SCHOOL OF SCIENCE AND HUMANITIES

Unit-1-SBAA3016 -RELATIONSHIP MANAGEMENT

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Definitions - Concepts of relationship Management - Evolution - Transactional Vs Relationship
Approach - Evaluation of Customer Relationship Management (CRM) - Customer Loyalty -
CRM Success Factors and Levels of Services - Service - Level Agreements

Definitions - Concepts of relationship Management

Introduction:
Relationship management helps organizations and business to maintain a certain level of
engagement with its audience and it can happen between two businesses or a business and its
customers. This relationship that is maintained with the partners and customers is more than
transactional and it helps in building the brand loyalty for the specific business. Mostly
relationship building happens on the customer level but when there are partners and
clients establishing relationship with them is significant as well. The task of
managing relationships on a professional level is not an easy task. Studying the mentalities of
people overall and their reactions to different products or advertisements or social media
interactions may be different each time. This is why companies and businesses hire relationship
managers to take care of relationship management. It is important that the company remains
connected to their customers so it can understand the needs of their customers.
The same applies for their business partners too. Improvising and changing according to the
demands of the customers and clients help businesses to hold on to them thereby continuing to
uphold the sale of their products and services. Relationship management also ensures that while
the company is capturing newer markets and making more customers it doesn‘t lose the older
ones.
Customer relationship management takes care of building a bond of trust be- tween the
organisation and the existing customers. Communicating with them usually involves sales
reports and data using which the business maintains the interest of the customers in the company
and the products or services that it deals in. Customer relationship management also comprises
of post-sale support and at times marketing techniques. There are different ways an organi-
sation can choose to communicate with their customers which include social media platforms,
newsletters, post-sale surveys, advertisements, tutorials, campaigns, emails, messages etc. This
helps in keeping their customers close

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Definitions of CRM:
CRM is an information industry term for methodologies, software and usually Internet
capabilities that help an enterprise manage customer relationships in an organized way.

―Customer Relationship Management is a comprehensive approach for creating, maintaining and

expanding customer relationships‖.

CRM is an integrated approach to identifying, acquiring and retaining customers. By enabling

organizations to manage and coordinate customer interactions across multiple channels,
departments, lines of business and geographies, CRM helps organizations maximize the value of
every customer interaction and drive superior corporate
performance.

CRM is a discipline as well as a set of discrete software and technologies which focuses on
automating and improving the business process associated with managing customer relationships
in the areas of sales, marketing, customer services and support. CRM software applications
facilitate the coordination of multiple business functions (such as sales, marketing, customer
services, and support) and also coordinate multiple channels of communication with the
customer face to face, call centres and the Web – so that organizations can accommodate their
customers‘ preferred channels of interaction.

Concepts of Relationship Management:

The purpose of CRM
The focus [of CRM] is on creating value for the customer and the company over the longer term.
When customers value the customer service that they receive from suppliers, they are less likely
to look to alternative suppliers for their needs. CRM enables organisations to gain competitive
advantage‘ over competitors that supply similar products or services.

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What does CRM involve?
CRM involves the following (3):
 Organisations must become customer focused
 Organisations must be prepared to adapt so that it take customer needs into account and
delivers them
 Market research must be undertaken to assess customer needs and satisfaction.
Benefits of CRM:
Benefits of CRM include (8):
 Reduced costs, because the right things are being done (ie., effective and efficient
operation)
 Increased customer satisfaction, because they are getting exactly what they want (ie.
meeting and exceeding expectations)
 Ensuring that the focus of the organisation is external
 Growth in numbers of customers
 Maximisation of opportunities (eg. increased services, referrals, etc.)
 Increased access to a source of market and competitor information
 Highlighting poor operational processes
 Long term profitability and sustainability

History and Evolution of CRM

Customer Relationship Management is a concept that became very popular during the
1990s. It offered long-term changes and benefits to businesses that chose to use it. The reason for
this is because it allowed companies to interact with their customers on a whole new level. While
CRM is excellent in the long-term, those who are looking for short term results may not see
much progress.
One of the reasons for this is because it was difficult to effectively track customers and their
purchases. It is also important to realize that large companies were responsible for processing
tremendous amounts of data. This data needed to be updated on a consistent basis. In the last few
years, a number of changes have been made to customer relationship management that has
allowed it to advance. These capabilities have allowed CRM to become the system that was once

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envisioned by those who created it. However, the biggest problem with these newer systems is
the price. A number of personalized Internet tools have been introduced to the market, and this
has driven down the cost of competition. While this may be a bane for vendors who are selling
expensive systems, it is a bonanza for small companies that would otherwise not be able to
afford CRM programs. The foundation for CRM was laid during the 1980s.

Transactional Vs Relationship Approach

Transactional Approach: Transactional marketing is a business strategy that focuses on single,
"point of sale" transactions. The emphasis is on maximizing the efficiency and volume of
individual sales rather than developing a relationship with the buyer.
Relationship Approach: Customer relationship management (CRM) is a process in which a
business or other organization administers its interactions with customers, typically using data
analysis to study large amounts of information.
A comparison of transactional marketing and relationship marketing in tabular form is given
below:

TRANSACTIONAL MARKETING VS RELATIONSHIP MARKETING

Meaning
The marketing strategy used to generate the The marketing strategy used to establish
highest possible sales in the shortest possible long-term relationships with customers
time
Objective
Generate sales Develop a connection with the customer
Duration
Short-term Long-term
Interaction with customers
Limited or no interaction with customers High degree of interaction with customers
Relationship with customers
Short and disruptive Long-lasting
Aim
Make a sale Become the first choice company in the
market
Promotional strategies
Incentives; discounts Exceptional customer service; loyalty
programs

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CUSTOMER LOYALTY
Loyalty is at the heart of equity and is one of important brand assets. Brand loyalty is a
conscious or unconscious decision expressed through intention or behavior to repurchase a brand
continually. When the consumer buys with respect to product features, price and convenience,
with little concern to the brand there is likely little equity. But, if the consumers prefer the brand
even at the face of competitors with superior features and offers, then brand is said to have high
brand equity. Loyalty reflects the consumer‘s attitude towards the brand, especially when there is
a change, either in price or product features. As the brand loyalty increases, the vulnerability of
the customer base to competitive action gets reduced.

The Strategic Value of Brand Loyalty

Reduced
Marketing Costs

Trade Leverage

Brand Loyalty
Time to Respond
to Competitive
Threats

Attracting New
Customers

As per Aaker‘s point of view the above factors produce a strategic value to the organization by
brand loyalty of customers.

Reduced Marketing Cost

Loyal customers minimize the cost of running business because the amount spent on getting new
customers is far more than retaining present customers. The higher the loyalty, the easier it is to

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keep customers happy. Loyal customer becomes an advocate for the brand, without any
incentive. Loyalty base of customers, act as a strong entry barrier for potential entrants by which
an organization can minimize the risk.

Trade Leverage
A brand having strong loyalty base force retailers to maintain adequate stock and allot enough
shelf space to accommodate the brand. At the extreme, customer‘s shop choice depends on
where their preferred brand is available. So, at the retail brands enjoy special recognition and
treatment.

Attracting New Customers

Existing loyal customers help marketers to get more business through prospective customers.
They create awareness of the brand among friends and colleagues, who develop positive attitude
towards the brand by actually seeing the brand in action. Brand image is projected by these
customers especially when the product requires after sales service or, prospective customers
require assurance of product performance.

Time to Respond to the Competitive Threats

Loyalty base also supports marketers against competitor‘s innovation by providing sufficient
time for them to retaliate.

