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Chapter 1: What is CRM?
What's So Hard About Customer Service?
One person's excellent service may represent barely adequate service to someone else. What impresses one customer may make absolutely no impression on another. To complicate matters, what a customer believes to be good service in one context may be unacceptable in another situation or at another time. Service is perceptual; it is individualized; and it is situational. So how can you figure out what customers want from you in terms of service? The kind and level of service that you must deliver depends on who the customer is, what her expectations are, what experience she has had with you and other firms, what your strategy is and what role customer service plays in its delivery —along with a host of other things. Many managers and executives are uncomfortable with this notion of variable service delivery; they would much prefer to be able to pin down service and to be able to standardize it so that it can be consistently delivered. But I don't believe service should be the same for everyone. In fact, the value of service as a relationship-building tool is its customizability. Simply out, some customers require and deserve better service than others. In some situations, you will want to be able to provide service that will impress customers so as to make an emotional connection. Whenever your employees can say to a customer, "Let me take care of that for you," you are delivering a higher level of service than the customer was expecting. Yet customer service gets far less attention than it deserves in many companies, simply because managers do not realize or accept its importance in influencing customer satisfaction and loyalty. Many view customer service provision as a cost, rather than an investment. Many spend a great deal of time looking for ways to reduce that cost, without appreciating the impact it has on the customer's feelings toward the firm.

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At the same time, managers tend to focus on what I call the functional side of service provision: the speed and accuracy of service delivery, in particular. Do we arrive on time? Do we have things in stock? Do we answer incoming calls within 20 seconds? These are the aspects of service with which managers in many firms are most comfortable, mainly because they are most easily and frequently measured in conventional customer satisfaction surveys. But they are a dangerously limiting view of service and not nearly as all-encompassing as the customer's view of service. Four levels of service Another element that gets in the way of impressive service delivery is management's very simplistic view of customer service. I can think of at least four levels of customer service, each of which involves the creation of progressively more emotional value for customers. To the customer, service involves more than just the functional delivery of service (the first level, which, in a world where companies like FedEx have practically perfected technical service provision, customers take as a given). Customers care how easy you make it for them to communicate with you. This opens the door to a discussion of your phone system, your web site and your customer service center—not to mention whether customers can find someone to serve them in your store. Increasingly, when you keep them on hold for 20 minutes, don't respond to their email inquiries and ask them to deal with unknowledgeable and unhelpful staff, they will walk away. At the third level, companies need to understand how customer service is linked to the people they employ. My experience suggests that customers are most likely to equate the notion of service with the way they are treated by employees. Finally, the level of service that customers experience is a powerful influence on how customers feel emotionally toward a company. Poor service can make a customer feel neglected, unimportant, frustrated, angry or even humiliated. Surprisingly good service leads to emotions such as comfort, relief, delight or excitement.

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------------------------- Customer Relationship Management -----------------------------That holistic view again Yet, many companies have a less-than-holistic view of their value proposition. Customer service must be seen to be an integral part of what we offer the customer. I recently encountered a major company that has separate marketing, sales and customer service departments, each of which prepares its own annual plan and sets its own budgets, without consulting with the others. In that firm, customer service is defined mainly as the operation of the call center. To the customer, service means much more. It is far too simplistic to ask customers to rate your customer service on the predictable 10-point scale. It's much too complex a concept for customers to reduce it to a single number. You can't interpret it, anyway. So last month they gave us a rating of 8.1 on customer service. What does that mean? Very little. There's no direction on how we can improve. Anyway, the only people who are rating you are current customers. How would those customers who stormed out or hung up in disgust rate your customer service? You will never know. Yet theirs is a much more important number. Customer service is not optional. It's not trivial. And it's not easily standardized. Don't make the mistake that one Canadian bank made of treating customer service as a promotion. That bank offered customers $5 if they had to wait in line more than five minutes in its branches. Customers were generally not impressed. To them, a wait time of five minutes was not the issue. Of course, wait time is important—but not nearly as important as being served politely and efficiently once you reach the counter.

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This is proved time and again. But. A narrow perspective of customer relationship management is database marketing emphasizing the promotional aspects of marketing linked to database efforts. management must appreciate their complexity. To utilize customer service to increase customer loyalty. to reinforce the positioning of the brand and to gain a competitive advantage. maintain. Customer-centricity has become the buzzword and the ones with clear and relentless focus on customers. In today’s hyper competitive scenario. through interactive. satisfaction and the increasingly popular customer experience. enjoy a better competitive position. To apply such concepts effectively. Shani and Chalasani define relationship marketing as “an integrated effort to identify. how would you mature into a customer-focused or customercentric organization? The answer is: By reading and understanding your customers. much like value. viewpoint is to consider CRM only as customer retention in which a variety of after marketing tactics is used for customer bonding or staying in touch after the sale is made. companies much have a strategy to guide its development and implementation. What is Customer Relationship Management? Before we begin to examine the conceptual foundations of CRM. it will be useful to define what CRM is. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 4 . Yes. K. companies go through meticulous processes to gradually and consistently mature into an “organization for the customers”.Customer Relationship Management ------------------------------ Customer service is extremely complex.------------------------. more than three quarters of the money and time spent by companies go towards acquiring and retaining customers. J. yet relevant. and build up a network with individuals consumers and to continuously strengthen the network for mutual benefit of both sides. Another narrow. individualized and value-added contacts over a period of time”. Yet.

This is the raw material.------------------------. CRM gives a framework for the activities. data warehousing and thus data base management techniques were born. what is required to do it . Customer insight is the basic point or the foundation for building a customer centric organization. process and people to obtain the final outcome .the people. Thus CRM was engineered as a tool to manage customer data using IT-enabled techniques. how to do it . and people . This is more a conversion process rather. It decides on what to do . Everything in the value chain revolves around this. which was exhaustive and scattered in nature and were desperately looking for a tool that could compile. who should do it . most organizations miserably failed in their efforts.just like a manufacturing process in a factory.the K.the custom made steps based on set objectives. The concept of CRM was again the result of an evolution born out of necessity. The machine here is technology .in entirety. many organizations had successfully completed the conversion process and tasted higher returns. but regularly and consistently over the lifetime of your customer and beyond. This whole scheme of activities that begin from customer information and end in processes and interactions that result in customer loyalty . preserve use the data in a way they want. Reading the customer demographics and understanding their needs (both explicit and implicit) is what customer insight is all about. Technology is mechanistic and didn’t know what is required and what is not.Customer Relationship Management -----------------------------this is all you need to do! And this you need to do not just once. When companies understood the need to obtain and maintain customer data. is what CRM is all about. process . Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 5 .information technology to be precise. A managerial tool was needed to perform the director’s role in order to decide the path and processes. Customer Insight goes through a set of processes to get converted into Customer Loyaltythe finished product. since the end product is Customer Loyalty! Over decades.the objectives. CRM relies on customer data to create customer loyalty. J.those who are trained to efficiently carry out the conversion process. technology came to the rescue with exclusive methods called data mining.the resources. The set of processes include use of machine.

These lead to superior value creation. how long to do it . Marketing productivity is achieved by increasing marketing efficiency and by enhancing marketing effectiveness. he is a part of the organisation. the purpose of CRM is to improve marketing productivity. CRM is unique in the respect that it follows a set of pre-determined processes to accumulate and manage customer data. tailor-made or hand made depending on the specific objectives it is set to achieve. CRM applications can enable effective customer relationship management. CRM is defined as: “Customer relationship management (CRM) is a business strategy to acquire and manage the most valuable customer relationships. sales and service processes. CRM requires a customercentric business philosophy and culture to support effective marketing. which was hitherto unpracticed. K. marketing efficiency is achieved because cooperative and collaborative processes help in reducing transaction costs and overall development costs for the company.Customer Relationship Management -----------------------------processes. In CRM. J.------------------------.the time frame. provided that an enterprise has the right leadership. Two important processes for CRM include proactive customer business development and building partnering relationship with most important customers. strategy and culture. CRM could be ready made.” As is implicit in the above definition. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 6 . The basic concept is that the customer is not someone outside the organisation. Hence.

and all users of the system see the same view of the customer (reduces confusion). but is not limited to. before they occur. repurchase times. retain good customers. A good CRM program will allow a business to acquire customers. increase the value of the customer to the company. • Help to identify potential problems quickly. 7 days a week. repurchase probabilities. product use information. • Provide a mechanism to track all points of contact between a customer and the company. • • Provide a fast mechanism for managing and scheduling follow-up sales calls to assess post-purchase cognitive dissonance.Customer Relationship Management ------------------------------ Purpose of CRM CRM. in its broadest sense. service the customer. Identify how each individual customer defines quality. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 7 . J. This includes. and technical assistance on web sites that are accessible 24 hours a day. and do it in an integrated way so that all sources and types of contact are included. and then design a service strategy for each customer based on these individual requirements and expectations. K. and repurchase frequencies. A good CRM program can improve customer service by facilitating communication in several ways : • Provide product information.------------------------. and determine which customers can be retained or given a higher level of service. means managing all interactions and business with customers. improving customer service.

and are a major source of customer dissatisfaction). J. Use the Internet to engage in collaborative customization or real-time customization.Customer Relationship Management -----------------------------• Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company cannot be resolved. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 8 . • Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer satisfaction). Provide a fast mechanism for managing and scheduling maintenance. repair. Use internet cookies to track customer interests and personalize product offerings accordingly. The CRM program can be integrated into other cross-functional systems and thereby provide accounting and production information to customers when they want it. and on-going support (improve efficiency and effectiveness). Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction).------------------------. • • • • • K.

------------------------.Sensitivities.Customer Relationship Management ------------------------------ Key CRM principles • Differentiate Customers All customers are not equal. 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. K. And the same customers’ reaction to a cellular company operator may be quite different as compared to a car dealer. recognize and reward best customers disproportionately. High value customer requiring low value service. Understanding each customer becomes particularly important. J.Lifestyle and age . Low value customer with potential to become high value in near future. What CRM needs to understand while differentiating customers is: . Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 9 . Preferences and Personalities . Tastes. High value customer requiring high value service.Culture Background and education .Physical and psychological characteristics • Differentiating Offerings     Low value customer requiring high value customer offerings.

