RESEARCH PAPER ON CUSTOMER RELATIONSHIP MANAGEMENT Submitted for the Partial Fulfillment for the Award of the Degree

of MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF MS. PRIYA SINGH

SUBMITTED BY RICHAGARG:02580003911 ROSHNI KUMARI: 07080003911 PRIYANKA RAWAT:01980003911 SHRUTI KHANDELWAL:06580003911 VENU ARORA:06080003911 ANUJ SRIVASTAV:02280003911 JAGRITI AHUJA: 04780003911

______________________________________________________________

GITARATTAN INTERNATIONAL BUSINESS SCHOOL

(Affiliated to GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY) ROHINI, NEW DELHI - 110085

TABLE OF CONTENTS

S.NO 1. 2. 3. 4. 5. 6. 7. Introduction

PARTICULARS

Historic Development Current issues Case study Future prospect Limitations References

CUSTOMER RELATIONSHIP MANAGEMENT

INTRODUCTION
A CRM is a collection of people, processes, software, and internet capabilities that helps an enterprise manage customer relationship effectively and systematically. The goal of CRM is to understand and anticipate the needs of current and potential customer to increase customer retention and loyalty while optimizing the way product and services are sold. CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. After all, good customer relationships are at the heart of business success. 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. The objective is to capture data about every contact a company a company has with a customer through every channel and store it in the CRM system to enable the company to truly understand customer action. CRM software helps an organization build a database about its customer that management, sales people, customer service provider and even customer can access information to access customer needs.

Traditionally, marketers have been trained to acquire customers, either new ones who have not bought the product category before or those who are currently competitors customers. This has required heavy doses of mass advertising and price-oriented promotions to customers and channel members. Today, the tone of the conversation has changed from customer acquisition to retention. This requires a different mindset and a 3 different and new set of tools. A good thought experiment for an executive audience is to ask them how much they spend and/or focus on acquisition versus retention activities. According to one industry view, CRM consists of: Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team.

 Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices) Allowing the formation of individualized relationships with customers, with the aimof improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service. Providing employees with the information and processes necessary to know their customers, understand their needs, and effectively build relationships between the company, its customer base, and distribution partners.

Definition: CRM is concerned with creating improved shareholder value through the use of customer centric business processes and the development of appropriate relationships with consumers. CRM--Customer Relationship Management--has entered the mainstream. Despite the uncertainty of the economy, CRM is being thrust into corporate budgets and talked about as a critical initiative by hundreds of Fortune 1,000 and tens of thousands of other companies. It has gone from being an important edge in the business world to a necessary tool for survival. The notion of the customer as king or queen is once again the rule. How you treat this is a mission-critical business issue. But, what is CRM and how does it change the way companies do business? The changes in the world have been so dynamic and so dramatic that the path is not necessarily all that obvious. How CRM impacts that business path is a continuing source of debate in the world of corporate management. Managing relationships with customers has become a critical organizational competency. Get winning strategies for acquiring and retaining customers by leveraging the latest advanced

technologies. This course will teach you how to select the right tools for your business-- so it can grow today--and on into the future. Lagging means lost customers, which means damage to the bottom line. But how do you not lag when customers are moving lightning fast to demand constant changes in the speed to complete their transactions? How do you keep your customers when the move to another company is nothing more than a mouse click and a minute away?

Objective of CRM
CRM, in its broadest sense, means managing all interactions and business with customers. This includes, but is not limited to, improving customer service. A good CRM program will allow a business to acquire customers, service the customer, increase the value of the customer to the company, retain good customers, and determine which customers can be retained or given a higher level of service. A good CRM program can improve customer service by facilitating communication in several ways: Provide product information, product use information, and technical assistance on web sites that are accessible 24 hours a day, 7 days a week

Identify how each individual customer defines quality, and then design a service strategy for each customer based on these individual requirements and expectations.

Provide a fast mechanism for managing and scheduling follow-up sales calls to assess post-purchase cognitive dissonance, repurchase probabilities, repurchase times, and repurchase frequencies.