Strategies to Build and Maintain Loyalty

Retaining the customers, keeping them happy, enhancing their satisfaction level is the continuous
endeavor of any organization as it cannot afford to miss any of the loyal customers. Ever
changing Indian consumer, cut throat competition and emerging new technologies are the thrown
challenges to develop loyalty programmes. Some of the strategies that suit the Indian context are
discussed below.

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Six Ways to Maintain Customer Loyalty:
1. Quality is Key: Quality is everything-it‘s what keeps customers returning for your
product or service, and not your competitions.
2. Happy Staff, Happy Customers: Your staff not only represents your organization, they‘re
the individuals whom your customers actually build relationships with. They‘re the face
of your company.
3. Engage: Customer engagement is very important for continually building customer
loyalty, and also marketing your company. Asking your customers for feedback is great
because you gain insight into what you‘re doing right, as well as improvement
opportunities
4. Own Failure: While you should never strive to fail your customers, within every failure
is the opportunity to redeem the relationship and affirm your customer‘s trust.
5. Loyalty Programs: Anything that adds value to your work and shows your appreciation
for your customers will go a long way maintaining their loyalty. One way companies are
doing this is through loyalty programs.
6. Innovate Operations: Customers want things simple, straightforward, and as fast as
possible

Measurement of Brand Loyalty

The criteria and factors considered for loyalty measurements is different at each level of loyalty
as the degree of loyalty and nature of relationship changes. In the bottom levels loyalty is not
recognizable. Loyalty measurement at this level is in terms of sales turnover, product‘s profit
margins, price attractiveness and price sensitivity. These are the major factors for purchase and
repurchase behavior of customers at these levels. At the middle level, loyalty is measured
through satisfaction level. Total spending on brand, liking – which is scaled in variety of ways
like respect, friendship, trust etc, and the reasons attributed. Another important measurement for
customers commitment is their involvement in spreading good word of mouth and number of
people to whom they refer the brand. Measurement tools include structured questionnaire (both
closed-end, open – end), likert scale, semantic differential scale, attitude rating scales, projective
techniques and indepth interviews.

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The Ladder of Loyalty
The ladder of loyalty shows the different stages through which a prospect becomes a customer, a
client and finally a partner.

Prospect
The prospect is an individual in a retail market or an organization in the business market, which
fulfils the requirement of the marketer‘s definition of target. For example, a cellular service
provider may segment the market and target executives in blue chip companies with a special
offer.

Customer
The prospect becomes a customer when s/he gets attracted by the offering of the marketer and
buys the product / service.

Client
A customer becomes a client when s/he purchases the product or service more than once. While
a customer may make the initial purchase as a trial or test, the client is one who does a repeat
purchase. It is likely that the trial was a satisfactory experience for the client.

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Supporter
A client becomes a supporter when he satisfies with the offering and recommends it to his friend,
relatives and acquaintances. This positive Word – Of – Mouth (WOM) has tremendous positive
impact as it helps the company get new customer. WOM is a most influential source of
information in converting prospects into customer.

Advocate
An advocate is a supporter who, in addition to referrals that gives increases sales, proactively
works with the company to improve its product and services. While developing new products
software companies regularly depend on the feedback from the lead users of their clients during
the Beta test phase. So is a case in new product development situation in several industrial firms,
who set up the prototype in their client‘s premises for usage and feedback, which helps in
improvement. In these situation, the level of interaction between the customer and the company
is at a much higher plane. There is sharing of vital information and the comfort level as well as
the confidence between the parties is high.

Partner
An advocate becomes a partner when they become actively involved in the decisions of the
company. Any relationship that attempts to develop customer value through partnering activities
is likely to create greater bonding between customers and marketers. In many cases, there are
joint investments resulting in a structural bonding. Examples include the kind of relationship that
exist between Procter and Gamble and Wal Mart, the world‘s largest retailers. This relationship
is characterized by genuine partnership. Wal-Mart shares the scanner data from its checkout
counters in its over 4,500 stores through satellite. This information gives the movement of P &
G‘s products, the status of stocks in its outlets and helps the joint teams comprising of P&G and
Wal Mart executives to plan replenishments. It helps P&G plan its production, better
management of its production runs and keep its inventories low as it no longer depends on sales
forecasts but actual sales data. Overall, it reduces the selling costs to P&G. Wal Mart gains as it
does not have to keep inventories, gets faster replenishments, incurs low cost and is able to pass
on the saving to the customers, thus, reinforcing its image of ‗Everyday Low Prices‘ among its
customers.

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CRM Success Factors:
While clear intention fuels the power of CRM, there are several other success factors to consider.
We will focus on five of the most important here. Organizations that implements CRM with a
strong return on investment share these characteristics.

1. Strong internal partnership around the CRM strategy. We said earlier that CRM is
a way of doing business that touches all areas of your organization. This means that you and your
management peers need to firm strong internal partnerships around CRM. If you and your
organization are early on the road to CRM implementation, now is the time to bring your CRM
needs to the table, and to be open to listening to the CRM needs of the other areas. You may find
that you have requirements that are, atleast potentially, in conflict. Resist the temptation to go to
the war for what you need.
If your organization has gone off the partnership road with CRM, then now is the time to come
back together and rebuild partnership with the area that is currently hampioning CRM. Let them
know that you appreciate what they have done. Let them know what data you have to offer and
help them understand how you plan to use the data you request from them.

2. Employees at all levels and all areas accurately collect information for the CRM
system. Employees are most likely to comply appropriately with your CRM systemwhen they
understand what information is to be capture and why it is important, they are also more likely to
trust and use CRM data when they know how and why it was collected.

3. CRM tools are customer – and employee – friendly. CRM tools should be
integrated into your systems as seamlessly as possible, making them a natural part
of the customer service interaction. A major manufacturer of speciality pet foods
redesigned the pop – up screens for its toll – free consumer phone line. In the original
design, the final pop-up screen prompted the representative to ask the caller‘s name
and address. Yet, representatives had found that it was easier and felt more natural toask,
―What‘s your name?‖ and ―Where are you calling from?‖ and ―What‘s your pet‘s
name?‖ at the start of the call.

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4. Report out only the data you use, and use a data you report. Just because your CRM tool
can run a report doesn‘t mean it should. Refer back to your CRM strategy, and then run the data
you will actually use. And share that data with your team.

5. Don’t go high – tech when low – tech will do. At Harley – Davidson outside of Milwaukee,
WI during the summer they often leave open the big metal doors to the manufacturing facility to
let in any breeze and the cooler evening air. Unfortunately, open doors occasionally let in other
things, including skunks. A team met to consider the problem and possible solutions. After
discussing the pros and cons of screens, half-doors, or keeping the doors shut, they came upon
ideal solution. When a skunk wanders in, just leave it alone and wait till it wanders back out.
Skunks may be Harley fans, but they never stay long. Organizations that successfully implement
their CRM look for the simplest solution when implementing their CRM strategy.

LEVEL OF SERVICE
Now you understand that the power of CRM lies in its ability to help you create, maintain, and
expand customer relationship. You‘re excited and ready to begin delving into the process of
creating your own CRM strategy, whether at the organization level or as it applies to your
specific area or department. Before you do that, we‘d like you to take a more in – depth look at
who your current customers are and what their relationships with you look like. Our model, the
Customer Service / Sales Profile, will help you to do three things.
First, it will show you what kind of customer relationships you‘re trying to create. Is your
success based in initial, stand-alone transactions? Or does the nature of your product or service
put customers in partnership with you over longer periods of time? How important is it for you to
have satisfied customers acting as a word – of – mouth advocates for you in the market place
Second, the Customer Service / Sales Profile will help you identify strengths in your current
CRM practices. Even in cases where there‘s no formal CRM strategy, if you‘re still in business,
you must be doing some thing right, may be several or many things. Knowing what right
practices have evolved naturally will help you create the greatest possible improvement with the
least amount of expense.