Referral sales invariably are low cost high margin sales. Learning from customers and prospects. 4. (having in depth knowledge of Creating value for customers and prospects Creating loyalty Acquiring new customers Creating profits Acquiring new customers customer) Why CRM is necessary? K. It has to innovate and meet the very needs of its clients/ customers so that they remain as advocates on the loyalty curve. so shall the customer retention with the organisation. 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. J. 2.------------------------.Customer Relationship Management -----------------------------• Keeping Existing Customers Grading customers from very satisfied to very disappointed should help the organisation in improving its customer satisfaction levels and scores. 5. 3. Summarizing CRM activities The CRM cycle can be briefly described as follows: 1. By identifying life stage and life event trigger points by customer. 6. As the satisfaction level for each customer improves. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 10 . marketers can maximize share of purchase potential. Company has to invest in terms of its product and service offerings to its customers. • Maximizing Life time value Exploit up-selling and cross-selling potential.

Used in association with data warehousing. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 11 . preferences." Other benefits includes: • • • • • • Faster response to customer inquiries. and other data so they can better anticipate what customers will want.------------------------. Increased marketing and selling opportunities. call centers and other intelligence-based applications. The goal is to instill greater customer loyalty. complaints. data mining. Deeper understanding of customers.Customer Relationship Management -----------------------------Several companies are turning to customer-relationship management systems and strategies to gain a better understanding of their customer's wants and needs. J. Identifying the most profitable customers. which can lead to: • increased sales through better timing due to anticipating needs based on historic identifying needs more effectively by understanding specific customer cross-selling of other products by highlighting and suggesting alternatives or trends • requirements • enhancements • effective targeted marketing communications aimed specifically at customer needs K. there are many potential benefits. Increased efficiency through automation. However. CRM "allows companies to gather and access information about customers' buying histories. A major benefit can be the development of better relations with your existing customers. Receiving customer feedback that leads to new and improved products or services Benefits of CRM Implementing a customer relationship management (CRM) solution might involve considerable time and expense.

------------------------. efforts can be concentrated on finding new customers and expanding your market.Customer Relationship Management -----------------------------• a more personal approach and the development of new or improved products and services in order to win more business in the future • enhanced customer satisfaction and retention. The more you know about your customers. there's always room for improvement. Even with years of accumulated knowledge. First among these was that it was simply so difficult and expensive to track and keep the high volume of records needed accurately and constantly update them. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 12 . J. ensuring that your good reputation increased value from your existing customers and reduced cost associated with in the marketplace continues to grow • supporting and servicing them. As the price of newer. however. more customizable Internet solutions have K. it proved to be an unwieldy process that was better in theory than in practice for a variety of reasons. History of CRM Customer Relationship Management (CRM) is one of those magnificent concepts that swept the business world in the 1990’s with the promise of forever changing the way businesses small and large interacted with their customer bases. increasing your overall efficiency and reducing total cost of sales Once your business starts to look after its existing customers effectively. however. newer software systems and advanced tracking features have vastly improved CRM capabilities and the real promise of CRM is becoming a reality. In the last several years. Customer needs change over time. and technology can make it easier to find out more about customers and ensure that everyone in an organisation can exploit this information. the easier it is to identify new prospects and increase your customer base. In the short term.

they began giving back to their customers not only in terms of the obvious goal of improved customer service. competition has driven the prices down so that even relatively small businesses are reaping the benefits of some custom CRM programs. Advances in the 1990’s In the 1990’s companies began to improve on Customer Relationship Management by making it more of a two-way street. Instead of simply gathering data for their own use. more advanced solutions that were customizable across industries. True CRM comes of age Real Customer Relationship Management as it’s thought of today really began in earnest in the early years of this century. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 13 . but in incentives. In the beginning… The 1980’s saw the emergence of database marketing. K. As software companies began releasing newer. gifts and other perks for customer loyalty. As companies began tracking database information. what they spend. it became feasible to really use the information in a dynamic way. key clients it was a valuable tool for keeping the lines of communication open and tailoring service to the clients needs.Customer Relationship Management -----------------------------hit the marketplace. however. In the case of smaller clients. survey-like information that cluttered databases and didn’t provide much insight. CRM was now being used as a way to increase sales passively as well as through active improvement of customer service. what they do. In the case of larger. which was simply a catch phrase to define the practice of setting up customer service groups to speak individually to all of a company’s customers. This was the beginning of the now familiar frequent flyer programs. they realized that the bare bones were all that was needed in most cases: what they buy regularly. J.------------------------. it tended to provide repetitive. bonus points on credit cards and a host of other resources that are based on CRM tracking of customer activity and spending patterns.

------------------------. a variety of high tech corporations and the telecommunications industry. leading to increased customer satisfaction from order to end product. CRM is still utilized most frequently by companies that rely heavily on two distinct features: customer service or technology. CRM enabled the development of new strategies for more cooperative work between these different divisions through shared information and understanding. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 14 .are financial services. Software specific to the industry can give financial service providers truly impressive feedback in these areas. With the increased fluidity of these programs came a less rigid relationship between sales. In recent years however.and use it to great advantage -. They also track changes in investment habits and spending patterns as the economy shifts. where before companies had difficulty supporting the enormous amounts of information. Branching of information. The Internet provided new possibilities and CRM took off as providers began moving toward Internet solutions. and custom tailored features enabled companies to break down information into smaller subsets so that they could evaluate not only concrete statistics. The financial services industry in particular tracks the level of client satisfaction and what customers are looking for in terms of changes and personalized features. Today. The growing de-intermediation process in many industries due to the advent of sophisticated computer and telecommunication technologies that allow producers to K. These include: 1. J. CRM became a way to continuously update understanding of customer needs and behavior. but information on the motivation and reactions of customers. customer service and marketing.Customer Relationship Management -----------------------------Instead of feeding information into a static database for future reference. The Internet provided a huge boon to the development of these huge databases by enabling offsite information storage. several factors have contributed to the rapid development and evolution of CRM. sub-folders. The three sectors of business that rely most heavily on CRM -.

the de-intermediation process is fast changing the nature of marketing and consequently making relationship marketing more popular. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 15 . ATMs and call centre that must be synchronized with customer’s non-electronic activities. On the supply side it pays more to develop closer relationships with a few suppliers than to develop more vendors. The speed of business change. etc formed partnering relations with suppliers and customers to practice TQM. Also nowadays consumers expect a high degree of personalization. In the current era of hyper competition. 2. K. networking and manufacturing technology have helped companies to quickly match competition. Emerging real time. requiring flexibility and rapid adoption to technologies. 8. 6. As several researches have found out retaining customers is less expensive and more sustainable competitive advantage than acquiring new ones. marketers are forced to be more concerned with customer retention and customer loyalty. The growth in service economy. Other programs such as JIT and MRP also made use of interdependent relationships between suppliers and customers. banks insurance. This needed close working relationships with the customers. interactive channels including e-mail. IBM. Ford. 5. Another force driving the adoption of CRM has been the total quality movement. in many industries such as airlines. 7. software or household appliances and even consumables.------------------------. Thus several companies such as Motorola. When companies embraced TQM it became necessary to involve customers and suppliers in implementing the program at all levels of the value chain. Databases and direct marketing tools give them the means to individualize their marketing efforts. Toyota. For example. Customer expectations are changing almost on a daily basis.Customer Relationship Management -----------------------------directly interact with end-customers. As a result product quality and cost are no longer significant competitive advantages. Xerox. it minimizes the role of the middlemen. 9. 4. Newly Empowered customers who choose how to communicate with the companies across various available channels. Advances in information technology. 3. General Motors. Since services are typically produced and delivered at the same institution. J.

------------------------. Chapter 2: CRM Programs & Activities CRM Programs One-to-one Marketing Meeting and satisfying each customer’s need uniquely and individually. The globalization of world marketplace makes it necessary to have global account management for the customers. 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. By using online information and databases on K. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 16 . J.Customer Relationship Management -----------------------------10.

The fourth function that often is the source of a competitive edge is that of innovation.Customer Relationship Management -----------------------------individual customer interactions. Information on individual customers is utilized to develop frequency marketing. 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. marketing and support. interactive marketing. Known as Key Account Management Program. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 17 . Companies must continually reinvent themselves to deliver an improved and often a totally new value offering to their customer base. CRM must provide the customer K. Partnering Programs The third type of CRM programs is partnering relationships between customer and marketers to serve end user needs. marketers aim to fulfill the unique needs of each massmarket customer. and aftermarketing programs in order to develop relationship with high-yielding customers. There is however a fourth critical function that is lacking in most CRM models. 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. J. two types of partnering programs are most common: co-branding and affinity partnering. individual marketing has been in place of quite sometime. Missing process of CRM Traditionally customer relationship management (CRM) revolves around the three functions of selling. here marketers appoint customer teams to husband the company resources according to individual customer needs. Various process models have been built around how these functions are integrated and operated in a customer oriented enterprise.------------------------. In the context of business-to-business markets. In the mass markets.

significant value can be derived from faster time to market cycle times and with new processes and services. Sales automation should be integrated with the innovation process by ensuring that all sales channels are prepared and ready to take new processes and services to market before competitive forces can react.automation to the basic business processes (marketing. in person) • • K.Customer Relationship Management -----------------------------intelligence that feeds information back into the enterprise’s knowledge management processes where it can trigger new innovation processes.support to analyze customer behavior. sms. The pressure to deliver results within the traditional definition of CRM already overwhelms companies.ensures the contact with customers (phone. sales. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 18 . Marketing automation must ensure that the innovation processes are actually market driven.------------------------. post. implements business intelligence alike technology Collaborative . The dialog must start rather earlier than later because the competitive window of traditional CRM is decreasing and customer demands for a more innovative and responsive enterprise will increase Architecture of CRM There are three parts of application architecture of CRM: • Operational . A market driven innovation process must include both strategies that are focused on satisfying customer requirements as well as strategies focused at redefining customer requirements. web. sales. email. Customer service automation must be designed to empower the customer with the option of assisting with the design of the value offering. J. fax. Redefining CRM around innovation. When CRM is integrated into the innovation process. service) Analytical . The remaining question is whether companies are prepared to take the initiative and expand the definition of customer relationship management to include the process of innovation. marketing and service can identify new competitive opportunities for an enterprise.

