“Listening to customers must become everyone’s business.

With most competitors moving ever faster, the race will go to those who listen and respond more intently”. Tom Peters, Thriving on Chaos

Chapter 1: Conceptual Framework for CRM
What is Customer Relationship management?
Before we begin to examine the conceptual foundations of CRM, it will be useful to define what is CRM. A narrow perspective of customer relationship management is database marketing emphasizing the promotional aspects of marketing linked to database efforts. Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention in which a variety of aftermarketing tactics is used for customer bonding or staying in touch after the sale is made. Shani and Chalasani define relationship marketing as “an integrated effort to identify, maintain, and build up a network with individuals consumers and to continuously strengthen the network for mutual benefit of both sides, through interactive, individualized and value-added contacts over a period of time”. The core theme of all CRM and relationship marketing perspectives is its focus on cooperative and collaborative relationships between the firm and its customers, and/or other marketing actors. CRM is based on the premise that, by having a better understanding of the customers’ needs and desires we can keep them longer and sell more to them. Growth Strategies International (GSI) performed a statistical analysis of Customer satisfaction data encompassing the findings of over 20,000 customer surveys conducted in 40 countries by Infoquest. The conclusions of the study were: • A Totally Satisfied Customer contributes 2.6 times as much revenue to a company as a Somewhat Satisfied Customer.

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• A Totally Satisfied Customer contributes 17 times as much revenue as a Somewhat Dissatisfied Customer. • A Totally Dissatisfied customer decreases revenue at a rate equal to 1.8 times what a Totally Satisfied Customer contributes to a business. • By reducing customer defection (by as little as 5%) will result in increase in profits by 25% to 85% depending from industry to industry. An important facet of CRM is “customer selectivity”. As several research studies have shown not all customers are equally profitable (Infact in some cases 80% of the sales come through 20% of the customers). The company must therefore be selective and tailor its program and marketing efforts by segmenting and selecting appropriate customers for individual marketing programs. In some cases, it could even lead to “ outsourcing of some customers” so that a company better utilize its resources on those customers it can serve better and create mutual value. However, the objective of a company is not to really prune its customer base but to identify appropriate customer programs and methods that would be profitable and create value for the firm and the customer. Hence, CRM is defined as: Customer Relationship management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer. As is implicit in the above definition, the purpose of CRM is to improve marketing productivity. Marketing productivity is achieved by increasing marketing efficiency and by enhancing marketing effectiveness. In CRM, marketing efficiency is achieved because cooperative and collaborative processes help in reducing transaction costs and overall development costs for the company. Two important processes for CRM include proactive customer business development and building partnering relationship with most important customers. These lead to superior value creation. The basic concept is that the customer is not someone outside the organisation, he is a part of the organisation.

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Key CRM principles
Differentiate Customers: All customers are not equal; recognize and reward best customers disproportionately. Understanding each customer becomes particularly important. And the same customers’ reaction to a cellular company operator may be quite different as compared to a car dealer. Besides for the same product or the service not all customers can be treated alike and CRM needs to differentiate between a high value customer and a low value customer. What CRM needs to understand while differentiating customers is: - Sensitivities, Tastes, Preferences and Personalities - Lifestyle and age - Culture Background and education - Physical and psychological characteristics • Differentiating Offerings

→ Low value customer requiring high value customer offerings → Low value customer with potential to become high value in near future → High value customer requiring high value service → High value customer requiring low value service High Low value customers who require high levels of service must either purchase the higher level of service or become our competitors low value/high cost customers High value customers who require a high level of service are maintained without expanding the costly offering to the entire customer population

Low Low Keeping Existing Customers Customer Value Fig. 1 Customer value – Service Matrix High

Service Requirement

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Grading customers from very satisfied to very disappointed should help the organisation in improving its customer satisfaction levels and scores. As the satisfaction level for each customer improve so shall the customer retention with the organisation. • Maximizing Life time value Exploit up-selling and cross-selling potential. By identifying life stage and life event trigger points by customer, marketers can maximize share of purchase potential. Thus the single adults shall require a new car stereo and as he grows into a married couple his needs grow into appliances. • Increase Loyalty Loyal customers are more profitable. Any company will like its mindshare status to improve from being a suspect to being an advocate. Company has to invest in terms of its product and service offerings to its customers. It has to innovate and meet the very needs of its clients/ customers so that they remain as advocates on the loyalty curve. Referral sales invariably are low cost high margin sales. (Fig 2. Categorizing Customers)

Summarizing CRM activities:

High Low Strategic Importance To Your Business Plan

*You have No Choice But To Handle Them Very Carefully. Will Consume Energy # Think Of Innovative Ways of Getting them On Your Side, But The ‘Cost Of Acquisition’ Must Be Controlled *Focus On Short Term Profitability. Spend Minimum Energy To Meet Your Objectives. #Don’t Pursue. Use Opportunity As It Comes. Short Term Acquisition Shouldn’t Affect Long Term Image.

*Cultivate Relationship. Spend Energy. Go Out Of Your Way. #Think Of Strategies TO Move Them Away From Competition. Will Consume Disproportionately High Energy. *Very cautious decision needed. Re-examine business Plan & Strategy. Evaluate That Your Loss (i.e. Your competitor’s gain) Doesn’t become nightmare for you. #Needs In-depth strategic review as acquisition alone and dissatisfaction later could be more harmful

*Existing Customers #Potential Customers

Low High Relationship & Profitability Potential

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2.The CRM cycle can be briefly described as follows: 1. 5.3 CRM Activities 4 1 Creating value for customers & prospects 5 3 2 Creating loyal customers Figure 4 Customer Life Cycle Management Customer Need Assessment & Acquisition Customer Retention and referrals for new customers Customer Development through personalization and customization Customer Equity Leverage through Cross Selling and Up Selling -5- . 3. (having in depth knowledge of Creating value for customers and prospects Creating loyalty Acquiring new customers Creating profits Acquiring new customers Creating Profits Acquiring new customers Learning from customers a& prospects customer) Fig. 4. 6. Learning from customers and prospects.

a number of key marketing concepts can also be used to see where CRM has developed from: • • • Satisfying Needs. Such direct interaction led to relational bonding between the producer and the consumer. It was only after industrial era’s mass production society and the advent of the middlemen that there were less frequent interactions between producers and the consumers leading to transactions oriented marketing. In recent years however. These include: - -6- . In addition to this. The production and consumption factions got separated leading to marketing functions being performed by the middle men and middlemen are in general oriented towards the economic aspects of buying since the largest cost is often the cost of goods sold. • 1990’s – Relationship Marketing. when Gibbs SR toothpaste began the first marketing of this kind with its black and white campaign. direct mail campaigns and early telemarketing (such as publishing) • 1980’s – where Niche marketing made millionaires of those who were best at it. The explosion of telemarketing and call centres. The recognition of the true value of retention and the use of Lifetime Value as a business case. Customer Orientation The organisation needs to be arranged so that all functions contribute Profit must be the consequence of delighting customers (Kotler) Developing customer relationship has historical antecedents going back into the pre industrial era. all set up to develop relationships with customers.The Emergence of CRM Practice The Past: Looking back at a snapshot history of marketing. we can see the following clear developments and progression over the last four decades: • 1960’s – the era of Mass Marketing. • 1970’s – saw the beginning of segmentation. several factors have contributed to the rapid development and evolution of CRM. Similarly artisans often developed customized produce for each customer.

software or household appliances and even consumables. Customer expectations are changing almost on a daily basis. it minimizes the role of the middlemen. This needed close working relationships with the customers. Databases and direct marketing tools give them the means to individualize their marketing efforts. Xerox. banks insurance. General Motors. 2. 7. 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 end-customers. interactive channels including e-mail. etc formed partnering relations with suppliers and customers to practice TQM. When companies embraced TQM it became necessary to involve customers and suppliers in implementing the program at all levels of the value chain. Emerging real time. Another force driving the adoption of CRM has been the total quality movement. 4. IBM. 5. Since services are typically produced and delivered at the same institution. in many industries such as airlines. For example. -7- . Toyota. Newly Empowered customers who choose how to communicate with the companies across various available channels. The speed of business change. In the current era of hyper competition. Also nowadays consumers expect a high degree of personalization. ATMs and call centre that must be synchronized with customer’s non-electronic activities. 3. requiring flexibility and rapid adoption to technologies. As a result product quality and cost are no longer significant competitive advantages. Advances in information technology. 8. the de-intermediation process is fast changing the nature of marketing and consequently making relationship marketing more popular. As several researches have found out retaining customers is less expensive and more sustainable competitive advantage than acquiring new ones. The growth in service economy. Thus several companies such as Motorola.1. 6. Other programs such as JIT and MRP also made use of interdependent relationships between suppliers and customers. marketers are forced to be more concerned with customer retention and customer loyalty. Ford. networking and manufacturing technology have helped companies to quickly match competition.

The globalization of world marketplace makes it necessary to have global account management for the customers. et al(1999) found that relational intensity increased in hospitals facing a high degree of competitive intensity 11. Purpose  Increase Effectiveness  Improve Efficiency Programs  Account Management  Retention Marketing Team Structure Role Specification Planning Process Process Alignment Monitoring Process Communication Employee Motivation Employee Training Evolution • Enhancement • Improvement Fig 5. three important decision areas relate to defining the purpose (or objectives) of engaging in CRM. CRM Formation Process In the formation process.9. In a recent study. CRM Process Framework Relationship Performance  Strategic  Financial  Marketing → Retenti on Partners  Criteria  Process -8- . On the supply side it pays more to develop closer relationships with a few suppliers than to develop more vendors. There is a greater opportunity for up selling and cross selling. Naidu. 10. selecting parties (or customer partners) for appropriate CRM programs and developing programs (or relational activity schemes) for relationship engagement with the customer. In addition several marketers are concerned with keeping customers for life than making one time sale.

partnering programs. building customer loyalty and commitment. one-to-one marketing. and. Relational Parties In the Initial phase. and general goals. operational goals. partnering to enter new markets and develop new products. reducing the burden of excessive customer acquisition cost. or business-to-business customers. consumers are motivated to seek the rewards and benefits associated with CRM programs. individualizing and personalizing their market offerings to anticipate and serve the emerging needs of individual customer. customers for its various programs. and redefining the competitive playing field for their company. to their natural inclination of reducing choices. CRM Programs A careful review of literature and observation of corporate practices suggest that there are three types of CRM programs: continuity marketing. stating the objectives and defining the purpose of CRM in a company helps clarify the nature of CRM programs and activities that ought to be performed by the partners. and through customer retention economics. marketing goals. These objectives could be specified as financial goals. -9- . streamlining order processing and inventory management. such as lower distribution costs. It will further help in evaluating CRM performance by comparing results achieved against objectives.CRM Purpose The overall purpose of CRM is to improve marketing productivity and enhance value for parties in involved in the relationship. strategic goals. These take different forms depending on whether they are meant for end-consumers. distributor consumers. a company has to decide which customer type and specific customers or customer groups will be the focus of their CRM activities. Defining the purpose would also help in identifying suitable relationship partners who have necessary expectations and capabilities to fulfill mutual goals. In addition. Customers are motivated to engage in relational behavior because of psychological and sociological benefits associated with reduction in choice decisions. They can enhance marketing effectiveness by carefully selecting. By seeking and achieving operational goals. firms could achieve greater marketing efficiencies. Thus.

Table 1 presents various types of CRM programs developed for different types of customers. Known as Key Account CRM Programs • • • Mass Markets Distributors Business to Business Markets • Special Sourcing Arrangements Key Account Global Account Strategic Partnership Co-Design Co-Development . interactive marketing. Customer Types Program Types Continuity Marketing • • One-to-One Marketing Partnering/CompanyMarketing • • • • • After. In the mass markets individualized information on customers is now possible at low costs due to the rapid development in the information technology and due to availability of scalable data warehouses and data mining products. In the context of business-to-business markets. One-to-one Marketing Meeting and satisfying each customer’s need uniquely and individually. and aftermarketing programs in order to develop relationship with high-yielding customers. individual marketing has been in place of quite sometime.Marketing Loyalty Programs Cross-Selling Permission Marketing Personalization Affinity Partnering Co-Branding • • • • • Continuos Replenishment ECR Programs Customer Business Development Logistics Partnering Joint Marketing • • Table 1 Continuity Marketing Programs Take the shape of membership and loyalty card programs where customers are often rewarded for their member and loyalty relationships with the marketers. The basic premise of continuity marketing programs is to retain customers and increase loyalty through long-term special services that has a potential to increase mutual value through learning about each other.10 - . By using online information and databases on individual customer interactions. Information on individual customers is utilized to develop frequency marketing. marketers aim to fulfill the unique needs of each massmarket customer.

