Customer Relationship

Management
(Project: June 2019)

Submitted By:-
Aman Jhabbarmal Dugar (77117921769)

SVKM's Narsee Monjee Institute of Management Studies

NMIMS (Deemed to be University)
V. L. Mehta Road, Vile Parle, West , Mumbai, Maharashtra, India, Pin Code - 400056
Contact : +91-22-42355555
Email ID : [email protected] Website: www.nmims.edu
 Acknowledgement

“There is no such thing as a self made man, we all

are made up thousands of others”
– George Adams.
 INDEX
Sr No. Particulars
1. Introduction to Customer Relationship Management
2. History of Customer Relationship Management
3. Aims to Customer Relationship Management
4. Why Customer Relationship Management?
5. Objective of Customer Relationship Management
6. Purpose of Customer Relationship Management
7. Importance of Customer Relationship Management
8. Ways to Keep Customers for Life
9. Components of Customer Relationship Management
10. Types of Customer Relationship Management Technology
11. Steps in Customer Relationship Management in the company
12. Significance of the Customer Relationship Management
13. Implementing Customer Relationship Management
14. Architecture of Customer Relationship Management
15. Pitfalls to avoid
16. Effects on Customer Satisfaction
17. Improving Customer Relationship Management within a firm
18. Phases of Customer Relationship Management
19. Improve Customer Retention
20. Elements of Customer Relationship Management
21. Customer Relationship Management Software Tools
22. Building Relationships With Customers
23. Customer Relationship Management in Practice
24. Impact of Customer Relationship Management on Business
Introduction to Customer Relationship
Management

“Customer Relationship Management is an approach

to manage a company's interaction with current and
potential customers. It uses data analysis about
customers' history with a company to improve
business relationships with customers, specifically
focusing on customer retention and ultimately
driving sales growth.”
First of all this title is a combination of three important things
of any company i.e. “Customer” “Relationship”
“Management”.
 Customer: A customer is an individual or business that purchases the
goods or services produced by a business. Attracting customers is the
primary goal of most public-facing businesses, because it is
the customer who creates demand for goods and services.
 Relationship: The concept of "relationships and family" is broad and
varies from person to person. In our model,
personal relationships refer to close connections between people,
formed by emotional bonds and interactions. These bonds often
grow from and are strengthened by mutual experiences.
 Management: The organization and coordination of the activities of a
business in order to achieve defined objectives. Management
consists of the interlocking functions of creating corporate policy and
organizing, planning, controlling, and directing an organization's
resources in order to achieve the objectives of that policy.
 The two important aspects of Customer Relationship
Management is Customer and Supplier

Customer Supplier
 A customer is an individual or  A Supplier is the one whose
business that purchases the goods work is to provide the good or
or services produced by a business. service required by the business.
 Customer do business for there  Supplier do business as per the
own satisfaction of needs and demand of any other supplier.
wants.
 Customer is the last person of  Supplier is the middle man in
the full supply chain. the full supply chain.
Customer buy product for  Supplier buy product from
consumption from retailer. manufacturer for the business or
trade purpose.
 History of Customer Relationship
Management
Customer Relationship Management (CRM) is one of those magnificent
concepts that swept the business world in the 1990’s with the promise
of forever changing the way businesses small and large interacted with
their customer bases. In the short term, however, it proved to be an
unwieldy process that was better in theory than in practice for a variety
of reasons. First among these was that it was simply so difficult and
expensive to track and keep the high volume of records needed
accurately and constantly update them.
In the last several years, however, newer software systems and
advanced tracking features have vastly improved CRM capabilities and
the real promise of CRM is becoming a reality. As the price of newer,
more customizable Internet solutions have hit the market place;
competition has driven the prices down so that even relatively small
businesses are reaping the benefits of some custom CRM programs.
In recent years however, several factors have contributed to therapid
development and evolution of CRM. These include: -
 The growing de-intermediation process in many industries due to
the advent of sophisticated computer and telecommunication
technologies that allow producers to directly interact with end
customers.
 Advances in information technology, networking and manufacturing
technology have helped companies to quickly match competition.
As a result product quality and cost are no longer significant
competitive advantages.
 The growth in service economy. Since services are typically produced
and delivered at the same institution, it minimizes the role of the
middlemen.
 Customer expectations are changing almost on a daily basis.
Newly empowered customers, who choose, how to communicate
with the companies’ various available channels. Also nowadays
consumers expect a high degree of personalization.
 Emerging real time, interactive channels including e-mail, ATMs and
call centre that must be synchronized with customer’s non-electronic
activities. The speed of business change, requiring flexibility and
rapid adoption to technologies.
 In the current era of hyper competition, marketers are forced to be
more concerned with customer retention and customer loyalty.
 As several researches have found out retaining customers is less
expensive and more sustainable competitive advantage than
acquiring new ones.
 On the supply side it pays more to develop closer relationships with a
few suppliers than to develop more vendors.
 The globalization of world marketplace makes it necessary to have
global account management for the customers.
 Aims of Customer Relationship Management

The Customer Relationship Management is a new technique in marketing

where the marketer tries to develop long term relationship with the customers
to develop them as life time customers. CRM aims to make the customer climb
up the ladder of loyalty.
The company first tries to determine who are likely prospects i.e. the people
who have a strong potential interest in the product and ability to pay for it. The
company hopes to convert many of its qualified prospect into first time
customers and then to convert those first time customers into repeat
customers. Advocates are those clients who praise the company and
encourage others to buy from it.
The ultimate challenge is to convert these advocates into partners where the
customers and the clients work actively together to discover ways of getting
mutual benefit.
In CRM the company tries to identify that small percentage (20%) of key
account holders who’s contribution to the company revenues is high (80%). So
from this point of view, CRM is also known as KEY ACCOUNT MANAGEMENT.
 Why Customer Relationship Management?
 A satisfied customer in 10 years will bring 100 more customers to the
company.
 It costs 7 time more to attract a new customer than to serve an old
one.
 20% of the company’s loyal customers account for 80% of its
revenues. (Pareto’s principle).
 The chances of selling to an existing customer are 1 in 2, the chances
of selling to a new customer are 1 in 16.
 Objective of Customer Relationship
Management
Turning prospects into advocates

Minimizing defections

Having a large proportion of loyal advocates

Having a profitable relationship of the type the

customers would desire and with those who desire
them.