kiosk. complaints. Enables a 360-degree view of your customer while you are interacting with them.------------------------. sales administration. lead/account management. forecasting. • Customer service and support (CSS) CSS automates some service requests. J. contact management. as well as the information necessary for carrying out the tasks and interfaces to back-end applications are being provided and activities with customers are being documented for further reference. Traditional internal help desk and traditional inbound call-center support for customer inquiries are now evolved into the "customer interaction center" (CIC). phone/fax. product returns. keeping track of customer preferences. SFA tools are designed to improve field sales productivity. Operational CRM provides the following benefits: • Delivers personalized and efficient marketing. Tasks resulting from these processes are forwarded to resources responsible for them. quote management. and demographics. etc). Key infrastructure K. using multiple channels (Web. regardless of the touch point. • • The operational part of CRM typically involves three general areas of business: • Sales force automation (SFA) SFA automates some of the company's critical sales and sales force management functions. buying habits. face-to-face. Sales people and service engineers can access complete history of all customer interaction with your company. for example. and information requests. as well as performance management. Key infrastructure requirements of SFA are mobile synchronization and integrated product configuration.Customer Relationship Management -----------------------------Operational CRM Operational CRM means supporting the "front office" business processes. marketing and service). and service through multichannel collaboration. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 19 . sales. which include customer contact (sales.

data gathered within operational CRM and/or other sources are analyzed to segment customers or to identify potential to enhance client relationship. • Enterprise marketing automation (EMA) EMA provides information about the business environment. Functions include demographic analysis. The intent of EMA applications is to improve marketing campaign efficiencies. variable segmentation. Information: Providing timely and regular information to customers. Analytical CRM In analytical CRM. Examples of Campaigns directed towards customers are: • • • Acquisition: Cross-sell.------------------------.Customer Relationship Management -----------------------------requirements of CSS include computer telephony integration (CTI) which provides high volume processing capability. CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. and also encourage new customers. and reliability. J. and macro-environmental variables. a company aims to make cost savings. It is the execution side of campaign and lead management. you might be able to check your bank balance via your WAP phone without ever having to talk to a person. When a customer calls. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 20 . saving money for the company. By serving the customer quickly and efficiently. and also keeping all information of a customer in one place. and predictive modeling occurs on the analytical (Business Intelligence) side. and saving your time. K. Integrated CRM software is often also known as "front office solutions. Many call centers use CRM software to store all of their customer's details. Customer analysis typically can lead to targeted campaigns to increase share of customer's wallet." This is because they deal directly with the customer. including competitors. industry trends. the system can be used to retrieve and store information relevant to the customer. For example. up-sell Retention: Retaining customers who leave due to maturity or attrition.

performance etc. Analysis typically covers but is not limited to: • • • Decision support: Dashboards.------------------------. Predictive modeling of customer attributes Strategy and research. K. J. business decisions are refined over time. Therefore. Analysis of Customer data may relate to one or more of the following analyses: • • • • • • • • • • • • Contact channel optimization Contact Optimization Customer Acquisition / Reactivation / Retention Customer Segmentation Customer Satisfaction Measurement / Increase Sales Coverage Optimization Fraud Detection and analysis Financial Forecasts Pricing Optimization Product Development Program Evaluation Risk Assessment and Management Data collection and analysis is viewed as a continuing and iterative process. reporting. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 21 . metrics. Business Intelligence is a related discipline offering some more functionality as separate application software. based on feedback from earlier analysis and decisions. most successful analytical CRM projects take advantage of a data warehouse to provide suitable data.Customer Relationship Management -----------------------------• Modification: Altering details of the transactional nature of the customers' relationship. Ideally.

J. letter.------------------------. processes and data together so companies can better serve and retain their customers. Collaborative CRM provides the following benefits: • Enables efficient productive customer interactions across all communications channels Enables web collaboration to reduce customer service costs Integrates call centers enabling multi-channel personal customer interaction Integrates view of the customer while interaction at the transaction level • • • Chapter 3: Tools for CRM Customer database K. phone. conversational and/or transactional in nature. unstructured.Customer Relationship Management -----------------------------Collaborative CRM Collaborative CRM facilitates interactions with customers through all channels (personal. It is a solution that brings people. fax. e-mail) and supports co-ordination of employee teams and channels. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 22 . The data/activities can be structured. web.

Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 23 . and it has sufficient depth to understand the customer and accurately anticipate their behavioral patterns in future. Companies are increasingly adding data from a variety of sources to their databases. and debt collection are also made. The customer database helps the company to plan. a telephone set/headset connected to a telecom switch. and customer support for computer hardware and software. Increasingly. collective handling of letters. the voice and data pathways into the centre are linked through a set of new technologies called computer telephony integration (CTI). microcomputers and LANs. and e-mails at one location is known as a contact centre. mail order catalogue firms. including mainframes.Customer Relationship Management -----------------------------A good customer information system should consist of a regular flow of information. implement. retention. Customer relationships are increasingly sustained by information systems. with work stations that include a computer. K. Examples of this include help desks and sales support. Examples include utility companies. A call centre is often operated through an extensive open workspace.------------------------. In addition to a call centre. Call Centre A call centre is a centralized office used for the purpose of receiving and transmitting a large volume of requests by telephone. systematic collection of information that is properly evaluated and compared against different points in time. and monitor customer contact. Customer data strategy should focus on processes to manage customer acquisition. Some businesses even service internal functions through call centres. and development. Most major businesses use call centres to interact with their customers. and one or more supervisor stations. It can be independently operated or networked with additional centres. faxes. clientele. Outgoing calls for telemarketing. J. A call centre is operated by a company to administer incoming product support or information inquiries from consumers. often linked to a corporate computer network.

Customer Relationship Management -----------------------------Systems Integration While CRM solutions are front office automation solutions. delivery. presale and post-sale services and complaint handling by providing an integrated view of the customer. 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. customer order processing and fulfillment. Somaiya College of Arts and Commerce(TYBMS)-------------------------------24 . Data Mining for CRM: Some Relevant issues Data mining is an important enabler for CRM. 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. J. order fulfillment and human resource giving an integrated view of business. inventory. CRM and ERP are complementary. where as CRM automates the relationship with customer covering contact and opportunity management . Data mining helps in the process of understanding a customer by providing the necessary information and facilitates informed decision-making. It is necessary that the two systems integrate with each other and complement information as well as business workflow. ERP is back office automation solution. An ERP helps in automating business functions of production. marketing and product knowledge. This integration of CRM with ERP helps companies to provide faster customer service through an enabled network. Therefore. sales force management. Chapter 4: Implementation of CRM How to implement CRM K. installation.------------------------. sales forecasting. which can direct all customer queries and issues through appropriate channels to the right place for speedy resolution. finance.

ensuring that everyone uses up-to-date information. desires and self-perception. which analyse data to identify patterns or relationships. Stage two .------------------------. Stage three . moving from collecting information about your customers and processing it to using that information to improve your marketing and the customer experience.Analysing customer behaviour Using data mining tools in spreadsheet programs.Marketing more effectively Many businesses find that a small percentage of their customers generate a high percentage of their profits. K.Customer Relationship Management -----------------------------The implementation of a customer relationship management (CRM) solution is best treated as a six-stage process. J. Those businesses with a website and online customer service have an advantage as customers can enter and maintain their own details when they buy. Stage one . you can reward and target your most valuable customers. the next stage is to make this information available to staff in the most useful format.Collecting information The priority should be to capture the information you need to identify your customers and categorise their behaviour. Using CRM to gain a better understanding of your customers' needs. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 25 . you can begin to profile customers and develop sales strategies.a centralised customer database that will allow you to run all your systems from the same source.Storing information The most effective way to store and manage your customer information is in a relational database . Stage five .Accessing information With information collected and stored centrally. Stage four .

If you outsource your CRM. personalization engine). ERP. Types for implementing CRM The final way to implement CRM is to find a full-service vendor of customer-service solutions. but. you will need to make sure that your marketing teams can access the businessintelligence components. The advantages of purchasing or licensing the software and implementing it on your own servers are that you have complete control over the software and over the data. etc.Customer Relationship Management -----------------------------Stage six . checkout. If their problems can be identified and resolved quickly. or OMS. OMS. then you should be able to find CRM software that works with at least some of your systems without extensive customization. your staff will have more time for other customers. If you have third-party software for your back-office processes (accounting. by working with vendors that have partnerships and interfaces with your existing vendors and their software — or with vendors that have partnerships with the ASPs that host your existing solutions — you can keep customization to a minimum. software.Enhancing the customer experience Just as a small group of customers are the most profitable. which might include phone assistance. There K. but it's also expensive every time you try to apply a patch or an upgrade. Customization is not only expensive when you first install third-party software.) and your front-end systems (content management. or order-management system.------------------------. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 26 . e-mail handling. It's unavoidable that you will have to do some customization. real-time chat and even creation of a knowledge base for your site.  Purchasing or Licensing Software Owning the software and running it on your own servers is ideal if you have highly customized enterprise resource planning. or ERP. J. however. including customer-service representatives. a small number of complaining customers often take up a disproportionate amount of staff time. merchandising. then you won't need any customer-service infrastructure.

With one type. Finally. requiring integration between the order-management system and the CRM system. no additional infrastructure or support are required from your IT department. If the customer database doesn’t talk to the CRM system. the ASP hosts its own CRM software. some ASPs will tell you that they'll implement whatever CRM software you'd like (at your expense. reduced K. The disadvantage of the second type is that when something isn't working with the software.------------------------. then your marketing department can’t segment customers based on purchases and use the analytical tools frequently built into CRM software to make intelligent decisions on what kind of promotions to make to attract the highest-value customers. The other type hosts a best-of-breed third-party solution. After all. There are two kinds of ASPs providing CRM solutions. and you can't necessarily get it fixed. There are several advantages to either kind of ASP described above. Second. However.  CRM Via ASP Only recently have CRM services become available via an ASP. If you already have a customer-service department with trained associates. and you don't expect rapid growth — or you believe you're equipped to handle rapid growth — then there's no point in paying to train CSRs elsewhere. J. in which case you don't get to take advantage of speed. of which ShopTok is one example. When you work with an ASP. With ASPs that host their own software. the first thing you'll want to know is the degree to which you can customize the interface and the software so that your other business software will talk to your CRM software. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 27 . the cost of getting started is usually low — certainly much lower than the cost of implementing software on your own servers. First. of course). the vendor hears your requirements for new features and your complaints about existing functionality.Customer Relationship Management -----------------------------aren't any of the privacy issues that might arise from having your data residing with a third party. you don't always know whether the problem rests with the ASP or with the software. the implementation time is usually short. your CSRs need to know what a customer has purchased to handle inquiries from that customer.