Training employees to interact with customers. accounting and budgeting processes. to work in teams. Thus marketers should create common bonds through symbolic relationships. • It is essential to establish intra-company communication particularly among all concerned individuals and corporate functions that directly play a role in managing the relationship with a specific customer or customer group. etc • Human resources decisions are also important in creating the right organisation climate for managing relationship marketing.11 - . Partnering Programs The third type of CRM programs is partnering relationships between customer and marketers to serve end user needs. two types of partnering programs are most common: co-branding and affinity partnering. affinity groups.Management Program. information systems. and membership benefits or by creating online communities • Involving customers in the planning process would ensure their support in plan implementation and achievement of planned goals. here marketers appoint customer teams to husband the company resources according to individual customer needs. • With mass-market customers frequent face-to-face interactions will be uneconomical. . In the mass markets. the more critical is the role specification decision for the partnering firms. and the more complex is the composition of the relationship management team. So is the issue of creating the right motivation through incentives and rewards. merchandising process. All customers are not willing to participate in the planning process nor is it possible to involve all of then for relationship marketing programs for the mass markets. endorsements. • Operating process between the company and customer partners: Operating alignment will be needed in order processing. and manage relationship expectations are important. CRM Governance Process • Greater the scope of CRM program and associated tasks.

one could estimate the propensity of either party’s inclination to continue or terminate the relationship. market and business development agents. If co-operative and collaborative relationship with the customers is treated as an intangible asset of the firm. initiating changes in relationship structure. etc. Such propensity could also be indirectly measured by measuring customer loyalty. CRM Implementation Issues One of the most interesting aspects of CRM development is the multitude of customer interfaces that a company has to manage in today’s context. While each of these units could operate independently.12 - . modification. CRM Performance Evaluation Process Without a proper performance metrics to evaluate CRM efforts. Internet websites. it would be hard to make objective decisions regarding continuation. a company’s direct interface with the customers. Another global measure used by firms to monitor CRM performance is the measurement of relationship satisfaction. call centres. For large customers it also includes cross-functional teams that may include personnel from various functional departments. service personnel. if any was primarily through sales people or service agents. creating a system for discussing problems and resolving conflicts. enhancement. its economic value add can be assessed using discounted future cash flows estimates. marketing departments. Until recently. or termination of CRM programs. they still need to share information about individual customers and their interactions with the company on a real time basis. For example. Here the term relationship equity comes in where you measure the intangible assets of the firm. In today’s environment most companies interface with their customers through a variety of channels including sales people. fulfillment houses.• Periodic evaluation of goals and results. design or governance process if needed. a customer who just . By measuring relationship satisfaction.

implementation tools to support interactive solutions for customer profitability analysis. is not likely to be treated kindly by the customer. they still do not provide knowledge output to the front line personnel. and measuring CRM performance would be the next level of solution sought by most enterprises.placed an order on the Internet and subsequently calls the call centre for order verification expects the call centre staff to know the details of his or her order history.6. In addition. CRM solutions platform needs to be based on interactive technology and processes. As shown in Figure. Such a system would identify appropriate data inputs at each customer interaction site and use analytical platforms to generate appropriate knowledge output for front-line staff during customer interactions. data warehousing and data mining tools are thus very valuable for CRM systems and solutions. customer problem solving. However. customer segmentation. integrated marketing communication. If a call centre personnel cannot identify or differentiate a high value customer and does not know what to up-sell or cross sell to him then it would be a tremendous loss of opportunity for the company. . virtual team management of large global accounts. Similarly a customer approached by a sales person unaware that she has recently complained about dissatisfactory customer service. Therefore effective CRM requires a front-line information system that shares relevant customer information across all interface units. Although most CRM software solutions based on relational databases are helping share customer information. demand generation. account planning.13 - . Relational databases. contact management. the challenge is to develop and integrated CRM platform that collects relevant data input at each customer interface and simultaneously provides knowledge output about the strategy and tactics suitable to win customer loyalty and support. customer care strategies. It should assist the company in developing and enhancing customer interactions and one-to-one marketing through the help of suitable intelligent agents that help develop front-line relationship with customers. opportunity management.

14 - . The lack of CRM strategy or CRM programs. but the usability and effectiveness in producing desirable results from such tools is limited. CRM tools would be valuable when they are used to identify and differentiate individual customers and to generate individualized offer and fulfill customized solutions. This leads to creating an operational tool within the company. .Sales Group Knowledge Output Data Input Knowledge Output Data Input Internet Market Development Data Input Knowledge Output Integrated Marketing Information Platform •Information Content •Relational Databases •Decision Support System •Active Intelligence •Business Rules •Collaborative Communication • User Profiles Knowledge Output Data Input Knowledge Output Data Input Call Centre Data Input Marketing Knowledge Output Customer Operations/ Service Figure 6 . it could backfire as ad hoc solutions could cause unintended deterioration in customer relationships. CRM should not be misunderstood to simply mean a software solutions implementation project. From a corporate implementation point of view. Information Platform for CRM Since CRM implementation comprises a significant information technology (IT) component. For those who apply themselves and develop improvised solutions. would leave the front-line people without any knowledge of what they should be doing with the additional customer information that they now have access to. these companies have handed over the responsibility of CRM implementation to information technology departments. Appropriate strategy and excellent implementation are both needed for obtaining successful results. They are focussed on simply installing CRM software solutions without a CRM strategy or program in place.

data and documents) means retaining the individual. sales after-sales people would be knowledge workers. Most growable customers. portals. figures. like legacy systems. Most valued customers. so too does knowledge. which is invariably not possible. it must be available at the right time to be able to act upon it. customers. existing data warehouses. but it’s a complex exercise. Retaining tacit knowledge (derived from experiences. external marketing research agencies and cultivating the knowledge where it resides. Knowledge Management (KM) is about embracing a diversity of knowledge resources. surveys. partners.15 - . Marketing. Metrics. thereafter information which is required to effectively implement principles of CRM. A straightway technique is to create a data warehouse. websites. It is possible to generate explicit knowledge from tacit knowledge. suppliers. benchmarking are some of the common technique of KM system evaluation. Just as more tangible corporate assets like computer systems have a finite shell life. Front office could be more productive if they could utilize customer knowledge. The key ingredient of this exchange is face to face sharing of knowledge or virtual environmental tools like . To effectively implement a CRM solution it is very important to identify real knowledge about different types of customers (Viz. ROI. etc. KM implementation is the key to CRM. could be mined out of this data warehouse. Balance Scorecard method. it becomes imperative to design CRM solutions keeping in mind these most valuable customers and to leverage 80% non structured data of about 20% of these most valuable customers. Below zero customers) from plethora of internal and external data.Chapter 2: CRM and Related Concepts Knowledge Management (KM) with focus on CRM As Peter Drucker defined “Information is data endowed with relevance and purpose”. It’s a proven fact that 80% of an organisation revenues come form 20% of its customers.

Whereas ERP implementation can result in improved organisational efficiency. i. satisfaction. There are ways to do text mining. The choice for CKM system could be Web (Enterprise information portal) or a packaged solution such as Lotus Notes. CRM aims to provide organisational effectiveness by reducing sales cycle and selling cost.Lotus Notes.e. albeit in front-office areas such as marketing. ERP and CRM Like ERP. and customer support. Apart from the end-users. profitability. The key to successful customer KM is personalization.16 - . which may be reinvested to further enhance its efficiency. The choice of Customer Knowledge Management (CKM) architecture should have a layered approach. and retention. it involves internal employees. ERP . promoting and executing best practices in customer facing activities. web solutions. CRM plays an important role in building long-term relationships. Role of CRM in the Context of SCM In the context of SCM. Hence for tacit knowledge exchange text mining is very useful and important. channel members and other external entities such as advertising agencies and consulting organisations. where alliances and partnerships are keys to success. The supply chain of tomorrow will look like a virtual organisation. identifying markets and channels for expansion. like search engines. how to extract the knowledge that is pertinent to the user and translate it into a format that is easily understood. Microsoft solution. CRM solutions focus on automating and improving business processes. Existing systems should be seamlessly linked with the proposed layer. customer service. sales. which can facilitate tacit knowledge exchange. and improving customer value. etc. and sustain the competitive advantage. The bonding between partners will be closely held by CRM practices. text analysis tools. seamlessly integrated through sharing data and savings as well. While CRM applications provide the framework for embodying. The success of relationships depends upon sharing of savings from the supply chain.

In fact. Key Findings of the study are: (a) the number of businesses citing customer retention as a critically important measure in the next 5 years has jumped to nearly 60%. The clerk could respond by “You are in luck! Your room isn’t ready. Regain Management “ The cost of acquiring a new customer is 9 to 12 times that of holding on to an existing customer. Income streams contribute cash flows in terms of years for any single product. Base and the company could provide additional features and benefits to win them back. and (c) companies predict their use of Internet to collect customer data will surge by 430% Consumer Life Time Value Quantifying the “value” of customers is absolutely essential in regain management. as companies shift their focus from attracting new customer to retaining their more profitable ones.17 - . Regain Strategies: • • Customization Differentiation Strategies The lost customer would be segmented differently from the existing customer. Each of the customers then delivers an income stream and the stream of profit far exceeds the value of original purchase.. That means you get to eat breakfast “on us” and use our business centre for free!” . up from about 40% today. “Wow” Syndrome For example. a client checks into a hotel and his/her room isn’t ready.provides the backbone. (b) by 2002. resources and operational applications to make organisations more efficient in achieving these goals. the percentage of profit a company makes from continued sales to its own customer base is consistently higher than the profit made on original sale. 83% of companies expect to have customer data warehouses.”-Philip Kotler A study conducted by Andersen Consulting in conjunction with EIU found that businesses are intensifying their focus on customer and are taking a more process oriented approach to customer relationship management.

retention. Companies are now focusing to .Chapter 3: Technological Tools for CRM Tools • Customer database A good customer information system should consist of a regular flow of information. These solutions integrate the voice switch of automated telephone systems (e. more innovative channels of interacting with customers are emerging as a result of new technology. and monitor customer contact.18 - . predictive dialing. and it has sufficient depth to understand the customer and accurately anticipate their behavioral patterns in future. such as global telephone based calls centres and the internet. systematic collection of information that is properly evaluated and compared against different points in time. Companies are increasingly adding data from a variety of sources to their databases. Customer data strategy should focus on processes to manage customer acquisition. Today. auto display of relevant customer data. Customer relationships are increasingly sustained by information systems. EPABX) with an agent host software allowing for automating call routing to agents. and development. self service Interactive Voice Response systems. Other Technologies that are used are as follows: • • • • Electronic Point of Sale(EPOS) Sales Force Automation Customer Service Helpdesk Call Centres Call Centre helps in automating the operations of inbound and outbound calls generated between company and its customer. These systems are useful in high volume segments like banking.g. implement. telecom and hospitality. etc. The customer database helps the company to plan.

• Systems Integration While CRM solutions are front office automation solutions. This will help the company in tracking and correcting the product problems reported by customers by feeding this information into the R&D operations via ERP. CRM and ERP are complementary. presale and post-sale services and complaint handling by providing an integrated view of the customer.offer solutions that leverage the internet in building comprehensive CRM systems allowing them to handle customer interactions in all forms. This integration of CRM with ERP helps companies to provide faster customer service through an enabled network.19 - . CRM – A FRAMEWORK Traditional Approach to CRM • Customer Contact by − Telephone − Mail − In Person • Personal Selling • After Sales Service • Complaint Handling • Account Management • Customer care • Customer Satisfaction Web-Enabled & Integration Approach • Customer Information System • Customer Database • Electronic Point of Sale • Sales Force Automation • Automation of Customer Support • Call Centres • Systems Integration • Lifetime value of a Customer Integration with technology (Web & Internet) . customer order processing and fulfillment. inventory. sales forecasting. ERP is back office automation solution. Therefore. sales force management. finance. An ERP helps in automating business functions of production. delivery. where as CRM automates the relationship with customer covering contact and opportunity management . marketing and product knowledge. order fulfillment and human resource giving an integrated view of business. installation. which can direct all customer queries and issues through appropriate channels to the right place for speedy resolution. It is necessary that the two systems integrate with each other and complement information as well as business workflow.

products they buy. Data mining helps in the process of understanding a customer by providing the necessary information and facilitates informed decision-making. income. marital status. Operational CRM Analytical CRM Collaborative CRM Customer Fig.20 - . preferences. education. Advances in data storage and processing technologies have made it possible today to store very large amounts of data in what are called data warehouses and then use data mining tools to extract relevant information. Individual level information consisting of: .8 Interactions between CRM Technologies Information Requirements Of An Effective CRM Solution The employees of a firm employing CRM would require rich information about their firm and customer base including: • Information about the market • Information about the firm • The current segment • Demographic Distribution (by age. etc) • • The firm’s best customers and the segment they belong to. Collaborative CRM involves the facilitation of collaborative services(such as e-mail) to facilitate interactions between customer and employees. sex. All this effort produces rich data that feeds the Analytical CRM technologies.Data Mining for CRM: Some Relevant issues Data mining is an important enabler for CRM. Operational CRM solutions involve integration of business processes involving customer touch points. habits and tastes of each segment.

we obtain clusters who are profitable to various extent. when customer of the retail store are segmented by profitability criteria. which influence a majority of the customer and therefore cannot be customized to suit individual tastes. dislikes. habits and preferences → Events coming up in their personal life etc. • Targeting new set of customers. Hence. When a new customer enters the store. education. • We are dealing with aspects of the service. Knowledge obtained by mining at macro level is useful when dealing with situations where: • We are dealing with a customer about whom we do not have individual information .→ Customer personal details such as name. In retail store example.21 - . a store can segment its customers on basis of age and characteristics can be extracted.  . Levels of data mining operations The aggregate or the Macro level Mining at the macro level gives us a broad overview of the data e. colour preferences. the salesman could use his intuition in arriving at the customer’s age and recover the characteristics of that age group such as the frequently bought products. If the retail chain has opened a new store it can use the data from the most similar current store to predict the behavior of the new prospects. example being the design of the physical layout of a retail store.g. family details. address. A salesman can encourage him/her to try out the product if his/her profile matches that of the current product users. etc. • Predicting the possibility of an action that the cu has never undertaken. etc → The customer group /segment to which the individual belongs → History of present and past behavior → Likes. A customer might not have tried out a new product because he/she was not aware of it. we need to extrapolate the characteristics of the group to which he/she might belong.