Using cross selling opportunities without annoying

customers.
 Turning prospects into advocates: The service marketers should identify and qualify
prospects. Customer forms the basis on which all strategic activities should be built.
The service company should convert prospects into customers. CRM uses the inputs of
customer database of the company extensively. The company has to select prospective
customers and identify the customer groups. Then, it should convert the customers
gradually into advocates. Needless to say, satisfied customers recommend the use of
services to their friends and relatives.
 Minimizing defections: One of the important objectives of CRM is minimizing
customer defections. CRM defines customer defections and determines the exact rate
of customer defection. The following examples illustrate how customer defections
occur.
a. Customers are attracted to competitors due to their lower prices. The cell phone
and airlines industries experience customer defections very frequently due to
lower prices.
b. A regular internet user may change his or her regular cybercafé for faster browsing
speed.
c. When a hotel or a restaurant serves a customer poorly, he may shift to another
one.
d. Customers may move from one city to another or one locality to another and
change their banks to the nearest available branch.
 Having a large proportion of loyal advocates: A customer goes through stages in his
relationship with a brand. He may finally reach the advocate stage where he actively
canvasses for a brand. The service firm should try to convert its good customers into
advocates, who in turn, would become the ambassadors of the brand. This follows
from the first objective and should result in a large number of loyal customers. Loyal
customers have an increased level of commitment to a brand. The marketing cost for
loyal customers is minimum. The referrals (advocates) give positive word of mouth
recommendations to other potential customers. Such recommendations reduce the
cost of serving them when they repurchase from the service provider.

 Having profitable relationship: Customers vary in attitude and behavior. In a

competitive market place, customers are exposed to hundreds of selling messages.
Customers have limited ability to process information. A number of constraints
influences their decision making. Every sale is the result of complex interaction with
customers. So, building strong casual relationship with customers is very important.
The CRM strategy maintains an ideal relationship without giving an impression to
customers that their privacy is being invaded.

