Project Report on "Customer Relationship Management"

Introduction
The biggest management challenge in the new millennium of liberalization and
globalization for a business is to serve and maintain good relationship with the
king – the customer. In the past producers took their customers for granted,
because at that time the customers were not demanding nor had alternative
source of supply or suppliers. But today there is a radical transformation. The
changing business environment is characterized by economic liberalization,
increasing competition, high consumer choice, demanding customer, more
emphasis on quality and value of purchase etc.
All these changes have made today’s producer shift from traditional marketing to
modern marketing. Modern marketing calls for more than developing a product,
pricing it, promoting it and making it accessible to target customer. It demands
building trust, a binding force and value added relationship with the customers.
The process of developing a cooperative and collaborative relationship between
the buyer and seller is called customer relationship management shortly called
CRM. According to Ashoka dutt head of Citi Bank “the idea of CRM is to know the
individual customer intimately, so that the company has a customized product
ready for him even before he asks for it.”

Objectives of Customer Relationship Management

1. To study the current practices of CRM.
2. To find out the impact of CRM on the profitability of the organization.
3. To study the factors affecting the CRM practices.
4. To study the role of information technology in CRM.
 Research Methodology

A research design is simply a plan for study in collecting and analyzing the data. It
helps the researcher to conduct the study in an economical method and relevant
to the problem.
Research methodology is a systematic way to solve a research problem. The
methodology should combine economy with efficiency.
Research design
The study conducted here is exploratory cum descriptive.
Scope of the study
The scope of the study is confined to Company maX Retail Division
Collection of the data
There are two types of data.
Primary data – primary data is that data which is collected for the first time. These
data are basically observed and collected by the researcher for the first time. I
have used primary data for my project work.
Secondary data – secondary data are those data which are primarily collected by
the other person for his own purpose and now we use these for our purpose
secondly.
Data collection
Data is collected through schedule.

Limitations of Customer Relationship Management

1. Time constraint is unavoidable limitation of my study.
2. Financial problem is also there in completing this project in a proper way.
3. As no work has been done earlier in this regard so scarcity of secondary data
is also there.
4. Inadequate disclosure of information is also the problem.
 Conceptualization
A firm in textile industry has to maintain good relations with its customers. They
have to retain the customers for a long time to avail the benefit of their relations.
The customer relationship management is one of the effective tool to identify,
establish and maintain relationship with the customers. With the help of this
research we are going to identify the importance of CRM in textile industry.

Focus of the problem

The textile industry is basically manufacturing based industry. Through this study
we are going to identify the importance of CRM in the textile industry. How it is
benefited from CRM? Is their any relevance of implementing CRM? And what role
does information technology can play in CRM?
Aims of CRM
The CRM is a new technique in marketing where the marketer tries to develop
long term relationship with the customers to develop them as life time
customers. CRM aims to make the customer climb up the ladder of loyalty.
The company first tries to determine who are likely prospects i.e. the people who
have a strong potential interest in the product and ability to pay for it. The
company hopes to convert many of its qualified prospect into first time customers
and then to convert those first time customers into repeat customers. Then the
company tries to convert these repeat customers into clients – they are those
people who buy only from the company in the relevant product categories. The
next challenge for the company is to convert these client into advocates.
Advocates are those clients who praise the company and encourage others to buy
from it.
The ultimate challenge is to convert these advocates into partners where the
customers and the clients work actively together to discover ways of getting
mutual benefit.
Thus in CRM the key performance figure is not just current market share but
share of life time value by converting customers into partners.
In CRM the company tries to identify that small percentage (20%) of key account
holders who’s contribution to the company revenues is high (80%). So from this
point of view, CRM is also known as KEY ACCOUNT MANAGEMENT.

