Customer Relationship Management

BBA/MBA-5 year integrated course

Semester - VI
Osmania University

Amjad Ali Khan College of Business

Administration –Banjara Hills Hyderabad

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 Course Description:
• This course examines customer relationship management
(CRM) and its application in marketing, sales, and service.
• Effective CRM strategies help companies align business
process
• with customer centric strategies using people, technology,
and knowledge. Companies strive to
• It highlights to use CRM to optimize the identification,
acquisition, growth and retention of desired customers to
• It explains how to gain competitive advantage and
maximize profit. Anyone interested in working with
customers
• Emphasis is given on theoretical, conceptual and practical
application of CRM
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 Learning Outcome
After completion of the Customer Relationship
Management course The students would be
able to identify the benefits of value creation for
the customers. ... Would be able to create a
loyalty model for retention of the customers
through increased interactions with customers

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 Unit – I
• CRM- Definition, Emergence of CRM Practice,
Factors responsible for CRM growth
• CRM process, framework of CRM, Benefits of
CRM, Types of CRM, Scope of CRM
• Customer Profitability, Features Trends in CRM
crm and Cost-Benefit Analysis,
• CRM and Relationship Marketing

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• CRM or Customer Relationship Management
is a strategy for managing an
organisation's relationships and interactions
with customers and potential customers. A
CRM system stay
companies helps to customers,
streamline connected and
profitability. processes, improve
• CRM as Technology: This is a technology
product, often in the cloud, that teams use
to record, report and analyse
interactions between the company and
users. This is also called a CRM system or
solution 5
 The benefits and advantages of CRM
include
• 1. Enhanced contact management
• 2. Cross-team collaboration
• 3. Heightened productivity
• 4. Empowered sales management
• 5. Accurate sales forecasting
• 6. Reliable reporting
• 7. Improved sales metrics
• 8. Increased customer satisfaction and retention
• 9. Boosted marketing ROI
• 10. Enriched products and services 6
 Types of CRM
• Operational. This type of CRM is for lead generation
and conversion. It integrates and automates sales,
marketing and service support,
• Sales force automation –it involves using of software
to automate the sales activities including orders,
deliveries, tracking, forecasting and control of sales
force etc.
• Marketing Automation – it involves use of software
for improving the marketing of products by means of
promotion through various channels mainly online
forms focuses on facilitating the marketing process

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• Analytical. CRM : Its main function is to analyse
customer data collected through multiple sources in
order to help top management, marketing, sales and
support departments get better insights on how to
improve customer service
• Collaborative. As the term implies, this type enables a
business organization to share customers’ information
with external stakeholders such as vendors, suppliers
and distributors so that they would be on the same
page
• Service automation – using of software to automate
the services including the service deliver and customer
feedback, like uber services are automated allows
business to retain customers by providing best quality
service
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A framework for customer relationship
management

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 Customer profitability (CP)

• It is the profit the firm makes from serving a

customer or customer group over a
specified period of time, specifically the
difference between the revenues earned
from and the costs associated with the
customer relationship in a specified
period. According to Philip Kotler, "a
profitable customer is a person, household or
a company that overtime, yields a
revenue stream that exceeds by an
acceptable amount the company's cost
stream of attracting, selling and servicing
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 Relationship marketing
• It was first defined as a form of marketing
developed from direct response marketing
campaigns which emphasizes customer
retention and satisfaction rather than a focus
on sales transactions.
• Relationship marketing differs from other
forms of marketing in that it recognizes the
long term value of customer relationships and
extends communication beyond advertising
and sales promotional messages.
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 Conti..
With the growth of the internet and mobile
platforms, relationship marketing has continued
to evolve as technology opens more
collaborative and social communication
channels. This includes tools for managing
relationships with customers that goes beyond
demographic and customer service data.
Relationship marketing extends to include
inbound marketing efforts, (a combination of
search optimization and strategic content), PR,
social media and application development
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 II Unit
• Customer Value, Customer
Expectation, Customer Satisfaction, Customer
Centricity
• Customer Acquisition, Customer
Retention, Customer Loyalty, Customer Lifetime
Value.
• Customer Experience Management
Customer Profitability, Enterprise Marketing
• Management, Customer
Satisfaction Measurements, Web based 13
 Customer Value

Customer Value is the incremental benefit which

a customer derives from consuming a product
after paying in return. The term value signifies the
benefits that a customer gets from a product. It is
the difference between the benefits (sum of
tangible and intangible benefits) and the cost.

