Strategic Customer Relationship Management(SCRM)
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The document discusses the importance of developing a strategic CRM orientation that emphasizes trust, relationship commitment, and communication for effective customer relationship management. It outlines methods to identify key customers, extend relationships, and create a strategic framework based on processes such as strategy development, value creation, multi-channel integration, information management, and performance assessment. By leveraging customer loyalty and creating communities, companies can enhance customer equity and retention.
Strategic Customer Relationship Management(SCRM)
- 2. Strategic Orientation For CRM To enable an effective CRM, a suitable strategy needs to be developed and implemented. The key drivers to be taken into consideration in CRM to ensure right orientation are: 1. Trust 2. Relationship Commitment 3. Communication Therefore a company should develop an orientation that would enable it to enjoy the trust of the customers, ensure commitment to relationships and also undertake proper communication.
- 3. Identifying the Key Customers • It involves slotting of customers into various segments based on the profitability, needs , purchase behavior etc. • Employing the resources of the company in an equitable manner on all customers. • For example. ICICI, AXIS bank offers Private banking facility for key customers, they are offered well appointed private lounge facility with basic hospitality, & a designated relationship manager is available on call.
- 4. Extending The Concept of Relationship • Companies developing the CRM strategy should also plan how the relationship can be extended to create more value through the loyal customers. • In this way, apart from leveraging the lifetime values of the customers, the companies can even extend the value that had been initially ascribed to the customer and create higher customer equity.
- 5. • The aspects that can help in this regard include: 1. Building a community: The customers belonging to a particular segment can be grouped together to create a community. For example Indian Express news paper has created the Express Youth Club which has become a community for readers belonging to the youth segment.
- 6. 2. Extended Family: The company can become an extension of the family for the customer. In olden days, families considered various service providers like jewellers,doctors etc . a part of the extended family. This feeling of extended family can be inculcated which will help to extend the concept of the relationship. 3. Loyal Advocates: Once the customer has exhibited loyalty, the company can take the opportunity of making the customer an advocate. For example the customers of amazaon.com are paid as referral fees
- 7. The Strategic framework for CRM • The CRM strategy should be encapsulated into a strategic framework which will serve as a guiding tool to be followed for the CRM initiative. Payne and Frow (2005)conducted research to develop a strategic framework for CRM. According to them, the key generic CRM process can be summed up in Five points viz. • The Strategy Development Process • The Value creation Process • The multi-channel Integration Process • The information Management Process • The performance Assessment Process
- 8. 1. The strategic development process: This can begin with a review of the company's vision as well as that of the industry and the competitors. 2. The Value Creation Process: The company should judge the value that is being offered to the customer which can include aspects like co-creation of value with the help of the customer as well. Also the company should judge the value being received from the customer
- 9. 3. The multi-channel Integration Process: In this process ,the channels are viewed from the customers standpoint and taking into account the fact that hybrid channels have emerged as a means to customer access, the channel most suited for a customer should offered to a customer or the customer could be migrated to that channel. 4. The Information Management Process: A critical role in the CRM process is played by the information management process. The parts that make up the information management system include-data repository, hardware, s/w etc.
- 10. 5. The performance assessment process: The performance assessment process should include the two components (1) Shareholder results (what value is it creating for shareholders), (2)Performance monitoring (enhancement of customer retention, satisfaction levels etc.).