Significance of the Customer Relationship Management

The CRM (customer relationship management) is an integrated effort to
strengthen the network of relationship for the mutual benefit of both the parties.
The biggest management challenge in the new millenium of liberalization and
globalization for a business is to maintain good relationship with the king – the
customer. This study is of great significance because
Ø A 5% increase in the customer retention will increase the profit up to 125%.
Ø It costs seven time more to attract a new customer than to serve an old one.
Ø 20% of the company’s loyal customers account for the 80% of its revenues.
Ø To study on customer relationship management would enable the researcher
to know about the CRM practices adopted in the textile industry.
 Chapter – 2

Review Of Literature
Review Of Literature

Customer relationship management has been defined as “a business approach

that integrates people, processes, and technology to maximize relationships with
customers” Goldenberg (2008, p.3). Moreover, it has been stated that customer
relationship management “characterises a management philosophy that is a
complete orientation of the company toward existing and potential customer
relationships” (Raab et al, 2008, p.6)
Mueller (2010) characterises customer relationship management aspect of the
business as a highly dynamic, and convincingly argues that businesses have to
adopt a proactive approach in devising relevant programs and initiatives in order
to remain competitive in their industries.
Sinkovics and Ghauri (2009) relate the necessity for engaging in customer
relationship management to high cost of direct sales, highly intensifying level of
competition in the global level, and need for information about various aspects of
the business in general, and consumer behaviour in particular, that can be used to
increase the levels of sales.
According to Peppers and Rogers (2011), there is global tendency in customer
relationship management that relates to the shift from transactional model
towards the relationship model. In other words, Peppers and Rogers (2011) argue
that satisfying customer needs as a result of on-time transaction is not sufficient
today in order to ensure the long-term growth of the businesses.
Instead, businesses have to strive to maintain long-term relationships with their
customers in order to maintain flexibility to adopt their increasing expectations
and thus achieving their life-long loyalty. Peppers and Rogers (2011) further stress
that, businesses that refuses to acknowledge this tendency in the global
marketplace would be risking their market share and growth prospects in the
future.
One of the most critical sources for the research is the book “Relationship
Marketing and Customer Relationship Management” authored by Brink and
Berndt (2009). The book offers an in-depth discussion of the concept of Customer
Touch Map and discusses the role of information technology in facilitating
customer relationship management.
The work of Mathur (2010) represents another significant contribution to the
research area to be used in the study. Namely, the author provides a wide range
of specific customer relationship management techniques and principles that are
used by multinational businesses. The findings of Mathur (2010) can be compared
to the primary data findings in the proposed research, thus enhancing the scope
of the study.
Khurana (2010), on the other hand, discusses the concept of customer
relationship management in a great detail, and also addresses advantages and
disadvantages associated with a range of relevant software applications. The third
edition of Pradan’s (2009) “Retailing Management” is another noteworthy source
that is going to be used in the study. Specifically, Pradan (2009) identifies
customer relationship management as an emerging aspect of marketing in retail
and discusses its importance for ensuring long-term growth for retail businesses.
A global approach towards the issues of customer relationship management is
adopted by Raab et al (2008) in “Customer relationship management: a global
perspective”. The value of this specific work to the proposed research can be
explained in a way that it will allow the comparison of customer relationship
management principles to the similar principles exercised by other multinational
retailers in a global marketplace.
Bhatia’s (2008) work, “Retail Management” is also going to be used in the
proposed study due to the significance of the contribution of the work to the
research area. Bhatia (2008) offers in-depth discussions related to the use of
loyalty cards by retailers, and this represents a comprehensive analysis of the
issue in the secondary data.
Moreover, Cox’s (2011) “Retail Analytics: The Secret Weapon” deserves also to be
mentioned in here thanks to the most modern and fresh perspective the author
adopts in order to approach the research issues. The most valuable part of this
specific article is that it provides highly practical recommendations to retailers of
various sizes in terms of increasing the levels of revenues through adopting a
range of customer relationship management principles.
A range of academic models and writings relate to this research in direct and
indirect ways and some of the most relevant models are going to be explored in
the study. One of the most models to be used in the study is The Gap Model of
Service Quality. “A model of service quality called the gap model identifies five
gaps that can cause problems in service delivery and influence customer
evaluations of service quality” (Lamb et al, 2011, p.189).
These five gaps are a) the gap between customer wants and the management
perceptions about customer wants; b) the gap between the management
perceptions about customer wants and the specifications of service developed; c)
the gap between the service specifications and the actual service provided; d) the
gap between the quality of service promised and the quality of service provided,
and e) the gap between expected service and perceived service on behalf of
customer.
Another relevant model to be tested during the study constitutes Relationship
Model of customer relationship management proposed by Peppers and Rogers
(2011). Specifically, the model advocates adopting a pro-active approach in
sustaining customer relationships and proposes a set of specific principles that
would assist to accomplish this task.