or experienced tech support. you can't outsource business intelligence. lower entry costs and CSRs who already know the software.------------------------. Some are also willing to purchase and install the CRM software of your choice on their servers. Critical Success Factors for Implementation of CRM Systems Critical success factors have been defined as the elements that make a project a success. Most full-service customerservice providers will work with the best-of-breed CRM vendors and offer you a choice of CRM systems with which to manage your customers. J. Rather than choosing the software and the ASP separately. effective communication. If you don’t need to integrate with existing systems. The cost associated with outsourcing CRM is usually a significant startup cost for developing your materials.Customer Relationship Management -----------------------------cost. These include trust. then a monthly fee based either on the number of hours of CSR you want available or on the number of calls/messages they receive for your site. and top management support. or you only need limited integration. For this to occur. let the software dictate the ASP you select. The pay-asyou-go model can be very attractive to smaller merchants. their training materials and your knowledge base. The ability to grow quickly can be an advantage for any size Web merchant. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 28 . then the fastest route to take is to outsource your customer service to a full-service provider who will give you Web access to the business-intelligence tools. and as the ‘events and conditions in a few key areas which absolutely must go right for the business to succeed’. which is the strategic component of CRM. which is one component of CRM. but be aware that this will eliminate the advantage of a quick implementation. The key CSF for CRM projects are:  Key Stakeholder Support K. proper measurement tools and metrics must be utilized to effectively control the project.  Outsourcing Customer Service While you can outsource customer service.

with alignment of project and corporate goals. employees. including top management and all management levels. Includes the timely reporting of the project status with accurate information. equipment and expertise available with appropriate support structures in place.  Sufficient Resources Resources of money. J. strategic partners. government. Any scope changes are mutually agreed and documented. suppliers. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 29 .Customer Relationship Management -----------------------------Support from all stakeholders in the organization. Includes time and budget allocations for training. and rarely produce an enterprise view of customers K. This is managed through a detailed project plan. and investors. Challenges of CRM Implementation Organizations face a number of key challenges in implementing CRM systems. with appropriate analysis of resource requirements. These include:  Methodology driven by end users IT personnel do not have knowledge or authority to influence corporate decision makers  Lack of executive sponsorship CRM projects are mostly driven by a functional head.------------------------. such as a VP or sales/marketing.  Clearly Defined Objective A clearly defined mission with a set of defined goals and objectives communicated to all stakeholders through clearly defined communication channels.  Managing Change Project changes are implemented through a formally defined process with appropriate approvals sought.

------------------------. and within the organization itself. Chapter 5: CRM Related Concepts K. The CRM system will be the main driver for a paradigm shift. Somaiya College of Arts and Commerce(TYBMS)-------------------------------30 . becoming an enabler for communication between the organization and its customers. J. resulting in failure  Over automation Focus on functionality and process design leads to highly automated business functions Lack of network infrastructure Inadequate IT infrastructure and networking facilities prevent the CRM from being implemented enterprise wide As can be seen from the challenges faced. it is important for organizations to realize that a CRM system implementation will only succeed when it is supported by a customer focused organizational culture.Customer Relationship Management ----------------------------- Lack of customer centric culture An acceptable return on investment will no be achieved if the organization does not have a strong customer centric culture  Inappropriate design approach CRM is designed to model a single functional view not an enterprise wide customer view.

J. and application of knowledge or intellectual capital across an organization. accumulation.Customer Relationship Management ------------------------------ • Knowledge Management Knowledge Management (KM) refers to a range of practices used by organizations to identify. and other knowledge repositories. various enabling organizational practices such as Communities of Practice and corporate Yellow Page directories for accessing key personnel and expertise. for example through on-the-job discussions with peers. expert systems. wikis. While knowledge transfer (an aspect of Knowledge Management) has always existed in one form or another.------------------------. Knowledge Management programs attempt to explicitly evaluate and manage the process of creation or identification. formally through apprenticeship. and distribute knowledge for reuse and learning across the organization. therefore. Knowledge Management programs are typically tied to organizational objectives and are intended to lead to the achievement of specific business outcomes such as improved performance. competitive advantage. corporate intranets and extranets. Content Management. and Document Management. or higher levels of innovation. various enabling technologies such as knowledge bases and expert systems. Knowledge Management. and — since the late twentieth century — technologically through knowledge bases. through the maintenance of corporate libraries. create. attempts to bring under one set of practices various strands of thought and practice relating to: - intellectual capital and the knowledge worker in the knowledge economy the idea of the learning organization. represent. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 31 . help desks. - K. through professional training and mentoring programmes.

It has become clear. Personal Knowledge Management (PKM) practice has arisen in which individuals apply KM practice to themselves.------------------------. with a wide range of contributions and a wide range of views on what represents good practice in Knowledge Management. or ensuring that the solution to a complex problem can be written once but reused many times. Knowledge Management may be distinguished from Organizational Learning by its greater focus on the management of specific knowledge assets and development and cultivation of the channels through which knowledge flows. Knowledge Management Plays a Key Role in CRM Success CRM and knowledge management (KM) were once considered entirely different disciplines. their role in the organisation and their career development. they would have to start speaking the same language. and that to deliver continuous improvement to business clients.Customer Relationship Management -----------------------------While Knowledge Management programs are closely related to Organizational Learning initiatives. be it locating the right expert at the right time. J. Knowledge Management is a continually evolving discipline. It is not difficult to understand why that capability is of great interest to CRM strategists. with the two sharing little but perhaps the same data warehouse hardware and a vague understanding that both efforts were meant to improve business efficiency and customer satisfaction. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 32 . K. that the two disciplines were really working toward the same goal. rather than routing and postcall management. In recent years. KM focuses largely on finding the right solution to a problem that requires detailed insight. however. The emergence of knowledge management has generated new organizational roles and responsibilities an early example of which was the Chief Knowledge Officer. Industry estimates suggest that upwards of three quarters of variable support costs come from the time and energy put into the resolution of customer support inquiries.

An incentive strategy tempts to regain business relations by offering customers some form of incentives like for example tickets for events. Addition to this process structure. K. such as computer companies. select valuable relationships and attempt to regain them in an effective and effic ient way. Conquering their own individual demons will not mean the end of the road for CRM and knowledge management leaders. . sell a single product that may incorporate dozens or even hundreds of other components. there is an information base needed. which have beenalready terminated. gifts and discounts. For example the company could offer some form of vouchers.g.A compensation strategy aims to compensate some (real or perceived) disservices. Many companies still have not attained the level of deep integration that ties knowledge base activity (particularly at the self-service level) to a CRM-facing customer record. which enables the exchange of collected information along the customer regain process. Regain management has to detect such ‘lost’ customers. Many manufacturers.------------------------. as they must join forces to realize even more value from the spheres of customer and product knowledge. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 33 . .Philip Kotler Goal of customer regain management is to reinitiate valuable customer relationships. . for which a systematic process is necessary. which as the motive for termination.” .Customer Relationship Management -----------------------------Better KM/CRM integration can help companies navigate complex support problems more easily. • Regain Management “The cost of acquiring a new customer is 9 to 12 times that of holding on to an existing customer.A dialogue strategy tries to regain trust through a dialog (e. but companies like computer peripheral manufacturer Adaptec use the intersection of CRM and KM to guide product and service decisions and attempt to waylay customer service overloads before they begin. Being able to crossreference the entire collected library for technical support and conflict resolution can make the difference between first-call resolution and a lingering headache. personal call). J.

seamlessly integrated through sharing data and savings as well. and sustain the competitive advantage. it is K. CRM plays an important role in building long-term relationships.A convincing strategy aims to persuade customers by means of use argumentations and explanation of some product advantage. • CRM-ERP Integration ERP’s foundation (which evolved from either manufacturing-based manufacturing resources planning (MRP) applications and its later incarnation. financial flows and workforce flows in the supply chain. SCM is supported by modular software applications that integrate activities across organizations.Customer Relationship Management -----------------------------. where alliances and partnerships are keys to success. • CRM in Supply Chain Management (SCM) Supply Chain Management (SCM) is a business system of enterprise strategies. manufacturers and distributors. business processes and information technologies for improving the planning. inventory control. J. which may be reinvested to further enhance its efficiency. In the context of SCM. manufacturing. product planning. The bonding between partners will be closely held by CRM practices. product assembly to product distribution. to increase sales to improve the coordination and the collaboration with suppliers. Goals of SCM to reduce inventory cost.------------------------. from demand forecasting. parts purchasing. execution and collaboration of material flows. MRPII applications). The supply chain of tomorrow will look like a virtual organisation. information flows. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 34 . The success of relationships depends upon sharing of savings from the supply chain.

previously known as middleware. can be the most cost-effective way of integrating the back and front offices. they are also dealing with your legacy systems. This doesn’t work with CRM. The third solution is what many companies are increasingly turning to Enterprise Application Integration (EAI). one important reason for CRM is real-time response to the constantly liquid-shifting of customer demands. But integrating all of that is what you could hire the ERP vendor for and implement the ERP vendor’s CRM solution. which they know nothing about. How can you be in command of the processes when they are based on your customers’ behaviour? Conceptually. eCRM provides to companies a means to conduct interactive. The simplest option is to hire a systems integrator to come in and integrate the systems. However. personalised and relevant communication with customers across both electronic and K. which is external.Customer Relationship Management -----------------------------based on creating internally stable business functions and predictable process control. J. But many of the solutions remain vapourware or poorly integrated. the obvious hazard here is that they are not only dealing with ERP and CRM applications they may not know much about. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 35 . which is not controlled internally at all. EAI applications. EAI’s purpose is mainly to integrate data between disparate applications that don’t natively speak with each other. The concept of ERP was the integration of all back-office functions so that the basic problems responsible for interruptions and breaks in the processes were smoothed out and the incompatibilities of the best of processes were smoothened and the incompatibilities of the best-of-breed applications were eliminated or reduced. It also means the psychology of the front-office is quite different from the psychology of the back-office. What is eCRM? In simple terms.------------------------.

customers being able to take care of themselves online: That’s the difference between CRM and eCRM. J. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 36 .------------------------. questions. It utilises a complete view of the customer to make decisions about messaging. and architecture that are different from client/server-based CRM. but unfortunately very few understands exactly what it is or how to evolve from their existing database marketing practices to an eCRM solution. But regardless of the size of the firm. timeliness and metrics is a means to an end optimizing the value of your most important asset: your customers. Many of them are issues general to the Internet. or. permission. technologies. approaches. offers. Mid-size companies may benefit from less sophisticated and easier-it-implement (and affordable). Advocates of eCRM recognize that a comprehensive understanding of customer activities. relevance. It implies a myriad of issues. It focuses on understanding how the economics of customer relationships affect the business. Companies agree that eCRM is critical to their business. hosted solutions offered through Application Service Providers. a suite of integrated applications and a non-trivial technical architecture to support both the eCRM process and the enterprise applications that automate the process. evolving to eCRM requires process and organisational changes. For Fortune 500 companies. and channel delivery. Others are issues related to the creation of applications for the Internet. you have no choice but to evolve to eCRM quickly. personalization. It synchronises communications across disjointed customer-facing systems. eCRM v/s CRM: The Differences Being able to take care of your customer via the Internet. The third group is related directly to eCRM and its actual value to business. Basic Requirements of eCRM or Six “E” of eCRM • Electronic Channels K.Customer Relationship Management -----------------------------traditional channels.