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 Conti..
• Customer value is dependent on the three
factors – Quality, Service and Price.
Hence, these three together form the
‘Customer Value Triad’. The value of a
product increases with its quality and
service, as the benefits increase. On the
other hand, the value decreases with
increase in price because of the increase
in costs increase in this case.
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 Customer value determinants are

• 1. Quality
• 2. Price
• 3. Service
• 4. Marketing/Branding
• 5. Social Influence
• 6. Past Experience with the product

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 Customer Expectations
Customer expectations refers to the perceived
value or benefits that the customers seek when
purchasing a good or availing a service. They are
the result of the ‘learning’ process and can be
formed very quickly because even first
impressions matter a lot. Once established,
these expectations can hold significant influence
in decision-making processes and can be very
hard to change.

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 Types of customer expectations
• 1. Explicit Expectations
• Explicit expectations are mental targets for
product performance, such as well-
identified performance standards
• 2. Implicit Expectations
• Implicit expectations reflect established norms
of performance. Implicit expectations
are established by business in general,
other companies, industries, and even
cultures.
• 3. Dynamic Performance Expectations 18
• Dynamic performance customer expectations are about
how the product or service is expected to evolve
over time. Dynamic expectations may be about the
changes in support, product, or service needed to
meet future business or use environments.
• 4. Technological Expectations
• Technological customer expectations focus on the
evolving state of the product category. For
example, mobile phones are continually evolving,
leading to higher expectations of new features
• 5. Interpersonal Expectations
• Interpersonal customer expectations reflect the
relationship between the customer and the product
or
service provider. 19
Zeithmal model of customer satisfaction

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 Customer centric strategy
Creating a positive consumer experience at the
point of sale and post-sale. A customer-centric
approach can add valueto a
enabling company differentiate
by it to itself from
competitors who do not offer the same
experience. Customer centric is a way of doing
business with your customer in a way that
provides a positive customer experience before
and after the sale in order to drive repeat
business, customer loyalty and profits.
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 Customer acquisition
• The process of persuading a consumer to
purchase a company's goods or services. The
cost associated with the important
customer acquisition process is an important
measure for a business to evaluate in
combination with how much value having
each customer typically brings to the
business. Customer acquisition is the
process of bringing new customers to your brand.
This typically is done through marketing, and
one of the goals is to maintain a consistent
influx of new customers 23
COCA, or cost of customer acquisition

• Above the line ads : Mass media usage

• Below the line ads : Medium other than mass
media, may direct mail, direct call or etc
• Through the line ads : Using both
these methods justifiably

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 Customer retention
Customer retention refers to the activities and
actions companies and organizations take to
reduce the number of customer defections.
stages for implementing customer retention
• Set customer expectations
• Become the customers’ trusted advisor
• Use relationships to build trust.
• Take a proactive approach to customer service
• Use social media to build relationships.
• Go the extra mile – Going above and
beyond will build strong relationships.
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 Customer loyalty
• It is the result of consistently positive
emotional experience, physical attribute-
based satisfaction and perceived
value of an experience.
• The goal of establishing customer loyalty is
to transform a company's one-time
customers into regular customers.
• Customer loyalty is both an attitudinal and
behavioural tendency to favour one brand
over all others
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 Customer lifetime value (CLV)
• It is a metric that represents the total net profit
a company makes from any given customer.
CLV is a projection to estimate a
customer's monetary worth to a business
after factoring in the value of the
relationship with a customer over time
• The strategic objective of CRM is CLV, all the
measures will be taken to enhance the life
time value of a customer

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 Customer experience management

Customer experience management (CEM) or

(CXM) as “the practice of designing and reacting
to customer interactions to meet or exceed
customer expectations and, thus, increase
customer satisfaction, loyalty and advocacy.” It is
a strategy that requires process change and
many technologies to accomplish.

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 Customer profitability

Customer profitability focuses on the

profitability of a specific customer. How much
revenue do they bring in? How much time,
resources, etc. do they require from your
company By calculating the profitability of each
customer, you have some great business insights
on productivity, resource allocation, etc.