 Using cross selling opportunities without annoying customers: Customers can be

groomed for purchasing not one product of the company but for a series of products
from the same organization. Credit facility may be provided to customers to buy other
service products of the same service provider.
CRM, in its broadest sense, means managing all interactions and
business with customers. This includes, but is not limited to, improving
customer service. A good CRM program will allow a business to acquire
customers, service the customer, increase the value of the customer to
the company, retain good customers, and determine which customers
can be retained or given a higher level of service. A good CRM program
can improve customer service by facilitating communication in several
ways:
 Provide product information, product use information, and technical
assistance on web sites that are accessible 24 hours a day, 7 days a
week.
 Identify how each individual customer defines quality, and then
design a service strategy for each customer based on these individual
requirements and expectations.
 Provide a fast mechanism for managing and scheduling follow-up
sales calls to assess post purchase cognitive dissonance, repurchase
probabilities, repurchase times, and repurchase frequencies.
 Provide a mechanism to track all points of contact between a
customer and the company, and do it in an integrated way so that all
sources and types of contact are included, and all users of the system
see the same view of the customer (reduces confusion).
 Help to identify potential problems quickly, before customer occur.
 Provide a user-friendly mechanism for registering customer
complaints (complaints that are not registered with the company can
not be resolved, and are a major source of customer dissatisfaction).
 Provide a fast mechanism for handling problems and complaints
(complaints that are resolved quickly can increase customer
satisfaction).
 Provide a fast mechanism for correcting service deficiencies (correct
the problem before other customers experience the same
dissatisfaction).
 Use internet cookies to track customer interests and personalize
product offerings accordingly.
 Purpose of Customer Relationship
Management
 Customer Segmentation: For CRM to be effective, the organization’s
customer base must be stratified into segments based on commonalities
amongst groups’ of individuals and customers. This also requires the
organization to have strategies to target consolidated customer
segments.
 Reduced Cost of Service: A customer relationship strategy should
reduce the cost of service for both the organization and it’s customers
and increase satisfaction levels.
 Service as a differentiator: The more competitive a market becomes the
more a business will need to rely on its superior product quality and
quality of service to differentiate itself from other businesses and
providers.
 Tie-in’s over time: The greater the effort a customer spends on a
relationship over time, the greater the customer’s stake in helping to
ensure that the relationship works and the more convenient and loyal
the customer becomes.
Importance of Customer Relationship
Management
Before getting to the importance of CRM let us ensure you understood
the importance of customer relationship management. Maintaining
healthy and productive customer relationship is the best way to ensure
a bright future for the business. Customer relationship management is
important because:
 Creating a bond with the existing customers ensures that you won’t
have to work on getting them again like new traffic.
 Having a bond with customers increases the chance of them making
numerous purchases so a bulk of that first-time buyers is not limited to
just that before perishing.
 When you make your customers feel welcome even after the purchase,
they too start feeling some loyalty towards your brand.
 Since the brand image is already created before all this even begins,
customers will have something to relate to or look up to when they
make multiple purchases.
 When you maintain a strong bond letting the customers know they are
valued, the customers become your friend.
 With prolonged good customer relationship management, customers
feel obliged or happy to advocate your brand to others and that’s how
your business rises to success and permanence.
 Ways to Keep Customers for Life
 Every part of the company’s marketing effort should be geared
towards building lifetime relationships.
 People want to do business with friendly people. To have effective
relations a friendly attitude must permeate in the organization.
 Information technology developments should be positively used to
serve the customers.
 The company should always be flexible to bend its rules and
procedures in the client’s favor.
 The company should communicate with its customers even when
it is not trying to sell something.
 The company can communicate and develop stronger customer
bonding by providing financial and social benefits.
 The company should try to know all its customers including their
lifestyles, hobbies, likes and dislikes etc.
 The company should make it a point to deliver more than what is
promised.
 Components of Customer Relationship
Management
The main components of Customer Relationship Management are
building and managing customer relationships through marketing,
observing relationships as they mature through distinct phases,
managing these relationships at each stage and recognizing that the
distribution of value of a relationship to the firm is not homogeneous.
When building and managing customer relationships through
marketing, firms might benefit from using a variety of tools to help
organizational design, incentive schemes, customer structures, and
more to optimize the reach of its marketing campaigns. Through the
acknowledgement of the distinct phases of CRM, businesses will be able
to benefit from seeing the interaction of multiple relationships as
connected transactions. The final factor of CRM highlights the
importance of CRM through accounting for the profitability of customer
relationships.
Over time, many additional functions have been added to CRM systems
to make them more useful. Some of these functions include recording
various customer interactions over email, phone, social media or other
channels; depending on system capabilities, automating various
workflow automation processes, such as tasks, calendars and alerts; and
giving managers the ability to track performance and productivity based
on information logged within the system.
 Marketing automation: CRM tools with marketing automation
capabilities can automate repetitive tasks to enhance marketing
efforts at different points in the lifecycle. For example, as sales
prospects come into the system, it might automatically send the
prospects marketing materials, typically via email or social media,
with the goal of turning a sales lead into a full-fledged customer.
 Sales force automation: Sales force automation tools track customer
interactions and automate certain business functions of the sales
cycle that are necessary to follow leads and attract and obtain new
customers.
 Contact center automation: Designed to reduce tedious aspects of a
contact center agent's job, contact center automation might include
prerecorded audio that assists in customer problem-solving and
information dissemination. Various software tools that integrate with
the agent's desktop tools can handle customer requests in order to
cut down on the time of calls and to simplify customer service
processes.
 Geolocation technology, or location-based services: Some CRM
systems include technology that can create geographic marketing
campaigns based on customers' physical locations, sometimes
integrating with popular location-based GPS apps. Geolocation
technology can also be used as a networking or contact management
tool in order to find sales prospects based on a location.
 Workflow automation: CRM systems help businesses optimize
processes by streamlining mundane workloads, enabling employees
to focus on creative and more high-level tasks.
 Lead management: Sales leads can be tracked through CRM,
enabling sales teams to input, track and analyze data for leads in one
place.
 Human resource management (HRM): CRM systems help track
employee information, such as contact information, performance
reviews and benefits within a company. This enables the human
resource department to more effectively manage the internal
workforce.
 Analytics: Analytics in CRM help create better customer satisfaction
rates by analyzing user data and helping create targeted marketing
campaigns.
 AI: Artificial intelligence (AI) technologies, such as Sales force
Einstein, have been built into CRM platforms to automate repetitive
tasks, identify customer buying patterns to predict future customer
behaviors and more.
Customer Relationship Management systems
include:
 Data warehouse technology, used to aggregate transaction
information, to merge the information with CRM products, and to
provide key performance indicators.
 Opportunity management which helps the company to manage
unpredictable growth and demand, and implement a good forecasting
model to integrate sales history with sales projections
 For small businesses a CRM system may consist of a contact manager
system that integrates emails, documents, jobs, faxes, and scheduling
for individual accounts. CRM systems available for specific markets
(legal, finance) frequently focus on event management and relationship
tracking as opposed to financial return on investment.
 Some CRM software is available as a software as a service, delivered
via the internet and accessed via a web browser instead of being
installed on a local computer. Businesses using the software do not
purchase it, but typically pay a recurring subscription fee to the software
vendor.
 Systems for non-profit and membership-based organizations help
track constituents, fundraising, sponsors' demographics, membership
levels, membership directories, volunteering and communication with
individuals.
 CRM systems for E-Commerce, focused on marketing automation
tasks, like: cart rescue, re-engage users with email, personalization.
 Customer-centric relationship management (CCRM) is a nascent sub-
discipline that focuses on customer preferences instead of customer
leverage. CCRM aims to add value by engaging customers in individual,
interactive relationships.
 CRM systems that track and measure marketing campaigns over
multiple networks, tracking customer analysis by customer clicks and
sales.
 Types of CRM Technology
The four main vendors of CRM systems are Salesforce, Microsoft, SAP
and Oracle. Other providers are popular among small to midmarket
businesses, but these four tend to be the choice for large corporations.
The types of CRM technology offered are as follows:
 On-premises CRM: This system puts the onus of administration,
control, security and maintenance of the database and information
on the company using the CRM software. With this approach, the
company purchases licenses upfront instead of buying yearly
subscriptions from a cloud CRM provider. The software resides on the
company's own servers and the user assumes the cost of any
upgrades. It also usually requires a prolonged installation process to
fully integrate a company's data. Companies with complex CRM
needs might benefit from an on-premises deployment.
 Cloud-based CRM: With cloud-based CRM, also known as SaaS
(software as a service) or on-demand CRM, data is stored on an
 an external, remote network that employees can access anytime,
anywhere there is an internet connection, sometimes with a third-
party service provider overseeing installation and maintenance. The
cloud's quick, relatively easy deployment capabilities appeal to
companies with limited technological expertise or resources.
Companies might consider cloud CRM as a more cost-effective
option. Vendors such as Salesforce charge by the user on a
subscription basis and offer the option of monthly or yearly
payments.
 Open source CRM: An open source CRM system make source
code available to the public, enabling companies to make alterations
at no cost to the company employing the system. Open source CRM
systems also enable the addition and customization of data links on
social media channels, assisting companies looking to improve social
CRM practices. Open Source CRM platforms such as OroCRM,
SuiteCRM and SugarCRM offer alternatives to the proprietary
platforms from Salesforce, Microsoft and other vendors.
 Steps in Customer Relationship
Management in the company

Identify your Customers

Differentiating your Customers

Interacting with the Customer

Customize your enterprise’s behavior

 Step 1 : Identify your customers:
To launch a one to one initiative the company must be able to locate and
contact a fair number of customers or at least a substantial portion of its
valuable customers. It is crucial to know the customer details as much as
possible, not just their names or address, but their habits, preferences and
so forth.
 Step 2 : Differentiating your customers:
Customers are different in two principal ways, they represent different
levels of value and have different needs. Once the company identifies its
customers differentiating them will help the company to focus its efforts to
gain the most advantage with the most valuable customers.
 Step 3 : Interacting with the customer:
Interaction is also a crucial component of a successful CRM initiative. It is
important to remember that interaction just not occur through marketing
and sales channels, customer interact in many different ways with many
different areas of the organization so to foster relationship all the areas of
the organization must be accessible to the customer.
 Step 4 : Customize your enterprise’s behavior
Ultimately to lock a customer into a relationship a company must adapt
some aspect of its behavior to meet customer’s individually expressed
needs this might mean mass customizing a manufactured product or it
might involve tailoring some aspect of the service surrounding the product.
 Significance of the Customer Relationship
Management
The CRM (customer relationship management) is an integrated effort to
strengthen the network of relationship for the mutual benefit of both the
parties. The biggest management challenge in the new millennium of
liberalization and globalization for a business is to maintain good
relationship with the king – the customer. This study is of great significance
because
 A 5% increase in the customer retention will increase the profit up to
125%.
 It costs seven time more to attract a new customer than to serve an old
one.
 20% of the company’s loyal customers account for the 80% of its
revenues.
 To study on customer relationship management would enable the
researcher to know about the CRM practices adopted in the textile
industry.
 Implementing Customer Relationship
Management
CRM requires an integration of a firm's resources; people, operations
and marketing capabilities to deliver added value to the customers. CRM
should provide businesses and organizations with a 'single view’ of their
customers and across irrespective of the interactive channel or medium
through which the customer accesses the service or product.