) to further cement the precious relationship. anniversaries. birth of child etc. the retail store can go to the extent of finding out the preferred colours of his shirt • A firm takes up micro level mining to build a detailed customer profile of a regular customer. The firm wants to take advantage of the personal events in a customer’s life (e. Offering individualized value adding propositions can strengthen relationship with the individual customer. the firm obtains more data about him/her. • Data mining this level might be expensive if the data mining tool has to cull out individual information from a large database.22 - . For example. The firm wants to assist the purchase of a new product based on the information it has of the last purchase. the retail store can offer discounts on the purchase of a bundle of products that the customer prefers buying together. For example. • Knowledge obtained at the individual level is useful in situations where: − The firm wants to customize its offering to the customer based on the customer’s tastes and preferences e. If retail customer suddenly switches brand then he/she might not be satisfied with the last purchase. Current patterns that go against usually observed customer behavior point to interesting phenomenon. if a customer has bought a suit in his visit.g. For this.g. birthdays. Some important features to note about mining at this level are: • Micro-level mining provides specific information about a particular customer. − − − The most common operations used at this level are: - Classification: . Having a separate database for profitable customer might be helpful.The Individual or Micro level As interactions of the individual with the firm increases. we need to track the cu and mine at the individual or micro level. then the store might offer a discount on the purchase of a tie of a matching colour.

CRM uses classification for a variety of purposes like behavior prediction. This deviation on further analysis points out to non-stocking of a popular brand. is an operation that seeks relationship between product items characterizing product affinities or buyer preferences. . Frequency. Suppose the retail store collects data on the monthly visits of the customers viz. design coupons. And purchases made during each visit.g. product and customer categorization. Such information can be used to design store layouts. If the manager has a strong intuition that total purchase is linked to frequency of visit. Link analysis can also trace connections between items of record over time.Classification is a process that maps a given data item into one of the several predefined classes. called market basket analysis. A link analysis task performed on this data will point to items that are bought together e. Segmentation Segmentation aims to identify a finite set of naturally occurring clusters or categories to describe data. Regression finds application in a CRM environment where prediction needs to be made about the behavior regarding real value added variables. This model can then be used to predict future purchases of a customer. Link Analysis Link Analysis seeks to establish relationship between items or variables in a database record to expose patterns and trends. Deviation Detection Deviation Detection (DD) focuses on discovering the most significant changes in the data from previously measured. Most CRM solutions have a DD task running in parallel on a regular basis. Regression needs sufficient amount of data to be reliable and valid. then this situation can be modeled by regression. Regression Regression is the operation of learning a function that predicts the value of a real valued dependent variable based on values of other independent variables. time spent on each visit. Suppose a retailer finds out that the sales from a particular section of the store have been much less than expected. bread and butter are bought together rather than bread and orange juice. etc.23 - . expected or normative values. The retail store collects thousands of interactions daily. The most important link analysis application in CRM.

This implies the organisation has to change from: Mass Marketing Product Focus Economies of Scale 1 way communication Response Time Product Focus Customer Focus Economies of time Interactive Real Time Present CRM Alternatives Present CRM solutions are offered by host of vendors that are to a great extent not industry specific. who have come up with industry specific solutions. The existing CRM Solutions Delivering the ‘360 view’ requires automation to bring together all the data concerning a customer. visualization techniques. Typical offerings of the current CRM solutions (such as Siebel. the broad model around which the CRM solutions are built remain the same. Internet Sales Call Centres. etc are used for the above purposes. Tele sales.Tools such as decision trees.24 - . nearest neighbor techniques. clustering algorithms. While there are some vendors.com. etc) vary from solution to solution. Tele marketing Product and brand management Field sales. Field Service Internet Customer Service Service Interaction Centre Business Partner Collaboration The Customer focussed organisation: CRM Model . case based reasoning. However typical CRM offerings consist of: Customer Development Service Centre Sale management and support Market Analysis Internet. rule induction. Oracle Apps or MySap. Adopting a similar or a look a like solution across industries is what causes major strain in servicing a customer.

its is critical that extensive customer research is done to identify their information needs and thus what profile data will be relevant for us. Sometimes critical DSS input like “Profitability Analysis” itself may reside on a worksheet. But typically sales teams could be managing leads on an excel worksheet. Thus any data-warehousing project needs to work closely with the research team. deduplicate. b) After extracting the data from various systems. Data Warehouse Legacy & Operation Extract & Transfer Risk Cube FP&A Cube Mktg & Sales Cube Campaign Mgmt OLAP Tool Thus a Data Warehouse solution must be able to accept information from such “unstructured” sources as well as budget for an open architecture to enable plug-in for systems to be developed in the future. c) Even though we may find 80% of the names in a database of a million customers using combinations of lets say a 1000 first and last names. we need to scrub and clean the data.25 - . a) Generally the existing information is mapped into a data warehouse. work on not completely predefined processes so as to enable front office to be proactive to each customer needs The Mindset impact on CRM A typical data warehouse will have the following components: • While developing a data warehouse one takes into account all the legacy and operation systems.The idea here is to develop systems that allow flexibility. to take into account all . Since a customer centric info-base is being developed.

retail outlets. d) Ad-hoc querying is a tool that is most often used in such applications. With the advent of tools like MetaData Repository. Thus the CRM specialist in marketing must be well versed with all these tools and techniques. value added experience to our customers at all touch points – call Centres. Even then we may not be able to comprehensively cover all future combinations. kiosks. It adheres to permission based practices. Unfortunately not much effort is made to make this tool “end-user” friendly so that even a layman could run his/her reports. respecting individual’s preferences regarding how and whether they wish to communicate with you and it focuses on understanding how the economics of customer relationship affect the business. as is the case with updating “masters” in a traditional system. Now. Internet and branches. drill down OLAP tools and Palm Pilots it is now possible for hardcore marketing and sales types to directly access and run their queries. mobile devices. the system must expect this kind of input on a regular basis rather than it happening by exception. personalized and relevant communications with customer across both electronic and traditional channels. e) The real power of the CRM system is its ability to provide a rich.26 - . eCRM What is eCRM? In simplest terms eCRM provides companies with means to conduct interactive. Infact we need to budget for training the sales and marketing team with the use of datawarehouse. It synchronises communication across otherwise disjoint-customer facing systems. Typically a data-warehouse and data mining person is placed in information technology to manage all queries. It utilizes a complete view of the customer to make decisions about messaging. offers and channel delivery.000 first and last names. Integration and information dissemination must happen at all these points.possible combinations we may actually need a database of 10. eCRM Vs CRM .

the call Centre. or even the fax.CRM is essentially a business strategy for acquiring and maintaining the “right” customers over the long term. External Information eCRM Architecture The primary inputs to this module are mainly from the eCRM Assessment and strategy alignment modules.27 - . a number of channels exist for interacting with customers. Empowerment 4. to the customer. assessment and “actionable” customer strategies. Economics 5. One of these channels is “electronic” – and has been labeled “e-commerce” or “e-business”. During this stage the company will try and develop a Connected Enterprise Architecture (CEA) within the context of the company’s own CRM strategy. albeit a powerful new one. The six “E’s” of eCRM 1. Evaluation 6. Enterprise 3. The following is a set of technical eCRM capabilities and applications that collectively and ideally comprise a full eCRM solution: . Electronic channels 2. This electronic channel does not replace the sales force. Why employ eCRM? Companies need to take firm initiatives on the eCRM frontier to • Optimize the value of interactive relationship • Enable the business to extend its personalized reach • Company-ordinate marketing activities across all customer channels. It is simply another extension. The thrust of eCRM is not what the organisation is “doing on the web” but how fully the organisation ties its on-line channel back to its traditional channels. Within this framework. or customer touch points. • Leverage customer information for more effective emarketing and ebusiness • Focus the business on improving customer relationship and earning a greater share of each customer’s business through consistent measurement.

The individual applications are not the best in any objective sense. which wants to implement CRM solutions can choose from four categories of solutions − − − − Integrated applications suite Interfaced applications bundle Interfaced best of breed solutions Best of cluster Selecting an interfaced best of breed approach for pure functionality or a front office application suite solely for integration limits enterprise choices. a set of interfaced application from a single vendor containing more than one technical architecture or more than one logical databasefrequently assembled by the vendor through the process of acquisition or partnership An alternative approach to suites is an interfaced best of breed solution – an approach whereby an enterprise selects from multiple vendors a set of applications that must be interfaced to work together. some enterprises select the applications because they best meet the particular needs. Rather. Enterprises need to start with a clear picture of the basic truths of integration. Some suites are more often interfaced application bundle i.28 - . one of the selected vendors or a third party integrator. Categories of CRM solutions Any enterprise . The challenge of this approach is that. either by the enterprise.• Customer Analytical Software • Data mining software • Campaign Management software • Business Simulation • A real time decision engine Review and Assessment of CRM solutions CRM software applications embody best practices and employs advanced technologies to help organisations achieve these goals. interfacing and functionality. the enterprise fails to . referencing a common logical database with a single schema. in some cases. An integrated application suite is a set of application that employs a common architecture.e.

and analysis. collateral generation and marketing materials management. proposal generation and management. repair scheduling and dispatching. the applications remain stove pipes. and expense reporting. Given below is a brief review of what some of the known vendors in this area have in their applications for these verticals. compensation. sales forecasting. problem and solution database. Customer service and support applications These include customer care. field service. The table 2 at the end gives comparative assessment of the products discussed below for the above verticals: • SIEBEL .29 - .complete the necessary interfaces to get the individual applications working together. incident. consequently. execution. and service request management. defect and order tracking. opportunity and pipeline management. Functional components and channels are described below: Sales applications Common applications include calendar and scheduling. pricing. territory assignment and management. Best of cluster is similar to best of breed except that here best is chosen from the cluster and they are interfaced. Key requirements for CRM solutions Some of the functional and technical requirements for CRM solutions are as listed below: • Business intelligence and analytical capabilities • Unified channels of customer interactions • Support for web based functionality • Centralized repository for customer information • Integrated work flow • Integration with ERP applications Functional Components of CRM solution CRM applications are a convergence of functional components. budgeting and forecasting. service agreements and contracts. advanced technologies and channels. contact and account management.list generation and management. Marketing applications These include web based and traditional marketing campaign planning.

finance. and capital market organisations to establish and maintain long term profitable relationship with consumers. through the retailer and the wholesaler. cable. medical management. call Centres. accelerate service delivery. • For telecom service providers: Siebel eCommunications helps wireless. Additionally. including the Internet. It has robust trade promotions planning functionality allowing users to manage customer promotion plans and the funds to support them. thereby ensuring better service and improved quality of care. The organisations can capitalize on information captured during each customer interaction to more effectively cross-sell and up-sell additional products and services. It is one of the few front office suite vendors having vertical specific functions. and Internet service providers to target and win the right customers. public sector (US). Using Siebel eConsumer Goods. and provide service across all touchpoints. and corporate customers.It continues to out market and out sell the competition. brokerage. • For Healthcare: Siebel eHealthcare gives organisations the ability to streamline and improve sales. apparel and footwear. communications. health care. enabling financial service organisations to provide a personalized experience across all channels. insurance. It can be integrated with most of the back office solution like SAP and Oracle.30 - . Its functionality is compelling. home office staff and independent brokers. The solutions for the verticals described above are discussed below: • For Consumer goods: a Siebel eConsumer goods offers eBusiness solution spanning the entire demand chain from the end consumer. By using multiple distribution channels. Siebel eFinance provides a comprehensive view of the entire customer relationship across multiple product lines. life sciences and high technology industry sectors. organisations can also identify customer-buying behaviors and translate this understanding into new trade promotions and product offerings • For Financial Services: Siebel eFinance enables banking. consumer goods. It has solutions for automotive. and network management services. member services. insurance. energy. Siebel eCommunications . while comprehensive route planning functionality enables integrated account targeting. Siebel eHealthcare provides organisations with a single view of their customers. to the manufacturer. small businesses.

The Internet computing architecture is compelling for connected non-mobile users. order management. It offers a broad set of functionality across e-commerce. Web Based. boasts 117 applications that span sales and service and incorporate multiple vertical markets.embodies the industry’s best practices for generating accurate service orders. the vendor's major release. centralized computing model. service representatives and salespeople can instantly access information such as billing. front office and business intelligence applications. and network management from Operation Support Systems (OSS). A major effort in the new application release is it integrates all the channels companies use to contact customers: Web. By using Siebel eCommunications’ integration technology. voice.0 Siebel eBusiness Connector for SAP R/3 Siebel Call Center Siebel eChannel ® Siebel eMail Response Siebel eCustomer Siebel Communications Server Siebel Field Service Siebel eMarketing Siebel Distance Learning Siebel Marketing Siebel eSales Siebel Global Enterprise Support Siebel Sales Siebel eService Siebel Language Extensions Siebel Service Siebel Wireless • Clarify It offers customer service & support and field service suite.31 - . • Oracle Oracle is betting everything on its thin. Oracle is rebuilding functionality on the new platform and integrates its various acquired products. however its sales functionality is immature. wireless and face-to-face contact. Siebel 99. and up-selling and cross-selling additional services. Some of Siebel employeeSome of Siebel customerSome of the additional products facing applications are: facing applications are: available in version 6. managing billing inquiries and adjustments. E-mail. to deliver highly responsive customer support and significantly increase sales. • Vantive .