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Third, because this process creates a visual image of your customer relationship, you will find it
helpful in communicating to others throughout the organization. Knowing your current profile
and the desired profile will naturally help you focus your energy and attention.

The Three Levels of Service / Sales: There are three service / sales levels to the Customer
Service / Sales Profile model.

Level 3:
Customer Advocates
……………………………………
Level 2:
Repeat Customers
……………………………………
Level 1:

The three level of service / sales levels

Level 1 is initial transactions. At this level you are focused on discrete, initial interactions or
stand-alone sales. This is the foundation for every business or organization. Yet, we know that
the more money, time, and energy you must invest in getting customers to come to you in the
first place, the harder it is to be profitable just working at this level. As we noted in Chapter 1,
it‘s not unusual for customers to actually cost you money the first time they do business with
you. Just consider the acquisition costs for you customers. As you can see, in order for our
Nature Retreat Center to be profitability at level 1, they need to:
➢ Identify customers at risk of leaving, never to return, and find out how they can woo them
back.
➢ Look for ways to teach new customers more about what the Nature Retreat Center offers
and how it works so that there are fewer avoidable service issues.
➢ Give staff tools and training on ways to turn the interaction into revenue – generating
opportunities while at the same time making guests feel well served.

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It will be important for the Nature Retreat Center to focus on this improvement. When initial
transactions run smoothly, with the minimum of fuss or error, it provides a strong foundation for
future business.
Level 2 represents repeat customers. At this level you‘re focus on getting customers to return for
a second, third or fourth time. Customers may come back for the same purchase – like the loyal
Carivou Coffee customer, cordially known by the staff as the ―extra large, skil latte with Carivou
cookie‖. Or the customer may turn to you for a variety of products and services – like a car
insurance customers who comes back to a agent for home owner‘s, this ability, and life
insurance. Repeat customers develop greater economy and emotional ties with you. And they
bring with them and expectation that you will value those ties. The top level of model is
customer advocates. Level 3 represent those customers who are not just satisfied and willing to
do business with you again. These customers actively tell others about their positive experience
they spread the good word. You might even consider them to be active participants on your
marketing team. As you can see, each level builds upon the level before without quality initial
transactions, customers won‘t want to do business with you again. And it‘s the customer who
seems himself or herself in a positive relationship with you who can provide the strongest
advocacy for you and your product and services.

Five level of Customer Relationship Management

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CRM Level I - Training Wheels still on:
 You use Microsoft Outlook (or maybe Google g-mail) to send out mass emails, like an e-
Newsletter.
 Phone Calling Lists with names and phone numbers are also kept in Microsoft Excel
Spreadsheets.
CRM Level II - Entry Level Internship:
 Now we're getting some place. You implemented a Small Business Low-Cost CRM and
use an outside e-Mail Service for mass emails.
CRM Level III - Average Sales Productivity:
• You invested in a top-rated CRM with lots of features that you don't use.
• Reps have minimal training, You may have a couple of plugin add-on services.
CRM Level IV - Top Performing Teams:
• The company spent a significant amount of time planning and implementing your CRM
system.
• You trained your team as part of the roll-out and have a training program each quarter.
You implemented a top-rated CRM.
CRM Level V - World-Class Sales Teams
• Your Top Executives are active CRM leaders for the company.
• You fully trained your team as part of the roll-out and have an on-going training program
each month. You implemented a top-rated CRM that you are using to its full potential.

SERVICE- LEVEL AGREEMENTS

It is just a new-age term for the age- old telecom contract,‖ writes Julie Bort in her article, ― SLA
Savvy, Five Secrets for Making Sure You Get the Most from Your Service-Level Agreements‖
(Network World, September 27, 1999). And she‘s right. However, today service level
agreements cover much more than telecommunications. SLAs can also be found in IT
(information technology), ASP (application service providers), and ISP (Internet service
providers) agreements. And, whether you enter into a formal contract or use the concept in
informal contract or use the concept in informal partnership discussion, understanding SLAs can

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help you ensure that everyone in your team is on board and contributing to your customer
relationship management strategy.

There are three basic types of SLAs:

Customer based SLA: A customer service-level agreement is between a service provider and its
external customers.
Service based SLA: Commitment between a service provider and a client (mobile service
provider).
Multilevel SLA: Split into the different levels, each addressing different set of customers for the
same services, in the same SLA

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Unit-2-SBAA3016 -RELATIONSHIP MANAGEMENT

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 Unit-2
Customer Life Cycle - Customer information Database - Customer Profile Analysis - Customer
perception, Expectations analysis - Customer behavior in relationship perspectives; individual
and group customer‘s - Customer life time value - Selection of Profitable customer segments.

Customer Life Cycle:

The customer lifecycle has five stages: reach, acquisition, conversion, retention, and loyalty

CUSTOMER INFORMATION DATABASE:

The true business of the every company is to make and keep customers‖. The single most
important factor for the success of any business enterprise is the customer. Understanding the
customer needs and wants is the important factor for selling of our product and services.

CUSTOMER INFORMATION.
The most often used information in a CRM database is the customer information. This can
include personal information, such as contact addresses and phone numbers, as well as family
size, location, and other demographic information. Many companies also use their CRM
database to record purchase information, service calls, customer support needs, and even
warranty information. Anything relative to customer interaction can be placed in a CRM
database.

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  Customer information database includes personal information, such as contact addresses,
phone numbers etc.
 It also includes family size, location and other demographic information and geographical
location.
 CRM database to record purchase information, service calls, customer support needs, and
even warranty information.
 Customer related databases might be maintained in a number functional areas; eg.
sales,marketing,logistics and accounts.
 Customer Information Database
 Databases might require quite different operational purposes Eg: Opportunities,
campaigns, enquiries, deliveries and billing.
 Customer related data can have a current, past and future perspectives, focusing upon
current opportunities, historic sales or potential opportunities etc.

INFORMATION TO BE INCLUDED IN CUSTOMER DATABASE
 Contact names
 Job title and job definitions
 Demographic or psychographic information
 Name of the company
 Address
 Methods of contact
 Buying history
 Sources of lead
 Sources of sale
 Special needs of customers

BENEFITS OF A CUSTOMER DATABASE

By using a customer database to keep in touch with, and market to, your customers, you can:
1. Increase awareness of your brand
2. Enhance marketing opportunities
3. Build and strengthen relationships between you and your customers

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 4. Build trust in your products and services
5. Increase your profits
6.
DEVELOPING A CUSTOMER INFORMATION DATABASE

Define the database functions

 Strategic CRM: Data about markets, market offering, customers, channels, competitors,
performance and potential.
 Operational CRM: Customer related data to help in the everyday running of the business.
 Analytical CRM: Data to support the marketing, sales and services decisions that aim to
enhance the value created for and from the customers.
 Collaborative CRM: It includes two subsets of operational and analytical
purpose.(OLTP,OLAP)onlineT-transaction, A-analytical processing.