It is enabled through:
 Information
 Processes
 Technology
 Applications

A firm that wants to implement CRM must align it's business processes
cross-functionally in the best possible way to allow increased customer
focus with an aim to deliver added value to the customer.
To implement Customer Relationship Management, the following steps
must be followed:
 Develop a Customer Relationship Management framework
 Align current business processes
 Design new cross-functional business processes (where required)
 Develop Functional Specifications (client-side services)
 Develop Technical Specifications
 Match Technical Specifications to available technology (Systems,
software, etc)
 Product Configuration
 Data Migration and Integration
 Staff Training
 Architecture of Customer Relationship
Management
There are three parts of application architecture of CRM:

A. Operational Customer Relationship Management: Operational CRM

means supporting the "front office" business processes, which include
customer contact (sales, marketing and service). Tasks resulting from
these processes are forwarded to resources responsible for them,
as well as the information necessary for carrying out the tasks and
interfaces to back-end applications are being provided and activities
with customers are being documented for further reference.
Operational CRM provides the following benefits:
1. Delivers personalized and efficient marketing, sales, and service
through multi-channel collaboration.
2. Enables a 360-degree view of your customer while you are interacting
with them.
3. Sales people and service engineers can access complete history of all
customer interaction with your company, regardless of the touch point.

The operational part of CRM typically involves three general areas of

business:
a. Sales force automation (SFA)
b. Customer service and support (CSS)
c. Enterprise marketing automation (EMA)

B. Analytical Customer Relationship Management: In analytical CRM,

data gathered within operational CRM and/or other sources are
analyzed to segment customers or to identify potential to enhance client
relationship. Customer analysis typically can lead to targeted campaigns
to increase share of customer's wallet. Examples of Campaigns directed
towards customers are:
a. Acquisition: Cross-sell, up-sell
b. Retention: Retaining customers who leave due to maturity or
attrition.
c. Information: Providing timely and regular information to customers.
d. Modification: Altering details of the transactional nature of the customer’s
relationship.
e. Analysis typically covers but is not limited to:
f. Decision support: Dashboards, reporting, metrics, performance, etc.
g. Predictive modeling of customer attributes
h. Strategy and Research Analysis of Customer data may relate to one or more
of the following analyses:
1. Contact channel optimization
2. Contact Optimization
3. Customer Acquisition / Reactivation / Retention
4. Customer Segmentation
5. Customer Satisfaction Measurement / Increase
6. Sales Coverage Optimization
7. Fraud Detection and analysis
8. Financial Forecasts
9. Pricing Optimization
10. Product Development
11. Program Evaluation
12. Risk Assessment and Management
C. Collaborative Customer Relationship Management: Collaborative
CRM facilitates interactions with customers through all channels
(personal, letter, fax, phone, web, e-mail) and supports co-ordination of
employee teams and channels. It is a solution that brings people,
processes and data together so companies can better serve and retain
their customers. The data/activities can be structured, unstructured,
conversational and/or transactional in nature.

Collaborative CRM provides the following benefits:

a. Enable efficient productive customer interactions across all
communications channels.
b. Enables web collaboration to reduce customer service costs
c. Integrates call centers enabling multi-channel personal customer
interaction
d. Integrates view of the customer while interaction at the transaction
level
 Pitfalls to avoid
Many CRM programs fail for two reasons:
 Lack of supportive business processes: Because business processes
and organizational goals are not part of a strategic CRM plan tied to
organizational goals and objectives.
 Lack of an enterprise perspective: For Relationship Marketing
to be effective, it requires that the organization creates a seamless
enterprise view. A lot of CRM programs fail because they are
assembled with disparate components that aren't designed to work
together as part of a complete CRM system designed to meet
organizational objectives.
 Effect on Customer Satisfaction
Customer Satisfaction has important implications for the economic
performance of firms because it has the ability to increase customer loyalty
and usage behavior and reduce customer complaints and the likelihood of
customer defection. The implementation of a CRM approach is likely to
have an effect on customer satisfaction and customer knowledge for a
variety of different reasons.
Firstly, firms are able to customize their offerings for each customer. By
accumulating information across customer interactions and processing this
information to discover hidden patterns, CRM applications help firms
customize their offerings to suit the individual tastes of their customers.
This customization enhances the perceived quality of products and services
from a customer's viewpoint, and because perceived quality is a
determinant of customer satisfaction, it follows that CRM applications
indirectly affect customer satisfaction. CRM applications also enable firms
to provide timely, accurate processing of customer orders and requests and
the ongoing management of customer accounts.
With Customer relationship management systems customers are served
better on day to day process and with more reliable information their
demand of self service from companies will decrease. If there is less
need to interact with the company for different problems, customer
satisfaction level increases. These central benefits of CRM will be
connected hypothetically to the three kinds of equity that are
relationship, value and brand, and in the end to customer equity. These
benefits were recognized to provide value drivers:
 Enhanced ability to target profitable customers.
 Integrated assistance across channels
 Enhanced sales force efficiency and effectiveness
 Improved pricing
 Customized products and services
 Improved customer service efficiency and effectiveness
 Individualized marketing messages also called campaigns
 Connect customers and all channels on a single platform.
Results of some of those benefits which are more significant in
customer's satisfaction are summarized in the following cases:
 Improve customer services: In general, customers would have some
questions, concerns or requests. CRM services provide the ability to a
company for producing, allocating and managing requests or something
made by customers. For example, call center software, which helps to
connect a customer to the manager or person who can best assist them
with their existing problem, is one of the CRM abilities that can be
implemented to increase efficiency.
 Increased personalized service or one-to-one service: Personalizing
customer service or one-to-one service provides companies to improve
understanding and gaining knowledge of the customers and also to have
better knowledge about their customers' preferences, requirements and
demands.
 Responsive to customer's needs: Customers' situations and needs can
be understood by the firms focusing on customer needs and
requirements.
 Customer segmentation: In CRM, segmentation is used to categorize
customers, according to some similarity, such as industry, job or some
other characteristics, into similar groups. Although these characteristics,
can be one or more attributes. It can be defined as a subdividing the
customers based on already known good discriminator.
 Improve customization of marketing: Meaning of customization of
marketing is that, the firm or organization adapt and change its services or
products based on presenting a different and unique product or services for
each customer. With the purpose of ensuring that customer needs and
requirements are met Customization is used by the organization.
Companies can put investment in information from customers and then
customize their products or services to maintain customer interests.
 Multichannel integration: Multichannel integration shows the point of co
creation of customer value in CRM. On the other hand, a company's skill to
perform multichannel integration successfully, is heavily dependent on the
organization's ability getting together customer information from all
channels and incorporate it with other related information.
 Time saving: CRM will let companies to interact with customers more
frequently, by personalized message and communication way which can be
produced rapidly and matched on a timely basis, and finally they can better
understand their customers and therefore look forward to their needs.
 Improve customer knowledge: Firms can make and improve products and
services through the information from tracking (e.g. via website
tracking) customer behavior to customer tastes and needs. CRM could
contribute to a competitive advantage in improving firm's ability of
customer information collecting to customize products and services
according to customer needs.
 Improving CRM within a firm
Consultants argue that it is important for companies establishing strong
CRM systems to improve their relational intelligence. According to this
argument, a company must recognize that people have many different
types of relationships with different brands. This information is valuable
as it provides demographic, behavioral, and value-based customer
segmentation. These types of relationships can be both positive and
negative. Some customers view themselves as friends of the brands,
while others as enemies, and some are mixed with a love-hate
relationship with the brand. Some relationships are distant, intimate or
anything in between.
 Analyzing the information: Managers must understand the different
reasons for the types of relationships, and provide the customer with
what they are looking for. Companies can collect this information by
using surveys, interviews, and more, with current customers. For e.g.,
Ethnographic interviews for customers to try and understand the
relationships they wanted with the companies and the brands.
They found that most customers were adults who used the product to feel
more playful.
Companies must also improve their relational intelligence of their CRM
systems. These days, companies store and receive huge amounts of data
through emails, online chat sessions, phone calls, and more. Many
companies do not properly make use of this great amount of data,
however. All of these are signs of what types of relationships the customer
wants with the firm, and therefore companies may consider investing more
time and effort in building out their relational intelligence. Companies can
use data mining technologies and web searches to understand relational
signals. Social media such as social networking sites, blogs and forums can
also be used to collect and analyze information. Understanding the
customer and capturing this data allows companies to convert customer's
signals into information and knowledge that the firm can use to understand
a potential customer's desired relations with a brand.
It is also very important to analyze all of this information to determine
which relationships prove the most valuable. This helps convert data into
profits for the firm. Stronger bonds contribute to building market share. By
managing different portfolios for different segments of the customer base,
the firm can achieve strategic goals
 Employee training: Many firms have also implemented training
programs to teach employees how to recognize and effectively create
strong customer-brand relationships. For example, Harley Davidson
sent its employees on the road with customers, who were motorcycle
enthusiasts, to help solidify relationships. Other employees have also
been trained in social psychology and the social sciences to help
bolster strong customer relationships. Customer service
representatives must be educated to value customer relationships,
and trained to understand existing customer profiles. Even the
finance and legal departments should understand how to manage
and build relationships with customers.
 Application: Applying new technologies while using CRM systems
requires changes in infrastructure of the organization as well as
deployment of new technologies such as business
rules, databases and information technology.
 Phases of Customer Relationship
Management