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Enterprise marketing management (EMM)
• It is defined a category of software used by
marketing operations to manage their end-to-end
internal processes.
• EMM can also be called Operations
Management (MOM) or
Marketing Resource
Management (MRM) Marketing
• EMM of marketing software
categories
consists such other as Analytics, Campaign
Management, Digital Asset etc
• The goal of deploying and using EMM is to improve
both the efficiencyWeb
and effectiveness of marketing
by increasing operational efficiency
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 web content management system - WCM

• It is a software content management system

(CMS) specifically for web content. It
provides website authoring,
collaboration, and administration tools
that help users with little knowledge of web
programming languages or mark-up
languages create and manage website
content. Most systems use a content
repository or a database to store page
content, metadata and other
information assets the system needs.
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 Web based customer support
• It is a range of customer services to assist
customers in making cost effective and correct
use of a product.
• It includes assistance in planning, installation,
training, troubleshooting, maintenance,
upgrading, and disposal of a product.
• Customer support is considered as one of the
main data channels for customer satisfaction
research and a way to increase customer
retention
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 Unit-III
• Steps in Planning-Building Customer Centricity
• Setting CRM Objectives, Defining
Data Requirements, Planning Desired Outputs
• Relevant issues while planning the Outputs
• Elements of CRM plan, CRM Strategy: The
Strategy Development Process,
Customer Strategy Grid.

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 Process of customer centricity

• centric process management is:

• Define the centricity process
• Establish the metrics for customers by
customers
• Measure the overall performance
• Analyse the sustainability
• Improve on goals and audit the
performance
• Implement any improvements if any
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 Setting CRM objectives SMART –Strategy

• Specific (simple, sensible, significant).

• Measurable (meaningful, motivating).
• Achievable (agreed, attainable).
• Relevant (reasonable, realistic and resourced,
results-based).
• Time bound (time-based, time limited,
time/cost limited, timely, time-sensitive).

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 Data requirement for CRM

• • Customer contact management

• • Account management
• • Reports
• • Case management
• • Knowledge base chat
• • Workflow statements
• • Email marketing integration

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 Desired output in CRM
• CRM software will help the organisation to maintain
and improve relationship with the customers
• CRM must help in acquiring potential new
customers
• It improves the internal communication within your
organisation by linking the various functional areas
• Increase of sales and revenues
• Core competency through customer centricity
• Customer retention
• Customer referrals
• Empowerment of internal customers
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Issues in planning CRM Output (CRM Challenges)
• Achieving User Adoption
• Managing the application
• Defined processes and their enforcement
• Finding the Right Partner
• Changing old habits
• Data importing
• Integrations
• Special requirements

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 Components of CRM and strategy
• 1. Sales Force Automation
• 2.Human Resource Management
• 3.Lead Management
• 4.Customer Service
• 5.Marketing
• 6.Workflow Automation
• 7.Business Reporting
• 8.Analytics
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 Customer strategy Grid

• This is basically a model and a frame which

explains about the various components to
be considered for developing and
creating effective customer strategy it
consist of 7 elements which are as follows

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 Grid components
• 1. Staff training and development
• 2. Service culture
• 3. Performance measurement
• 4. Process and execution
• 5. Technological software
• 6. Structure and roles of employees
• 7. Facilities and work environment

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Unit – IV

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CRM Marketing Initiatives

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 Sales force Automation- SFA
• Abbreviated SFA, sales force automation is a
technique of using software to automate
the business tasks of sales, including
order processing, contact management,
information sharing, inventory
monitoring and control, order tracking,
customer management, sales forecast
analysis and employee performance
evaluation.
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• The sales force automation helps them by
automating the tasks; it gives them more
and more time for focusing on the most
important thing and can sell better. The
salespeople collect lots of data which
helps them to be more effective in their
sales call if they use it intelligently.

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Key features of SFA

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 Campaign management
• It is defined as the planning, execution, tracking,
and analysis of a marketing initiative; sometimes
cantered around a new product launch or an
event. Campaigns normally involve multiple
pushes to potential buyers through email, social
media, surveys, print materials, giveaways, etc.
Your customers' requirements are the focus of
your campaign process. Campaign management
plays a central role in (CRM). The campaign
process consists of three central phases:
planning, management and analysis.
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 Characteristics of good campaign

Six features which are important

• Structured communication
• Credibility
• Aligned climate
• Target opinion leaders
• Commonplace interesting
• Positive messages

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 Call Centre
A call centre is a centralised office used for
receiving or transmitting a large volume of
enquiries by telephone. An inbound call centre
is operated by a company to administer
incoming product or service support or
information enquiries from consumer. It works
as a vocal communication channel that
customers use to report requests or complaints
to a business.