Define the information requirements

 Customer information fields
 Contact data
 Contact history
 Transactional history
 Current pipeline
 Opportunities: It looks forward after sales.
 Products
 Communication preferences

Identify the information sources

 Internal data: market size ,market segmentation, customer profile, customer acquisition
channel, competitor product and pricing, customer requirement
 External data:
a) Compiled list data:
b) Census data: obtained from govt records.
c) Modeled data generated by third parties includes variety of sources.
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  Secondary and primary data:
a) Competition entries
b) Subscriptions: customer Subscribe of newsletter or magazine
c) Registrations: customers are invite to register their purchase
d) Loyalty programs

Maintain the Database

 All new transactions, campaigns and communications are inserted immediately.
 Regularly re duplicates the database.
 Get customers to update their own records.(online purchase)
 Audit the subset of files every year.
 Drip-feed

PROCESS OF ANALYSING CUSTOMER INFORMATION DATABASE

 Extract (information)
 Clean
 Merge &
 Analyze

CUSTOMER PROFILE ANALYSIS

 A good method of identifying and understanding customers is to develop customer
profile.
 This approach is similar to that used in market segmentation.
 The marketers creates some basis for dividing the various customer groups.
 The marketer then develops a typical customer profile which helps to analyze and
understand consumer behavior.

COMPONENTS OF CUSTOMER PROFILE

• Customer profile analysis : Customer profile that gives an indication of who might typically
use their outlet. A customer profile is affected by the macro business environment. A customer

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profile is also influenced by the micro-environment, the specific business arena in which the
individual market operates.
The perspective of changing consumer profile can be very important to the marketer in order to
adequately manage the marketing mix and formulate a marketing strategy. Changing customer
profile includes into two categories.
Changing customer demography changing in consumer values and life style.

CUSTOMER PERCEPTION ANALYSIS

Customer perception analysis is a value-chain assessment methodology that gives a better
understanding of one‗s interaction with customers. Perception is a process through which the
information from outsider‗s environment is selected, received, organized and interpreted to make
it meaningful.

PERCEPTION
According to kolasa,‖ perception is selection and organization of materials which stems from the
outside environment at one time or the other to provide the meaningful entity we experience.
According to Robbins, "perception may be defined as a process by which individuals organize
and interpret their sensory impressions in order to give meaning to their environment.

FACTORS INFLUENCING CUSTOMERS PERCEPTION ANALYSIS

1. Exposure- attention (ad)
2. Interpretations (It involves making sense out of stimulus)
3. Relevance –several other factors (substitute)
4. Surprising stimuli
5. Subliminal stimuli
6. Selective perception process
7. Selective Exposure
8. Selective Attention
9. Selective Comprehension
10. Selective Retention

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STRATEGIES FOR INFLUENCING CUSTOMER PERCEPTION
1. Measure and manage customer satisfaction and service quality
2. Aim for customer quality and satisfaction in every service encounter-zero defects
3. Plan for effective recovery
4. Facilitate adaptability and flexibility
5. Encourage spontaneity
6. Help employees with problem customers
7. Reflect evidence of service
8. Enhance customer perception of quality and value through pricing.

EXPECTATIONS ANALYSIS
Customer expectations are any set of behaviors or actions that individuals anticipate when
interacting with a company.

The types of Customer Expectations

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FACTORS INFLUENCING CUSTOMER EXPECTATIONS OF SERVICES

 Sources of desired service expectations (desired services Zone of tolerance adequate

service)
1. Personal needs
2. Enduring service intensifiers - desired service expectations

 Sources of Adequate service expectations

1. Transitory service intensifiers (urgent need-small purchase, doctors etc)
2. Perceived service alternatives (booking of tickets)
3. Customer‗s self-perceived service roles (food service in hotel)
4. Situational factors (petrol bank, food served for marriage)
5. Predicted services (give quality service rather than predicted service)

 Sources of both desired and predicted service expectations

1. Explicit services promises (ad -we promises to customers)

2. Implicit service promises (two company charges diff. prices)
3. Word-of-mouth communication
4. Past experience (previous exposure to the focal firm‗s service )
• Managing customer expectations
• During pre-purchase phase

CUSTOMER BEHAVIOR

Customer or consumer behavior is the study of how individuals make decisions to spend their
valuable resources (Time,money,effort) on consumption-related items. It includes what the buy
it, why they buy it, where they buy it, how often they buy it, and how often they use it.
According to belch and belch ‖consumer behavior is the process and activities people engage in
when searching for, selecting, purchasing, using, evaluating and disposing of products and
services so as to satisfy their needs and desires.

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CUSTOMER BEHAVIOR IN RELATIONSHIP PERSPECTIVE
1. Understanding customer is the central part of the marketing process to know why a
customer or buyer makes a purchase.
2. Without such an understanding, business will find it hard to respond to the customer‗s
needs and wants.
3. Some business still produces the product without knowing the importance of the
customer.
4. Organization clearly understands the benefits wanted by customers, reasons for purchase,
repurchase etc.
5. Importance of customer behavior
6. Production policies
7. Price policies
8. Decision regarding channel of distribution
9. Decision regarding sales promotion
10. Exploiting market opportunities
11. Customers do not always act or react predictably.
12. Consumers preferences are changing and becoming highly diversified.
13. Rapid introduction of new products
14. Implementing the ―marketing concept

FACTORS INFLUENCING CONSUMER BEHAVIOR

1. Psychological factors
 Motivation
 Perception
 Learning
 Beliefs and attitude
2. Personal Factors
 1. Age and Life cycle stage
 2. Occupation
 3. Life style

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  4. Personality and self-concept
3. Cultural factors
 Culture
 Sub culture
 Social class
4. Social factors
 Refernce groups
 Family
 Roles and status
5. Economic Factors
 Personal Income
 Family Income
 Savings

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INDIVIDUAL CUSTOMER
 The term consumer, end user, individual buyer and individual user refer to the same, a
buyer who buys product and services for end use.

 Understanding their need, want, value expectation and service expectations are the way to
win this market by product and services which a firm is offering.

Individual customer decision making process/Buying process

 Problem recognition
 Pre-purchase information research
 Personal service
 Commercial sources
 Public sources
 Experimental sources
 Evaluation of alternatives:
 Evaluative criteria
 Beliefs
 Attitudes
 Intensions
 Purchase decisions
 Post-purchase behavior
 Post-purchase satisfaction
 Post-purchase action
 Post-purchase use and disposal

GROUP CUSTOMERS
 Group customer are referred as industrial market which consists of all the individuals or
organizations who acquire goods and services that enter into the production of other
products or services that are sold, rented or supplied to others.
 Organizations establish the need for purchased products and services, and identify,
evaluate and choose among alternatives brands and suppliers.
Group customer decision making process/Buying process
 Problem recognition
 General need Description
 Product specification
 Supplier Search
 Proposal solicitation

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  Supplier selection
• Purchase Routine selection
• Post purchase evaluation

CUSTOMER LIFE TIME VALUE

 Customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV)
is the net present value of the cash flows attributed to the relationship with a customer.
 The use of customer lifetime value as a marketing metric tends to place greater emphasis
on customer service and long-term customer satisfaction, rather than on maximizing
short-term sales.
 Building Profitable Customer-Centric Strategies: Maximizing Profit Potential
 Our high-impact processes for becoming more customer-centric and creating innovative
strategies will be valuable only if we can effectively deliver on these profitably.

SELECTION OF PROFITABLE CUSTOMER PROFITABILITY

 We first understand the key factors that will drive profitability for customer insight
initiatives.
 During the innovation stage, the objective was to creatively generate new sources for
capturing intelligence from customers and creating insight that could enhance the way we
communicate and sell to customers.
 As you learn more from customers about their needs and preferences, you have the
opportunity to better target your marketing messages, offers and channels, which
ultimately leads to reduced marketing expenses and increased conversion rates.