Why – customer relationship management

Ø A satisfied customer in 10 years will bring 100 more customers to the
company.
Ø It costs 7 times more to attract a new customer than to serve an old one.
Ø 20% of the company’s loyal customers account for 80% of its revenues.
(Pareto’s principle).
Ø The chances of selling to an existing customer are 1 in 2, the chances of selling
to a new customer are 1 in 16.
Eight ways to keep customers for life
1. Every part of the company’s marketing effort should be geared towards
building lifetime relationships.
2. People want to do business with friendly people. To have effective relations a
friendly attitude must permeate in the organization.
3. Information technology developments should be positively used to serve the
customers.
4. The company should always be flexible to bend its rules and procedures in the
client’s favor.
5. The company should communicate with its customers even when it is not
trying to sell something.
6. The company can communicate and develop stronger customer bonding by
providing financial and social benefits.
7. The company should try to know all its customers including their lifestyles,
hobbies, likes and dislikes etc.
8. The company should make it a point to deliver more than what is promised.

CRM in the Textile industry

In textile industry one company sell its product to another company. For example
a yarn manufacturing company sell to fabric manufacturing company. A fabric
manufacturing company sell fabric to apparel company. The main customers of
the companies in the textile industry are the wholesalers. And the final product is
sold to the wholesalers and retailers. In this industry the customers are few and
profit margins are high. So CRM is very much necessary and relevant in this
industry. There is a high degree of uncertainty on the part of the buyers, the
likelihood of customers seeking a relationship is increased. If the firm loses its
customer it would be major loss to the firm. The product in the textile industry is
complex and quality is an important factor. One of the major values the customer
expects from vendors is quality. No customer will tolerate average quality.
According to GE’s chairman John “quality is the best assurance of customer
allegiance and strongest defense against competition and the only path to
sustained growth and earnings.” If the product is not of good quality the customer
will not be satisfied and the firm may lose its customer. Moreover there is a scope
of customization in the product. The seller has to customize the product
according to the need of the customer. Customization is changing the product
according to the need of the customer in order to satisfy him.

How to introduce CRM in the company

There are four key steps for putting one to one marketing program to work –

Step 1 : Identify your customers

To launch a one to one initiative the company must be able to locate and contact
a fair number of customers or at least a substantial portion of its valuable
customers. It is crucial to know the customer details as much as possible, not just
their names or address, but their habits, preferences and so forth.

Step 2 : Differentiating your customers

Customers are different in two principal ways, they represent different levels of
value and have different needs. Once the company identifies its customers
differentiating them will help the company to focus its efforts to gain the most
advantage with the most valuable customers.

Step 3 : Interacting with the customer

Interaction is also a crucial component of a successful CRM initiative. It is
important to remember that interaction just not occur through marketing and
sales channels, customer interact in many different ways with many different
areas of the organization so to foster relationship all the areas of the organization
must be accessible to the customer.
Step 4 : Customize your enterprise’s behavior
Ultimately to lock a customer into a relationship a company must adapt some
aspect of its behavior to meet customer’s individually expressed needs this might
mean mass customizing a manufactured product or it might involve tailoring
some aspect of the service surrounding the product.

Review of the existing literature

With the available literature we can summarize CRM in the words of various
authors as follows-
According to Shani and Chalarani – Customer Relationship Management
marketing can be defined as “ an integrated effort to identify, maintain and
build up a network with the individual customers and to continuously
strengthen the network for the mutual benefit of both parties, through
interactive, individualized and value added contracts over a long period of time.
In the words of Lekha “CRM aims at delivering better products and value to the
customers through better understanding of his needs.”

Findings

§ The customers of COMPANY are the wholesalers throughout India.

COMPANY is also importing the fabric from Dubai.
§ The needs of the customers are clearly defined and the products are
customized according to the needs of the customers.
§ Customer’s comments and complaints are welcomed and resolved quickly
and positively. Comments and complaints are taken through face to face
interactions.
§ The company conducts customer satisfaction surveys through research
agencies.
§ Sales persons of the company maintain frequent and informative
communication with the customers.
§ Business process is regularly reviewed to eliminate non value-adding
activities.
§ The average sale per customer has increased by 15% and customer’s
response to the marketing activities is also improving. Customer retention
is also improving.
§ The factors which have an impact on the CRM are – organizational culture,
support from top management, interpersonal skill of the sales personals
and working environment of the company.