which ability to opt for or out of. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 37 . interactive and economic customer communications. directing resources and efforts at individuals likely to provide the greatest return on customer communication initiatives. An eCRM strategy relies heavily on the construction and maintenance of a data warehouse that provides a consolidated. Consumers decide which firms earn the privilege to “talk” with them. reaching beyond just the bounds of marketing to sales. J. services and corner offices – whose occupants need to understand and assess customer behaviour. Evaluation of K. • Empowerment In this new age. through customer analytic reporting.Customer Relationship Management -----------------------------New electronic channels such as the Web and personalised eMessaging have become the medium for fast. challenging companies to keep pace with this increased velocity. detailed view of individual customer behaviour and communication history. • Economics Too many companies execute communication strategies withlittle effort or ability to understand the economics of customer relationships and channel delivery choices. • Enterprise Through eCRM. a company gains the means to touch and shape a customer’s experience across the entire organization. A company should evaluate customer interactions along with various customer touch point channels and compare anticipated ROI against returns. • Evaluation Understanding customer economics relies on a company’s ability to attribute customer behaviour to marketing programs. eCRM strategies must be structured to accommodate customers who now have the power to decide when and how to communicate with the company and through which channel.------------------------. Yet customer economics drives smart asset allocation decisions.

• Leverage customer information for more effective eMarketing and eBusiness. • Focus business on improving customer relationship and earning a greater share of each customer’s business through consistent measurement. • Co-ordinate marketing activities across all customer channels. Somaiya College of Arts and Commerce(TYBMS)-------------------------------38 . J. This information can be gained from sources such as third-party information networks and Webpage profiler applications. under the condition that companies adhere to strict consumer opt-in rules and privacy concerns. • External Information The use of consumer-sanctioned external information can be employed to further understand customer needs. Chapter 6: K. The Need to Adopt eCRM Companies need to take firm initiatives on the eCRM frontier to • Optimize the value of interactive relationship. assessment and “actionable” customer-contact strategies.------------------------. • Enable the business to extend its personalized messaging to the Web and e-mail.Customer Relationship Management -----------------------------results allows companies to continuously refine and improve efforts to optimise relationships between companies and their customers.

Customer Relationship Management ------------------------------ Problems and Drawbacks There are several reasons why a customer relationship management (CRM) solution might not have the desired results. Trying to implement CRM as a complete solution in one goes is a tempting but risky strategy. J. It is better to break your CRM project down into manageable pieces by setting up pilot programs and short-term milestones. There could be a lack of commitment from people within the company to the implementation of a CRM solution. Adapting to a customer-focused approach may require a cultural change. In order to make CRM work. Consider starting with a pilot project that incorporates all the necessary departments and groups but is small and flexible enough to allow adjustments along the way. Weak leadership could cause problems for any CRM implementation plan. Poor communication can prevent buy-in. The result is customer dissatisfaction and eventual loss of revenue. If a proposed plan isn't right for your customers. You need to carefully consider what data is collected and stored to ensure that only useful data is kept. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 39 . K. and make sure that you can expand your systems if necessary. The onus is on management to lead by example and push for a customer focus on every project. unless everyone in the business is committed to viewing their operations from the customers' perspective. don't do it. Don't underestimate how much data you will require.------------------------. There is a danger that relationships with customers will break down somewhere along the line. all the relevant people in your business must know what information you need and how to use it. Send your teams back to the drawing board to come up with a solution that will work.

The main reasons for CRM failures include:  Customer focus Organizational culture is not customer focused. J. For more information. timelines. the organization is aware of those factors by which success can be measured. identifiable individuals. and will ensure the CRM system is implemented in a manner to satisfy all stakeholders. Reasons for CRM Implementation Failure An understanding of the challenges and critical success factors is paramount to project success. and lack of technical knowledge  Data & Warehouse Requirements Poor quality data. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 40 . In this way. lack of communications and changing business needs  Project Management Misalignment between project and business requirements. with limited involvement of customer facing personnel in the design and implementation phase  Organizational Management Lack of support and understanding form senior management. incentives. with unrealistic goals. see their guide on how to comply with data protection legislation. inconsistent data between different systems K.------------------------.Customer Relationship Management -----------------------------You must also ensure you comply with the eight principles of the Data Protection Act that govern the processing of information on living. Avoid adopting rigid rules which cannot be changed to be more flexible to the needs of individual customers. coupled with a lack of planning and insufficient reporting and control  Team Members Lack of support. lack of CRM understanding.

------------------------- Customer Relationship Management ----------------------------- Technical Factors

Short term solution focus not aligned to long term architectural infrastructure growth, no prototyping or testing, misunderstanding technical requirements. CRM is failing because the correct capabilities are not being built at the enterprise level. The requisite changes in organizational culture, behavior and attitude are not being implemented. Overall, in failed projects, there is little or no alignment between stakeholders on success criteria, critical success factors, performance metrics, project drivers, nor on the dynamics of how these parameters may change over the project life cycle. The requirements of the customer are either misunderstood, or not taken into account. The result is an inconsistency in focus, with less than optimum system design and implementation. Hence CRM is failing due to two primary reasons: a) technical; due to the size, complexity, and lack of knowledge of technology, and b) human behavior; due to general change management issues in the organization. What is required is a coherent, all encompassing strategy that focuses on key stakeholder requirements. Companies underestimate the complexities of CRM projects, lack clearly defined business objectives, and tend to invest inadequately in the provision of CRM software.

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Chapter 7: CEM: Future Concept

Customer experience management (CEM) is "the process of strategically managing a customer's entire experience with a product or a company" Marketing research has shown that about 70 to 80% of all products are perceived as commodities that are, seen as being more-or-less the same as competing products. This makes marketing the product difficult. Marketers have taken various approaches to this problem including: branding, product differentiation, market segmentation, and relationship marketing. Relationship marketing, (also called loyalty marketing) focuses on establishing and building a long term relationship between a company and a customer. There are several approaches that have been espoused including customer experience management, customer relationship management, loyalty programs, and database marketing.

CEM's critique of traditional marketing
The development of customer experience management originally started with a critique of three existing marketing concepts. It concluded that the following three concepts do not go far enough:

Marketing concept--Since the 1970s there has been a gradual shift from a product-, technology-, and sales-focused orientation towards a customer- and market-oriented approach by determining the wants and needs of customers and satisfying them more efficiently or effectively as compared to competitors. However, the approach is still mostly functional, with similarities and differences between competitors being defined mostly by product features and customer benefits. In addition, the customer is perceived as being rational, which is in most cases not the case, as e.g. Kahneman and Tversky's Prospect theory has proven.

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------------------------- Customer Relationship Management -----------------------------Also, it is asserted that market research is mostly analytical leaving little room for qualitative assessments of customer relationships towards products, services, or brands. It is claimed (by Shultz) that traditional marketing, in practice, takes an inside-out approach (starting with internal variables like production capabilities and available capital then moving to external variables like customer needs), rather than taking an outside-in approach as marketing theory requires.

Customer relationship management is claimed to be deficient because it primarily consists of database and software programs used in call centers and thus, focuses too much on quantitative data. By doing this, it is led by transactions rather than a desire to build lasting relationships with customers.

Customer satisfaction is an outcome-oriented attitude deriving from customers who compare the performance or value of the product with their expectations of it. It is claimed that the customer satisfaction approach depends too heavily on outcome oriented measures like satisfaction and too superficially on direct experiential measures. A customer is said to be satisfied when a product's performance is above the customer's expectations. Thus, traditional customer satisfaction techniques are deficient if they don't help firms to understand and manage customers' experiences, experiences that lead to the following equation: good experience = satisfaction.

CEM recognizes, as does all of marketing since the early 1970s, that customers are a company’s most valuable asset. What makes CEM different from traditional marketing is that it claims that marketing theory has seldom been implemented adequately. Although all marketing management and strategic management does all of these, CEM supporters claim that they have a methodology that will yield better results. Being convinced that the marketing concept is too product-centered, Customer relationship management too focused on quantitative data, and customer satisfaction too functional, CEM looks for another perspective on the relationship of a consumer with a product or service. And what's key? The experience linked to it is the key. This enables companies

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achieve a truly customer focused management concept. and 5 are focusing on Implementation. product aesthetics. e. logos Step 4: Structuring the Customer interface • • all sorts of dynamic exchanges and contract points with customers intangible elements (i. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 44 . J. value. behaviour) Step 5: Engaging in Continuous Experiential innovation • anything that improves end customers' personal lives and business customers' working lives K.Customer Relationship Management -----------------------------to strategically manage a customer's experience with a brand and by doing so. “look and feel”. Step 3: Designing the Brand experience • experiential features. Whereas steps 1 (Analysis) and 2 (Strategy) form the basis for CEM.e.g.------------------------. 4. attitude. steps 3. The CEM Framework Schmitt's book "Customer Experience Management" offers the following five step framework that should help managers understand and manage the "customer experience": Step 1: Analyzing the Experiential world of the customer • • analyze socio-cultural context of the customer (needs/wants/lifestyle) analyze business concept (requirements/solutions) Step 2: Building the Experiential platform • • connection between strategy and implementation specifies the value that the customer can expect from the product.

enabling companies to make effective. correct. email or Web channels. and the customer. and processes that were a part of the interaction. are all combined with customer experience information and analyzed/reported in real-time. and incorporates key information related to customer behavior and profitability. store sales. and critical day-to-day adjustments in resource allocation and execution — as well as enterprise-wide shifts in strategy. How Does CEM Technology Work? CEM Technology captures customer experience information across all customer touch points and feeds it back to the organization so that action can be taken to improve profitability. The state of the customer experience has implications on the type of information to communicate with K. Whether phone. average purchase amounts. Customer Experiences can be categorized into three unique states. The questions that are delivered to the customer are specific to that interaction type. CEM Technology accesses existing CRM data. The strength of a CEM system is in its ability to continually align company performance with customer needs and behaviors. J. products. Done properly. to bring all pieces together. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 45 .Customer Relationship Management -----------------------------And finally. customer segments. The questions are also conditional in nature and facilitate both quantitative as well as qualitative experience information. a holistic approach is required that provides a linkage between the different steps and connects them with the organization. Information such as retention rates. productivity metrics. the experience information is collected within context of the interaction.------------------------. and within context. the people. this process will result in better than 80% customer participation and have a measurably positive effect on customers. complaint and resolution rates. At the beginning or end (or both) of an interaction. etc. the customer is invited (automatically or manually) to provide their perspective via four or five short questions.