Customer life time value

The key factors that will drive the profitability of customer insight initiatives include these:
 Reaching high-value customers and prospects
 Capturing intelligence on a critical mass of customers to justify the fixed costs of setting
up and managing the program

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 Generating incremental profits from increased sales to new customers, higher customer
retention, selling more to existing customers or winning back lost customers
 Reducing costs of delivering solutions and servicing customers
 Capturing intelligence cost-effectively
 Building the ability to influence customer profitability over time

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Unit-3-SBAA3016 -RELATIONSHIP MANAGEMENT

30
 UNIT 3 CRM STRUCTURES

Elements of CRM - CRM Process - Strategies for Customer acquisition - Retention and
Prevention of defection - Models of CRM - CRM road map for business applications.

ELEMENTS OF CRM:
When your company communicates with your customers the process can involve many different
people within both organizations using a variety of different methods. The main tool that is used
is an order that is communicated by your customer to your sales department. However this is
only one of many communications that should be managed. To ensure that your company can
provide the best customer service experience possible the use of customer relationship
management (CRM) software should be considered.

 Customer Knowledge:
The customer service function in your company represents the front office functions that
interact with your customers. These are the business processes that allow your company to
sell products and services to your customers, communicate with your customers with regards
marketing and dealing with the after sales service requirements of your customers. Each
interaction with the customer is recorded and stored within the CRM software where it can
be retrieved by other employees if needed.
 Relationship Strategy
 Communication
 Individual Value Proposition
 Sales Force Automation:
The company‗s sales department is constantly looking for sales opportunities with existing
and new customers. The sales force automation functionality of CRM software allows the
sales teams to record each contact with customers, the details of the contact and if follow up
is required. This can provide a sales force with greater efficiencies as there is little chance for
duplication of effort. The ability for employees outside of the

31
 sales team to have access to this data ensures that they have the most recent contact
information with customers. This is important when customers contact employees outside
of the sales team so that customers are given the best level of customer service.

 Campaign Management:
The sales team approach prospective customers in the hope of winning new business. The
approach taken by the sales team is often focused in a campaign, where a group of specific
customers are targeted based on a set of criteria. These customers will receive targeted
marketing materials and often special pricing or terms are offered as an inducement. CRM
software is used to record the campaign details, customer responses and analysis performed
as part of the campaign.

CRM PROCESS
 The formation process of CRM refers to the decisions regarding initiation of relational
activities for a firm with respect to a specific group of customers or to an individual
customer with whom the company wishes to engage in a cooperative or collaborative
relationship.

 It is important that a company be able to identify and differentiate individual customers.

In the formation process, there are three important decision areas: defining the purpose
(or objectives) of engaging in CRM; selecting parties (or customer partners) for
appropriate CRM programs; and developing programs (or relational activity schemes) for
relationship engagement with the customer.

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CRM process

THREE STEPS OF CRM PROCESS

1. Acquisition : It comprises enquiry, interaction, exchange, co-ordination and adaptation.
2. Customer Interaction Management
3. Customer Retention
 Customer Acquisition
 Customer acquisition is a broad term that is used to identify the process and
procedures used to locate, qualify, and ultimately secure the business of new
customers.
 Customer retention effort is to identify and quality potential customers.
 Inputs for Acquisition
 The purpose of customer acquisition an organization is likely to focus its attention on
the following:
1. The suspects

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 2. The enquiries
3. The lapsed customers
4. The former customers
5. The competitors customers
6. The competitors lapsed customer‗s
7. The competitor‗s enquiries
8. The competitors former customers
9. The referrals
10. The existing customers

STRATEGIES FOR CUSTOMER ACQUISITION

1. Focused Approach:
a) Knower
b) Preferer
c) Indifferent
d) Rejecters
2. Providing a Win-Win Platform
3. Intimate Forum for Communication
4. Attempt to Minimize- ―FUD‖ (Fear, Uncertainty, Doubts)
5. Projection Of Benefits And Not Products
6. Contextual Application
7. Focus On Decision Process

CUSTOMER RETENTION
Customer retention is the activity that a selling organization undertakes in order to reduce
customer defections. Successful customer retention starts with the first contact an organization
has with a customer and continues throughout the entire lifetime of a relationship. A company‗s
ability to attract and retain new customers, is not only related to its product or services, but
strongly related to the way it services its existing customers and the reputation it creates within
and across the marketplace.

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 Customer Retention Programs Figure

STRATEGIES FOR CUSTOMER RETENTIONS

1. People
2. Product
3. Process
4. Organisation
5. Setting Satisfactory Service Standards
6. Concentration on Competitors
7. Customer Analysis
8. Cost Analysis
9. Concentration on the Paying Ability of Customers
10. Knowledge on Purchase Behaviour Pattern

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CUSTOMER DEFECTION
Customer defection is the rate at which customers defect or stop the usage of products of a
company. Business with high defection rate would be losing their existing customers. In order to
overcome this they use another term of customer retention, in simple words it‘s to retain or
prevent the existing customers to defect the product.

TYPES OF DEFECTION
 Price Defectors
 Product Defectors

 Market Defectors
 Technological Defectors
 Organisational Defectors

STRATEGIES FOR PREVENTION OF DEFECTION

Every customer that you keep represents at least three that you don‘t have to attract. Numerous
research studies indicate that the cost of acquiring a new customer usually runs from two to four
times the annual cost of keeping an existing customer. Obviously, an effective customer
retention strategy translates into profits.
It has been estimated that most companies spend about 98 percent of their time reacting to
problems and less than 2 percent preventing them. The first, most important, way to prevent
customer defections is to identify and define each problem from the customer‗s vantage point.
This blog suggests several ways to retain customers once you understand the problems and their
ramifications.
Superior service and database management provide your best defense against customer
defections. Service provides the opportunity to solve customer problems and build partnerships;
the database serves as a vehicle to personalize customer communication and enhance your
relationships. The Key Points Are
1. Analyze Customer Defections and Monitor Declining Accounts
2. Address Key Churn Drivers

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 3. Implement Effective Complaint-Handling and Service Recovery Procedures
4. Increase Switching Costs.

MODELS OF CRM

A CRM model is a workflow that guides all of your team's interactions with leads,
prospects and customers.

IDIC MODEL-I:

I- IDENTIFY
D – DIFFENCIATE
I – INTERACT
C – CUSTOMIZE

IDIC model
The IDIC model was developed by the Peppers and Rogers Group as a generic
blueprint for implementing CRM in a variety of situations. IDIC stands for the four
stages of CRM implementation: identify, differentiate, interact, and customize.

QCI MODEL

• QCI is a customer management model rather than a customer relationship model, the
Quality Competitive Index model focuses on three main activities: acquisition, retention,
and penetration.
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• The QCI model starts with the customer‘s external environment at the top—their pain
points, business goals, and other factors will affect whether they are ready to buy or
interact with your sales team, which in turn impacts the customer experience.
• The customer experience then affects customer proposition (what you offer the customer)
and customer management activities. As you can see from the magnified version of the
inner circle, many activities are involved to acquire and retain customers.
• The QCI model also considers the people and technology involved with keeping this
whole system going.
• QCI has replaced the word ―relationship‖ in CRM, this model still starts and ends with
people.

QCI model

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PAYNE’S FIVE PROCESS MODEL

Payne’s model outlines five processes

Strategy development

Value creation

Multichannel integration

Information management

Performance assessment

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 • The Five Process CRM model was developed by Adrian Payne and
Pennie Frow.
• This model emphasizes a cross-functional approach for effective
CRM processes.
• There are two main components to the model: cross-functional
CRM processes and key elements of CRM implementation.

CRM VALUE CHAIN MODEL

 A value chain is a high-level model developed by Michael Porter .

 Identifies the processes a business uses to develop an end product or service for the
customer.

 The goal of the value chain model is

 to identify and prioritize the most valuable activities to the company and
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  To improve processes to gain a competitive advantage.

 The CRM value chain model applies this principle to customer relationships.

