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Introduction To CRM: Session-1 Date

CRM stands for customer relationship management. It involves initiating, enhancing and maintaining long-term mutually beneficial relationships with customers and partners through business intelligence strategies. CRM systems allow companies to capture customer data, analyze it to develop insights, and use those insights to improve marketing, sales and customer service efforts with the goal of acquiring new customers, increasing sales to existing customers, and improving customer retention and loyalty. Companies that interact frequently with large numbers of customers in complex ways tend to benefit the most from CRM.

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Bhaskar Saha
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49 views

Introduction To CRM: Session-1 Date

CRM stands for customer relationship management. It involves initiating, enhancing and maintaining long-term mutually beneficial relationships with customers and partners through business intelligence strategies. CRM systems allow companies to capture customer data, analyze it to develop insights, and use those insights to improve marketing, sales and customer service efforts with the goal of acquiring new customers, increasing sales to existing customers, and improving customer retention and loyalty. Companies that interact frequently with large numbers of customers in complex ways tend to benefit the most from CRM.

Uploaded by

Bhaskar Saha
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Introduction to CRM

Session-1
Date:
OLD VS. NEW MARKETING

• OLD MARKETING • NEW MARKETING


– Transaction oriented – Relationship oriented
– Market share oriented – Share of wallet oriented
– All customers are equal – All customers are not equal
– Marketers sell – Marketers manage demand
– 4P marketing – Relationship marketing
– Mass marketing – Individual marketing
– Sell to the customer – Manage customer experience
– Focus on new customers – Focus on existing customers
– Offensive – Defensive
– Broadcast oriented – Dialogue oriented
– Transaction profit – Customer lifetime value
Business Implications
Customer Connections Impact Results

“Very Satisfied” Companies that retain


customers are 6 times 5% more customers
more likely to typically increase
repurchase than merely profitability by 25%
“Satisfied” customers

Acquiring new
90% of customers state customers is 6 to 10
that personalization times more expensive
would influence their than retaining existing
propensity to customers
repurchase
Sources in Appendix

3
Transaction Marketing
• Transaction marketing – the traditional
marketing emphasizes that a transaction is an
exchange of values between parties & that
money is one of the traded values.

• Enter “ Relationship Marketing”


Relationship = Trust

Honesty &
Integrity in all
dealings
Look out for
the other Openness in
person’s TRUST communication
interests
Keep your
promises &
meet your
obligations
The Meaning of
Relationship Marketing

Relationship marketing means identifying,


establishing, maintaining, and enhancing
relationships with customers and other
stakeholders at a profit, so that the objectives of all
parties involved are met; this is done by a mutual
exchange and fulfillment of promises.
The Four Dimensions Marketing
Relationships
The Relationship Marketing Continuum

• First Level: Focus on Price

• Second Level: Social Interactions

• Third Level: Interdependent Partnerships


Comparing Transaction-Based Marketing and
Relationship Marketing Strategies

10-9
Definition-1

“Customer Relationship Management is


the initiation, enhancement, and maintenance of
mutually beneficial customer and partner long-term
relationships through business intelligence-generated
strategies based on the capture, storing, and analysis
of information gathered from all customer and partner
touch points and transaction processing systems.”

Baran, Galka, Strunk


Why CRM?
• It costs six times more to sell to new customer than to
sell to an existing one.

• A typical dissatisfied customer will tell 8-10 people

• By increasing the customer retention rate by 5%, profits


could increase by 85%

• Odds of selling to new customers = 15%, as compared


to those for existing customers (50%)

• 70% of the complaining customers will remain loyal if


problem is solved

• 90% of companies do not have the sales and service


integration to support e-commerce
Customer Relationship Framework
Benefits of CRM
Marketing Benefits:
Studies( Bain & Co) have shown that
– Customers are profitable over time
– The initial acquisition cost exceeds gross margin
while retention costs are much lower.
– A percent increase in sales to existing customer
increases profits by 17 % .
– The same amount to new customers increase profits
by just 3 %.
– A company can boost its profits by 85 % by reducing
its annual churn by just 5 %.
Why CRM Systems are Being Used

• Identifying prospects
• Acquiring customers
• Developing customers
• Cross-selling and up-selling
• Managing migration
• Servicing
• Retaining
• Increasing loyalty
• Winning back defectors
Who Uses CRM and Why?
 Firms develop CRM systems for the following reasons:
• To increase customer retention and customer loyalty
• To stay even with their competition
• To attempt to differentiate themselves from their competitors
based on their ability to provide outstanding customer service
• To encourage development of customer communities and social
networks
Which Companies Benefit Most from CRM?

• Companies serving large numbers of customers


through complex and frequent interactions:

– Communications companies
– Retail banks
– Insurance companies
– Healthcare organizations
– Utilities
Which Companies Benefit the Least from
CRM Today?

• Companies that engage in minimal interactions with


each customer
– Auto dealers
– Government agencies

• Companies with simple transactions


-Movie theaters
-Retail stores

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