Customer Relationship

Management

Day 1 and 2

CUSTOMER
RELATIONSHIP
MANAGEMENT
 Definitions
• An integrated effort to identify, maintain and build up a network
for and with individual customers and to continuously strengthen
the network for the mutual benefit of both sides, through
interactive, individualized and value added contacts over a
period of time.
• Focus is on cooperative and collaborative relationship between
the firm and its customers and/or other marketing actors.

• CRM is a comprehensive strategy and process of acquiring,

retaining and partnering with selective customers to create
superior value for the company and the customers.

• CRM is a philosophy and a business strategy, supported by a

system and a technology, designed to improve human
interactions in a business environment.
 The emergence of CRM practices
• Direct interactions between producers and customers in
pre industrial era. Customized products were available
• Mass production society and advent of middle man lead
to less frequent interaction between producers and
customers and a transactions oriented marketing. The
production and consumption function separated and
focus was only on profits.
• But CRM developed due to many reasons:
– De-intermediation process.
• Due to growth in technology- direct interaction with customers was
encourages and their willingness to undertake responsibility of direct
ordering.
• Growth of service economy. Service being produced and delivered at
the same institution , role of middlemen became minimal. Emotional
bonds created made it easy to see that CRM is important.
– Total quality movement. Philosophy to improve quality and reduce costs
required involvement of suppliers and customers at all levels of the value
chain
– Popularity of systems selling approach. Emphasis on the integration of
parts , supplies and sale of services along with the individual capital
equipments. New purchasing approach emerged such as national contracts
and master purchasing agreements lead to development of Key account
management
– Also due to the era of hyper competition lead to customer retention and
loyalty
– Changing customer expectation. Customers unwilling to compromise on
product and service quality.
– Globalization.
 CRM today
• It consists of the processes a company uses to
track and organize its contacts with its current
and prospective customers.
• Typical CRM goals are to improve services
provided to customers, and to use customer
contact information for targeted marketing.
• From the outside, customers interacting with a company perceive
the business as a single entity, despite often interacting with a
number of employees in different roles and departments. CRM is a
combination of policies, processes, and strategies implemented by
an organization to unify its customer interactions and provide a
means to track customer information. It involves the use of
technology in attracting new and profitable customers, while forming
tighter bonds with existing ones.
• CRM includes many aspects which relate directly to one another:
– Front office operations — Direct interaction with customers
– Back office operations — Operations that ultimately affect the activities
of the front office
– Business relationships — Interaction with other companies and partners
– Analysis — Key CRM data can be analyzed in order to plan target-
marketing campaigns, conceive business strategies, and judge the
success of CRM activities (e.g., market share, number and types of
customers, revenue, profitability).
 Tools for Customer Service
• Personalized Web Pages
• FAQs
• Tracking Tools
• Chat Rooms
• E-mail and Automated Response
• Help Desks and Call Centers
• Troubleshooting Tools
 Four Aspects of CRM
• Active CRM: A centralized system for storing data ,
which can be used to automate business processes and
common tasks.
• Operational CRM: The automation or support of
customers processes involving sales or service
representatives.
• Collaborative CRM: Direct communication with
customers not involving sale or service representative.
• Analytical CRM: Analysis of data for a broad range of
purposes.
 Active CRM
• Centralized data store
– Ordering Information Customer details and business
prospects all stored in a single system.
• IT department helps in creating new user accounts and
maintaining the data store.
• Single centralized data store helps to organize data
efficiently.
– Segment
– Manage
– Track
– Analyse
 Active CRM
• Advantages
– Improved customer Relationships
– Automated Business Tasks and Processes
– Targeted Marketing Campaigns.
 Operational CRM
Operational CRM generally refers to the products,
services and operational capabilities that enable an
organisation to “take care of its customers”
• Operational CRM
– provides support to "front office" business processes, e.g. to
sales, marketing and service staff. Interactions with customers
are generally stored in customers' contact histories, and staff
can retrieve customer information as necessary.
– The contact history provides staff members with immediate
access to important information on the customer (products
owned, prior support calls etc.), eliminating the need to
individually obtain this information directly from the customer.
Reaching to the customer at right time at right place is
preferable.
– Operational CRM processes customer data for a variety of
purposes:
• Managing campaigns
• Enterprise Marketing Automation
• Sales Force Automation
• Sales Management System
 Goals of Operational CRM
• Should be to ‘integrate people, processes
and technology using the customers
perspective and expectations as the key
driver.’
• Generally cuts across many organizational
boundaries , making it high profile.
 Benefits of Operational CRM
• Drive revenue growth
• Reduce costs
• Solve problems quicker
• Gain a 360-degree view of your customer
while you are interacting with them
 Analytical CRM
• Analytical CRM aids the preparation , support and optimization of
customer oriented decision processes.
• Goals of analytical CRM:
• Analysis of customer behaviour to aid product and service decision
making(pricing, new product development)
• Management decisions(Finanacial forecasting, customer profitibility
analysis)
• Design and execution of specific customer campaigns including
customer acquisition, upselling, cross selling , retention.
• Design and execution of traget marketing campaigns to optimise
marketing effectivenss.