Provide a mechanism to track all points of contact between a customer and the company, and do it in an integrated way so that all sources and types of contact are included, and all users of the system see the same view of the customer (reduces confusion).

 Help to identify potential problems quickly, before customer occur. Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company cannot be resolved, and are a major source of customer dissatisfaction). Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer satisfaction). Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction). Use internet cookies to track customer interests and personalize product offerings accordingly Use the Internet to engage in collaborative customization or real-time customization Provide a fast mechanism for managing and scheduling maintenance, repair, and ongoing support (improve efficiency and effectiveness)

HISTORY OF CRM
Customer Relationship Management (CRM) is one of those magnificent concepts that swept the business world in the 1990s with the promise of forever changing the way businesses small and large interacted with their customer bases. In the short term, however, it proved to be an unwieldy process that was better in theory than in practice for a variety of reasons. First among these was that it was simply so difficult and expensive to track and keep the high volume of records needed accurately and constantly update them. In the last several years, however, newer software systems and advanced tracking features have vastly improved CRM capabilities and the real promise of CRM is becoming a reality. As the price of newer, more customizable Internet solutions have hit the marketplace; competition has driven the prices down so that even relatively small businesses are reaping the benefits of some custom CRM programs. In the beginning The 1980s saw the emergence of database marketing, which was simply a catch phrase to define the practice of setting up customer service groups to speak individually to all of a companys customers. In the case of larger, key clients it was a valuable tool for keeping the lines of communication open and tailoring service to the clients needs. In the case of smaller clients, however, it tended to provide repetitive, survey-like information that cluttered databases and didnt provide much insight. As companies began tracking database information, they realized that the bare bones were all that was needed in most cases: what they buy regularly, what they spend, what they do. Advances in the 1990s In the 1990s companies began to improve on Customer Relationship Management by making it more of a two-way street. Instead of simply gathering data for their own use, they began giving back to their customers not only in terms of the obvious goal of improved customer service, but in incentives, gifts and other perks for customer loyalty. This was the beginning of the now familiar frequent flyer programs, bonus points on credit cards and a host of other resources that are based on CRM tracking 3333 customer activity and spending patterns. CRM was now being

used as a way to increase sales passively as well as through active improvement of customer service. True CRM comes of age Real Customer Relationship Management as its thought of today really began in earnest in the early years of this century. As software companies began releasing newer, more advanced solutions that were customizable across industries, it became feasible to really use the information in a dynamic way. Instead of feeding information into a static database for future reference, CRM became a way to continuously update understanding of customer needs and behavior. Branching of information, sub-folders, and custom tailored features enabled companies to break down information into smaller subsets so that they could evaluate not only concrete statistics, but information on the motivation and reactions of customers. The Internet provided a huge boon to the development of these huge databases by enabling offsite information storage, where before companies had difficulty supporting the enormous amounts of information. The Internet provided new possibilities and CRM took off as providers began moving toward Internet solutions. With the increased fluidity of these programs came a less rigid relationship between sales, customer service and marketing. CRM enabled the development of new strategies for more cooperative work between these different divisions through shared information and understanding, leading to increased customer satisfaction from order to end product.

CURRENT ISSUES IN CRM

Today, CRM is still utilized most frequently by companies that rely heavily on two distinct features: customer service or technology. The three sectors of business that rely most heavily on CRM -- and use it to great advantage -- are financial services, a variety of high tech corporations and the telecommunications industry. The financial services industry in particular tracks the level of client satisfaction and what customers are looking for in terms of changes and personalized features. They also track changes in investment habits and spending patterns as the economy shifts. Software specific to the industry can give financial service providers truly impressive feedback in these areas. In recent years however, several factors have contributed to the rapid development and evolution of CRM. These include: 1. The growing de-intermediation process in many industries due to the advent of sophisticated computer and telecommunication technologies that allow producers to directly interact with endcustomers. For example, in many industries such as airlines, banks insurance, software or household appliances and even consumables, the de-intermediation process is fast changing the nature of marketing and consequently making relationship marketing more popular. Databases and direct marketing tools give them the means to individualize their marketing efforts. 2. Advances in information technology, networking and manufacturing technology have helped companies to quickly match competition. As a result product quality and cost are no longer significant competitive advantages. 3. The growth in service economy. Since services are typically produced and delivered at the same institution, it minimizes the role of the middlemen. 4. Another force driving the adoption of CRM has been the total quality movement. When companies embraced TQM it became necessary to involve customers and suppliers in implementing the program at all levels of the value chain. This needed close working relationships with the customers. Thus several companies such as Motorola, IBM, General Motors, Xerox, Ford, Toyota, etc formed partnering relations with suppliers and customers to