 This CRM model observes all the stages and activities required to build a relationship
with a customer.

 These activities are divided into two stages: primary and support.

Primary stage

 The primary stage of CRM has five main processes that enable the strategy.

 Customer portfolio analysis;

 Customer intimacy;

 Network development;

 Value proposition development and

 Relationship management

CRM ROAD MAP FOR BUSINESS APPLICATIONS

A CRM Roadmap is a strategic plan that identifies how an organization can meet
and exceed its customers' needs. This includes, but is not limited to, assessing how
the sales, marketing and service entities work together to

• Gain insight from their customers (e.g. purchase history, Desired

products/services),

• Produce valuable offerings/products (e.g. personalized product) and

• Provide the ultimate customer experience (e.g. multiple touchpoints, 360

degree view of the customer).

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Steps can ensure that your company meets its CRM goals

Developing a CRM Roadmap involves aligning an organization's business strategy

with its prioritized CRM capabilities. For example, if a company's business
strategy is to develop products faster to gain unique market positioning, the
capabilities that the company needs to master should be aligned with that strategy,
and might include:

 Leveraging customer information from the service process (e.g.

integrating customer feedback during service calls with the
marketing department),
 Effectively managing product mix (measuring success by
campaign), and
 Effectively managing sales channel strategy (eliminating conflict
between distribution channels).

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Unit-4-SBAA3016 -RELATIONSHIP MANAGEMENT

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 UNIT 4 CRM PLANNING AND IMPLEMENTATION
Strategic CRM planning process - Implementation issues - CRM Tools- Analytical CRM -
Operational CRM - Call center management - Role of CRM Managers.

STRATEGIC CRM PLANNING PROCESS

 Defining the business objectives.
 Understanding CRM Three dimensions (people, process, IT)
 Using a structured approach to manage CRM
 Identifying both corporate and customer needs
 Using customer needs to re-engineer business processes
 Selecting technology based on business needs and functionality
 Ensuring systems development is business led
 Ensuring actionable measures of customer performance
 Actively managing culture and change, win buy in
 Using a phased implementation strategy

CRM IMPLEMENTATION
 Develop the CRM Strategy
 Build CRM Project foundations
 Need specifications and partner selection
 Project implementation
 Performance evaluation

1. Develop the CRM Strategy

 Situational analysis
 Customer or segments
 Market offering
 Channels of distribution
 Commencing the CRM education

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  Developing CRM vision
 Setting priorities
 Goals and objectives
 Identifying the people, process, and technology requirement
 Develop a business case

2. Build CRM Project foundations

 Identify stakeholders
 Establishing the governance structure
 Identify the change management needs
 Identify the project management needs
 Identifying the criteria success factors
 Developing a risk management plan

3. Need specifications and partner selection

 Process mapping and refinement
 Data reviewing and gap analysis
 Hosted or On-premise CRM
 Calling for proposals
 Invite potential partners
 Revised technology need identification
 Asset the proposals and select one or more partners

4. Project Implementation
 Refining project plan
 Identifying the technology customization needs
 Prototype design,test,modify,and roll out.

5. Performance Evaluation
 Project outcomes
 Business outcomes
 Implementation issues
 Poor planning

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  Poor Integration
 Towards a solution

CRM TOOLS

A CRM tool is techniques to

 Store customer and prospect contact information, identify sales
opportunities,
 Record service issues, and
 Manage marketing campaigns,
All in one central location and make information about every customer interaction
available to anyone at your company who might need it.
 Strategic Crm
 Technology and Implementation
 Moblie Business for the Enterprise
 Sales and Marketing
 Business Inteligence
 Customer Contact Center

ANALYTICAL CRM

1. Analytical CRM may be defined as a decision support system that is targeted to helping
senior executives ,marketing, sales and customer support personnel to better understand
and capitalize upon their customer needs, the company‗s interaction with the customer
and the customer buying cycle.
2. Analytical CRM consist of applications that enable business to analyze relevant data in
order to achieve a more meaningful and profitable interaction with the customer.
3. It uses customer data for analysis, modeling and evaluation to create a mutual
relationship between company and its customers.
4. It helps to better understanding of customer behavior.

46
 5. The analytical CRM solution enables the effective management of a customer
relationship. Analysis of customer data can a company begin to understand behaviors,
identify buying patterns and trends and discover causal relationship.

Key features of Analytical CRM

 It integrates and inheriting all this data into a central repository knowledge base with an
overall organization view.
 It combines and interacts the value of customers with strategic business management of
organization and value of stakeholders.
 It determines, develops and analyze inclusive set of rules and analytical methods to scale
and optimize relationship with customers by analyzing and resolving of all questions.

NEED OF ANALYTICAL CRM

 Customer Acquisition
 Customer Attrition(Slow Destruction)
 Time Until Attrition
 Revenue Dollar Model
 Customer Upgrade

PURPOSE OF ANALYTICAL CRM

 Design and execution of targeted marketing campaigns to optimize marketing

 effectiveness.
 Design and execution of specific customer campaigns, including customer
 acquition,cross selling, up- selling, retention.
 Analysis of customer behavior to aid product and service decision making.
 Management decisions
 Prediction of the probability of customer defection
 Analytical CRM generally makes heavy use of data mining.
 Importance of analytical CRM

47
  Make more profitable customer by providing high value services.
 Retaining profitable customer through sophisticated analysis.
 Addressing individual customer needs and efficiently improving the relationship with
 new and existing customer.
 Improves customer satisfaction and loyalty.
 Find and explore useful knowledge in large customer database.
 It helps in classifying customers, predicting customer behavior.

OPERATIONAL CRM

 OPERATIONAL CRM involves the areas where direct customer contact occurs. These
Interactions are referred to as customer touch points.
 Company maximize the process of gathering and understanding customer information
from all touch points.( eg: call centers, point of sales, web etc.)
 Touch point classification:
o Face to Face touch points: sales/service/channel/events/stores/promotions
o Database-Driven Touch-points: telephone/e-mail/mail/SMS/Fax/loyalty
cards/ATM‗s.
o Mass Media: Advertising /public relations/Website.

APPLICATION OF OPERATIONAL CRM

1. MARKETING AUTOMATION:

It is automatically focused on automating marketing processes. In marketing campaign

management involves marketers to use customer specific information to determine, evaluate and
develop communication that are targeted to customers in individual as well as multi level or
multi channel environment. Campaigns developed to communicate customers individually are
easy and involves unique and direct communication.

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 2. SALES FORCE AUTOMATION:
The main part of CRM is not only deal with existing customer. It also try to acquire new
customers also. The process starts with identification of customers, maintaining all
correspondence details into the CRM system. This process includes generation of lead and
qualifying those leads into prospects. Business people following up the customer continuously
and convert them into a winning deal. Automation of selling process is effectively handle by
salesforce automation, which automates all the methodologies or sales cycle.

3. SERVICE AUTOMATION
It deals with managing organizations service. The actual interaction with the customers such as
contact, direct sales, direct mail, call center , web sites and blogs etc. are examples of
operational CRM. Each interactions with the customer can be collected to the client database
generally known as customers history. This helps to assess a clear view of customer needs such
as products owned, prior support calls etc. Basis of the information, if e customer required the
customer can easily be contacted at the right time at the right place.

CALL CENTER

A call center is one of the best asserts a customer driven organization can have becoz
maintaining a high level of customer support is critical to obtaining and retaining customers.
Contact centers also track customer call history along with problem resolution.
 WEB BASED SELF SERVICE – This service allow customers to use the web to find
answers to their questions or solutions to their problems. Example, FedEx courier service,
Gas Booking System, E-Ticketing.
 CALL SCRIPTING – This system helps to assess organizational databases that track
similar issues or questions and automatically generate a details to the CSR (Customer
Service Representatives) who can then relay them to the customer. Example, Frequently
Asked Questions.

