
differentiated activities, strategies and policies of companies or
the company
Resources can easily be imitated by the rivals and the advantage
can be lost;
The gained advantage in competitiveness should not be for short
term and has to carry the necessary qualities for sustainability.
In this way, the companies can have a long term
relationship with their customers who will bring customer loyalty
and long term profit.
In addition to the customer loyalty, there are some other
conditions that the companies should meet to be preferred. These
can be listed as reducing the costs in the production phase;
flexibility in meeting the changing needs and demands of
the customers fastly and punctually and putting the
quality first.
The approach of focusing on the customers to secure
advantage in

Competitiveness, brought the approach of Customer Relationship

Management. At this point, collecting information about the
customers and using them in order to produce unique products
and services has become one of the main conditions of an
effective and sustainable supremacy in the competition.
In order to gain advantage in competitiveness, companies not
only make changes in their organizations and production and
marketing strategies but also try to catch up with the changes
occuring outside the company. Differences among the
strategies of companies explain why some of them prove
successful in high productivity, highly demanded products,
competitiveness and high profitability
According to
Porter in order to say that the strategy of a company is better
than the strategies of the rivals, there should be a vast difference
between them.
Companies work in an environment of intensive competition.
Being aware of their advantages and possible opportunities and
challenges in front of them, they plan and apply different
strategies in order to survive. One of the most important
strategies is CRM.
CRM is defined as looking at the customer-company relationship
from a wide perspective, starting from the planning of the
production costs, the production process and a multidimensional
and careful analysis of the customer behavior in order to make
deductions for the future. There are many factors behind the
emergence of CRM.
They can be listed as the increasing costs of mass marketing,
increasing importance of the customer compared to the market
share, rising importance of the concepts such as customer
satisfaction and customer loyalty, appreciation of the importance
of existing customers, rising need for keeping the existing
customers, necessity of developing strategies dealing with each
customer singly, intensive competition, developments in
the communication Technologies and Database
management systems

Competition, Competitive Advantage and the

Sustainability of Competitive Advantage
Competitive advantage, is the sum of definite differences among
companies which gives some a superiority over the others. These
superiorities can appear as organizational capabilities. In this
context, companies may succeed in some Cases in which the
others are unsuccessful, make an activity better than the others
or can be the best among the rivals.
Besides, competitive advantage may be a result of organizational
assets or resources. In this case, companys gaining of the
resources it didnt have before, can bring the competitive
advantage .
Development, innovation and change are the basic factors
for competitive advantage.
The main option for a company to secure advantage over the rival
international companies is finding a brand-new way of
competition or finding brand-new tools in the existing competition
environment. For example, Sony was the first company to equip a
radio with a transistor. Boeing, one of the leading enterprises in
the aircraft industry, offered the idea of a family of planes. With
this
Innovative concept of planes carrying similarities in design,
Boeing became the first company to compete globally in its
sector. History of all of the global leaders is written by such
innovation and success stories
In order to gain competitive advantage, a company has to make
achievements in some activities. These are exceeding the
Achievements of the rivals, making activities which cannot be
easily imitated by the rivals and which create customer
Value, manufacturing products which are hard to substitute and
which will cover the average costs
Sustainable supremacy of competition resembles a long-term
success which provides advantage in the competition and the
development of superior resources which will become out-of-date
until the rivals can imitate them.

It is important that in order to block the rivals opportunity of

reaching the same performance, the company should renew its
resources to gain temporary advantages, as a challenge in front
of the rivals . A sustainable
Supremacy in competition exists when a company collects the
gains of its investments more than the rivals with similar
investments and when the increase in the gains lasts so long that
the rivals would not catch up with. It is generally
accepted that sustainability depends on three main factors,
namely; resistance, transparency & repeatability
It should not be forgotten that, before starting the strategic
implementations for sustainability in competitive advantage,
rivals should be analyzed carefully. Competition analysis has four
stages:
I. Formulation of a proper strategy in case of
competition,
II. Finding a superior strategy which would provide
advantage in competition,
III. Being prepared for the expected reactions of the
rivals,
IV. Finding ways of formulating reactions against the
attacks of the rivals

