UNIT 5

CUSTOMER RELATIONSHIP MANAGEMENT

INTRODUCTION

 Meaning of CRM:-
 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.
 In simple words, CRM refers to the study of needs & expectations of the
customers and providing them the right solution.
 CRM refers to all strategies, software & technologies used by organizations for
engaging, acquiring & retaining customers.

 Importance/ Advantages/ benefits of CRM:-

1) Better Knowledge of Customers
2) Retain More Customers
3) Better Segmentation
4) Minimizes Cost
5) Better Internal Communication
6) Improves Customer Relations
7) Increase Revenue
8) Better Customer Service.

 Meaning of Relationship:-
 Relationship refers to a state of connection and association between two parties.
 A relationship is the way two or more people are connected, or the way they
behave towards each other.
 In business relationship exists b/w two or more parties (the organization &
customer) & they move from a state of independence to dependence or
interdependence.

 Meaning of Relationship Marketing:-

 Relationship marketing is a part of CRM that focuses on customer loyalty and
long- term customer engagement rather them, shorter- term goals like customer
acquisition and individual sales.
  The term was introduced in 1983 by leopard berry in the context of service
marketing, focused on longer-term relationship with customers.
 The goal of relationship marketing is to create strong, even emotional, customer
connections to a brand.

 Advantages/importance of relationship marketing:-

1) Long-term customer retention.
2) Increase in sales volume
3) Gain a competitive advantage
4) Low advertisement cost
5) Creates brand image
6) Provides sustainability

 Disadvantages/limitations of relationship marketing:-

1) Over expenditure
2) May lead to negative campaigns
3) Missing out new opportunities
4) Time consuming

 Levels or types of relationship marketing:-

1) Basic marketing :- Basic marketing is the initial phase of relationship marketing
which is concerned with acquiring clients and providing them guidance
throughout the sale journey.
EX:- basic level of relations by Walmart, Nike basic ads, daily discount stores
etc.
2) Reactive marketing:- It is the second step where company receive response i.e
feedback from customers past making sales.
EX:- E-mail by Starbucks to their customers showing appreciation & informing
about new offers.
3) Accountable marketing:- this step is expanded version of reactive marketing.
Here company tries to contact with customers in order to take their suggestions
which guides business in improving their experience level.
EX:- apple practices this by offering training & awareness on health &
environmental concerns with their customers.
 4) Proactive marketing:- It is a stage where business make efforts to enhance the
quality of their products & service . companies after taking suggestions from
customers work on them in order to provide them the best possible experience.
EX:- pre- approved loan offers by banks to its customers.
5) Partnership marketing:- this stage also makes efforts to improve customer
experience similar to proactive marketing business tries to collaborate with
another business in order to improve their services .
EX:- GoPro & Red Bull.

 Evolution of Relationship Marketing:-

 Pre-Industrial Age:- refers to time period in which there were one to one
relationship b/w producers & customers.
 Industrial Age:- refers to time period when focus shifted from one to one to
mass production.
At this time producers were more concerned about reducing per unit cost by
producing a large volume i.e the relationship in this age were based on cost
advantage.
 Service Economy Age :- refers to an era when produce were combined with
intangibles to satisfy the needs & wants of customers.
In this phase, producers were focused on creating value for customers by
providing them additional benefits.
 Knowledge Economy Age :- refers to a period when a relationship b/w
producers & consumers were based on mutual collaboration of knowledge.

 Transactional Marketing :-
1) It is a business strategy that focuses on single, “point of sale” transactions.
2) The emphasis is on maximizing the efficiency & volume of individual sales
rather than developing a relationship with the customer.
 3) It follows the four traditional elements of marketing : product ,pricing,
placement & promotion often know as the 4P,s which means business focus on
providing customer with high- quality products at attractive prices.