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• The three major classifications of call centres
are inbound, outbound, and
automated. Businesses use these
three types of call centres for various
product or service needs that require an
increased amount of customer service

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 CRM in consumer markets
One of the common uses of customer
relationship management (CRM) in consumer
markets is to rank customers on profitability or
lifetime value measures. ... Given the
commoditized nature of many markets today,
does customer relationship management—and
its associated focus on quality, value, and
satisfaction

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 CRM in Service sector
CRM has benefits for multiple business sectors.
Both can use the CRM data to keep track of
clients and potential clients, learning when and
how to deliver messages to each. However, CRM
support for customer service has a primary role
because customer service blends marketing,
sales, support, and retention efforts. In order to
deliver customer satisfaction the most
significant element needed is service, hence
CRM plays very important role in service sector
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 CRM in Mass market
The implementation of CRM in a Mass
marketing concept is always a challenge because
the CRM tries to provide customisation and
individualization where as the Mass marketing
depends on the approach of One product for
all. CRM-in mass market is a term referring to
the strategies and tactics, as well as to the
technologies supporting the execution of said
strategies and tactics, marketers use this for
managing the relationship with their customers
throughout the customer lifecycle.
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 CRM in Manufacturing sector
CRM in the manufacturing sector can give useful
insights about operations, inventory
management, order processing, warehousing
and distribution chains. Having an intelligent
supply chain can deliver phenomenal results as
it empowers firms to manage production
schedules. Companies are leveraging CRM for
Manufacturing Industry to streamline their
business processes and deliver unparalleled
customer service.
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 Reasons for CRM in manufacturing sector

• Accurate Demand Forecasting. ...

• Improved Product Quality. ...
• Intelligent Supply Chain. ...
• Enrichment of Customer Relationships. ...
• More Business Won.
• Expansion of business by word of mouth
• Creating brand value and image

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Unit- V

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 CRM CHALLENGES AND ISSUES

1: Convincing Your People to Change

2: Getting Approval from Management
3: Handling Data Security
4: Leaving Favoured Programs and Software Behind
5: Dealing with the Time and Cost of CRM
6: Trusting the Technology
7: Choosing the Wrong CRM
8: Lacking Scope Clarity
9: Managing Integrations

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 Various technologies used in CRM
• VoIP. Voice over internet protocol
• Web Services and Services Oriented Architecture.
Speech Applications. ...
• Outsourced Application Delivery. ...
• Social Networking. ...
• Wireless Connectivity and Applications. ...
• Presence Technologies (RFID, POS)
• Open Source CRM.
• Information Technology (IT) and CRM have three
key elements, namely Customer Touch Points,
Applications, and Data Stores
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 CRM Implementation Roadmap
A CRM Roadmap is a strategic plan that
identifies how an organization can meet and
exceed its customers' needs. This includes, but is
not limited to, assessing how the sales,
marketing and service entities work together to
gain insight from their customers (e.g. purchase
history, desired products/services), produce
valuable offerings/products (e.g. personalized
product) and provide the ultimate customer
experience

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 Measuring CRM performance, CRM
Metrics
• The Top 5 CRM Metrics
• CAC (Customer Acquisition Cost) This metric tells
you your price per lead and helps you estimate
the total spend for your lead generation efforts.
• Customer Lifetime Value (CLV) ...
• Length of Sales Cycle. ...
• Percentage of Marketing-Originated Customers. .
• Time to Recoup Customer Acquisition Cost.

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 .
Sales Metrics

• Number of prospects
• Number of new customers
• Number of retained customers
• Number of sales calls made
• Amount of new revenue
• Sales cycle duration
• Number of proposals given
• Marketing
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 Marketing Metrics
• Number of campaigns
• Number of campaign responses
• Revenue generated by campaign
• Number of customer referrals
• Number of web page views
• Time per website visit
• Customer lifetime value
• Cross-selling and upselling

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 Service Metrics

• Number of issues solved

• Number of cases closed/day
• Average time to resolution
• Complaint time to resolution
• Number of customer call backs
• Percentage compliance with SLAs( service
level agreements)
• Calls lost before being answered
• Average call handling time
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 Top 5 CRM Metrics

• CAC (Customer Acquisition Cost) This metric

tells you your price per lead and helps you
estimate the total spend for your lead
generation efforts.
• Customer Lifetime Value (CLV) ...
• Length of Sales Cycle. ...
• Percentage of Marketing-Originated
Customers. .
• Time to Recoup Customer
Acquisition Cost.
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