practice TQM. Other programs such as JIT and MRP also made use of interdependent relationships between suppliers and customers. 5. Customer expectations are changing almost on a daily basis. Newly empowered customers, who choose, how to communicate with the companies various available channels? Also nowadays consumers expect a high degree of personalization. 6. Emerging real time, interactive channels including e-mail, ATMs and call centre that must be synchronized with customers non-electronic activities. The speed of business change, requiring flexibility and rapid adoption to technologies. 7. In the current era of hyper competition, marketers are forced to be more concerned with customer retention and customer loyalty. 8. As several researchers have found out retaining customers is less expensive and more sustainable competitive advantage than acquiring new ones. 9. On the supply side it pays more to develop closer relationships with a few suppliers than to develop more vendors. 10. The globalization of world marketplace makes it necessary to have global account management for the customers. Implementing CRM: CRM requires an integration of a firm's resources; people, operations and marketing capabilities to deliver added value to the customers. CRM should provide businesses and organizations with a single view of their customers and across irrespective of the interactive channel or medium through which the customer accesses the service or product. For example, a business (e.g. hotel) customers profile and personal references should be accessible to the business (or hotel) irrespective of channel i.e. whether the customer books online, calls in or walks into any location should not make a difference to the service provided based on the personal profile of the business client. It is enabled through:

 Information Processes Technology Applications

A firm that wants to implement CRM must align it's business processes cross-functionally in the best possible way to allow increased customer focus with an aim to deliver added value to the customer. To implement CRM, the following steps must be followed: Develop a CRM framework Align current business processes Design new cross-functional business processes (where required) Develop Functional Specifications (client-side services) Develop Technical Specifications Match Technical Specifications to available technology (Systems, software, etc) Product Configuration Data Migration and Integration Staff Training

CASE STUDY
CRM ACTIVITIES IN THE AUTOMOBILE INDUSTRY Traditionally, the automotive industry with its unique distribution channels, that is, they are the vehicle through the different parts of their sales agents as partners, is mainly responsible for motor vehicle dealers are planning to promote in the market, and make a strong public relations with co-operation of the vehicle sold to customers at different levels. The automotive industry also need to do CRM? The answer appears to be very clear. Because in this highly competitive industry, enhance customer loyalty, customer loyalty so that they can change the time or more and when to buy a family car or business when, once again choose the same brand of car, is a very important consideration. Similarly, for a new customer base, of course, are the needs of each vehicle to lobby for a place. Then, in the automotive industry, the implementation of CRM and what a unique problem? Let us and everyone here today to explore. Master customer data Because the majority of all motor vehicle dealers and motor vehicle dealers, through sales around the world, so they are not directly face the customer, motor vehicle dealers is a direct customer-facing. Can imagine, these customer data often cannot effectively return to their motor vehicle dealers and agents for many reasons, this may be related to motor vehicle dealers the data is not well preserved, or it may be reluctant to agents and car sharing of customer data, to these important business data to stay for their own use. Therefore, automobile dealers in order to better understand their customers in order to make a different, targeted marketing strategies, we will be working with a number of motor vehicle dealers and customers with access to activities, activities through contact with these customers, motor traders can effectively the accurate and updated customer data to master it, it can be said of the automobile dealer's CRM is an important action, because only with accuracy of data before they can take corresponding actions. The use of customer service and maintenance information Motor vehicle dealers for example, to motor vehicle dealers and their effective implementation of common customer service program will not only make customers more satisfied with their

products, for example agents, but also for a stable source of income each year and at the same time motor vehicle dealers bring the sale of auto parts. More importantly, the customer service system can only dynamic customer data, including complaints they have, whether their car warranty has expired, or if almost time for change and so the information can master them. For motor vehicle dealers, the question of how customer service data and other customerrelated data integration in together on a 360-degree customer understanding, will provide more business opportunities.