The three states of Customer Experience are: Normal Experience. contact centers learning that it's about more than efficiency Despite some confusion and marketing spin though. and Unique Experience.------------------------. customer experience management (CEM) is emerging as a way companies can look in their own back yards to leverage K. J.Customer Relationship Management -----------------------------and collect from customers. Fig. Critical Experience. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 46 . Managing Customer Interaction CEM Versus CRM Managing customer experience is a subject of lip service at many companies.

Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 47 . Contact center agents listen to a call and appropriately enter keywords like "cancellation" or a product name into the CRM system. business rules trigger the CEM system to digitally record and file the conversation for specific owners like product or marketing managers. it's not separate and distinct. Training and supervisory review of calls helps team leaders spot opportunities for agents to use the inquiry to increase loyalty. Initially." you've been part of the CEM experience. or files can be listened to at their owners' leisure. a Texas-based outsource service provider that manages one million calls per month for large software firms and ISPs. "This call may be monitored for quality assurance. While some customers are reluctant to be up-sold or surveyed. Alerts can be sent. CRM starts with vision and strategy. indicating interest in another product or service. While the contact center might deal in hundreds of products. That means relationships should be built on a proper foundation that brings the K. Spectrum uses CEM technology from NICE Systems. The next layer down is collaboration and valued customer experience. It's more multimedia now. CEM was used as a coaching and training tool.Customer Relationship Management -----------------------------CRM for qualitative as well as quantitative insight into interactions that improve opportunities for customer loyalty and new sales. As it applies to the contact center. So CEM is a part of CRM. a query lets managers tap a single point of interest and monitor the recorded calls. or with case management products like Remedy. and you can't have CRM unless you create a great customer experience. You can't have CRM unless the organization works well together. CEM solutions like Witness or NICE integrate with CRM applications like Siebel.------------------------. Caching the Experience If you've ever heard a voice say. J. cross-selling and surveying are also at work. Toni Portmann is president of Spectrum Contact Services. CEM is still important to trigger gaptraining or e-learning sessions for agents. CEM is about capturing (recording) interactions between agents and customers and applying business rules to them. though newer goals of up-selling. game film of how we did and how we can improve.

one that doesn't mind being interviewed. This may be fine for checking a balance or buying a book or plane ticket. would you mind if we ask you a few questions?' they might get valuable information they'd never get from self-service. At that point. and your problem was resolved and now you are pleased." The Reluctant Customer and Self Service Cost management benefits of CEM are clear. which by definition involves no agent participation. K. and the other that just wants to get off the phone.Customer Relationship Management -----------------------------customer into the discussion. "Imagine if you called upset. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 48 . "He doesn't want to be polled every day. Efficiency is a strategy. it just goes to the more expensive contact center channel anyway. but often enrages customers faced with deeper service or product needs. BMW just started charging $5 to people who preferred to talk on the phone rather than use self-service. do they really want to be polled or up-sold? It's funny.------------------------. companies are doing a better job of fusing marketing automation with CEM. but don't then expect the customer to pay a premium for your service. let's start with listening. J. he's the best consultant you can get and it's free. When he calls. there are almost two major groups of people. but when customers call a contact center about a problem with a product or service." Meanwhile. in the name of efficiency. 'We really don't want this to happen again. Efficiency equals customers judging you on price and it will take you downhill. If customers escalate the problem. Having figured out that CEM is a process and not just technology. if a supervisor says. companies are increasingly offering voice and Web self-service.

J. The question is whether you want to compare CRM programs of Indian companies with the standards and best practices of players like Ikea and Marriott who have been torchbearers in this K. some industries like steel. It is therefore no surprise that the Indian companies are jumping into the CRM bandwagon to seize a chunk of the global market. Call centers. both products as well as services. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 49 . Companies in India are realizing the need for RM and some of the forward-thinking ones have been strategically investing in CRM initiatives and relate activities. So the awareness of CRM there. Even though. India is fast becoming an important development base of major CRM companies. With the easing of infrastructure constraints. aluminum and cement could get by without any active customer management. With is vast talent pool. catering primarily to the American and European markets are coming up in and around the metros. they realize that is now all history and that they have to do something to create and build relationships. The first steps have been taken by many.Customer Relationship Management ------------------------------ Chapter 8: CRM in India Software is to India what oil was to Gulf.------------------------. This trend is likely to increase in the future. India is likely to emerge as a significant player in this segment.

reskilling and the ability to adapt that will distinguish the laggards from the winners. Outsourcing CRM back offices. founded with the purpose of assessing and improving CRM practices. Modi Xerox. and Epicenter Technologies among many others. Tata Telecom. It has to be whole revolution within the entire organization. Founding members include Tata Telecom. Carrier Refrigeration. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 50 . ICICI Lombard. It needs a CEO who walks the talk. AC Nielsen. The difference lies in the way CRM has been deployed at these organisations. Satyam Infoway. good customer. Escotel. Tata Infotech. Adoption of CRM by Indian companies is at an infancy stage. BPL Telecom and Air-India have successfully used these tools—and benefited. among others. TVS Electronics. It’s about training. The CRM enabled companies include Modi Xerox. HP India. Carrier Aircon. J.------------------------. It is a combination of technology and process change that has worked. CRM is now an integral part of organizational strategy and overall business objectives. Tata Teleservices. learning. Has CRM in India been reduced to an empty buzzword that’s tossed around so that a company appears to be keeping up with the industry? Not entirely. and many Indian companies are managing CRM operations for Fortune 500 and medium- K. because the cost of creating a new customer is 5 to 10 times more than the cost of retaining an old. India is growing to be the back office of the world. India even has a CRM Foundation in New Delhi. India has a long way to go. One has 200 customers and the other 2000 customers. and Motorola India. Planet M.Customer Relationship Management -----------------------------field. Indian companies would do well to realize that CRM cannot be delegated to the marketing department. Global Groupware. because organisations like Standard Chartered Bank. The entire organization from the chairman to the doorman has to be galvanized to become a customer-oriented organization. in other words CRM is an absolute necessity now for the smallest kirana store to a large player like Ambuja Cement. But both can’t afford to lose even a single of their customers.

help desk calls. However. today the vehicle for these calls-the internet has become cheaper and more reliable for the average Indian business. a result of numerous mergers and acquisitions taking place within the sector. The business has boomed to the extent that many people are now running BPO’s out of their cyber cafes and houses in New Delhi. and businesses that capitalize on the potential cannot only reduce cost. There were over 400 companies operating within the Indian BPO space. BPO is one of the greatest global forces for improvement today. bill payments).Customer Relationship Management -----------------------------sized companies in USA and Europe. but now. J. Now that the outsourcing market is mature. The sector witnessed considerable activity during 2004-05. The Indian BPO industry remains on a growth path. including captive units (of both MNCs and Indian companies) and third-party services providers. emerging as one of the key investment markets in the country. BPO began as a way to significantly reduce labor costs for low-value or transaction activities (e.g. including a ramping up of operations by major Indian and MNC players and stepped up hiring. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 51 . catalyzed by demand from the telecommunications and BFSI segments. BPO’s in India The business process outsourcing industry in India has grown by leaps and bounds and as its size increases so does its competitive advantage.. but also increase productivity and raise revenue significantly. Compared with 1996 when this Industry had started inroads into the United States with Outbound Telemarketing campaigns. Indian companies may also begin to outsource for cost reduction. The domestic BPO market.------------------------. matched the growth of BPO exports. The market experienced maturity and consolidation. it's emerging as a way to deal with higher complexity. few companies have realized K. CRM outsourcing providers alone have a $30 billion market opportunity. value-added activities.

Chapter 9: Case Studies on CRM 1. But when they set out to implement in Japan as part of their efforts to make the company's CRM systems operate globally. To capture these benefits organizations need to do two things: outsource to improve productivity (not just costs) and cost-effectively identify emerging revenue opportunities. The sales support operations manager. Kozo Sekino. it ensures that in the end they have maximum buy-in to the true business changes that need to occur. And then they realized that they needed to do the same for other countries—without sacrificing the global standards HP aims to institute based on their long-term strategy. Hewlett Packard – Computers and IT sector Traditionally. Resistance K. J.Customer Relationship Management -----------------------------the full range of benefits that BPO offers.------------------------. they recognized it wouldn't work that way. If HP strongly involves management and multiple audiences along the way. pointed out that the Japanese work better by being included in the business process definition early on. HP would begin implementing a new CRM system by starting with a strong focus on systems design and functional specs. who was their local eyes and ears with the sales and marketing groups in Tokyo. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 52 .

Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 53 . are concerned that their ability to meet customer needs may be hampered by an overzealous and globally-driven standardization effort. J. they recognized that all due diligence to the point of "pushing the button to be online with CRM" had to be done prior to the meeting with the top sales executive. has overcome some of the unique challenges an American-based company regularly faces when aiming for global standardization of business processes and IT infrastructures. In today's landscape. As a whole. who. for good reason. when you're implementing a solution in another country. you must be adaptive and culturally sensitive. In Japan. local solutions make the implementation of globally consistent business processes more challenging.Customer Relationship Management -----------------------------Globalization meets resistance in many ways. where Mike Overly has been for more than 20 years and Johannes Beirmann has been for 10 years. the company has always been intent of reducing cost to stay competitive. Oftentimes. that requires trade-offs between global standardization and local needs. K. What is so unique about being an American-based company and how does this affect a CRM implementation outside the United States? Consider these three problematic characteristics and how HP handled them: • American companies are not anxious to spend much time on planning and implementing an agreed-to business process or solution.------------------------. it usually arises through the local sales and marketing organizations such as their Japan country teams. Their usual order of implementation began with executive meetings to launch the effort. particularly from a financial perspective. Yet. highly customized. They want to see immediate results pertaining to the defined change. HP. For CRM. They reversed that in Japan. The IT infrastructure has become the notable beneficiary of the CRM effort: Global standards allow for much simpler IT environments and the retirement of a vast number of dispersed assets.

they gathered feedback from top executives. something that had not been the case in earlier efforts. It has since become the unspoken and guiding principle for the effort. They developed a common account planning and selling methodology by including as many regional people in the planning as they could. and you will find that K. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 54 . Go to Japan. One example is the stricter and varying customer privacy standards in different countries. J. which was not the case before. Japan team members from sales and marketing took part routinely in key global workshops well before they even made it to the hot implementation phase in Q4 of 2005 by adding their valuable inputs into the business process design. • American companies tend to struggle to find the right regional balance for common standards. should HP follow the same selling methodology in Japan that it does in Canada? To address this. The benefit. Every sales rep in Japan now uses the CRM system.------------------------. given the continuous involvement of hundreds of decision-makers and subject matter experts. specifically including the regional sales and marketing managers in this process. For example. they have seen a tremendous business being managed through the new solution environment. They also formed a permanent governance structure with and strong regional representation. A global team at HP designed the future-state global business processes. "Global Process Consistency" was initially just the project name. using global standard processes in sales across field and inside sales. Since January 2006. however. both for field and inside sales. But you can find this struggle in business processes as a whole. was an explicit statement by the leaders that committed all management levels to the importance of utilizing CRM once they did deploy. High personal buy-in proved the case—although it was not an easy achievement.Customer Relationship Management -----------------------------It took them about nine months to agree on the roadmap for Japan and set the "golive" day—a real challenge for their deployment team.

posters or video messages to their staff. J. They complemented these with resources helping the prospective end-users with the organizational readiness. With customers ranging from the largest companies in the world to small mom-and-pop operations. there is often a false focus on technical deployment. Top-level executive commitment is a must-do.------------------------. In Japan. K. field sales personnel in the local enterprise group and marketing managers from three business groups." The end result was considerable cost reductions in the IT infrastructure. they formed an extended task force that dedicated substantial time to the implementation. That is exactly what Hewlett Packward did in Japan—and what they do in other countries across the world. Despite the fact that American-based companies know the importance of managing the organizational and people-related transitions associated with a changed—and usually more integrated—CRM environment. explain the business value of CRM in simple terms. • American companies don't integrate non-technical resources consistently. HP has a lot of customers to satisfy. Hewlett Packard: Enterprise-Wide Solutions on a Global Scale While the company set out to improve a variety of business issues with CRM. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 55 . HP put a real focus on process adoption. but the real work is to engage first-level sales and marketing users in regions and country field organizations. and the program's magnitude only begins to hit home. It included representatives from their call center in Fukuoka. and engage them through workshops.Customer Relationship Management -----------------------------"GPC" is almost like a "rallying cry. It led them to have task forces dedicated by region—and in some cases by country—to securing not just technical deployment but also adoption of the CRM system. as they consolidated and eliminated redundancy and increased productivity for both sales and marketing. its overarching goal is to provide a best in class customer experience. Combine this with the fact that the company is rolling out its CRM program worldwide.

HP's initial CRM effort focused on the organization that touches the customer most: The sales force. Everyone had their own rules and guidelines about managing their customer activities. Over time. Its goal was to provide the company's global sales force with an automated— and standard—way to perform contact management and account planning. They knew that in order to deploy a global CRM solution. they needed to influence the entire organization. While the initial functionality was classic sales force automation. but what makes a customer happy is pretty universal.Customer Relationship Management -----------------------------What They Did: Mike Overly and his HP CRM team weren't naïve. K. Overly's CRM team has made the ability to share information about customer touch points across organizations a key CRM success measure. and has deployed the Oracle Sales Online product to customer-facing employees around the world with more on the way. or call up information about the latest marketing campaign and its primary channels. HP can provide a remote salesperson with the ability to track a customer's activities across organizations. J. from the sales organization to marketing to the company’s myriad call centers. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 56 . For instance. a salesperson can find out which of his customers have contacted the company's help desk. HP is gunning for even bigger improvements. The goal is to establish an ongoing dialog with customers so that customers will gain greater control over their relationships with HP. such as dynamic personalization for Web visitors and automatic lead routing from marketing to the internal sales staff and HP partners. Reporting directly to the President of HP's consumer business unit provided the team with the clout and visibility it needed to gather consensus from a range of different corporate functions. The mantra sung by each organization is the same: To manage the total customer experience. the hurdles were high. Indeed.------------------------. By integrating customer activity data in an Oracle "customer master" database. both headquarters and field staff will have access to a range of customer information and history on both corporate and local Oracle databases. The company chose a CRM solution from business partner Oracle.

Data. Since Oracle's CRM environment is based on portal technology. and technologies that are customer-related will slowly be merged with the current CRM program. every sales person has a preferred way of getting the job done. Another challenge has been rendering ongoing management sponsorship and involvement as painless as possible for HP's busy executives. and internal education necessary to deploy enterprise-wide CRM. preferring instead to expend the extra time. the Change Manager is chartered with developing and tracking all project communications.Customer Relationship Management -----------------------------Standardizing CRM corporate-wide has meant phasing out numerous legacy systems. sales people can customize their interfaces to include client information and contact activities as well as data from external news sources and the global financial markets. the company offers localized Web courses in native languages to several countries including Korea and Japan. Good Idea: From the beginning of the CRM initiative. driving cost savings in the millions of dollars. The company is delivering Web-based CRM training in order to educate staff on how to use the Oracle CRM technology and apply it to their specific job functions. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 57 . J. Besides establishing ongoing CRM performance measures. While most of the training is conducted in English. No matter where they are in the world. They were no longer talking about a personal productivity tool.------------------------. but about an HP solution. money. The Challenges: Deploying CRM worldwide has its trials. Overly’s team shrewdly steered away from the point solution approach. sales reps share the goal of being as productive as possible. However. including internal communications across HP such as guiding executives in communicating new customer-focused policies. Overly and his team have had to surmount habits and assumptions that are often not only organizationally entrenched but cultural. This meant organizing CRM development around so-called "vertical silos" representing various corporate functions K. business processes.

Overly advises others who may be deploying CRM on a similar global scale to be mindful of three success metrics: 1: Obtain sustained executive presence. it ensures that CRM business processes. technologies. and customer service. and the other on tomorrow's problem. meaning that executive leadership must be engaged throughout the CRM lifecycle. This approach of uniting vertical efforts with horizontal standards not only avoids development in a vacuum. For a multi-disciplinary technology conglomerate like HP. marketing. deploying a global and interdisciplinary CRM program could take years. and improving the total customer experience—measurement. executive involvement. with emphasis on the word leader. is ongoing. and implementation methods are consistent across the company.------------------------. like the CRM program itself. "Every day there's a new challenge—you need someone who has a good understanding of the problem and the authority to fix it. and process K. J. data. With such a high-visibility commitment." The Golden Nugget: While HP has committed to three primary measures—increased revenue. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 58 . The CRM team considers customer survey data to be a primary measurement source. not to mention the complexity. 2: Always keep one eye on today's problem. decreased costs. Measurement results might dictate a range of business changes. 3: Ensure change leadership. The CRM team members for each vertical silo work with the executives in related business organization.Customer Relationship Management -----------------------------such as internal sales. as well as with a CRM manager who's responsibility is to integrate each independent effort into the corporate-wide CRM program. such as changing sales compensation levels to rely less on customer revenues and more on customer satisfaction.

This includes a range of high-end servers from Sun and HP. fraud management. not years. Like any Telco. AirTel. Bharti considers information technology a key business enabler." 2.Customer Relationship Management -----------------------------changes. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 59 . some of the applications that are running on its network are billing. In the telecom business volumes are very large. it’s noteworthy that it took the initial SFA application months. Thus IT is very important to Bharti. They have millions of records and process them everyday. to be released to its global business users. They also have some internal-facing applications like Oracle Financial and Oracle HRMS. Bharti have an extremely large infrastructure based on products from multiple vendors. revenue assurance and data warehousing. J. How can a company of HP's size be so nimble. Bharti Tele-Ventures – Telecom Sector Bharti Tele-Ventures is one of India's leading private sector telecom operators. The main data centre is located in Gurgaon. is a leading mobile telephony brand. so for them storage is in terabytes. The company also has an extranet in place through which it extends different applications to its dealers and partners.------------------------. yet so visionary? HP Team would politely reiterate: "We're in the solutions business. Bharti believes it plays two significant roles-it works as a support system. Its cellular business. and it can also be a business driver. IT is like bread and butter. K. It had a WAN in place with a mix of leased lines and E1 and E3 lines. As far as software is concerned. For telecom. Bharti also has a storage area network (SAN) in place. Haryana.

they implemented the CRM tool immediately. At that point of time only 40 percent of their customer issues were getting resolved-this has now gone up to about 90 percent. A customer should get the same quality of service no matter which of their call centres he contacts. It is vital for them to manage the expectations of their customers and provide them with innovative products and services in a manner which makes them loyal. when Bharti started operations. To achieve this. Bharti acquired many circles and sought new licences in other circles. Bharti needed the right tools. it decided to go ahead with the Oracle CRM platform. The goal was that all the circles would go live by the first quarter of 2004. and because of that they have gone in for a centralised application like CRM. After a thorough evaluation exercise. The migration had to be done in such a manner that the existing customer base did not suffer. facilitation of knowledge sharing. Cherrypicking a solution Today Bharti is using the Oracle CRM platform. the whole system was run manually. This has been their vision. Before choosing its CRM tool. K. and integration with the billing system.------------------------. Roll it After starting its services in Delhi. It considered factors like proper workflow automation. It is this need that made them opt for a CRM (customer relationship management) solution. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 60 .Customer Relationship Management -----------------------------The case for CRM Initially. they intend to provide AirTel services anywhere and at any time. But they had to put in a migration strategy in those acquired circles which had an existing subscriber base. As part of their vision. J. Bharti evaluated many options. whenever they got a new licence.

J. K. If the customer is a heavy user then they have some specific schemes. this is used for business development activities. Apart from this. One of the primary things that Bharti have done in this solution is the segmentation of customers. helping them in their day-to-day activities.------------------------. AirTel is now able to give its customers more value for money. which has helped in providing customers more value for their money. The CRM strategy at Airtel revolves around two aspects: operational CRM and analytical CRM. It was important to understand and segregate customer needs depending on the product and services he is buying. they have also managed to segregate their workflow with the help of the CRM tool. When they went in for such a largescale implementation they faced problems. With this. but they were able to overcome them. With the help of CRM. The second provides staff with the required information on customers. they are able to provide customers different schemes and services depending on airtime usage. Together they help Bharti provide better services to its customers. Tailor-made schemes One of the primary things that Bharti has done with CRM is segmentation of customers.Customer Relationship Management -----------------------------The biggest challenge for Bharti was to have a unified process in place. for normal users they have other schemes. The first is about helping their call centres in the workflow part. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 61 . Once this was done they faced the challenge of imparting training. They also had certain technical difficulties during implementation.