 Difference b/w transactional marketing & relationship marketing

Basis for Transactional marketing Relationship marketing

comparison
1) Meaning Transactional marketing Relationship marketing is
is a business strategy an aspect of CRM which
maximize sales focuses on customer
efficiency by increasing loyalty & long – term
the volume of individual customer engagement.
sales.
2) Focus Individual sales Retaining customers.
3) Orientation Product essential roots Product advantages
business resolution.
4) Time boundary Short- term Long- term
5) Focus on customer Comparatively low Focus on building a
connection with customer
6) Promotional Discounts, incentives Reward system ,loyalty
methods etc. programs, exceptional
customer service.
7) Degree of Mutual Generally Low Generally high
dependence
8) Production Focus Mass Production Mass Customization

 Process of relationship management:-

Target Right Audience

Analyze the needs of the targeted customers

Place the product

 Promote the product stressing on the key wants & benefits for the target customers

Provide prompt after sales service & receive customer feedback

Stay in touch with customers and subtly promote repeat purchase.

Innovate products as per the needs of customers.

 Managing Customer Profiles is a crucial aspect of customer relationship

management (CRM) and is vital for providing personalized and efficient services.
Here are some key steps and considerations for managing customer profiles:

Data Collection:

Collect relevant information: Gather essential customer information such as contact

details, purchase history, preferences, and any other data that can help in understanding their
needs.
Centralized Database:

Use a centralized system: Store customer information in a secure and centralized

database. This ensures that all relevant departments and employees have access to the most
up-to-date and accurate information.
Data Security:

Prioritize data security: Implement robust security measures to protect customer data.
Ensure compliance with data protection regulations such as GDPR, HIPAA, or any other
applicable laws.
Segmentation:

Segment your customer base: Divide customers into segments based on

demographics, buying behavior, or other relevant criteria. This allows for targeted marketing
and personalized communication.
Customer Preferences:
 Record customer preferences: Document customer preferences, such as
communication channels, product preferences, and frequency of interactions. Use this
information to tailor your approach to each customer.
Communication History:

Maintain communication history: Keep a record of all interactions with customers,

including purchases, inquiries, and support requests. This helps in understanding the
customer's journey and provides context for future interactions.
Automation:

Use automation tools: Implement CRM software or other automation tools to

streamline the process of managing customer profiles. Automation can help in data entry,
follow-ups, and maintaining consistency across interactions.
Regular Updates:

Keep profiles up to date: Encourage customers to update their profiles regularly,

especially if there are changes in their contact information or preferences. This ensures that
your data remains accurate.
Customer Feedback:

Gather feedback: Actively seek feedback from customers regarding their experiences
with your products or services. Use this feedback to improve your offerings and tailor your
approach to better meet customer expectations.
Personalization:

Leverage customer data for personalization: Use the gathered information to provide
personalized experiences, such as targeted marketing campaigns, product recommendations,
and customized communications.
Analytics:

Utilize analytics: Analyze customer data to identify trends, predict future behaviors,
and make informed business decisions. Analytics can help in understanding what works well
and what needs improvement.
Training and Education:
 Train your team: Ensure that your team is trained on the importance of managing
customer profiles and understands the tools and processes in place for effective customer
relationship management.

 Choosing a Customer Relationship Management (CRM) strategy is a crucial

decision for businesses looking to enhance customer interactions, improve efficiency,
and drive growth. Here are key steps and considerations for selecting a CRM strategy:

Define Objectives:

Clearly outline your objectives: Identify the specific goals you want to achieve with CRM.
This could include improving customer satisfaction, increasing sales, streamlining processes,
or enhancing marketing effectiveness.
Understand Your Customer Base:

Know your customers: Understand your target audience and their needs. Tailor your CRM
strategy to align with the preferences and behaviors of your customer base.
Choose the Right CRM Type:

Select the most suitable CRM type: There are various types of CRM systems, including
operational, analytical, and collaborative CRM. Choose the type that best aligns with your
business goals and requirements.
Cloud vs. On-Premises:

Decide on deployment: Choose between cloud-based CRM and on-premises solutions. Cloud
CRM offers flexibility and scalability, while on-premises solutions provide greater control
over data but may require more upfront investment.
Integration with Existing Systems:

Consider integration capabilities: Ensure that the CRM system integrates seamlessly with
your existing tools and systems, such as ERP, marketing automation, and customer support
platforms.
User-Friendly Interface:
Prioritize usability: Select a CRM solution with an intuitive and user-friendly interface. User
adoption is critical for the success of the CRM strategy, so make sure it is easy for your team
to use.
Mobile Accessibility:

Opt for mobile compatibility: In today's mobile-centric world, choose a CRM system that
offers mobile accessibility. This allows your team to access customer information on the go,
fostering better communication and responsiveness.
Scalability:

Plan for scalability: Consider the scalability of the CRM solution. Ensure that it can grow
with your business and accommodate increased data, users, and functionality as your needs
evolve.
Customization:

Look for customization options: Select a CRM system that allows for customization to meet
the unique needs of your business. This may include custom fields, workflows, and reporting.
Data Security and Compliance:

Prioritize data security: Choose a CRM system that prioritizes data security and compliance
with relevant regulations. This is crucial for protecting customer information and maintaining
trust.
Training and Support:

Assess training and support options: Evaluate the training and support services offered by the
CRM provider. Adequate training ensures that your team can effectively use the CRM
system, and responsive support is essential for troubleshooting issues.
Cost Considerations:

Evaluate total cost of ownership: Consider not only the initial costs but also ongoing
expenses, such as subscription fees, customization, and training. Assess the ROI to determine
the value the CRM system brings to your business.
Feedback from Stakeholders:
Involve key stakeholders: Get input from different departments and team members who will
be using the CRM system. Their insights can provide valuable perspectives on the features
and functionalities needed.
Continuous Improvement:

Plan for continuous improvement: CRM is an ongoing process. Develop a strategy for
continuous improvement based on feedback, changing business needs, and technological
advancements.

 Tools For Capturing Customer Information

There are various tools available for capturing and managing customer information
effectively. The choice of tools depends on your specific business needs, the type of
information you want to capture, and your overall customer relationship management (CRM)
strategy. Here are some commonly used tools:

Customer Relationship Management (CRM) Software:

Examples: Salesforce, HubSpot, Zoho CRM, Microsoft Dynamics

CRM software is designed specifically for managing customer information. It allows you to
centralize customer data, track interactions, and analyze customer behavior. These platforms
often offer customization options to tailor the system to your business needs.
Marketing Automation Platforms:

Examples: Marketo, Mailchimp, HubSpot Marketing Hub

Marketing automation tools help capture customer information through various channels.
They often include features like lead capture forms, email marketing, and analytics to track
customer engagement.
Customer Data Platforms (CDP):

Examples: Segment, Tealium, BlueConic

CDPs collect and unify customer data from various sources, providing a comprehensive view
of customer profiles. They are particularly useful for businesses with data spread across
different systems.
Survey and Feedback Tools:

Examples: SurveyMonkey, Typeform, Google Forms

Use survey tools to gather feedback directly from customers. These tools can help you
understand customer satisfaction, preferences, and areas for improvement.
Web Analytics Tools:
Examples: Google Analytics, Adobe Analytics, Mixpanel
Web analytics tools track customer behavior on your website, providing insights into how
customers interact with your online platforms. This includes data on page views, clicks, and
other user actions.
Customer Support Software:

Examples: Zendesk, Freshdesk, Intercom

Customer support platforms not only manage customer service interactions but also capture
valuable information about customer issues, inquiries, and resolutions.
Social Media Monitoring Tools:

Examples: Hootsuite, Buffer, Sprout Social

Social media monitoring tools help track and analyze customer interactions on social media
platforms. They capture mentions, comments, and messages, providing insights into customer
sentiment.
Form Builder Tools:

Examples: Wufoo, JotForm, Formstack

Form builders enable you to create customized forms for lead generation, customer feedback,
or any other data collection needs. These forms can be embedded on your website or shared
through various channels.
Email Marketing Platforms:

Examples: Mailchimp, Constant Contact, Sendinblue

Email marketing tools not only facilitate email campaigns but also capture information
through subscription forms and customer interactions with email content.
E-commerce Platforms:

Examples: Shopify, WooCommerce, Magento

If you run an e-commerce business, your platform likely includes features for capturing
customer information during the purchasing process, tracking order history, and managing
customer accounts.
Mobile Apps:

Examples: Custom-developed apps, Firebase, Mobile analytics SDKs

If your business has a mobile presence, mobile apps can capture valuable customer
information. Analytics SDKs help track user behavior within mobile applications.