CRM solutions are interwined combinations of technology and business processes.Vantive offers a compelling customer service and support and field service suite.A. N. In order to be effective CRM service providers will need a balanced understanding of both . Available Available N. N.A.A.32 - . and Event Management.A. Logix Microsystems. Available Available N. Available Available Available Available N. N. Table 2 Comparative Assessment of CRM Products for Vertical Specific Requirements CRMApplicationRequireme nt Consumer Products Category Management Promotion Management Demand Planning Interactive Selling Siebel Clarify Oracle Vantive Available Available Available Available Available N. Available Available N. N. Available Some Indian CRM solutions are by Sales Logix. Other CRM solutions are Aurum.A. Sonata Software.A. The rest of its front office functionality makes it suite more of a bundle. Available N. Epiphany. Encyclopedia Management. Available Available Available Available Available N. N.A.A. Available Available N. N. L&T information technology. Brand Management. N.A.A.A.A.A.A. The solution is integrated with PeopleSoft at the back office. Available Available Available Available N.A.A. Some frequent modules that most CRM have is: Forecast Management. Opportunity Management.A. Oracle India.A. Available Available Available Available Available Available Available Available N. Campaign Management.A. Telecom Service Providers Blended Sales & service contact Centre Competitive Pricing Analysis Integration with Billing System Churn management Commercial Banking Contact Centre Profitability Analysis Integrated Targeting Marketing Datamining Pharma & Healthcare Contract Management Marketing Analysis Disease Education System Knowledge Management System Available N. etc. N.A. Available N. Avyaya and Onyx. Available Available N.A.A. N. Available N.A.

The databases feed the technology infrastructure which links You with the customer touch points. The potential use of CRM lies in it being the leading indicator of future revenue than just being used as a customer facing transaction-processing tool or as a lagging indicator communicating past consumer grievances. The complete concept of CRM can be mapped on a technology solution as per the following blue print. Thus we have four components of a CRM initiative rollout • • • • Customer Value Management Strategy CRM roadmap keeping in mind industry nuances Database solutions Customer access channels Case Study 1: Implementing a TechnologyBased CRM Solution .33 - . It’s necessary to have an expertise in not CRM technology but also customer service processes.products and services.

34 - . CRM at ICICI involves increased communication between the virtual universal bank and its customers and prospects. It will also enable efficient campaign . icicimoneymanager. The Retail Strategy As part of plans. it established ICICI bank as a commercial bank that is flexible. ICICI believes that a true customer centric relationship can only be accomplished by considering the unique perspectives of every single customer of the organisation. sales associates. bank branch. kiosk.com.com. ICICI Lombard General insurance.The ICICI Experience ICICI set up as Development Bank over four decades ago to provide products and services for the corporate segment. ICICI Capital Services. Hence the pressing need to put in place a technology enabled CRM solution. is viewed as a discipline as well as a set of discrete software technologies. and be able to generate customized reports and promote cross selling. and magiccart. ATM. In addition to the bank. The underlying idea is to enhance every instance of contact with the customer. at ICICI. To begin with it will automate process-flow tracking in the product sales process. and ICICI web trade. etc – so as to allow ICICI to carry out cradle-to-grave customer management more efficiently. which will focus on automating and improving the business processes associated with the customer – face –to-face. call Centre. which would provide an integrated view of its customers to everyone in the organisation. telephone. among others. it is implementing various projects to establish world class CRM practices. as well as within the group itself. This apart the retail initiatives also include a plethora of web based businesses including city portals and various other utility sites such as billjunction. web. innovative and prompt in meeting customer requirements. the retail initiatives include Prudential ICICI AMC. diversified into the retail segment of the financial markets in the early 1990s. ICICI Personal Financial Services. It should allow ICICI to engage in one-to-one marketing by tracking complete customer life-cycle history. In 1994. Prudential ICICI Life Insurance.com. The CRM Roadmap CRM.

The CRM Business Transformation Map below shows the various aspects of that change.management by providing a software interface for definition. Implementing CRM A very detailed and comprehensive CRM action plan was developed based on the understanding that CRM will require enterprise wide transformation. the enterprise-wide CRM solution should seamlessly integrate non-transactional related customer information housed in the front-office with the transactional information housed in the back office. BUSINESS FOCUS Product Sales Channel Marketing Service Customer ORGANISATIONAL STRUCTURE Product Management Place Management Promotion Management Channel Management Contact Management Customer Management BUSINESS METRICS Product Performance Place Performance Program Performance Customer Revenues Customer Patterns & Profitability Customer Lifetime Value and Loyalty MARKETING FOCUS Mass Advertising TECHNOLOGY Sales Promotion Marketing Campaigns Integrated Marketing Communications Segment Specific Marketing CRM Transaction Processing Data Maintenance Data Access Data Warehouse Data Marts Customer Touchpoint Systems Source: “How to Get There From Here” by Melinda Nykamp. execution. all focussed on CRM. tracking. . and analysis of campaigns.35 - . From an architecture perspective. Nykamp Consulting group Interviews with key individuals throughout the organisation helped identify different initiatives that have been launched. President.

and what they wan to buy. be alert for the changes and be prepared to modify the service and value proposition as they change. differentiation should be based on the value customer are expected to deliver. And that is exactly what ICICI group aims to achieve out of its CRM initiatives. • Interact and Deliver ICICI is strongly of the opinion that value is not just based on the price of the product or the discounts offered. Successful customer retention basically involves getting it “right” on an ongoing basis. Remember that customers change as they move through differing life stages. customer perceptions of value are based on a number of factors including the quality of products and service.36 - . • Acquire and Retain The more ICICI learns about customers. • Develop and Customize ICICI believes that the extent of customization should be based on the potential value delivered by the customer segment. In fact. how and when they like to interact. ease of use. The CRM Business Cycle: • Understand and Differentiate Organisations cannot have a relationship with the customer unless they understand them… what they value. the easier it is to pinpoint those that are producing the greatest value for the organisation. Successful customer retention is based very simply on the organisation’s ability to constantly deliver on three principles:   Maintain interaction. . to identify and specifically describe the gaps. ICICI group’s customers need to see that the company is differentiating service and communication based on both what they have learned independently and on what the customer has told them. what types of services are important to them. speed. never stop listening to customers Deliver on customer’s value definition. convenience.The next step in the planning process was a Gap Analysis. At the same time. This analysis essentially compared current stage against optimal relative to the five aspects of business. responsiveness. and service excellence. True understanding is based on a combination of detailed analysis and interaction.

it was based on three-month phases with clear deliverables that will demonstrate both progress and quick hits or measures of success. The evaluation of each of the strategies identified to resolve the gaps at ICICI were based on: Cost to implement – including initial one time costs. resource skill sets and a number of other factors. Selecting and Implementing a Technology Based Solution Technology The success of the CRM initiatives were contingent on various decisions pertaining to technology. as well as anticipated ongoing expenses. Scalability. data and systems support. Feasibility – based on the organisation readiness. Some criteria were Functionality.• Prioritizing Changes Because there might be many gaps. This part of the action plan helped assess the drivers and restraints of change and the organisation’s readiness to assess the change. prioritization was critical. Some of the key issues were: (a) Make or Buy: .37 - . Time Required – including the time necessary for training and addressing “cultural” change management issues related to a specific strategy     • Creating an Action Plan The next step in the planning process was the development of a very detailed action plan. Another key factor for the planning process was the Leadership Action Plan. Overall benefit – some changes may have higher impacts on an organisation’s ability to increase customer value and loyalty.The decision to buy was based on an evaluation of an identified set of criteria. Flexibility. therefore many changes that an organisation will need to make. Fit with existing . Advancing on the CRM transformation map required significant organisation change. The plan identified interdependent activities and should comprehensively detail the time and resources required for each activity. While the complete plan might span three or more years.

etc. Processes All processes were mapped on to product by understanding the details. After shortlisting two product vendors and system integrators. was decided to purchase an off-the-shelf CRM solution and customize it to suit ICICI’s requirements. client list. life history. several opportunities for improvement were identified and implemented. (b) From whom to buy: Some Criteria included were CRM expertise. During the course of the process mapping.38 - . A detailed Request for Information (RFI) was sent to each of the shortlisted companies. reference calls were made to several of the past clients of all shortlisted companies. Retail Finance Experience. etc. another round of evaluation was done. The Sales Process – Pre CRM and Post Implementation of CRM Independent Databases Call Centre Sales Agent Scrutiny Credit Agent Operations Database Call Centre Sales Agent Scrutiny Credit Agent Operations Lessons so far from the ICICI experience .architecture. After receiving the RFIs. Credentials including financials.

Sales. or data-driven/database marketing. CRM results in more effective.If CRM involves optimizing product. is extremely close to their customers…understanding their needs and wants. • CRM is not a technology initiative. data driven marketing efforts. one area of the organisation that is less than committed to CRM … can make the difference between success and failure. sales. as well as the other inner workings of the organisation. Many have confused CRM as a technology initiative. CRM requires marketing experience. But CRM is strictly not a marketing initiative. service. Having even one “broken spoke in the wheel”. promotion. however. place of distribution. • CRM is not exclusively a sales initiative. • CRM is not exclusively a service initiative. Many organisation have merely equated CRM with customer focused marketing. CRM is often lodged within the sales department.. price. sales and service. and if not. As with sales and marketing. • CRM is not exclusively a marketing initiative. But customer service is not the sole driver of the process. and technology. and that is necessary for effective CRM. The sales-force. Similar to marketing. after all. customer service is one functional aspect of successful CRM implementation. why is it so difficult? CRM is difficult because it is an enterprise wide initiative. and assigned the CRM implementation project to their information system or information technology group. CRM involves marketing. is just one functional area that can benefit from CRM. CRM conferences often equate to technology exhibits and demonstrations. Case Study 2: Building Relationship with Doctors .39 - . why are so many companies struggling? Hasn’t anyone really mastered the art and science of CRM. or the solution to successful CRM implementation. and trying to fulfill them. Technology is needed in order to implement CRM – particularly the customization part – but technology is not the driver of CRM.

Starting a CRM initiative . Glaxo Wellcome. No advertising mentioning the brand names is allowed in the lay press. As a result most of the doctors are being met by atleast 60-100 companies. It is a very fragmented market with the number one player. Rs. Out of the total doctor population as much as 60-65% are general practitioners within the basic MBBS degree. having a market share of 5. 140000 million growing at a healthy 10%. also play a role albeit a limited one. journal advertising. Infact the combined of the top 5 companies does not exceed 20%.000 of this doctor population.8%. Earlier MNC’s used to sell on the quality plank but today quality is a table stake condition where even the smallest player is able to meet the highest quality norms. The largest of the pharmaceutical companies cannot meet more than 125. The higher specialties constitute the remaining 35-40%.000 doctors in India who are registered with the Indian Medical Association. Doctor Population There are approximately 500. The medical representative (MR) is the major means of promotion though other media like direct mail. conferences.For Effective Marketing The Case of the Pharmaceutical Industry Introduction The Indian Pharmaceutical market is worth approx.000 players both in the organised and the unorganised market vying for a piece of this pie.40 - . There are around 16. Promotion In an ethical market product promotion is directed solely to the qualified directors.

there are individual associations for almost all the specialties whose membership directories are also easily available. as it contains nothing more than contact information along with some basic information. etc typically lists the name. These have a directory of all their members listing their contact details and some personal information. geographical coverage etc. qualification. This list is generated through interviews with stockists. • List of conference participants: each specialty of doctor organises a national level conference every year where members from all over the country attend. updations and deletions are always taking place.. But nevertheless it is a starting point.Having understood the major characteristics of the industry. interaction and customization (IDIC). or distributing give always in exchange for information.41 - . MVL (Must Visit List). The term is a misnomer. Similarly. address. Details can be collected through the sponsorship of the front-desk. telephone no. . The list called the MSL (must see list). These are a good source to begin with but most are updated at very long intervals and hence the veracity of the data has to be checked. the identification. • Doctors Referral: Another route would be akin to a member get member scheme wherein doctors would be encouraged to refer follow practitioners. Customer list. as well as his peers from other companies. retailers. Continuos additions. to serve as a tool for the marketing decision making process. differentiation. model as suggested by Don Peppers and Martha Rogers would be used to understand the steps to a CRM initiative. since at best it is a customer list. The key driver for a CRM program is integration of this data from all the MRs to a central database. Identification The first step towards any CRM initiative is identification of the customer. Thus a semblance of a database would take shape. specialty. The list cam be mined for details of specialty wise break-up. Each medical representative maintains a list of doctors in his area. The next step is to add to this data by collecting details from other sources like • Membership directories of association: Almost all cities have their branches of the Indian Medical Association’s (IMA). organising contests. The database at no stage can be termed as final as collection of doctor details is an ongoing process. and other basic data of the doctor. visit timings.