Acquiring Enhancing Retaining

New Existing Customer
Relationships Relationships Relationships
There are three phases of customer relationship management :-
 Acquiring new relationships:- Acquiring new customers or relations
involves persuading consumers to purchase a company’s products and/or
services. Companies and organizations consider the cost of customer
acquisition as an important measure in evaluating how much value
customers bring to their businesses. Customer acquisition management
refers to the set of methodologies and systems for managing customer
prospects and inquiries that are generated by a variety of marketing
techniques. Some successful customer acquisition strategies include
customer referrals, customer loyalty programs, and the like. One way to
think about customer acquisition management is to consider it the link
between advertising and customer relationship management, as it is the
critical connection that facilitates the acquisition of targeted customers in
an effective way.
 Enhancing existing relationships:- Over the last few years, professional
service firms in every major market around the world have made big strides
forward in building their client relationship capabilities. Professionals have
recognized that the critical field of competition is how effective they are at
developing deep, trust-based client relationships.
 In order to improve their client relationships, professionals need to
understand that relationships are never static, they are a process. Unless a
client relationship is moving forwards, it is moving backwards, eroded by
manifold pressures including ever-stiffer competition. There are four stages
in the client relationship development process:
1. Engaging
2. Aligning
3. Deepening
4. Partnering
 Retaining Customer Relationships:- Customer retention refers to the
activities and actions companies and organizations take to reduce the
number of customer defections. The goal of customer retention
programs is to help companies retain as many customers as possible,
often through customer loyalty and brand loyalty initiatives. It is
important to remember that customer retention begins with the first
contact a customer has with a company and continues throughout
the entire lifetime of the relationship.
 Improve Customer Retention
Obviously, established companies and organizations need to focus on customer
retention. More important, companies are finding that customer profitability
tends to increase over the life of a retained customer, so employing customer
retention strategies is a worthwhile use of company resources. We have
compiled some of the more successful customer retention strategies and
techniques and outline them here, for your convenience:
 Set customer expectations:- Set customer expectations early and a little
lower than you can provide to eliminate uncertainty about the level of your
service and ensure you always deliver on your promises.
 Become the customers’ trusted advisor:- You need to be the expert in your
particular field, so that you can gain customers’ trust and build customer
loyalty.
 Use relationships to build trust:- Build relationships with customers in a
way that fosters trust. Do this through shared values and fostering customer
relationships.
 Take a proactive approach to customer service:- Implement anticipatory
service so that you can eliminate problems before they occur.
 Use social media to build relationships:- Use LinkedIn, Twitter, and
Facebook to connect and communicate with customers and give them a
space for sharing experiences with your company, so they can become
brand ambassadors.
 Go the extra mile:- Going above and beyond will build strong relationships
with customers and build long-term loyalty by paying attention to their
needs and issues.
 Make it personal:- Personalized service improves customer experience and
is something customers are expecting and demanding. Make their
experience personal to strengthen the bond with your brand.
Rather than try to manage customer retention with a mishmash of customer
retention strategies, many companies use customer retention software
systems and targeted customer retention plans to improve customer retention.
Some companies offer customer experience management solutions that
enhance customer retention rates.
 Elements of Customer Relationship
Management
A big part of a CRM system’s ongoing success is choosing well in the first
place, but implementation — the process of getting a CRM up and
running — will also greatly impact its value to your organization. The
details of this process will vary depending on the system you select, as
well as on the agreement between your organization and the vendor.
Yet most selection and implementation processes will involve the
following steps and considerations, which are as follows:
 Customer Relationship Management Review and Selection
 Project Management
 Vendor Contracting and Software Licensing
 CRM System Customization
 Data Migration
 Training and Support
 Customer Relationship Management
Review and Selection
There are dozens of CRM solutions to choose from. Check out a variety
of systems to get a good sense of what features are available and to
assess how easy the systems are to use. Narrowing in on appropriate
CRM systems is critical to maintaining a timely and cost-effective
project.
A great (and often overlooked) resource for narrowing in on CRM
systems are organizations doing work similar to yours that have already
gone through the process of selecting and implementing a CRM. These
organizations will often have overlapping requirements, and can offer
valuable advice about tools they reviewed as well as pitfalls to avoid as
you proceed.
Project Management and Communications
Implementing a CRM can be a time-consuming and costly process, with
many elements often occurring simultaneously. Ensuring strong project
management and following a detailed communications strategy can help
to keep all participants informed of their responsibilities and upcoming
steps in the process.
Strong project management requires that the organization identify a
staff person in charge of this task. Typical tools of a project manager to
help keep the project on track include:
 Calendar:- Keep track of meeting dates for all participants, as well as
major project milestone dates, including the final launch of the CRM
system.
 Work plan:- This is typically the part of the contract that specifies
what will be built or configured, what vendor support will be
provided, what the overall timeline and cost should be, and the basic
obligations of both the vendor and the organization.
 Budget spreadsheet:- A list of vendor costs, software fees, and other
costs per month during implementation.
 Task lists:- A list of tasks for individual staff to complete, such as
reviewing CRM functionality, making decisions on reports, testing,
and so on.
Both the CRM vendor and the organization should take care to follow
both the contract and work plan. The organization should ensure regular
vendor communication, including the addressing of any organizational
questions. A weekly or fortnightly formal communication is reasonable
in keeping up-to-date with the progress of the CRM
implementation. The organization should follow all costs closely to
ensure the project is on track financially.
Vendor Contracting and Software Licensing
Once you have identified a CRM system that is a good fit for your
organization and selected a project manager to oversee the process,
you’re on to the next step: contracting and licensing. Each of these is
vital in setting expectations for what kind of CRM system will be
implemented, how it will be supported, and the costs involved. Don’t
underestimate the importance of this; CRM implementation projects
that are not supported by clear contract and licensing terms often result
in significant cost increases and missed timelines.
 Contracting: The contract phase of setting up a CRM involves an
agreement (and possibly negotiations) with a CRM vendor or outside
consultant regarding setup, services, and support of your CRM
system. Whether you are signing a contract provided by the system
vendor or negotiating your own, bear in mind that a good contract is
not just a legal agreement but part of a detailed work plan that will
impact how your system will be set up and run.
 Some vendors will require that you exclusively contract with them to
implement and support the system; others may allow for support
from unaffiliated third-party consultants. For organizations with the
proper staff and skills, some CRM systems may be implemented in-
house with no outside technical support.
 Licensing: Often incorporated into the vendor contract, licensing is a
written agreement outlining the CRM system vendor’s rules regarding
intellectual property, fair use, and costs. A license will describe what
the organization can and cannot do with a CRM system. Some CRM
vendors retain all ownership rights to the software, protecting their
code from being modified by outside parties. Other CRM systems are
“open source,” allowing users to modify the code extensively with
minimal restrictions. Maintaining CRM software license requirements
may require one-time or ongoing payments, or it may be free. Take
care that you understand your CRM vendor’s licensing terms, and
make sure you have them in writing.
There are several factors to consider when contracting and licensing
software:
 Always negotiate a contract: Never begin a CRM implementation without an
agreement on a contract. All contracts are negotiable. Clearly articulate what you
