Customer Relationship Management

From: Dr. Harjit Singh

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About CRM

CRM is basically for developing long lasting relationship with a customer. This
maximizes profits, since it is cheaper to retain a current customer than it is t
o find a new one. It also consists of the processes a company uses to track and
organize its contacts with its current and prospective customers«..
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Why CRM?

It typically costs 5-10 times as much to acquire a new customer as it does to re

tain an existing one. ³Some companies can boost profits by almost 100% by retainin
g just 5% more of their customers.´ Harvard Business Review (Reicheld & Sasser) Mo
st companies lose 50% of their customers in 5 years (Harvard University) 70% of
repeat purchases are made out of same customers««««.
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Determinants of CRM
1. 2.
Trust Value it offers«.
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Determinants of CRM

In addition to trust and value, salespeople must: Understand customer needs and
problems; Meet their commitments; Provide superior after sales support; Make sur
e that the customer is always told the truth; and Have a passionate interest in
establishing and retaining a long- term relationship««.
   

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CRM Objectives
1. 2. 3. 4.
5.
To simplify marketing and sales process To make call centers more efficient To p
rovide better customer service To discover new customers and increase customer r
evenue To cross sell products more effectively«
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CRM Benefits
1. 2. 3. 4. 5.
6. 7. 8.
Develop better communication channels Collect customer related data Create detai
led profiles of individual customers Increased customer satisfaction Access to c
ustomer account history, order information, and customer information at all touc
h points Identify new selling opportunities Increased market share and profit ma
rgin Increased revenues
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CRM Benefits Contd..
9. 10. 11.
12. 13. 14. 15.
16.
More effective reach and marketing Improved customer service and support Improve
d response time to customer requests for information Enhanced customer loyalty I
mproved ability to meet customer requirements Improved quality communication and
networking Reduced costs of buying and using product and services Better stand
against global competition««.
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Role of salespeople in relationship building
In identifying potential customers and their needs; By presenting true image of th
e company By offering what customers need ; not what company wants to sell By hand
ling customers¶ complaints By informing company about customers¶ new demands, liking
etc
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Types of CRM
When it comes to application of CRM, three broad classifications are possible. T
hey are: 1. Operational CRM 2. Analytical CRM 3. Collaborative CRM«.
4.
http://www.tutorialreports.com/software/crm/operational.php
5.
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1. Operational CRM

It provides support to "front office" business processes, e.g. to sales, marketi

ng and service staff. Interactions with customers are generally stored in custom
ers' contact histories, and staff can retrieve customer information as necessary
. Purpose is to provide what customer want. i.e. reaching to the customer at rig
ht time at right place is preferable. Operational CRM processes customer data fo
r a variety of purposes:
Managing campaigns Sales Force Automation Sales Management System ««
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2. Analytical CRM

It analyzes customer data for a variety of purposes:

Designing and executing targeted marketing campaigns Designing and executing cam
paigns, e.g. customer acquisition, cross-selling, up-selling, addon-selling Anal
yzing customer behavior in order to make decisions relating to products and serv
ices (e.g. pricing, product development) Management information system (e.g. fin
ancial forecasting and customer profitability analysis)«..
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3. Collaborative CRM

It covers aspects of a company's dealings with customers that are handled by var
ious departments within a company, such as sales, technical support and marketin
g. Staff members from different departments can share information collected when
interacting with customers. For example, feedback received by customer support
agents can provide other staff members with information on the services and feat
ures requested by customers. Its objective is to use information collected by al
l departments to improve the quality of services provided by the company««
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Collaborative Contd..

Act as data distributor within customers, manufacturers and partners. Manufactur

ers can use CRM information to develop products or find new market. CRM facilita
tes communication between customers, suppliers and partner by using new informat
ion system such email, link and data bank«..
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CRM Strategies
1. 2.

Customer Acquisition Customer Retention

Retain and expand your business and relationships with your customers through up
-selling, cross-selling and servicing.
3.

Customer Loyalty
Offer programs to ensure that your customers happily buy what you offer only fro
m you.
4.
Customer Evangelism
Enable loyal customers to become a volunteer sales force.
5.

Cost Reduction
Reduce costs related to marketing, sales, customer service and support.
6. 7.
Improve Productivity Enhance your e-business strategies«...
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CRM Goals, Benefits and Value
CRM Increases

Internal: Revenue, Margins, Profitability, Results, ROI, ROA, Conversion Rates,

Knowledge, Strategy, Efficiency, Effectiveness, Creativity, Products, Innovation
, Morale, Customer Focus« External: Customer Acquisition, Up-selling, Cross-sellin
g, Personalization, Interaction, Feedback, Service, Satisfaction, Loyalty, Evang
elism, Relationships, Value, Understanding« Internal: Costs, Time, Errors, Employe
e Defection, Frustration, Fear, Uncertainty, Doubt« External: Customer Issues, Com
plaints, Attrition, Churn Dissatisfaction«
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CRM Decreases
Implementation of CRM
1. 2.
3. 4. 5.
To implement CRM, following factors need to be given due consideration: Easy int
eraction between customers and company, Easy access to information about company
like content of customization, advantages of the company, benefits doled out to
the customers. Abundant supply of customer information Customers' information s
hould be updated always Have cordial relationship with other companies targeting
the same customer segment«..
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CRM for Whom?

Companies that do not have repeat business from customers will not gain much fro
m CRM. Companies having walk-in customers not providing multiple sales and servi
ce channels will not benefit much from CRM. Again if maintaining long term relat
ionship with customer is not a priority for the company, it will be wise not to
invest in CRM«..
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CRM for Whom?

Then who benefits? The more the channels to access customers and more the number
of touch points with customers, greater is the need for CRM installation. Compa
nies in
banking finance insurance airlines and hotels telecommunications and health care
«.
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Technical Functionalities

1.
Multiple communication channel - This is one major factor of CRM, which enables
business to be responsive to the needs and desires of its customers. The various
communication channels are: Web channel - This supports a number of customer se
rvice
and customer account management activities. Customers can verify and browse prod
uct descriptions and also report problems through this channel. 2. Fax channel -
Company can use this channel to generate fax that is sent directly to customers
, while customers use this to submit requests for information and contact. 3. In
teractive TV channel - Cable TV companies interact with customers through this c
hannel.
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CRM Failure Reasons

Lack of employees¶ cooperation Business focus- More on selling less on customer se

rvice Problem in data integration ± who will collect? Weak functional organization
of a company can cause customer and employees' confusion. Short term interests
are often given importance. Limited financial resources Other new technology and
solutions are introduced without implementing the necessary framework«.
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Future of CRM

In short, the future of CRM is bright indeed. CRM will become deeply embedded as
a business strategy for most companies. Technology will evolve while technical
and organizational challenges are overcome. Much will change in the years ahead,
but one thing is certain: CRM is a journey, not a destination, and customers ha
ve their hands on the road map and the steering wheel. The rest is up to you. Ar
e you ready?
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