The numbers would propotionately increase as per the Pareto principle.(or expects to get) from them. Typically. important and others based on the amount of business he gets. likes. A level of conviction has to e brought into him that the data he would collect would actually be used and more importantly will help him do his job better. the MR is the sole and final judge. His hobbies. Airlines. The MR can easily collect most of the information from his day to day interaction with his customers. The idea is get to know the doctor intimately. In a typical pyramidal fashion the top-rung doctors who are the least in number would be commercially most important and the importance would linearly decrease as one goes down the pyramid. The biggest hurdle to this approach is not surprisingly enough the MR. Thus the database formed is step one. It is of utmost important that it is decided beforehand what kind of information would be collected and much more importantly how it will be used. Interaction Now comes the stage of building on the database collected and refined in the above 2 stages. Since there is no formal mechanism of capturing data about the revenue generated from a doctor.etc. Interaction can be done at two levels: • Firstly. family details.Differentiation The success of any loyalty program lies in differentiating the key customers. Numerous instances abound of . The number of sub-classes would vary but the principle would be the same. who would classify frequent fliers based on data collected from reservation. a MSR would classify his doctors using the ABC Method as core. dislikes. The basic idea now is to build on the data collected in the first stage. The point to be borne in mind is that the whole basis of diffrentiation is being done on very subjective terms of the perception of the local MR unlike other industries viz. Alternatively a formal structured questionnaire can also be administered. personally at the MR level: the most productive would be using human intervention.42 - . The fundamental premise being that the doctor is as human as anybody else is and hence we should recognise his individuality. can be now classified into the important doctors and the not so important ones.

The information collected is then incorporated to the basic database earlier formed. • Secondly. Direct at the corporate level. What is important to note that they have been able to demonstrate their sincerity in actually using this data. Even bouquets can be delivered at the doorstep. The easiest and the most preliminary step is to start greeting the doctor on his birthday and marriage anniversary. favorite vacation destinations. professional Ownership Details: Household durables owned. attendence at national conferences. etc qualification and experience.companies who have gone about collecting loads of information on their doctors through their MRs and finally not using them at all. : The structured questionnaires requesting further details can also be mailed to doctors with each response entitled to a token gift.43 - . etc. The success of the whole programme hinges on how well can the companies pass on the data of the doctor to their field force and train them on how to use this data. etc interest. vehicle ownership. etc membership of associations. Just to give an idea of the type of information collected by companies consider the following: • • • • Personal information : date of birth. tv channels watched. marriage anniversary. This approach typically would yield a lower rate of return but the quality of information would be superior to the first approach as it is coming directly from the doctor. Gifts based on the interests and hobbies can be presented. He is actually . through either of the means elaborated earlier. If a doctor has expressed interest in national conferences of his specialty the same can be arranged. Customisation This is the time to start using the data. A company even arranges for the doctor to have dinner with spouse on their marriage anniversary. with the tab taken care ofcourse! But more important to customise the interaction with the doctor based on the data we have on him. From a simple card personally signed to a personal phone call from the head office anywhere in the country to a birthday cake being actually presented are some of the ideas. etc Companies have been able to collect enormous amount of such data. Hobbies and Interests: Activities during spare time. details of children. general Professional Interests: Type and name of medical journals read. magazines read.

Thus the lowest rung would be restricted to the basic of activities. It is important that it is clearly defined at the onset what will be the objective of the programme and more importantly convey the exclusivity of the programme. reward them for their custom and encourage them to increase their spend. Thus there are ethical issues involved in rewarding points in return for prescriptions. All activities and inputs should only reinforce this communication. A sort of ‘masterdatabase’ can be generated which would recover every contact with a doctor through the field. telephone. Since a captive database has been put into place it can easily lend itself to direct marketing initiatives. The success of such a programme hinges on making the doctor covet the membership to the programme. Thus a continuos monitoring is required of the returns generated from the doctor. A branded programme can be started for the most important doctors. The doctor has to be made to realise that he is the ‘chosen one’. mail. Direct Marketing It is a valuable tool for effective CRM. Loyalty programme The next obvious step is to have a loyalty programme as a frequency marketing initiative. etc. If they fall below a predefined limit then the doctor can be downgraded and his privileges reduces. It is necessary that the information received on an interaction be fed into the system so that it can be used for the next interaction.44 - . As the primary fields captured are the contact address a program through mail is easiest to accomplish. The number and the level of activities would increase as the important of the doctor grows. Brand awareness .the man of the moment. This concept in case of the pharmaceutical industry has a twist since the customer (the doctor) is not the actual consumer (the patient) of the product.n One cannot have a reward programme based on the redemption of these points. One approach would be to set the whole programme based on the classification into which the doctor falls. web. this master database would be the key driver to foster a learning relationship. An ideal loyalty programme would be able to identify its key accounts.

45 - . A response of 15-20% can be easily achieved through such communications. exploit alternative avenues for brand promotion etc. who would like to more about the drug profile. Call Centre In case of chronic therapies like hypertension. a campaign. the response received is usually much higher then that accepted as a norm in other industries. The medium lends an ear to three types of customers 1. Dermatologists and GPs. Patients who seek counseling.mailers. Apart from mail other DM media like telemarketing and web have also been tried. Doctors. The primary rationale is to save the time of the field by promoting the low involvement (for the doctor) products. contests all can be conducted by mail.g. serious conditions like AIDS and in hitherto unknown conditions (atleast in India) like erectile dysfunction the call centre provides the answer. discuss a specific case. promote brand recall for a new product. the nearest physician or chemist shop. Retailers asking for pricing details. In fact since the target audience for a brand is usually sharply defined in terms of their specialisation e. 2. An allergy product to ENTs. Most of the pharmaceutical companies have realised the advantages of this mode of communication. new launches. which is more technology savvy and information hungry. The telephone provides anonymity to the caller especially when discussing taboo subjects 3. geographical area. Information technology has several advantages • • • It is very cost effective: A large audience can be touched at a relatively cheaper cost It can be targeted and specific to the right target audience in term of specialisation or It is measurable with use of reply devices one can immediately gauge the efficacy of as compared to personal selling. product availability . Using the e-mail to correspond and interact with doctors is being tried. ask for a reference on use in a specific condition. It is especially useful for targeting higher specialties. While telemarketing has been tried for promoting new launches to get instant feedbacks the web has still to achieve its potential. The PC penetration in India is still very low which handicaps the growth of this mode.

Thus most medical queries have to be escalated to a qualified physician who responds to a doctor’s queries within a set time limit. This method would at best provide a qualitative idea but would nevertheless give an idea of the success or failure of the programme. Measurement Systems The measurement system would require studying the prescription profile of the doctors who are being exposed to the CRM programme vis a vis a control sample who are met by the field force but not exposed to CRM activities. Conclusion The importance of internally marketing the CRM programme is very important.46 - . The success of the whole programme hinges on the support of the top management who can act as a mentor. There are certain factors to be borne in mind whilst setting up a call centre. The prescription given by the doctors can be studied over a particular time frame and the amount of prescriptions before exposure to the programme can be measured. the call centre is an excellent medium to come closer to the customer and pharmaceutical industry is realising the potential. This is especially relevant if the centre would cater to calls from patients.With the advent of paging companies who can provide a single number nation wide. The idea is to check if the prescription levels have increased after the doctor has been made the member of the loyalty programme. facility of leased lines from DOT and the toll free numbers in select metros this medium is set for take-off. The sheer diversity of the country means that callers would speak different languages and may not be comfortable with English. Case Study 3: Relationship Building in Cement Marketing The Case of Indian Rayon . The programme takes time to take off and much more time to actually show results. These limitations notwithstanding. Also doctors would not prefer their queries being answered by a lay person without any medical knowledge.

Indian Rayon an Aditya Birla group company, was one of the first cement companies which felt the need to gain this immediate distinguishing factor and further long run equity by using CRM as a strategy. The company wanted to bring about a transformation in the way in which it interfaced with its customers. Dealers being the interface with the customers were identified as one of the major areas in this direction. The company consciously worked on the aspect of maintaining long term relationship with its set of customers and came out with the conclusion that if the user-customer can build long-term relationship with the distribution channel (and thus the company) of Indian rayon cement Products, this will be a major gain in the overall strategic marketing objectives of the company and also it will provide the company a distinct positioning. Indian Rayon decided to upgrade select dealers to become Birla Super Shoppes. The intention was also to make the retailer go beyond being a mere sales channel. The Birla Shoppes were geared to become Centres for what the company prefers to call “ technomarketing service” and relationship outlets focussed at maintaining long term relationship with its customers, which no other competitor can offer. The idea of building relationship with the customers through this unique route came after studying the buying behaviors of customer more closely. For one, the customer base was not homogenous – there were different categories of cement buyers in the market; the mason, the civil engineer, the architect, the contractor, and the institutional or large scale buyer along with the end user. While each of its customer has some degree of knowledge and practical experience of the products quality and usage, there was a latent need for technical information and advice before purchase. In most cases though this need was never addressed, simply because the dealer himself did not know much. At the same time most dealers tended to stock multiple brands were more concerned with pushing their stock then spending time explaining the exact details of any brand. Each of these Shoppes had a qualified civil engineer that offered free technical consultation to every customer. Customers were provided with comprehensive information right from manufacturing of cement to its application in various end purposes. Based on the type of construction, the right type of cement along with the free

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advice on the usage of cement and other additives and building materials. To further consolidate customer relationship each shoppe a regular “Mason Meet” where the actual users are invited and given technical and practical knowledge and solutions. Besides the shoppe owners of a particular area also get together once a week on an average for market and technical information sharing. Here the differences are ironed out and collective strategies shaped. The company involvement manifests through the regular seminars and training programs that are organised for the shoppe personnel. Indian rayon has been successful in achieving results on twin fronts of CRM: a) Consolidating Relationships with the customers through the unique distribution channel route. b) The company has also been able to strengthen bonds with its distribution channel(who is also amongst the company’s customer groups) Conclusion To conclude, CRM in cement industry although in a very nascent stage has strong strategic connotations. CRM is a strategy towards the marketers’ objective of providing value to its customers. This value when translated is able to provide a distinct equity to the cement marketers to stand apart and gain an edge in the clutter of intense competition, and relatively undifferentiated products – which is peculiar to the cement industry.

Chapter 4: Organising for CRM
Assessing Need
How do you know your business requires CRM?

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It is very easy for a business to get caught in the latest ‘customer trap’ when it is being driven by the information technology (IT) market. Every business does require CRM; the question is to what level? Trends Many businesses are pushed by the current trend to change their business strategy, especially around CRM. There are basically three trends that effect a business: Consumer The customer is an ever-changing image, to be really successful with CRM you must recognize the customer trends that are effecting the business. If a business does not understand a customer profile and the changes that have occurred then it is not possible to provide true customer relationship management. Products It is the business providing the products that meet the changing customer trends. Products need to be reviewed constantly perhaps enhanced or even removed. Supermarkets are a perfect profile to look at for viewing ‘product trends’, they constantly add and remove products and they constantly view customer buying profiles and set out the pattern of the store to meet the strongest buying trend. This may not always be by using the latest ‘technology’, it could be by just reviewing shells at the end of the day, but the super market is at the minimum watching for the two basic trends in CRM. Technology Ensure that the business is ready to install the new technologies, is the customer data upto it, or is it time to start again? Do you need to review every technology being used or just one area. Will it assist the business, is it going to grow with the business requirements or is the technology just another ‘trend’? Relationship management should not be an alternative to existing functions/technology; it could be a logical extension to enhance those in existence, though it could radically change some of the operational processes. Is your Business ready? Are your customers Ready? What are the costs, monetary, time, people and long-term issues?

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Does CRM really matter? Whatever the business activity is all companies have to ask themselves is CRM the real factor for their company to succeed. Some customers do not need long-term relationship with their suppliers; therefore only minimal information is required from that customer. That however is still a form of CRM. Other companies have high quality and high value customers that they need to know information about, they need to provide exceptional service, the ‘pedigree’ of CRM. Whatever the business is, if it has customer it has to ask, does customer relationship management matter? What does it man to them in business terms? At what cost? What is the overall loss if not adhered to? CRM: Yes it does really matter – the strategy needs to last, be constantly reviewed and can evolve over time.

Employee Empowerment and CRM
The Case of Hewlett-Packard India

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unenthusiastic and unhappy employee will never care for the customers. Also organisations willing to spend money when they are doing well should spend on employees more rather than less when things get bad. Customer Satisfaction & Market Share Productivity Satisfaction With Manager Market Share Customer Satisfaction -ve -ve Cost Of Quality Employee Satisfaction Job Satisfaction Satisfaction with Right Skills Market Share ESS CSS 40% 35% 30% 25% 1990 91 CSS 92 ESS 93 94 95 96 97 Market Share Initiatives for Employee satisfaction A demotivated.51 - . .Relationship between Employee Satisfaction. An employee satisfaction survey should be carried out on a regular basis.

The training program for the partner is also regularly revived. HP contacts all customers. 1270 e-mails and 15. Whenever the customer purchases a product. who are not happy with the service. It is a challenge to motivate engineers who are the employees of the service providers and are not HP employees. There are points for various aspects such as training.000 out of which 4600 are through web support.52 - . They use automated call distribution software. the point of contact is the front line team. then there would be deduction in the reimbursements of that reseller. customer service. The partners provide the hardware support. The top contributors among the resellers are identified and are sent for training or entertainment apart from monetary incentives. which also enables to track the particular history of the customer. and there is an issue to be resolved. The sales and services are provided by DPSP’s and the ASP’s only. customer feedback. It handles the usage-related. quiz bulletin. the application related and the real product related issues. the total number of customer calls logged in at HP are 21. In case the partner performance falls below the desired level of points. Typically in a month. The service providers are assessed continuously.Hewlett Packard (HP) Case HP sells its products through its channels. re-repair rate. and through the partners it is attempted that certain steps are taken so that the customer is happy. . The engineers/service providers’ performance is monitored on: • • • • • • Turnaround Time Number of parts requested per call (Multiple Part consumption) Closing the call Customer satisfaction Repair rate Effective handling of customer escalations HP has allocated points for each of these parameters for partner performance measurement.000 telephone calls. The backend team handles the upgradation issues. There is also a Reward 1000 plus program where there are points awarded. However if he exceeds the given point scale then he qualifies for additional reimbursements which are offered as rewards.

which encompasses developing customer centric processes. there is synchronisation of the employee satisfaction and customer satisfaction process to ensure a higher market share.53 - .So at HP. Chapter 5: Status of CRM In India A Survey of Service Firms Successful implementation of CRM requires a strategic approach. . selecting and implementing technology solutions.