need; ask for changes if anything is missing.
 Know all costs: Every contract should clearly specify what the costs are for
complete system installation, and what licensing and support costs are required
going forward.
 Determine a timeline: Clarify how long the project will take and identify a delivery
date.
 Clarify communication: Agree on a point of contact with the vendor or consultant,
as well as how updates will be communicated. Ensure these updates will
address any changes in cost, features, and timeline expectations.
 Identify a process for quality control and testing: Most CRM systems will require
some unexpected modifications and updates during implementation. Clarify what
the process is for identifying these changes, and how much of this cost (if any) will
be borne by the customer.
 Establish a data-migration plan: Moving customer information into a new CRM
system can be a time-consuming and technically advanced task. Identify the vendor
or consultant’s role in this process.
 Know customer responsibilities: All customers must be involved in the CRM
implementation process. Agree on testing periods, data-migration responsibilities,
milestones for customer approval and sign-off, and training opportunities.
 CRM System Customization
Some CRM systems require only basic setup and preparation before
organizations can begin using them, while others require some to
substantial customization before they can be implemented. In most
cases, the development work will substantially affect the final CRM
product, and will be the most significant cost component.
CRM developers require a clear understanding of an organization’s
business rules. The organization should clarify any informal or
undocumented processes that affect the customization of the CRM, and
clearly explain these to the developer. The organization should also
review the work of the developer at regular intervals to ensure that the
task is being completed to satisfaction.
Elements to consider during software development include:
 Explain what, and why: Conversations with developers require a
focus not only on what features should be built, but why they are
important from the organization’s business perspective. Leaving out
the “why” can lead developers to make incorrect assumptions about
how features should work, resulting in costly overruns.
 Get involved: Organizations should review features in development,
even if other parts of the CRM are not yet ready. This helps avoid
mistakes from growing into costly budget items or missed timelines.
 Track accomplishments: Ask the vendor to document the features he
or she has worked on, and what has been accomplished in each case.
This helps organizations understand the costs of specific features, as
well as what it might cost to continue working on them. It also helps
confirm that the vendor is on schedule.
 Clarify change requests and bugs: Be sure to identify issues that
appear to be “bugs” (something broken that the vendor should fix
within the budget) and “changes” (work that may or may not cost the
organization extra). Reach an agreement before proceeding to work
on these.
 Data Migration
Many organizations have information stored in older systems that they
wish to move to the new CRM. This information is oftentimes organized
differently from the new CRM system, requiring some effort to relocate.
Focusing on migration strategies early on can help ensure a smoother
transfer of information down the road.
Vendors require a close partnership with the organization to properly
understand the groups or individuals responsible for migrating data.
Having a good grasp of the organization’s ability to understand and
manipulate their own data allows the vendor to offer tips and tools for
how best to prepare for migration into the specific CRM tool, as well as
to determine the optimal division of labor between the organization and
vendor. Guidelines to consider during data migration include:
 Find the data: Information is often scattered among various
organizational staff and systems. Locate the useful information
required to populate the CRM and identify who maintains it, what it
contains, and how accurate it is.
 Improve the data: Many organization move inaccurate data into their
new CRM tool, creating just another problem for users. Work to
identify existing inaccuracies, correcting these when possible prior to
importing to the new system.
 Identify available migration tools: Some CRM systems and vendors
offer tools and services to help transform data to fit the new CRM,
and even to automatically move it into the system. Understand these
tools and services early on and identify what work the organization
must do to make use of these tools.
 Test before migrating: Make sure to run a “test migration” using the
new CRM. A test will help ensure that the information transfers
correctly and allows the organization to make corrections before the
final transfer takes place.
 Training and Support
CRM software offers a wide range of tools for users to learn and master.
Many users will require multiple exposure to documentation and
training in order to gain the critical skills required to succeed with the
new CRM. Some CRM systems provide written documentation, videos,
and other self-paced trainings, while others offer single or ongoing in-
person group and individual trainings. During training, remember:
 Identify all training options early: Give future CRM system users a head
start by introducing them to an overview of how they can learn to use the
new CRM tool. Understand what is free and what is fee-based. Review
trainings for quality and to prepare users for future training.
 Plan for gaps: In many cases, the available training materials will not cover
every CRM feature the organization plans to use. Identify any gaps in
training, including written materials, video, or live webinars. Plan for how
these gaps may be filled, whether internally or via external consultant.
 Learn in context: Be sure to practice CRM skills using real data the trainee
can recognize and understand.
 Train the trainers: Document all processes and tips gathered from trainings
to facilitate future training of other staff.
 Customer Relationship Management
Software Tools
CRM is now the leading software category which is proof of its
usefulness and relevance to businesses. Vendors offer CRM tools either
as complete, all-in-one packages or as separate, feature-specific
modules. They can be cloud-hosted or deployed on-premise. There are
several popular CRM software tools available in the market and in some
cases you will even be able to get a CRM software for free. Here are
some of them:
 Pipedrive – An award-winning platform designed by sales
professionals and hardcore web app developers. It helps you to
organize leads, offers an insightful overview of your sales, and can
quickly set up crucial operations. It is fully mobile optimized, can
work seamlessly with numerous third-party business apps and comes
with email integration, contact history, multi-language capability,
24/7 support, and a powerful API.
 HubSpot CRM – A popular solution for companies investing in a CRM
system for the first time as well as for enterprises that have not been
able to fully utilize their existing CRM platform. A very
popular Pipedrive alternative. The software is designed to help sales
reps function effectively without making drastic changes to their
existing workflow. It is an easy and smart product that offers all the
essential basic features such as email integration, company database,
social media, phone integration, and email integration.
 Freshsales – This CRM platform is part of the Freshdesk suite of
products and was created to manage multiple aspects of the sales
process. It uniquely offers all the functions of legacy CRM platforms
and also provides its own tools to boost sales and prioritize pipeline
opportunities such as its dynamic analytics that reveals deep sales
insights. The app also features calendar sync, email scheduling, call
history, activity timeline, and role-based access.
 Zoho CRM – A leading choice for companies looking for reliable CRM
software, Zoho boast of powerful sales force automation, lead
management and account management. It can automate daily work
activities, monitor sales, engage customers on various channels, and
customize sales processes to fit your operations. It also has Social
CRM, mobile CRM, and CRM for Google Apps to further extend its
functionality.
 BPM’online CRM – A process-driven CRM built around the BPM
platform to help in your sales, marketing, and service support by
combining customer data with business process management tools.
Among its many features include drag and drop functionality, easy
customization, mobile capability, and integration with popular
productivity tools.
 Adsoup – A multi-platform sales CRM with a focus on unifying client
and prospect communications. The software is directed towards
SMEs based in Asia to assist them in monitoring their inbound leads
and sales from all channels.
 Building Relationships With Customers
As a serial entrepreneur, I know firsthand how important it is to connect
with customers. Building relationships is key to learning your customers’
needs. And, you may gain more returning customers, referrals and net
income in the process. As a small business owner, you have an
advantage when it comes to building customer rapport. The size of your
company allows you to reach people at a more personal level than big
businesses, which turns into stronger relationships with customers.
To create customer relationships, and keep them strong, you must do all
