CRM:

CRM is a collective term for processes and strategies regarding individualized relationships
between enterprises and customers, prospects, and business partners for marketing, sales and
service with the goal of winning new customers, extending existing customer relationships
across the entire customer life cycle, and improving competitiveness and business success by
optimizing the profitability of individualized customer relationships.

CRM is the integration of sales, marketing, service and support strategy, process, people and
technology to maximize customer acquisition, value, relationships, retention and loyalty.

4 aspects of CRM:

1. Active CRM: A centralized database for storing data, which can be used to automate business
processes and common tasks.

2. Operational CRM: The automation or support of customer processes involving sales or service
representatives

3. Collaborative CRM: Direct communication with customers not involving sales or service
representatives (‘self service’)

4. Analytical CRM: The analysis of customer data for a broad range of purposes

Goal 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

CRM Strategies:

Customer Acquisition
Gain the greatest number of new “Best” customers as early in their “lifespan” as possible

Customer Retention
Retain and expand your business and relationships with your customers through up-selling,
cross-selling and servicing

Customer Loyalty
Offer programs to ensure that your customers happily buy what you offer only from you

Cost Reduction
Reduce costs related to marketing, sales, customer service and support

Customer Evangelism
Enable loyal customers to become a volunteer sales force

Improve productivity

Enhance your e-business strategies

CRM Processes/mapping:

Re-examine all of your customer management business processes

Redefine where CRM provides the greatest value to your “best” customers and your
organization

Incrementally implement CRM to improve top targeted processes like Subscription Renewal
Processes

How CRM helps business?

Personalized customer contact

Customer specific product catalog and catalog views

Customer specific prices and conditions

Customer specific product configuration

Customer specific product recommendations

Customer specific user interfaces in e-selling solutions

Stage 1: No Meaningful Performance Management - This is the default stage where

many companies start at and continue for some time. That doesn't mean that they don't have
any measures at all, just that they have too few or meaningless ones. The meltdown of the
Internet bubble in the Noughties was caused in large part by meaningless measures (eyeballs!
rather than cashflow). So is the current NPS fad sweeping through less-thoughtful
organisations. If you are at this stage then you need to work diligently to skip to Stage 3:
Balanced Scorecard as soon as you can. Your business' future success may depend upon it.
Stage 2: Performance Measurementitis - Organisations at Stage 1 sometimes catch the
measurementitis virus. They go from measuring hardly anything to measuring absolutely
everything they can. I remember talking to an executive from an airline who was proud to be
measuring 400 different customer-facing measures. 400! And most central government
department's are full of well-meaning managers who want to know everything that is going
on, but don't understand how any of it actually works. The problem is obvious. With so many
measures to look at it is nigh-on impossible to know which ones are the really importnat ones
and how they influence each other. If you are still using long-lists of plausible but unconnected
measures, that is a sure sign that you need to move to Stage 3: Balanced Scorecard, by
whittling down the list to something more meaningful.
Stage 3: Balanced Scorecard - Kaplan & Norton's invention of the Balanced Scorecard in the
Nineties was a god-send to managers. They showed that you need to focus on a small number
of different types of measures to be successful. They originally identified four types of
measure: Financial measures which measure how successful the organisation has been,
customer measures and process measures which measure how effective the organisation is
today and innovation & growth measures which measure how successful the organistion will
be tomorrow. Some organisations added people and other measures too. The Balanced
Scorecard is a highly effective way of focussing on a small number (probably no more than 20-
25) of measures that provide a balanced view of success. For most organisations, the
Balanced Scorecard is all they need to be successful. But there is a downside too. Many
managers in public companies focus only on the short-term measures that drive quarterly
reporting and ultimately, whether they make their bonus or not. To overcome this short-
sightedness some organisations have started to move beyond the Balanced Scorecard to
Stage 4: Systemic Value Drivers.
Stage 4: Systemic Value Drivers - This is the final stage in the evolution of performance
management. Smart organistions recognise that the real world is highly interconnected. And
that these interconnections sometimes produce unintended long-term consequences. The lack
of appropriate credit risk measures let to overlending to uncreditworthy house buyers in the
US. The financial risks so created were then repackaged into opague CDOs and sold to
financial institutions around the world. Once house buyers in the US started to default on their
loans, the interconnections between the CDOs the financial institutions around the world had
bought created the credit crunch now threatening to tip several European countries into
economic recession. Only by understanding how value is created for the organisation, the
interconnections between the value drivers and how this plays out over time can managers
hope to manage performance over the long-term. This is one reason why carmaker Toyota,
with its legendary long-term planning approach, is hugely more profitable than the US
carmakers with their short-term focus. And Toyota's planning approach starts, continues and
ends with its customers. Value Driver Analysis and the Value Based Management that uses it
isn't as easy as just developing a Balanced Scorecard. But it is sometimes the difference
between success over the long-term and failure in the short-term