T & Telecom 36% The survey focussed on the quality and the customer centric processes. The research focussed on the following major issues: • • • • Do managers in service firms believe that their processes are customer centric? Do they select technology on the basis of an understanding of customer needs? Have they empowered their employees to deliver superior services? Do they have a customer knowledge strategy? How well do they manage their customer relationships? Methodology The research was exploratory in nature and adopted a two-stage process. and customer knowledge strategy to gauge the status of CRM practices in these firms. customer information and knowledge generation capabilities to differentiate them. These managers belonged to the following three categories: a) Hospitality Industry encompassing hotels and restaurants b) Information technology and Telecom industry which included software firms and telecom providers c) Financial Services included commercial banks and mutual funds Finance 35% Respondent Profile Hospitality 29% I. and the ability to learn from best practices. . employee empowerment. During the first stage.employee empowerment. Research Objectives The current research was aimed at determining the approach being adopted by businesses in India for relationship marketing. technology selection. 50 managers of service firms operating in India were surveyed through respondent administered questionnaires.54 - .

About 8% of the overall sample have indicated the absence of any quality initiatives in their organisations. Most of the players in the hospitality and the finance sector report having some methods in place to ensure quality management initiatives. These interviews explored the following issues: 1. How successful are these programs in retaining customers? Analysis of Findings Processes The managers reported a wide divergence with respect to the adoption of quality assurance across the three sectors. 14%12% 4% 52%50% 27% 33%38% 69% I. most managers believe that they understand most of the interactions between customers and their business processes.In the second stage.55 - . managers of select firms in each category of services were interviewed to understand the relationship marketing practices adopted by them. The I. What are the various CRM initiatives undertaken by the firm? 2. How do they develop these programs? 3. Quality Assurance Process 80% 60% 40% 20% 0% None Finance Some Methods Hospitality Formal Organ.T and telecom sector is at the forefront of adopting a formal quality management organisation. How do they measure the effectiveness of these programs? 4.T & Telecom At the broad level. About 50% of them have indicated that .

In response to the question on whether they take into consider customers’ needs when selecting and implementing information technology. Only 14% of managers in financial services do customer validation when selecting technology. Technology Selection Information Technology (I. Customer-centric marketing emphasizes understanding and satisfying the needs.56 - . about 30% of managers have indicated that they C ustom C er entric IT 70% 60% 50% 40% 30% 20% 10% 0% 62% 50% 38% 29% 23% 14% 5% Non e 38% 23% 23% 3% 0% Con sidered a a V lid te t s Cu tomer Cen ric F an in ce H ospitality I.T & Telecom they have a full understanding of all possible interactions between customers and their business processes. and resources of individual customers rather than those of mass markets.T & Telecom have considered customer needs.70% 60% 50% 40% 30% 20% 10% 0% 0% 4% Most Hospitality 15% 48% 50% 62% 52% 35% 35% Some Finance All I. While only 23% of the managers in . wants.T) is a major facilitator for CRM implementation. Therefore it is very important to have an understanding of all linkages between the customers and the business processes which help fulfill the customer needs.

It helps employees respond to customer queries and provide support in a fast and timely manner. 60% 40% 20% 0% 20% 10% 12% Employee Empowerment 50% 43% 28% 24% 23% 28% Finance Hospitality 24% 24% 15% I. Information technology helps employees respond to customer queries and provide support in a fast and timely manner. This aspect of limited empowerment gets reinforced when one looks at the linkage between the employee’s rewards with the customer centric behavior. Most of them feel that their employees have been empowered to take independent decisions within the guidelines. . Over 18% of the respondents across the sectors have reported no linkages or use of ad hoc methods to reward customer centric behavior. It helps them access information. which is normally spread across the organisation.information technology & telecom firms believe that their technology selections are customer centric whereas this was over 50% in the other two sectors.T & Telecom Strictly Rule Bond Independent Decisions w ithin guidelines Encourage decisions Require every w hich affect employee to ensure customer satisfaction customer satisfaction Facilitation of employees for their role fulfillment through information technology is another aspect of employee empowerment. Employee Empowerment When asked whether their employees are empowered to make decisions in favor of the customers.T and Telecom firms have provided the most effective technology to all employees who interact with customers.57 - . less than a quarter of the managers across the three sectors indicated that every employee is empowered to take actions to ensure the ultimate satisfaction of the customer. Over 54% of I. This reduces to 42% for the hospitality and 19% for the financial services sector.

T & Telecom interactions. opportunities to come in direct contact with their customers are high in comparison to other businesses that have intermediaries and hence have an arms length relationship with their customers. preferences and usage patterns. buying behavior.T&T com ele 17% 2 7% 17% 19% 3 3% . But information collection is just the first step in generating customer knowledge. This information has to be combined with experiences to develop consumer insights which S trateg fo C m in gC sto er In rm nw E erien y r o b in u m fo atio ith xp ces tog erate en K o led e nw g 67% 80% 70% 60% 50% 40% 30% 20% 10% 0% 38% 33 % 24% 15% 1 0% 0% P r oo F nce ina Is E ncouraged H ospitality P rocess for S ct ele C ustom ers R igorous P rocess for each C ustom er I. Over 60% managers in the hospitality industry have indicated that they have a continuous strategy for collecting customer information.Customer Knowledge Strategy Customer knowledge gets built when information is collected systematically over a period of time.58 - . Therefore it is natural for service firms to collect customer information on a regular basis. But importantly this information has to be combined with the organisation’s experiences with customers to build rich customer profiles. This can be done through regular surveys and also during customer 70% 60% 50% 40% 30% 20% 10% 0% Strategy for Collecting Customer Information 48% 27% 12% 14% 27% 62% 42% 24% 14% 0% 8% 23% None Is Encouraged Have Programs Continous Strategy Finance Hospitality I. In most of the services.

help them serve their customers better. When it comes to combining customer information with experiences. Peppers. Individualized Marketing Programs 54% 60% 50% 40% 30% 20% 10% 0% Finance The purpose of collecting 33% 28% 33% 36% 35% 28% 19% 8% 0% Mass Market Hospitality Perceived Niche Some for Individuals All Programs Specific to each customer needs 12% customer information and developing knowledge is to be able to 14% I. This falls to about 40% in the hospitality and IT services. Zeithmal and Berry 1985). Rogers and Dorf (1999) have recommended a four-stage process of Identification. Over 50% managers in financial services have indicated that they have critical business information about their relationships with individual customers. Most of them seem to be doing it for select customers. Hotels do it for their regular guests specially those who have enrolled for their membership schemes. Over 40% of managers in the financial services have indicated that they work with customers as a team to ensure that their expectations are met or exceeded. Financial service providers selectively do it for their high net worth individuals who typically use multiple offerings of the service provider. Interaction. It is very important to work with customers to understand their expectations as research has consistently indicated that one of the major reasons for poor service quality is the gap between managers perceptions about customers expectations and actual customer expectations (Parasuraman. Differentiation.59 - . Customer knowledge can be used to initiate . Most service firms rely on periodic surveys to understand their customers’ expectations and also understand and anticipate their behaviors.T & Telecom differentiate customers and meet their specific requirements. service firms seem to be economizing. and Customization for implementing one to one relationships with customers.

(e) In several cases. they cannot survive in the business without these schemes if everyone else offers them.customization of the service for customers based on their needs.60 - . Managers were convinced that these retention programs had long-term benefits but they were still grappling with metrics which would indicate that the investments were paying off.e. This had impact on the success of the overall program. they accepted that many a times. (f) The managers of firms who have been successful in relationship management reported strong top management support for their initiatives as well as complete employee involvement cutting across departmental boundaries. Pioneers in the industry like one of the multinational bank. only marketing and customer service ended up as the 'program champions'. But the race is always to differentiate on the basis of convenience for customers. . which introduced the concept of relationship manager. With the emergence of e-commerce. (b) Most of them also indicated that these schemes were table stakes i. Some of the important findings of the depth interviews with managers of these services are: (a) The relationship initiatives undertaken by firms have been directed towards customer retention. A majority of the marketing programs are targeted for smaller segments of the markets. firms can customize their offerings to all or select customers. adaptation of successful programs in parent organisations abroad especially for the multinational firms. (c) The source and reasons for adopting these programs were found to be diverse frontline initiatives. (d) A common finding. Although managers admitted that cooperation and coordination were crucial. But there is a growing trend towards individualizing these programs. was the absence of measures for determining the effectiveness of these programs. this trend is going to further intensify. The initiatives were mostly membership /privilege schemes with gradations based on frequency and value of usage / purchase. across sectors. there was a lack of coordination across functional departments. By tailoring the elements of services marketing mix. adopted the practices of their parent organisation. or copying competitor’s offerings.

Chapter 6: CRM in Select Services . But these are mainly based on some loyalty programs and investments in technology for enhancing the capability of databases. usage behavior. firms need to be marketing oriented before initiating relationship-marketing initiatives. Managers should ensure that while investing in databases. human resources and relationship marketing programs.Conclusions Relationship marketing is emerging as a new area of focus for service firms in India. integrate technology through customer oriented approaches. Successful firms take a long term strategic view of customer relationship management. technology. attempts should also be made to develop milestones. To be successful. motivate employees to perform to their full potential through empowerment are prerequisites for firms to successfully utilise their customer knowledge for customized or even one to one marketing. These milestones become benchmarks against which future programs get evaluated. A holistic approach which leads firms to develop customer centric process. which help them sustain these initiatives. Measurement metrics get developed over a period of time when one starts collecting information about customers. It cannot be solely managed through periodic programs.61 - . etc and start linking them to the marketing programs. referrals. their buying patterns.

Titan Watch Repair Services . exercise.62 - . etc with GE staff. The product is designed to reflect their passengers’ preferences. Also on cards is a ‘Fitness Program’ where Taj’s experts will share information of food nutrition. which are quite different in Delhi and Mumbai. wherever necessary. a Loyalty Program is being designed wherein for purchases of snacks and confectionery. SATS. With another company Taj is involved in cafeteria design and selection of equipment. Similarly. Taj Air Caterers & Singapore Airlines Taj actively participates in product designs and influences service design. 2. Taj Customer Relations responds within a stipulated time frame directly to GE employees and analyse their satisfaction.e. Taj staff gets trained at Singapore Airlines’ catering subsidiary. Taj Caterers share a lot of information and can access technology issues with Singapore Airlines. and on different sectors ex-Mumbai.1. Taj and GE (for canteen and food supply). This has evolved after getting an insight into Singapore Airlines’ customer profile and their needs. 3. GE employees can obtain attractive discounts at Taj outlets/hotels. TAJ Chefs conduct an annual workshop on Indian Cuisine for Singapore Airlines’ caterers worldwide. Taj Air Caterers & GE Capital Services There is e-mail connectivity between the service provider i.

• • Signet operations form a part of the quarterly appraisal for their showrooms. Today the Titan Signet has been extended to 102 World of Titan showrooms across 59 cities all over India Behind The Scenes While the program has taken customer bonding one step further in Titan.What did Titan Do? The Titan Signet CRM initiative was undertaken in May 1995 to provide that ‘extra’ touch to its special customers at the exclusive World of Titan stores. These are : • • Showroom Personnel are trained not only in the operations of the program at the Enrolments in the program are tracked on a monthly basis for each showroom. there are many behind-the-scene activities that ensure that the program is run efficiently. responded to within stipulated time frame. along showroom but also in the finer details of CRM. with data on purchases made by Signet members who have returned to the showroom to buy again. thereby A grievance redressal system is in place to ensure that our valued customers are ensuring that they earn more marks on their efficient and effective performance. Its mission was to create a sense of belonging of the customer to the store and vice versa by: • • • Building a special relationship with high life time value Titan customers Recognising and rewarding his/her loyalty to Titan Providing a platform for direct feedback from these valued customers to the company Where? It initially started in 6 showrooms in Banglore. .63 - . effectively and with the level of enthusiastic participation.

besides its relationships with customers. it is working on its relationship with business partners and employees. in fact they have become a necessary part of every business industry. The demand for computer software professionals has shown an increasing trend over the years. APTECH is considering some cultural and organisational issues within the organisation. this demand is bound to increase even further in the near future and in the years to come. The impact of such a move is being felt on customer satisfaction ratings and the critical word of mouth that attracts new inquiries. There are of course certain implementation issues to be tackled. organisations take initiatives to obtain even the slightest competitive edge. INTRODUCTION Today. As a result of this many entrepreneurs took to . With the increasing focus on computer software development by the Indian government and NASSCOM along with many software export houses.Case Study 5: Customer Relationship Management At APTECH The case of APTECH Ltd. computers are not restricted to computer software field only. The company described in the case is in the process of implementing a Customer Response System across its 1500 odd centres.64 - . Private institutes today produce about 65% of the software professionals and remaining by government affiliated institutes. This has led to tremendous rise in the demand for trained computer professionals. The rapid growth of this industry has led to high growth in the computer education and training business. Also. In order to evaluate the system implementation at test centres.3 billion ten years back to 70 billion today. In such markets where technology is changing by the minute. Deals with an organisation in the intensely competitive information technology education and software services industry. The growth in the demand in future is expected to be spurred by the growth in the information technology sector both domestic and international. which is growing by the rate of 30-40%. and to work through the implementation in the remaining centres. The Indian computer software industry itself has grown from a mere 0.

etc. As far as students are concerned CRM is providing unlimited access to anyone in the organisation. and corporate consultancy. Eighty percent of the students enroll at APTECH because of word of mouth. We also have a service portal where plug and play solutions can be downloaded. we now have a system known as Customer Response System (CRS) that captures any suggestion.65 - . Structure of information technology Education Industry The information technology education industry in India is estimated to be around 625 crores. TULEC. Therefore. SOL-STAR etc. Although there are many players. For ERP solution we have an e-link template that reduces development time by sixty percent. what experience was shared is not documented. IEC. complaint or query made by a student. However. BITS. LCC. software.this opportunity and opened computer-training institutes. This sector is growing at the rate of 20%. APTECH. they are widely used in ecommerce and ERP solutions. SSI.” . it is mainly dominated by NIIT and APTECH in the organised sector. As far as reusable templates are concerned. training. Over the years these institutes have developed rapidly to become huge in terms of their spread and the number of students churned out. Notably among them are companies like NIIT. Market Shares O thers 30% N IIT 40% APTECH 30% N IIT APT ECH O thers CRM at APTECH “There are tow sides to APTECH’s business: student education. There is qualitative and quantitative research.