CRM ACTIVITIES TAKEN UP AT HONDA About the Company Honda is a Japanese company, which has established its reputation as one of the world leaders in the production of automobiles and motorcycles. The company has also undertaken research and development of various other products such as robots, watercrafts, and aeronautics to name a few. Their innovative spirit is evident in the complete name of their organization, which is Honda Technology Research Institute Company Limited. Honda is considered to be the foremost manufacturer of engines across the world in terms of the sheer volume of the engines it manufactures annually. The various CRM activities taken up by the company are: (1) Facilitate Integrated and Consistent Cross-Channel Interactions The first step in offering an exceptional customer experience is to offer a multi-channel contact center comprised of phone, fax, e-mail, SMS, and perhaps even Web chat, so that patients and customers can conduct interactions with you exactly when and how they like. With wellintegrated channels, healthcare providers are able to deliver better service, improve pricing and quality transparency, and lower operating costs. Providing consumers with a seamless experience across all channels ensures that their interactions are as consistent and efficient as possible, which will help build a solid relationship with the consumer. And, streamlining data exchange and supporting collaboration across all channels promotes operational efficiency and reduces errors. (2) Handle calls more intelligently When taking calls, top priorities for healthcare providers are to make sure they deliver high quality healthcare service, including the ability to quickly and easily schedule appointments with customers. (3) Business Priority Routing During times of peak volume, virtual hold technology allows callers to receive a callback at a convenient time rather than to wait on hold. This technique improves call response times and

increases customer satisfaction levels without adding costs for additional resources. Business priority routing uses business rules to prioritize calls based on customer value, available channel resources, hold times, and other factors. For instance, response times are easily met during times of low call volume and, therefore, agents have free time to focus on other activities, such as verifying contact and insurance information. (4) Make More Effective Use of Customer Data and Segmentation Soft Remedies makes efficient use of customer data and segmentation in order to look for more targeted ways to compete. Going one step further, Soft Remedies is also into demographic matching where customers are assigned to agents with similar demographic profiles. The result is that customers get to interact with staff who more readily relate to their needs because they share certain commonalities, such as native language, age range, healthcare specialty, and so on. (5) Integrated Self-Service It provides a holistic caller experience while reducing handling times and service delivery costs. These capabilities provide touch-tone or speech-enabled access for conversational exchange to identify and resolve routine customer requests and transfer more complex calls to the best-skilled agent. Core Team member of New Vehicle Launch-Technical Team; Certified Technical Service advisor. Assessing customer needs and advising to their needs accordingly with the right product and solution in the most cost effective manner.

THE FUTURE OF CRM

Often driven by the need to improve customer satisfaction and retention, CRM systems can aid in understanding a customer or segment to focus sales and marketing activities. We will see more of an appreciation that profitability is a key variable in determining cross-sell promotions, product pricing and packaging based on historical as well as future anticipated consumer information. Lifetime value will be better understood to allow for organizations to think about potentially good prospects and the overall return on the relationship that is developed over time. CRM systems will be blended with operational and back- office systems to provide a seamless, real-time data environment. CRM will not only be about servicing the customer better, but also servicing the customer in the best interests of the customer as well as the business itself.

LIMITATIONS
Many CRM programs fail for two reasons: 1. Lack of supportive business processes: Because business processes and organizational goals are not part of a strategic CRM plan tied to organizational goals and objectives.

2. Lack of an enterprise perspective: For Relationship Marketing to be effective, it requires that the organization creates a seamless enterprise view. A lot of CRM programs fail because they are assembled with disparate components that aren't designed to work together as part of a complete CRM system designed to meet organizational objectives.

REFERENCES
Websites http://en.wikipedia.org/wiki/Customer_relationship_management http://www.crmnewz.com/ http://www.microsoft.com/crm www.crmsolution.com