Analytical CRM generally makes heavy use of data mining and

other techniques to produce useful results for decision-making
 Analytical CRM Benefits
• Employees can quickly assign, manage and resolve
incidents with automated routing , queuing and service
request escalation.
• Reports help indentify common support issues, evaluate
customer needs , track processes and measure service
performance
• Employees can easily share sales and order information as
well as support information and use it to indentify top
customers and prioritize service needs.
• Access to a centralised , custoimizale view of slaes and
support activity along with complete customer history either
online or offline and from any location using a Web browser.
 Analytical CRM Benefits
• Shorter sales cycles and improved close rates with tools
that enable lead and opportunity management, workflow
rules customization for automated sales processes,
quote creation and order management
• Comprehensive reports that forecast sales, measure
business activity and performance, track sales and
service success, as well as indentify trends , problems
and opportunities.
 Collaborative CRM
– Emphasis on direct Interaction with customers
• Internet
• Email
• Automated phone/ interactive voice response
– Automated' self service ‘ type relationship
• Customer interactions are mostly ‘automated ‘.
• Information can be directly captured by CRM system without ‘special
formatting ‘by a middle layer
– Collaborative CRM's ultimate goal is to use information collected
by all departments to improve the quality of services provided by
the company.
 Collaborative CRM
• IT Department helps design customer interaction
methods
• IT staff carefully designs web pages and emails
formats which enable customers to feed data
directly into the system without reformatting.
• It staff continuously scans for newer and better
ways to automate customer interaction and data
capture.
 Collaborative CRM
• Includes Partner Relationship Management
- Managing relationships with partners(resellers and
distributors)
• Objectives
- Cost reduction by using automated systems.
- Service improvements through efficient consumer
response.
- Better understanding of customer needs with various
departments pooling data from different sales and
communication channels.
• CRM is a process or methodology used to learn more
about customers' needs and behaviours in order to
develop stronger relationships with them. There are
many technological components to CRM, but thinking
about CRM in primarily technological terms is a mistake.
The more useful way to think about CRM is as a process
that will help bring together lots of pieces of information
about customers, sales, marketing effectiveness,
responsiveness and market trends.
• CRM helps businesses use technology and human
resources to gain insight into the behaviour of customers
and the value of those customers.
 Goals of CRM
• Gain insight into the behavior of the customers and the
value of those customers
• Provide better customer service
• Increase business revenues
• Discover new customers
• Simplify marketing and sales processes
• Helps sales staff close deals faster
• Make call centers more efficient
• Company can get continuous feedback
• Cross selling products more effectively
 Need for CRM
• No accurate information on who your customers
are and what their needs or desires are or will be
at any given stage in their lives
• Losing customers to a competitor, lack of
understanding of your customers
• Customers have different characteristics
• Having multiple offices and /or mobile workers
and need to share and manage customer
information from all sources.
 Types of data CRM projects collect

– Responses to campaigns
– Shipping and fulfilment dates
– Sales and purchase data
– Account information
– Web registration data
– Service and support records
– Demographic data
– Web sales data
Principles of CRM
CRM Process Framework
 Formation Management and Performance
governance

Purpose:
•Increase effectiveness. Team structure
•Improve efficiency.
Role specification

Programs: Planning Process Relationship

Performance:
•Account management
Process alignment •Strategic
•Relation marketing
Monitoring process •Financial
•Co-op Agreements
•Marketing
•Strategic partnership
Communication •Satisfaction

Employee motivation •Loyalty

Employee Training
Partners:
•Criteria
•Process
Evolution:
•Enhancement
•Improvement
• CRM Formation Process.
– Decisions regarding initiation of relational activities.
• Purpose of engaging in CRM
– To improve marketing productivity and enhance mutual values
for the parties involved in the relationship
• Selecting Parties for appropriate CRM programs.
– Intuitive judgment of top management.
– Revenue potential of the customer/customer
commitment/resourcefulness/ etc.
• Developing CRM program.
– Continuity marketing programs.
– One-to-one marketing
– Partnering programs.
• CRM Governance Process:
– Role specification.
– Communication.
– Common bonds.
– Planning process.
– Process alignment.
– Employee motivation.
– Monitoring procedures.
• CRM Performance evaluation process
– A performance evaluation metrics for each
relationship or CRM program.
• Strategic
• Financial
• Marketing
• CRM evolution
– Continuation/termination/enhancement/modifi
cation.
 CRM implementation Issues.
• Interface with Customers:
– Sales people
– Service personnel,
– Call centers,
– Internet websites,
– Marketing departments,
– Fulfillment houses, market and business
development agents.
 Hurdles:
• Usability
• Effectiveness in producing desirable
results.
• Fetching the desired data.
• Involvement of all departments.
END