There was a need to be able to practice what one preached. CRM Road Map at APTECH There are two units of CRM – CRS and CAS. An element of monotony had crept into the manual systems – students said what they were expected to say. Secondly. complaints. and for Overall improvement in delivery process using this feedback. while informal channels included faculty interaction and open houses. In the feedback forms emphasis was placed on the contents of the course. Using CRS. so that students can access their information on a limited basis. If a student had a good rapport with the centre staff his/her feedback. Product Design. However. This will help the student o judge his/her current status and accordingly plan if any corrective action is required. and General Management for Monitoring Centre Performance. Where policy decisions are taken.O.How did APTECH get into customer care? Firstly.66 - . are wary of expressing their concerns. The second unit CAS (Centre Automation System) is the database of the students.. APTECH was in the knowledge management business. It is also planned to use the available information and extend the concept to a . E-mail facility is already available for APTECH members. The plan is to have a web interface. for monitoring centre performance in terms of product delivery. R. Improving or revamping the product. being young. A need was felt for more quantifiable metric. a student gives feedback on the Centre. both formal and informal. Product. these contained an element of subjectivity. and queries were paid cognisance. there was the business imperative. Students. they affect CAS (Centre Automation System) and RAS (Regional Automation System) and changes are incorporated as necessary. so that the student can consult the respective Faculty/Centre Personnel in case any assistance is required for planning. The need to be at the vanguard of the quality initiatives was recognised. People. and Specific Issues. suggestions. Formal mechanisms included feedback forms. Currently this database is used by Centre Personnel for student tracking and by the R. making policy decisions.O. There were already manual systems in place.

Ratified and Pending Closure. In the regional office it is linked to the regional automation system. Company also plans to use the database being built up for alumni. as convenient to them. . Customer Response System (CRS) CRS is a customer service solution and not a data crunching operation. The Client-Server module has various screens like review categories/notifications – Exception. Technology behind CRS The Client Server module has a back end developed in Oracle. and head office. to the customer Provide an interface for the customer to communicate his/her views on the service Have a mechanism in place to capture warning signals at an early stage to enable for judging their current status and make a plan for the future based on the same received by them. There are multiple objectives of CRS: • • • Provide sufficient information. In the centres and the regional offices CRS consists of Client Service Module. while in the head office it consists of Client Server as well as Knowledge Management modules. A flow chart.67 - . depending on their requirements and current job profile. indicating the mechanics of how the Client-Server module functions. is shown in Exhibit 1. regional office. so that students placed by them can be given value added inputs on a time to time basis. It covers three locations: centre. and a front end developed in Powerbuilder. Today’s Feedback. The Knowledge Management module is developed in Lotus Notes.. through an easy to access interface. In each centre CRS is linked to the Centre Automation System. proactive preventive action. so those inquiries can be directed to the nearest point. Awaiting Rectification.call centre.

Features at the centre level – there is a complaint registering facility for students. Also. Analysis report on the complaints can be generated. and the administrator interface with the system. exception . The system provides accessibility to all students. students. It enables ease of complaint retrieval by centre management.New FEEDBACK by student Exception Today’s Feedback Awaiting Ratification Ratified Pending Closure Notification to SRO/CH Actions/Investigation Inform Student to ratify Ratified Awaiting Ratification Over 15 days Pending Closure Satisfied Ratified Close Complaint Closed Exhibit 1 Flow Diagram of Client Service Module CRS Interface At the centre level. regional SRO. student relationship officer (SRO) and administrators interface with the system. at the regional office level the regional head.68 - . Whereas.

69 - . There is facility to request for immediate regional office/head office intervention by SRO/Centre Head. There is a complaint closure facility. and Root Cause Analysis Knowledge management module The Knowledge management module can be viewed from two perspectives – User and Knowledge administrator/integrator. Personnel at the regional office level can participate in discussions to resolve complaints and be informed about action taken at the head office. There is a facility to find out details of complaints logged earlier by a student while receiving a complaint. Complaint Details. A facility to query on complaint status and for forced closure of feedback has been provided. The regional office has access to complaint information from all centres. They also have access to knowledge repositories at head office. Status Statistics. Status Report. updated weekly. Cycle Time for Redressal Analysis. The student receives intimation for ratification of redressed. perspective it consists of six links: • • • • • Discussion Group Knowledge Repository Latest Updates Best Practices FAQs . The SRO/Centre Head is notified of all complaints. The feature of automatic escalation of complaints has been provided. Dynamic querying on complaint data can be done. Solution Architect of the Knowledge Management Module says that from users. Mr. Jahangir Kazimi. A facility to send reminders/repeat a complaint has been provided. The student ratifies all complaints.reports can be produced. Exception report. The architecture of the Knowledge Management module is shown in Exhibit 3. Analysis reports across centres and analysis reports can be generated. Complaint recurrence analysis. The student receives a complaint acknowledgement. Dynamic querying on complaint data and query on complaint status are possible. Features at the regional office level – Complaint entry by regional office personnel is possible. CRS reports – The different reports generated by the CRS system are: Complaint Category wise Frequency Analysis.

This consists of the tasks allotted to the user by the knowledge integrator.This contains complaints that are not resolved for a certain number of days. Where it originated. Knowledge Repository – Once a feedback is closed it may or may not be knowledge enriching. next and so on? The status of a feedback can be discerned. by centre. who responded first. One of the options under discussion group is Priority Issues . or author.Exhibit 3 Architecture Complaint Management System – KN Functional Architecture Oracle Application Experts Exception Reports Authors/ Contributors Discussion Groups Outcomes Knowledge Repository Users Discussion group: feedback is grouped by category. The default view is my view. Once a discussion is concluded more responses are not required.70 - . If it is generally applicable it undergoes a process of cleansing and filtering and is then stored in the Knowledge Repository. the user can also initiate a request to the author. Each document has to have an . All documents go through a two-stage validation process. There is a blank format tat the user can fill in. region. It is possible to trace the thread of a compliant.

he/she acts as a facilitator. To achieve this an exhaustive session was conducted to all members of the Centre covering the various aspects of the system and the advantages of the system. which was reinforced by the top management. No immediate decision is taken on putting it in the Knowledge Repository. Second.71 - . There are various ways of presenting information. First. One way is to search for a key word in the entire document. The main challenge was to remove the phobia of COMPLAINT and replace this as a suggestion for improvement. He/she acts as a moderator – closing. some knowledge item is placed in the Knowledge Repository. Counselor. so atleast 2 to 3 rounds of training were conducted. The knowledge integrator validates the structure and the content of Best Practice. The functions of the knowledge integrator are two fold. Therefore. Another way is tp search for keywords assigned by the author. It is possible that after the review of the expired discussions. by author. if they are not participating on a certain issue. ensuring that the right people interact to find the correct solution. There are different search features. captured and stored.approver. Best Practices: There are various document forms such as Best Practice. This cannot be achieved in one round of training. Whether a feedback is knowledge enriching or not is not a black and white issue. with a date by which to contribute. declaring and concluding discussions. It was imperative that all members of the Centre were convinced about this system. and problem-solution. the knowledge integrator drives what is happening in the forums.g. The approved document is then forwarded to the knowledge integrator for incorporation in the Knowledge Repository. there is the concept of a brewing tank. and Problem Solution documents. Knowledge is created. Implementation Process There are Faculty. Administrative Staff and other category of members in a centre. Latest Updates: Contains complaints by category e. . FAQ’s: Here are answers to frequently asked questions are stored. The knowledge integrator can notify employees. The knowledge integrator acts as a link between the Knowledge management and the Client Server modules. Besides these five options there are search mechanisms. Root cause. root cause. .

etc (b) Encourage the students to use the system. The Customer’s viewpoint: Few students of APTECH franchised centre where CRS had not yet been installed and few students from a centre run directly by APTECH where CRS where CRS went online were interviewed to understand its immediate impact. As the system matures. Since APTECH is in the early stages of implementing CRS. and then the second step of introducing the system to the students was undertaken.whenever a communication took place. by promptly attending to the feedbacks received. Conclusions The primary requirement for any system to get implemented successfully is the buy – in process of the end user. For CRS there are 3 users namely: Student. The complete success depends upon how much the user is convinced about the benefits of the system to be implemented.72 - . Since the CRS was coupled with CAS no additional infrastructural requirement was there to implement CRS in the Centre. two of the major metrics that will be looked at is product delivery and time for delivery. Once the centre staff was convinced. they didn’t know anything about CRS or any system by which . This was 2-step procedure: (a) Publicise the existence of the system for the usage of the students. Centre Head and Student Relation Officer. This was done (i) (ii) (iii) By putting up posters in the centre Announcing in the classes by the faculty Informing them during informal meeting by counselors. Through word of mouth among the students the usage of CRS as a platform for communicating the feedback to the centre is increasing on day-to-day basis. The whole process of implementation in the Centre took roughly one calendar month time. Centre Head. Students from the first type of centres were highly dissatisfied because their basic expectations in terms of service and facilities were not met. the only two parameters currently that they are looking at is the response time and the resolution time on a feedback.

While students from APTECH run centres were highly satisfied with the facilities. The aim was to go beyond customer service. They have seen the actions been taken very fast on the issues raised by them in the CRS. 1. The endeavor was creating a virtuous cycle. of a learning organization. a particular employee was considered to be the ‘boss’ in Java programming. 5. and possess domain specific expertise. Financial Framework for CRM . To improve the quality of response to feedback CRS has helped APTECH in reaping these benefits. They were also not at all sure if the franchised centre would act on the feedback. 3. Some of the employees are brilliant. and would be consulted on this particular subject. To create a tighter and well-knit network among the employees.they can give the feedback on which some meaningful action can be taken.73 - . and services as they exceeded their expectations. To measure the performance of the employees. a spiral process.g. e. APTECH’s is a people. There existed informal networks within the organization. 4.oriented service. 2. They started using the system in the 4th week of April 2000 and have found it very useful. The benefits of CRS were predicted to be manifold.

100% Direct Sale 100% Composite Costs % 50% of ove rall sale Unit Selling cost Referral Sale Time T1 Time T1 Fig. (higher cold call to order ratio) . Organisation dependency on direct sale can gradually be reduced since they stand to account for reduced numbers in the overall sums.(a) Sale Cost Line Figure 2 illustrates that with a given investment in direct sale channel the productivity can at best be only slightly increasing line. 1.There are organisational constraints encountered in execution of CRM programs. while a referral line will be an exponentially increasing trend line with growing subscriber numbers. This creates a multiplier effect that quickly overtakes the direct sale numbers. ‘Torpedo Graph’ Fig. Direct selling machinery would have costs that are significantly higher than referral sale – hence the need to invest in customer relationship with an eye on acceleration of referrals so as to bring down costs or increase productivity of sales. 1. Mainly they are as follows: • A mismatch between resource allocated and service levels desired for building customer relationship • Absence of financial business case and ROI for investments in Customer Relationship • Horizontal non alignment of organisations to customers line of sight • Balance to be achieved between maximisation of revenue and customer satisfaction.74 - . Figure1 illustrates the phenomenon that organisations can drive referral sale line in a manner that can reduce time T1 and with that in figure 1(a) the overall unit selling cost (average of direct sales cost + referral sale cost) can be reduced with higher sales productivity. .