Customer Relationship Management as a Tool for

Sustainable Competitive Advantage

In todays world, it has become difficult to find customers by using

traditional marketing methods and increasing the profit in this
way. What the companies has to do is to prevent the threat of the
possible leaving of the existing customers,
Keeping the existing customers, selling more to them and trying
to attract new customers only after this stage.
In order to achieve all these, a customer centered organizational
structure is needed . CRM is a new concept in relation based
marketing and the underlying idea is treating different
customers differently. Main mechanism of the
one-to-one marketing strategy comprises understanding the
differences among the customers and building a strategy which
would enable the company to treat each customer properly.
CRM is a data based application and CRM strategies have four
stages.
The customer selection stage comprises defining the target
group, and defining the segmentation, location and marketing
strategies for the target group.
In the customer attraction stage, the company tries to find
the ways of making effective sales via need analysis, preparing
offers for buying and pre-demands, and activities such as sales.
In the customer keeping stage, the company tries to build
loyalty among the customers and secure the sustainability of the
relationship via organizing the demands and problem solving.
In the second phase of customer keeping, the company aims to
increase the spendings of the customer by securing the customer
loyalty and profitability gained through activities such as need
analysis and cross sales campaigns .
The common point of the successful CRM implementations is that
all the
processes related to the customer are arranged from the
perspective of the customers .

Examples: (Companies Implementing CRM

Successfully)
In accordance with the advances in technology it became possible
to collect data about the customers by using information
technologies in the points where the company is in touch with the
customers such as shops, branches, websites, call centers, ATM
machines and sales points where shopping with credit cards is
possible.
The collected data is used to build databases, applying data
mining and designing effective marketing startegies. Thanks to
the new technologies, it became possible to build one-to-one
relationship with customers when compared with the costs and
the time needed for such an activity in the past. CRM unites the
elements of human, process and technology to maximize the
relationship with all customers.
CRM provides a seamless coordination among the customer
oriented functions . Customers both living in Turkey and in other
parts of the world have countless options. Companies use the
internet in order to follow the customers, to increase their interest
in the company and build customer loyalty.

Amazon.com
Besides being one of the globally leading bookstores,
Amazon.com is also one of the most important retailers in the
internet, providing a variety of services. In the competition
between actual and virtual bookstores, Amazon.com asserts that
trust is also as important as the price and offers a solution to its
customers who are used to shopping from actual bookstores. The
company took the book buying as a process and divided
this process into concrete responsibility groups. By
focusing on the customers, the company has become one
of the most important retailers on the internet.

This website enabling book selling from the internet, the

customers can make research, find the products they have been
looking for and buy them while sitting in their chairs.

In order to make the research process easier for the customers,

Amazon.com categorized its products and extended their range
by including music and video products and games, enabling the
customers to reach different products from the
Same address.

Harley Davidson
Harley Davidson brand is presented not only as a motorcycle but
also as a jacket, as eye-glasses or an after shave cream. In this
way, Harley Davidson desires to produce not only products but a
lifestyle for its customers. Customers view Harley-Davidson as
more than a motorcycle producer. It is accepted as a lifestyle
comprising a distinguished meaning, image and values for
thousands of people.
In order to gain customers for different types of products, Harley
Davidson puts the customer in the center.
Brand management of Harley Davidson operates with these key
aims:
Understanding the scope of the company/brand and its
meaning for the customers, transmitting the brand to the
consumers and other target groups, managing the brands
in accordance with their life cycles and creating brand
equality.

Turk cell
Turk cell puts CRM in the centre of its strategy and uses the
Journey with the Customer program to maximize customer
satisfaction. Turk cell has also attracted attention as the only
company to use independent audit in this field. That is why
Turkcell is regarded as the number one Turkish company in CRM
implementation.
Telecommunication giant Turk cell uses CRM to understand the
differing needs of customers and providing differentiated service
in the each point of encounter with the customers.

When we have a look at the position of Turk cell in CRM services it

can be said that the company not only uses CRM implementations
targeting its workers and customers but also provide support to
the other companies.
In 2006,Turk cell Technologies started many projects for its
corporate customers through a specially designed CRM program
for them and put the Siebel Sales Force Automation
implementation in the service of its corporate sales team.
Since 2007, corporate customer representatives of Turk cell
manage their relations with the customers via Siebel SFA.
In 2007 and 2008, in order to serve both individual and corporate
customers, thousands of Turk cell call-center workers started to
use the Siebel Call Center implementation in order to get in touch
with the customers not only by phone but also using other
channels such as e-mail and fax. Customer representatives can
reach in detail information about their customers easily at one
stop and can provide need-based service depending on these
information.
Since 2010, Siebel Order Management implementation, including
the individual processes, has been put at disposal of the Turk cell
Communication Centers.
When compared to many unsuccessful examples of CRM
implementation, it can be said that Turkcell Technologies has been
successfully implementing CRM projects such as Sales Force
Automation, Call Centers and Individual Sales
Management.