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CALL CENTER MANAGEMENT
A call center is a place that encourages customers to make calls in order to facilitate their easy
usage of the product/service offered by the organization. All calls from customers regarding their
queries, problems, suggestions are entertained. It consists of a group of personnel that are
specifically trained in handling inbound and outbound customer calls thus catering to customer
service needs.
A center is a place where a number of people handle the incoming as well as outgoing telephone
conversations of a varied nature with their customers. Call centers are undergoing major
development. Companies are becoming customer oriented instead of product oriented and are
investing in CRM. CRM (Customer Relationship Management ) being the customer centred
strategy of the decade and finding its roots in customer satisfaction and customer focus, has
started to play a very prominent role in the call center sector. How has it achieved this? Call
centers are finding that implementing this strategy brings them vast benefits. For example the
high potential that call center CRM software has in collecting vital customer data and storing it.
This data is entirely essential to the call center and is utilized in its day to day activities. It helps
them possess a clearer view of the customer being handled and enables them to give the right
answers to customer queries, problems etc. Knowing the customer, his preferences, his purchase
history etc all contribute significantly to the better handling of the customer.

A few features available in this system.

 Automatic call distribution
 Interactive voice response ( IVR) – Cellular Service,#1,#2,#3,#9.
 Predictive Dialing.

CLASSIFICATION OF CALL CENTERS

1. Inbound / Outbound
2. International / Domestic
3. In-house / Out-Sourced

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THE BEST CALL CENTER CRM

Customer relationship management (CRM) software for call centers offers telephonic features
for tracking and making business calls in addition to tools for contact and lead management.
 Fresh sales: Best overall for businesses that want the essential calling features for sales
enablement combined with an easy-to-use, customizable CRM.
 Nextiva: Great choice for companies that want robust call center automation tools.
 Zoho CRM: Ideal option for small businesses looking for a low-cost, operational CRM
with call center options.
 Agile CRM: Best for teams that use multiple channels and applications to communicate
with customers.
 Bitrix24: Suitable for businesses that want call center features combined with project
management tools.
 Voicent: Excellent choice for companies looking for advanced call center features.

ROLE OF CRM MANAGERS

Role of CRM manager in planning and implementation
 Developing CRM Programs
 Direction
 Listening
 Conflict resolution
 Positive image
 Follow through
 Administrative duties
 Coaching sessions
 Customer interaction
 Communication
 Reporting to senior management

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Responsibilities:
1. Measurable increase in customer satisfaction measures
 Maintain or increase recurring revenue from their customers
 Develop/maintain referenceable customers
 Decrease in Executive level escalations from assigned customers.
2. Acts as Customer Advocate within the organization
 Develops in-depth knowledge of the customer's goals and strategy as it relates to the
product/service being used, assists the customer in reaching those goals, and
communicates those goals internally to help drive product/service decisions.
 A single contact/escalation point for cross product/cross functional issues
 Holds customer accountable for maintaining contracted levels of training/staffing/etc.

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Unit-5 -SBAA3016 -RELATIONSHIP MANAGEMENT

53
 UNIT 5 TRENDS IN CRM

e- CRM Solutions - Data Warehousing - Data mining for CRM - an introduction to CRM
software packages.

E-CRM INTRODUCTION

E- CRM is the electronic based version of CRM. The user of an E- CRM solution
uses the sources of the internet to increase the relationship with the customer.
E-CRM provides a company to conduct interactive, personalized and relevant
communication across the globe with their customers by utilizing both the
traditional and electronic channels.
It adheres to permission based practices, respecting individual's preferences
regarding how and whether they wish to communicate with you; and
It focuses on the understanding how the economics of the customers relationships
affects the business.
 Web based CRM can easily handle the relationships between
 Central sales management,
 Regional sales office,
 Customer care,
 Sales,
 Sales distribution,
 Regional sales team etc.

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 E-CRM

 E-CRM (Electronic Customer Relationship Management) expands the traditional CRM

techniques by integrating new electronic channels, such as
 Web,
 wireless, and
 voice technologies and combines it with e-business applications into the overall
enterprise CRM strategy.
 His goal is to drive consistency within all channels related to sales, customer service and
marketing initiatives to achieve a flawless customer experience and maximize customer
satisfaction, customer loyalty and revenue.
 Therefore, it is just an expanded, integrated version of CRM.

GOALS OF E-CRM

 Reduce :
o Costs of marketing.
 Improve :

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 o Accuracy and relevance of recommendations.
o Customer satisfaction.
 Increase :
o Conversion rate, i.e., Turn surfers into buyers.
o Customer retention.
o Order size.
o Customer response.
o Competitiveness through differentiation.
o Profitability

MODEL OF E- CRM

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DIFFERENCE BETWEEN CRM AND E-CRM

DATA WAREHOUSING
 Data Warehouse is the extension of database
 Data warehouse is the main repository of customer‗s data
 Data in the data warehouse are processed (i.e., EFL) therefore is more integrated and
consistent.
 While the information in the database tends to be real-time, the information in the data
warehouse can be updated regularly.
 While database focuses on automating the process of collecting and customers
information, data warehouse looks more at assisting managers in performing more
advanced analysis and thus making better decisions.

What is Data warehousing?

A series of analytical tools works with data stored in databases to find patterns and insights for
helping managers and employees make better decisions to improve organizational performance.

57
  A data warehouse is a database, which is kept separate from the organization's
operational database.
 There is no frequent updating done in a data warehouse.
 It possesses consolidated historical data, which helps the organization to analyse its
business.
 A data warehouse helps executives to organize, understand, and use their data to take
strategic decisions.
 Data warehouse systems help in the integration of diversity of application systems.
 A data warehouse system helps in consolidated historical data analysis.

Date Warehouse

FEATURES OF DATAWAREHOUSE
The key features of a data warehouse are discussed below:
 Subject Oriented - A data warehouse is subject oriented because it provides information
around a subject rather than the organization's on going operations. These subjects can be
product, customers, suppliers, sales, revenue, etc.

58
  Integrated – A data warehouse is constructed by integrating data from heterogeneous
sources such as relational databases, flat files, etc. This integration enhances the effective
analysis of data.
 Time Variant - The data collected in a data warehouse is identified with a particular time
period. The data in a data warehouse provides information from the historical point of
view.
 Non-volatile - Non-volatile means the previous data is not erased when new data is added
to it. A data warehouse is kept separate from the operational database and therefore
frequent changes in operational database is not reflected in the data warehouse.

APPLICATIONS OF DATAWAREHOUSE
 Data warehouse helps business executives to organize, analyse, and use their data for
decision making.
 Data warehouses are widely used in the following fields:
 Financial services
 Banking services
 Consumer goods
 Retail sectors
 Controlled manufacturing

CONCEPT OF DATA WAREHOUSE

A data warehouse is constructed by integrating data from multiple heterogeneous sources that support
analytical reporting, structured and/or ad hoc queries, and decision making.

Data warehousing involves

 Data cleaning,
 Data integration, and
 Data consolidations.

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USING DATA WAREHOUSE INFORMATION
There are decision support technologies that help utilize the data available in a data warehouse.
These technologies help executives to use the warehouse quickly and effectively. They can
gather data, analyse it, and take decisions based on the information present in the warehouse. The
information gathered in a warehouse can be used in any of the following domains:
Tuning Production Strategies - The product strategies can be well tuned by repositioning the
products and managing the product portfolios by comparing the sales quarterly or yearly.
Customer Analysis - Customer analysis is done by analysing the customer's buying preferences,
buying time, budget cycles, etc.
Operations Analysis - Data warehousing also helps in customer relationship management, and
making environmental corrections. The information also allows us to analyse business
operations.