1997 71% 1998 78% 1999 86% 2000 86% Impact of referrals was measured as a part of six-sigma improvement team working on Sales productivity improvement. This will determine saving rate impact through referrals and can serve as a decision point for how much investment should be made for tracking & accelerating referrals. Order conversion rates from various sources of lead generation was taken and the results are as follows Method of lead generation Cold Calling Database Referrals Sample Size 2210 1674 352 Conversion Rate 3% 1% 29% Organisation/selling channels have to individually draw the sale cost line for their products. Referral Sale T1 Time Figure 2 Organisational measure of referral propensity can be taken through customer feedback on their willingness to recommend the product to their friend and acquitances.Direct sale Sale Unit No. . This is based on face to face survey conducted through independent market research agency on a sample base with >95% confidence level.75 - . Data of Likelihood to Recommend from Kerela market of Escotel subscriber is illustrated below. Company commissioning the survey was identified to the respondents.

one can appreciate the fact for having an effective customer relation. cost of mailers. Therefore. Clarify. when CRM is not in place).CRM IN HMTL: A Financial Analysis Hutchison Max Telecom Ltd. which can be reduced to 80 using CRM Telephone outcall cost − . etc. In Mumbai. the staff requirement is around 100. Vantive. A typical commercial CRM package to be installed at HMTL would cost around Rs. there are about 14. The customer interactions can be segmented into various categories: E-Mail Direct Walk-In Fax/Letter Calls 2% 5% 8% 85% The peak load hours are from 10:00 AM to 11:00 PM. Staffing cost.000 customer interactions in a day. 5 crores.76 - . on an average a single customer interacts once in 14 days. In telecom industry the cost of handling the customer can be calculated by assigning the various cost factors such as cost of operation of call office. Oracle.e. it is not possible to quantitatively find out the benefits of having a CRM. i. It owns the brand ‘Orange’.) Assumptions Package is purchased for 100 sales people Cost of Product acquisition including opportunity cost and training cost is approximately: Rs.e. it is recommended the cost of not serving the customer (i. (HMTL) is the leading cellular operator in India. Instead of the Cost-Benefit Analysis. Other Costs are as follows: − Staffing Cost: In call centre at HMTL. 5 Crore (Assuming one would go for a top of the line CRM package like Siebel. Financial Analysis The complete transition from the internally developed CRM to a commercial CRM package would take 6 to 12 months.

− − Delay cost Transition cost Reduction in staff cost Enhanced productivity (subscriber to agent ratio) Quicker turnaround times Saving due to call handling by alternate channels Better Customer Relations Churn Prevention Segmented Promotions Benefit Parameters        The total benefits expected from these parameters are approximately Rs.3 crores. .77 - . Hence it is safe to conclude that the payback period should be approximately 2 years for HMTL.

78 - .FRONT END IVR/VoIP Input to System Computer ACD Call Centre Browser Presentation Layer Telephones Web mail Server Computer MIDDLE WARE Database BACK END OLAP Server Output to Management Data Storage Layer Data Mining Layer ERP Figure. CRM Scheme In HMTL References .

.com www.crmsearch. ‘Relationship Marketing: The UK Perspective’.com www. E. (1990). ’Relationship Marketing: The Route to Marketing Efficiency and Effectiveness’." Journal of Marketing Payne. T. Journal of the Academy of Marketing Science Jagdish And Sheth.crmfoundation. Atul Parvatiyar.org www. "A Conceptual Model of Service Quality and its Implications for Future Research. L. F. Emerging Perspectives’.) Handbook on Relationship Marketing. A. and Parvatiyar. (1997). A. 'Zero Defections: Quality Comes to Services'.79 - .crmindia. Gruen. Zeithaml. N. ‘Relationship Marketing of Services: Growing Interest. (eds.crmcommunity. Sage Publications. Harvard Business Review. N. L. and Parvatiyar. G Shainesh.com www.crmguru. A. ‘CRM Emerging Concepts. V. Journal of the Academy of Marketing Science.com www. L. Inc. September – October Sheth.. F.com www. J. Business Horizons.com  Philip Kotler: Marketing Management ***** . Tools and Applications’        Websites        www.: Reichheld. A. A. J. (1983). and Sasser.CRM-forum. W. November – December. in Sheth. Berry. (1995) ‘Relationship Marketing in Consumer Markets: Antecedents and Consequences'. (2000).crmassist. Parasuraman. W. and Berry. (1985).

selecting.Technique splitting a population studied (purchasing. Churn analysis . and modeling large amounts of data to uncover previously unknown patterns of data to gain a business advantage. domain-specific information — often stored in data warehouses — to enable users to discern trends. Analytical model .matching lifestage with the probability of responding to a customized promotion.Data that result from errors (for example. They enable purchasing behavior patterns to be anticipated. a decision tree is a model for the classification of a data set. services and finance (multi-holding) etc.Activity Based Costing An accounting method that enables an organization to understand where costs are incurred by allocating costs to all activities and then charging these to the relevant product. For example.A system for storing and delivering massive quantities of data. a typical classification problem is to divide a database of companies into groups that are as homogeneous as possible with respect to a creditworthiness variable with values of "Good" and "Bad. Used in retail (simultaneous purchases). Back-office .application which helps to manage telephone based contact with customers. Involves examining data on customers and transactions in order to find hitherto unknown information in the data and respond to it Decision tree . exploring. product line. data entry keying errors) or that represent unusual events. The representation in the form of a tree enables easier analysis of the results. recognize patterns. Contact strategy . Anomalous data should be examined carefully because it may carry important information. Configurator ." Cross selling . Data warehouse . It is based on the explanatory capacity of response to each of the criteria taken into account by the analysis. Data mining .Non-linear predictive models that learn through training and resemble biological neural networks in structure. These files are used as needed for locating. services and competitors. Enables the customer portfolio to be increased and their loyalty to grow. Database marketing . Association .An approach by which computer database technologies are harnessed to design. The database which allows the manipulation of large quantities of information to aid analysis and decision making Data Mining: This functionality involves the process of discovering meaningful correlations. gain insights and draw conclusions.business applications which relate to the day to day transactions of a business such as accounting. human resources Call-centre . targeting.The process of selecting. create and manage customer data files containing information about each customer's characteristics and history of interactions with the company. and different groups are as "far" as possible from one another. Business Intelligence (BI): This process involves analyzing and exploring structured.The process of dividing a data set into mutually exclusive groups such that the members of each group are as "close" as possible to one another. The BI process includes communicating findings and effecting change. response.The profile's definition of customers that have left and the identification of customers that are likely to leave.Cross selling of a product. where distance is measured with respect to specific variable(s) you are trying to predict. patterns and . Artificial neural networks . Clustering .Definition of segments. Classification .) into a series of subpopulations (branches) described by criteria. logistics.GLOSSARY ABC . taking into account the purchase of another product at instant. and different groups are as "far" as possible from one another. and establishing relationships with the customers to enhance the long-term value of these customers to the company.A search for associated products in a range. Anomalous data . products. We also speak of segmentation trees (same thing). The BI domains include customers.A structure and process for analyzing a data set. Temporal associations trace out sequences of associations. where distance is measured with respect to all available variables.80 - . etc. customer or supplier.The process of dividing a data set into mutually exclusive groups such that the members of each group are as "close" as possible to one another.application which uses a set of rules to help guide a customer through the features and options of a complex product ensuring that they only choose a combination which is compatible and meets their needs Classification . They are based on the probability of purchase of a product at a known time. For example.

A score per family is prepared and calculated periodically for each customer.This is based on the qualification. These decisions generate rules for the classification of a data set. access and use of information assets. capture. Enterprise Resource Planning (ERP): This is a business strategy that improves shareholder and customer value by integrating manufacturing. Electronic ERP: E-ERP represents the Web-enabled elements of an ERP business strategy that improve shareholder and customer value by integrating interenterprise manufacturing. Basically. Life Time Value (LTV) – Predicted value of a customer to an organization. Aims to reduce total costs. Electronic CRM: E-CRM involves the integration of Web channels into the overall enterprise CRM strategy.All actions of direct communication with customers and prospects (often based on the previous definition of segments). When the score reaches a threshold value. It is the customer knowledge base (data warehouse marketing). inventories and physical assets and improve consumer choice. e-service. Direct marketing . we seek to determine their trajectory over time (inactive-> average customer-> good customer-> very good customer). A component of CRM and e-business. Marketing information database .Electronic Funds Transfer at the Point of Sale . CSS and marketing initiatives to achieve a seamless customer experience and maximize customer satisfaction. it includes such Web-based customer channels as e-sales. uncaptured knowledge of people. Decision tree . as well as statistical and mathematical techniques. Data mining employs pattern recognition technologies. i. KM is an enterprise discipline that promotes a collaborative and integrative approach to the creation. expected future profitability. at each instant.Data on individuals/households typically collected via consumer questionnaires. e-marketing and e-retailing." Its most basic function is to enable communication . Rather than concentrating on the instantaneous profitability of a customer.ECR is a strategy to remove unnecessary costs from the retail / grocery distribution system and make it more responsive to consumer demand.e. satisfaction and service. The goal is to drive consistency within all channels relative to sales.A tree-shaped structure that represents a set of decisions. It requires distributors and suppliers to focus jointly on the efficiency of the total grocery chain rather than the efficiency of individual components. and then estimate the profitability potential over the period of the relationship. GartnerGroup defines middleware as "runtime system software that directly enables application-level interactions among programs in a distributed computing environment. EFTPOS . customer loyalty and revenue.trends by sifting through large amounts of data stored in repositories. sold by companies such as ICD and Claritas. Middleware: This term is used in many ways. of each customer in relation to a family of offered products. including the tacit. such as a call-centre or sales force automation system Knowledge Management (KM): This is a business process that formalizes management and leverages an enterprise's intellectual assets. the customer is automatically prospected for the corresponding offer. organization. Electronic Business: E-business comprises any Internet.The use of graphical and descriptive statistical techniques to learn about the structure of a data set. Front office .the category of applications that might be used by employees who have direct contact with the customer or by the customer themselves. Actions are subsequently implemented which will raise the customer on this trajectory (or will avoid a descent). EPOS . middleware is the software "glue" that helps programs and databases that may be on different computers work together. financial and distribution functions to dynamically balance and optimize the resources of the enterprise together with its trading partners. Dynamic segmentation . financial and distribution functions to dynamically balance and optimize an enterprise's resources.This is created from internal management systems and external data. Exploratory data analysis . More formally.81 - .or network-enabled business activity that transforms internal and external relationships to create value and exploit market opportunities driven by the new rules of the "connected economy". Lifestyle data .Technology that enables consumers to pay for goods with plastic / cards to debit account directly.Electronic Point Of Sale – Checkout counter equipped with bar code reader Efficient Consumer Response (ECR) .

behavioral (purchase situation. navigate through. the expectation of maximum profitability 3. the costs generated 2. Expected results : loyalty. marketing. services and information from the supplier to the customer.) 3. it is the last stage in the customer relationship. the expectation of maximum return Telephone Preference Service (TPS) . Frequency. 7 P's of relationship marketing . Share of wallet . hold information about their contacts and give them access to information from the back-office systems about pricing and product availability Segmentation . lifestyle and personality. geographical (territory.in other words how the product gets to where the customer wants it .A service enabling domestic telephone subscribers who don't wish to receive unsolicited telephone calls to register their numbers.Technique of increasing the value of a customer by selling products with a higher status or perceived value (eg.a tool for use by the sales force which helps them to manage the sales cycle.Selection of a sub-population in a customer or prospect file. Supply Chain Management (SCM): This is the process of optimizing the delivery of goods. etc.) Value chain analysis . customer service and other enterprise business functions to partners to foster more-collaborative channel partner relationships. Provision of Customer Service. sex. income. B.) 4. SCM is a set of business processes that encompasses a trading-partner community engaged in a common goal of satisfying the end customer.A structure and process for predicting the values of specified variables in a data set. and presenting the content to the user in an integrated. and analyze multidimensional databases.Relational marketing conducted at the individual level by establishing a personal relationship (including in direct marketing) with each customer. POS .Elements of the marketing process that need to be coordinated .a measure of how much of a consumer's total business a company has.between application programs or DBMSs within a single-application system or across multiple-application systems Marketing mix . Profiling – Describing typical customers in terms of demographics. constructing business rules to select relevant content based on those preferences or behaviors. Refers to array-oriented database applications that allow users to view. region. C1 etc). you typically want to find customers who purchased recently. One to One Marketing . profession. cohesive format. Predictive model . power of recommendation. cultural class.classic marketing technique. It rests on continuous knowledge of the requirements of the customer in relation to supply and the channels of distribution. lifestyle. wholesale or retail outlets etc). checkout or hole-in-the-wall Partner Relationship Management (PRM): This is the CRM element that extends sales.Technique used to view organization as a series of customer facing processes. Targeting may be done by focusing on: 1. etc. housing micro-area) 2. personalization includes determining a user's interest based on his or her preferences or behavior. with regard to the product offered) Four broad types of criteria may be distinguished: 1. psychographical (social class. Monetary) .Basis for segmenting consumer markets based on social class (A.Point of Sale . price.Online analytical processing. place (physical distribution and marketing channels .g. Up-selling . Process. Depending basically on the number of customers. Sales force automation (SFA) . promotion. manipulate. Relational marketing – Marketing centered on the relationship established with the customer base.Place where purchase is actually made e. user status. on the criteria chosen. resistance to external offers. Constructing the value chain consists of identifying the sequence of direct activities that add value to the . purchase frequently and spend a large amount. OLAP .) Targeting .4P's + People. habits etc Psychographics . socio-demographic (age. Personalization: Using continually adjusted user profiles to match content or services to individuals. RFM -(Recency. etc.Technique of identification. of groups of potential customers with the same requirements and needs (eg. A credit card company offers a gold card to its standard card holders.82 - .often referred to as the four P's: product.for example sales force.

customer and indirect or support activities that enable the direct activities to take place.83 - . Annexure 1: .

Sample Questionnaire asked to 50 managers across various companies in the service industry.84 - . How do they measure the effectiveness of these programs? 4. What steps have they undertaken for employee empowerment? 8. 1. What are the quality and customer centric processes that they follow? 6. How successful are these programs in retaining customers? 5. How do they decide the technology that is to be implemented? 7. How do they develop these programs? 3. What strategy do they follow to acquire more knowledge about the customer? . What are the various CRM initiatives undertaken by the firm? 2.