you can to engage customers. Here are five ways to build customer
relationships and keep them coming back.
 Communicate:- As a key to any good relationship, communication is
an essential way to build customer relationships. Promoting your
business and listening to your customers are equally important.
Rather than just telling customers about your business, have
conversations with them. Find out what your customers need, then
show them that you have a solution to their problem.
 If you have employees, teach them how to effectively communicate
with customers. Instead of waiting for customer service to become a
problem, foster communication skills with customers
while onboarding new employees. Maintain an employee policy,
requiring timely follow-up, to make sure the customer’s needs are
met. Make sure your staff returns voicemail messages and emails
promptly.
 Exceed expectations:- Your customers expect great products or
services from you. You should continue to raise the bar on what your
company offers.
To put it simply, under promise, and over deliver. When you impress
customers, they keep coming back.
To exceed customer expectations, you can deliver a product or
service faster than anticipated. When you deliver earlier than
expected, the customer will be happy about the surprise. For
example, tell a customer their order will be ready by the end of the
month, knowing you will have it ready a week earlier.
 Ask for feedback:- Whether customers have a good or bad opinion
about your business, they will make their feelings known. Invite
customer feedback to show you are listening. Place comment cards
on your business counter, or conduct a survey. Customer feedback
helps you hone your customers’ specific needs so you can find the
best solutions to their problems. The better your offering meets their
needs, the more your business will grow.
Always listen carefully to comments and respond promptly, whether
it’s a compliment or a complaint. The worst thing you can do is ask for
feedback then not address concerns.
 Connect:- With technology, there are more ways to begin
conversations with your customers than ever before. There are many
online tools and social media outlets you can use to reach customers.
When you engage with customers online, be careful not to create a
one-way conversation. Ask customers questions, and respond to their
inquiries.Also, make sure your website is top-notch, and start a blog
to engage your customers and prospects. Build customer
relationships through your online presence.
 Show appreciation:- Reward long-time customers with a loyalty
discount program. You can hand out reward cards, or use a loyalty
program app to track customer rewards.
With a loyalty program, customers earn points for buying your goods
or services. After earning a certain number of points, the customer
gets a reward. For example, you could reward a customer with a
discount on their next purchase.
Also give away inexpensive branded items, such as pens or notepads,
or even expensive items, like shirts, hats or jackets with your logo on
it. It’s a small yet effective way to say thank you to customers while
keeping your business top-of-mind.
 Customer Relationship Management in
Practice
 Call centers:- Contact center CRM providers are popular for small and
mid-market businesses. These systems codify the interactions
between company and customers by using analytics and key
performance indicators to give the users information on where to
focus their marketing and customer service. This allows agents to
have access to a caller's history to provide personalized customer
communication. The intention is to maximize average revenue per
user, decrease churn rate and decrease idle and unproductive contact
with the customers.
Growing in popularity is the idea of gamifying, or using game design
elements and game principles in a non-game environment such as
customer service environments. Gamification tools can motivate
agents by tapping into their desire for rewards, recognition,
achievements, and competition.
 Contact-center automation:- Contact-center automation, the
practice of having an integrated system that coordinates contacts
between an organization and the public, is designed to reduce the
repetitive and tedious parts of a contact center agent's job.
Automation prevents this by having pre-recorded audio messages
that help customers solve their problems.
For example, an automated contact center may be able to re-route a
customer through a series of commands asking him or her to select a
certain number in order to speak with a particular contact center
agent who specializes in the field in which the customer has a
question. Software tools can also integrate with the agent's desktop
tools to handle customer questions and requests. This also saves time
on behalf of the employees.
 Social media:- Social CRM involves the use of social media and
technology to engage and learn from consumers. Because the public,
especially young people, are increasingly using social networking
sites, companies use these sites to draw attention to their products,
services and brands, with the aim of building up customer
 relationships to increase demand.
Some CRM systems integrate social media sites like Twitter, LinkedIn
and Facebook to track and communicate with customers. These
customers also share their own opinions and experiences with a
company's products and services, giving these firms more insight.
Therefore, these firms can both share their own opinions and also
track the opinions of their customers.
Enterprise feedback management software platforms combine
internal survey data with trends identified through social media to
allow businesses to make more accurate decisions on which products
to supply.
 Location-based services:- CRM systems can also include technologies
that create geographic marketing campaigns. The systems take in
information based on a customer's physical location and sometimes
integrates it with popular location-based GPS applications. It can be
used for networking or contact management as well to help increase
sales based on location.
 Business-to-business transactions:- Despite the general notion that
CRM systems were created for the customer-centric businesses, they
can also be applied to B2B environments to streamline and improve
customer management conditions. For the best level of CRM
operation in a B2B environment, the software must be personalized
and delivered at individual levels.
The main differences between business-to-consumer (B2C)
and business-to-business CRM systems concern aspects like sizing of
contact databases and length of relationships. Business-to-business
companies tend to have smaller contact databases than business-to-
consumer, the volume of sales in business-to-business is relatively
small. There are fewer figure propositions in business-to-business,
but in some cases, they cost a lot more than business-to-consumer
items and relationships in business-to-business environment are built
over a longer period of time. Furthermore, business-to-business CRM
must be easily integrated with products from other companies. Such
integration enables the creation of forecasts about customer
behavior based on their buying history, bills, business success, etc.
application for a business-to-business company must have a function
to connect all the contacts, processes and deals among the customers
segment and then prepare a paper. Automation of sales process is an
important requirement for business-to-business products. It should
effectively manage the deal and progress it through all the phases
towards signing. Finally, a crucial point is personalization. It helps the
business-to-business company to create and maintain strong and
long-lasting relationship with the customer.
 Impact of Customer Relationship
Management on Business
At the end of the day, Customer Relationship Management matters
because customers matter. Research shows, that improved customer
experience drives growth by increasing loyalty. So, if you are in it for the
long run, you cannot overlook the relationship you have with your
customers. With this in mid, let’s take a closer look at what CRM can do
for your business:
 Organize and analyze data in a way that is understood and easily
accessible: CRM enables data-driven decision making. Informed
decisions are the result of understanding the information you have in
the first place. CRM lets you access data points in formats that are
easy to understand and interpret.
 Identify and manage leads: CRM can greatly affect the efficiency of
the sales process. For example, Surveypal’s survey integration to
Salesforce allows you to create new leads in Salesforce and trigger
 customized follow up actions based on individual sales lead data. This
way your sales team can cut down on response times and better
manage the relationship with the lead.
 Anticipate customer needs: With CRM you gain instant access to data
such as contact information, purchase history, customer service
contact history, and more. Additionally, you can incorporate Voice of
the Customer data into your CRM to enhance your understanding of
customer expectations. This information is crucial because it enables
you to anticipate the needs of your customers and, therefore, make
them happy.
 Improve products and services: Collecting customer feedback data
and integrating it into your CRM gives you a better understanding of
customer expectations in relation to the product or service you are
offering. These insights can be used to identify issues and improve
what you offer to meet customer needs.