DATA MARTS
DATA MARTS
 Companies often build enterprise-wide data warehouses, where a central data warehouse
serves the entire organization, or they create smaller, decentralized warehouses called
data marts.
 A data mart is a subset of a data warehouse in which a summarized or highly focused
portion of the customers data is placed in a separate database for a specific population of
users.
 For example, a company might develop marketing and sales data marts to deal with
customer info.
 A data mart typically focuses on a single subject area or line of business, so it usually
can be constructed more rapidly and at lower cost than an enterprise-wide data
warehouse.
 However, complexity, costs, and management problems will rise if an organization
creates too many data marts.
 Sourcing, Acquisition, Cleanup and Transformation Tools.
The functionality includes:

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  Removing unwanted data from operational databases
 Converting to common data names and definitions
 Calculating summaries and derived data
 Establishing defaults for missing data
 Accommodating source data definition changes

 The data sourcing, cleanup, extract, transformation and migration tools have to deal with
some significant issues, as follows:
– Database heterogeneity.
– Data heterogeneity
METADATA
 Metadata is data about data that describes the data warehouse.
 It is used for building, maintaining, managing, and using the data warehouse.
 Metadata can be classified into the following:
o Technical metadata
o Business metadata
o Data warehouse operational information such as data history (snapshots,
versions), ownership, extract audit trail, usage data

 The non-trivial extraction of novel, implicit, and actionable knowledge from large
datasets.
– Extremely large datasets
– Discovery of the non-obvious
– Useful knowledge that can improve processes
– Cannot be done manually
 Technology to enable data exploration, data analysis, and data visualization of
very large
 Databases at a high level of abstraction, without a specific hypothesis in mind.
 Sophisticated data search capability that uses statistical algorithms to discover
patterns and correlations in data.
 Data Mining is a step of Knowledge Discovery in Databases (KDD) Process

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 o Data Warehousing
o Data Selection
o Data Preprocessing
o Data Transformation
o Data Mining
o Interpretation/Evaluation

 Data Mining is sometimes referred to as KDD and DM and KDD tend to be used as
synonyms
 Data Mining Evaluation
 Data Mining is Not.
 Data warehousing
 SQL / Ad Hoc Queries / Reporting
 Software Agents
 Online Analytical Processing (OLAP)
 Data Visualization
 Data Mining Applications

DATA MINING FOR CRM

 Data mining is becoming a fundamental component of the global business infrastructure

that assists the firm in the decision making process and helps them capture the
multifaceted aspects of the new economy.
 The process of extracting knowledge from data and information stored in databases, data
warehouses, and other repositories. This process is called data mining.
 Data mining (knowledge discovery from data)
 Extraction of interesting (non-trivial, implicit, previously unknown and
potentially useful) patterns or knowledge from huge amount of data
 Data mining: a misnomer?
 Alternative names
 Knowledge discovery (mining) in databases (KDD), knowledge extraction,
data/pattern analysis, data archeology, data dredging, information harvesting,
business intelligence, etc.

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The interaction of three entities of Data Mining

Scientific
Knowledge

Business Information
Community Technology

SCIENTIFIC KNOWLEDGE
A body of scientific knowledge accumulated through decades of forming well established
disciplines such statistics, machine learning and artificial intelligence.
INFORMATION TECHNOLOGY
A technology evolving from high volume transaction systems, data warehouses and internet.
BUSINESS COMMUNITY
A business community forced by an intensive competitive environment to innovate and integrate
new ideas, concepts and tools to improve operations and DM quality

AN INTRODUCTION TO CRM PACKAGES

Organizations expect a lot from today‗s Enterprise Applications Systems - and rightly so. The
market trends have been driving this and the environment which is influencing the scenario of
single ERP vendor, less customization, more frequent upgrades, integrated modules, web

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services, vendor consolidation and outsourced support and hosting etc. Our solutions revolve
around the Organizations requirements to:
 Standardize processes and Domain-specific Customizations
 Integrated Operations and Application Management, Integrated Helpdesk and
infrastructure services
 De risk through discrete application outsourcing
 Reporting and analysis of business performance
 An introduction to CRM packages
 Our Enterprise Resource Planning Solutions, extend to all realms of business
 Forecasting and Budgeting
 Post Mergers and Acquisition IT integration
 Financial Reporting and Analysis

 Governance and Compliance

 Risk Management

 Accounts Receivable and Dispute Management Process

 We take cognizance of the following areas of concern while proposing an ERP

implementation solution to our customers

Name of the CRM Software Packages

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ORACLE

 Oracle is the leader in the CRM field. The company currently offers 50 CRM
applications that are able to provide for all the customer service requirements of small,
medium and large industries.
 Oracle provides CRM applications that aid the organization through improved business
processes. What does Oracle have to offer? The answer is accurate information. In
addition to that the functionality it offers is just as important.
 It manages to provide excellent support for all departments within the organization like
customer support and added services .

SAP

SAP was established in 1972 and is now a leader in the provision of business solutions for all
types of industries. It is a CRM software vendor that caters to businesses worldwide and
currently serves more than 32,000 customers. SAP has a presence in more than 50 countries. It is

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the world's largest business software company. It is the world's third-largest independent
software provider overall and employs more than 35,000 people. They are able to provide
excellent customer service and support. It boasts of having the Knowledge, Experience, and
Technology that is needed to optimize Business efficiency. It manages to provide a range of
solutions that cater to every aspect of the business.

The benefits from SAP are:

 Better efficiency
 Cost reduction
 Better performance
 Adaptability to business environment
 Overall Growth
 SAP
 SAP offers several solutions for Customer Relationship Management and is able to
deliver customer-centric solutions that revolve around each customer. It helps the
organization to support the various departments like marketing, sales, and service and
provides them with good analytics as well as excellent interaction capabilities.
SAP CRM supports the customer-related processes and deals with all customer-related activities
across all departments. It sources and gathers together all customer data in the organization in
order to facilitate better decisions. It enables company's address their business needs adequately,
manages to achi`eve the business objectives and reaps the required return on investment.

E-COMMERCE

 Fingent provides Full lifecycle IT services for ecommerce and e-business to address
supply side and buy side needs of retailers and consumer product manufacturers. Our
eCommerce CoE has capabilities in providing SOA based integrated back end e-
Business solutions, Web 2.0 technologies and creating a multichannel buying experience
through a robust Multichannel framework.
 E-Commerce Functional components: Order Management, Catalog Transaction
Reporting, Business Intelligence
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  B2C: Personalization, Live Chat, Community, email Marketing Social Networking
 B2B: Collaboration, Product Information Management, Customer Web Store, Promotions
Management
 Design & Blue Print, Application Development & Integration, Application Management,
 User Interface & Web site Response time optimization Infrastructure: 24x7 support,
Managed hosting services, PCI compliance.

References
1. Bull, C. (2003). Strategic issues in customer relationship management (CRM)
implementation. Business process management Journal.
2. Kotorov, R. (2003). Customer relationship management: strategic lessons and future
directions. Business Process Management Journal.
3. Campbell, A. J. (2003). Creating customer knowledge competence: managing customer
relationship management programs strategically. Industrial marketing management, 32(5), 375-
383.
4. Singh, H. (2006). The importance of customer satisfaction in relation to customer loyalty and
retention. Academy of Marketing Science, 60(193-225), 46.

5. Payne, A., & Frow, P. (2005). A strategic framework for customer relationship
management. Journal of marketing, 69(4), 167-176.

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