Analysis
The customers of the COMPANY are the wholesalers. It is because the number of
retailers are very large as compared to the wholesalers. So it is not possible for
the company to approach to the retailers. Therefore the company sells to the
wholesalers and then wholesalers sell to the retailers.
Customers are encouraged to give suggestions and complaints so that the
company can improve its working and services. If the customer’s complaints are
not resolved the customers will be dissatisfied and the company may lose its
customers.
Different customers have different requirements. So the company customize its
product accordingly to satisfy the customers. It also gives more choice to the
customers.
To get the information about the customers and to measure the satisfaction the
company conducts surveys. Because of the expertise needed in the research the
company give this work to research agencies like AC NILSON.
The company gives credit facility to its customers to increase the sales volume. If
the company do not sell on credit the customers may switch over to other
companies.
The company maintains frequent communication with the customers. As soon as
the product is ready or a new product is launched the information is provided to
the customers. Communication is also necessary to maintain the interest of the
customers in the company.
The company gives concession to its regular customers so as to retain its most
valuable and profitable customers.
The company regularly reviews the business process in order to eliminate non
value-added activities, to reduce the cost and to make the whole work efficient
and effective. If the internal customers are not satisfied and there is lack of
coordination among the departments then it will affect the external customers
also.

Conclusion
From this study it can be concluded that the customer relationship management
in Company is satisfactory. The company is using various CRM practices like
customization of the product, maintaining interaction with the customers
regularly and providing good quality product etc. Customer relationship
management has a certain impact on the profitability of the company. Average
sale per customer has increased 15% over the last two years. Customer response
rate towards marketing activities is also improving. There are various factors
affecting the customer relationship management like working environment of the
company, support from top management and coordination among the
departments of the company. Information technology is not used as much as it
should be. The company is using traditional tools of CRM like quantitative
research, personal interviews. The company should modern tools like data
mining, contact center, e-CRM and web based survey tools.

Suggestions
 There should be more and more emphasis given by the company for satisfying

the customer up to a apex limit and by providing the utility of every penny of
his money.
 There should be more use of information technology.

 The company should be flexible to bend its rules and procedures in the clients

favour.
 The company can communicate and develop stronger customer bonding by

providing social and financial benefits.

Questionnaire
1. Who are your customers?

a) Wholesaler
b) Retailers
c) Both

2. Are your customer’s needs clearly defined ?

a) Yes
b) No

3. Do you conduct customer satisfaction surveys?

a) Yes
 b) No

4. Do you communicate results of your customer satisfaction surveys regularly

throughout the company?

a) Yes
b) No

5. Do you actively seek out customer comments and complaints?

a) Yes
b) No

6. How do you get customer comments and complaints?

a) Face to face interview.

b) Toll free numbers, formal surveys.
c) Others means

7. How do you get information about the customers?

a) Face to face interviews

b) Surveys.
c) Any other means.

8. Do you analyze channel effectiveness? ie which channel is most effective in

serving the customer?

a) Yes
b) No
9. Do you provide credit facility to your customers?

a) Yes
b) No

10. Do you give concessions to your regular customer?

a) Yes
b) No

11. Do you take feedback from your customers?

a) Yes
b) No
12. Do you customize your product or services according to the customer?

a) Yes
b) No

13. Do you have a concept of “internal service”?

a) Yes.
b) No.

14. Do you communicate with your customers frequently?

a) Yes.
b) No.

15. Do you regularly review the business process to eliminate non value- adding
activities and improve customer satisfaction?
 a) Yes
b) No.

16. Is the working environment is conducive to the well-being and morale of all
employees?

a) Yes
b) No.

17. How much is the role of computers in serving the customers?

a) Plays a big role
b) Not much role to play
c) No role to play.
18. Do you have centralized database for customer information?

a) Yes
b) No such database.

19. Does the staff have access to the customer database?

a) Yes
b) No

20. Is there commitment from top management to support the customer-focused

service concept?

a) Yes
b) No

21. Is there any improvement in average sale per customer?

 a) Yes
b) No

22. Is there any improvement in customer response rate to the marketing

activities?

a) Yes
b) No

23. Is there any improvement in customer retention and loyalty?

a) Yes
b) No.
This is Project Report on Customer Relationship Management [CRM]