J. Pfizer is one of the few pharmas to adopt a home-grown Customer Relationship Management (CRM) software solution to catalogue all data pertaining to its sales force.------------------------. some who have automated it to a large extent have found that their IT systems have brought substantial returns to them. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 62 . While most companies have a scientific approach to this activity. It will also help in cases of attrition where if a sales representative quit another could take over easily with the help of the information available online. . Pfizer – Pharmaceutical sector Competition is forcing pharmaceutical companies to look at marketing as a key differentiator.Net Platform In 2001. the Indian wing of Pfizer perceived that the deployment of a sales reporting system would ensure structured documentation of information collected by its representatives. K. Pharmas are working at maintaining an active field force that targets doctors one at a time as the most economical means for creating awareness.Customer Relationship Management ------------------------------ 3.

and the events he attends. being an A-class doctor does not mean that the representative will make 10 calls to him every day. it is easy to identify markets that will have good returns. If the doctor participates in public forums the Pfizer CRM captures whether or not the doctor is an opinion leader. the profiles of the patients that he treats.------------------------.Customer Relationship Management -----------------------------Each representative has about 200 doctors on his list. J. stock and transfer the right amount of drugs to the K.NET platform. The nine-member IT team at Pfizer designed Optima to fulfil this need. The company can therefore manufacture. One-Stop-Shop The first step to any CRM implementation is collection of extensive and clean data. The CRM application runs on Windows 2003 and SQL Server that is primarily accessed over the Internet and is hosted at a thirdparty IDC. The doctors are classified by priority. and how quickly he prescribes new drugs. and today it is a full-scale CRM solution coded on the Microsoft . Since it is based on the combined information on the doctors and chemists in a particular locality. the sales team can determine what kind of prescriptions the doctor generates. whether or not he is price-sensitive. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 63 . the system has been overhauled considerably. At Pfizer that is taken care of because all data input is checked as per predefined business rules before it is entered into the system. The system has two advantages. the CRM captures the profile and buying power of a chemist’s customers. In the case of doctors. The second benefit is that the CRM helps predict the stock requirement pattern. However. based on the data entered into the system. Over the past four years. Similarly for the chemists. The information in the system is reviewed on a regular basis to check for new entrants as well as pattern changes in different areas. In addition to that the system captures data with regard to the associations or societies the doctor is a part of. Basic information captured in the Pfizer CRM includes doctors’ and chemists’ profiles.

Improved response to customer queries is another advantage that is derived from Optima. Regular Updation As part of technology upgradation. Or if sales personnel come across schemes being run by Pfizer’s competition. The product management team can then start using the information to provide business intelligence. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 64 .------------------------. the system is yielding good returns in the present format. Different people have different requirements from the system. Even so. if a Pfizer representative pays a visit to the doctor. the information is keyed into the system. Pfizer has reserved its CRM for the sales force. One section on the Pfizer India Web site has been enabled for doctors to log in and post queries and concerns. If a representative works in North-east Mumbai.Customer Relationship Management -----------------------------market just-in-time so as to minimise storage space and lessen the chances of wastage from damaged or expired products. he has to know which doctors can be targeted. The CRM system also helps provide market intelligence on competitors. The system generates a list of doctors in the area with ratings and the expected frequency of visits. so the information the CRM returns is based on need. Planning and reporting the key Sales Force Automation features have improved analysis capabilities with regard to field force activities. The information gathered needs to be consolidated and analysed for business decisions. J. the company has noticed that instances of Indian doctors approaching the company via the K. the system is updated every five to six months with a clear business objective. while waiting he may meet his counterpart from another company and can feed in the information he collects. whether the sales force feeds in information at the end of the day or every few days does not make any difference. According to the company. Perhaps that is why Pfizer has not invested in a system that allows input on the fly. but may not be feasible for mobile devices. Hence. For example.

For adverse reports. and asked to pass their skill-sets to their colleagues. To ensure that there is business and user buy-in. For example.------------------------. Pfizer has manned telephone numbers on which doctors can call. the company wants to maintain the users’ faith in the system. the IT budgeting has provisions only for the infrastructure. The entire process is documented in the CRM. The in-house team that architects the solutions is limited to nine people. and HR buys software to automate salary calculations Looking For More Most problems with regard to the CRM deployment were technical in nature and could be resolved easily. People K. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 65 . To ensure that there is business and user buy-in. the company works on a model wherein the department that requires IT budgets for it. To ensure that every solution caters to a specific business need. A large part of the technical work is outsourced. the marketing department pays for CRM and HR buys software to automate salary calculations. Pfizer maintains a small IT team comprising mainly project managers (with experience in the pharma business) and technology specialists. Champions in the technology are identified. This ensures that the systems installed are used to the maximum. J. Even the maintenance budgets for IT are taken care of by the respective departments. it believes in conducting training.Customer Relationship Management -----------------------------Internet is limited. In most cases it is the company representative who has to be on his toes and deliver to the expectations of the doctors. For example. However. The call operators or representatives who gather the adverse report feed it into the system and the problem is highlighted till it is resolved. the marketing department pays for CRM. Pfizer works on a model wherein the department that requires IT bud gets for it. and communicating via e-mail. User Buy-In At Pfizer.

managing expectations is a continuous challenge. exclusively meant for reporting. WHHI was looking for a solution that would allow the hospital to manage its patient and staff details' database efficiently. Wockhardt – Hospital and Health care sector When you aim to build a world class hospital. The first version of Optima. Keeping this goal in mind and to give patients better value for their money. J.------------------------. It also needed to connect specialists to the hospital network such that the doctors could monitor the patient remotely. which consists of four people. The WHHI IT team. took 10 to 15 minutes to complete a task. 4. you need world-class processes in place. Now employees want the system to do much more—but within the same time-frame. The foursome considered a CRM solution custom-made to the hospital's needs and a network linking that they termed eICU. found that the most suitable solution was to put in place two inter-linked systems. K. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 66 .Customer Relationship Management -----------------------------continually expect improvements in the system and want their suggestions to be incorporated. This system connected the patients' monitors to an RAS accessible over the internet. Thus.

J. Plus it can sort categories of patients such that the hospital has now been able to start clubs of people with similar experiences. it now also generates reports. patients share their experience and sometimes also learn from each other. Vice President Operations. developed and implemented a CRM application to specifically meet the demands of WHHI. At the forum. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 67 . occupancy reports. a group of people who have undergone similar heart surgeries at WHHI. The solution To meet these requirements.------------------------. believed that such implementations are required to create an ambiance of efficiency. Moreover. The accuracy rate of the reports has seen a new high as a result. The implementation generates feedback reports. which conceived. average length of stay. It has resulted in the creation of the Happy Hearts' Club. More importantly the CRM solution has automated relationship management. WHHI. it is not a one time transaction. Vishal Bali. waiting and discharge reports. The beginning To develop and maintain a special relationship with doctors." And the CRM solution has helped with just that. Vice President Operations explained the importance of this routine task: "Hospitalization should not be seen as an episode but as a patient hospital relation. the hospital approached an outfit called Think Ahead.Customer Relationship Management -----------------------------The CRM system WHHI put into place not only helps identify the right doctor for the right occasion. K. patients. The CRM solution also automatically forwards newsletters and relevant information to keep in touch with doctors and patients. obviating any chance of delay. and corporates. the solution has helped maintain and update all the reports on a daily basis. Vishal Bali. While all these reports were being filed even earlier. with the narrowing difference in service level at hotels and hospitals internationally. WHHI required an easily manageable system that would catalog all the required details. The implementation was also required to track feedback to generate a patient satisfaction index.

WHHI was also able to initiate a tele-medicine program. A resident doctor can consult a senior consultant while at the operation table and the CRM solution helps retrieve the most suited consultant for a given case. These are video links established at medical colleges in the relatively less developed parts of India. and images. The system is capable of transferring audio.------------------------. The hardware blocks unauthorized access and the software firewall acts as an active state packet filtering firewall. the WHHI IT team has set up a hardware and software firewall. Relatives and friends can visit any patient online in a virtual patient room. J. text. Similarly. The doctors at WHHI use this link to address classes in these colleges as well as to make routine follow-ups on chronic patients. These are connected to a Windows 2000 Server that is linked to Remote Access Servers (RASs). To secure its network. The RASs can be accessed over the internet via a 2 MBPS line. in case of a smaller problem the doctor is not required to rush to the hospital. The Total Internet Security Suite scans inbound and outbound network traffic. video. The eICU allows doctors to consult specialists in life and death situations. Security issues With so much data available over the internet it is natural that information security would be a concern. This way all decisions can be collaborative. The eICU consists of ICU monitors on the side of the bed. The remote system also means that every patient has 24x7 coverage from his/her doctor. K. WHHI has developed an eICU. Furthermore. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 68 .Customer Relationship Management -----------------------------e-Hospital Besides the CRM system. e-Visit WHHI's association with Think Ahead led to other creative initiatives. The first is the Virtual Family Visit.

Perhaps. Though HDFC enjoyed a monopoly when it started out. who built the organisation on the core values of integrity. the element of care not only reflects in the very vision that prompted its inception. According to him. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 69 . At HDFC. providing finance for housing is not merely about earning profits. Parekh. transparency and trust. the implementation cost WHHI close to Rs 2 million. the level of automation and improved efficiency due to this system could be used to establish the system's ROI. according to Bali. but a way to provide an essential and valuable service to the society. To HDFC.Customer Relationship Management -----------------------------Cost factor Overall. J. but also in the manner in which the company relates to its customers. However. Bali does not look at it from a profit perspective. 5. as the standards for hospitals improve the world over.------------------------. but rather as a 'Staying in Business' investment. Wockhardt must set a standard in India. It all began with a thought that took shape in the mind of HDFC’s founder. T. the company’s firm focus K. HDFC – Banking and Financial Sector Owing a Home still remains to be the single most cherished dream for many Indian households and one need to be treated with great care while assisting people realize their dreams. Late Shri H.

With over 28 years of experience in the real estate industry and business relations with the developers. there are a number of issues and concerns a customer has when he deals with any developer. Its experience and indepth knowledge of the sector is a boon for its customers. HDFC aims to bring creditability and trust to the property deals. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 70 . It was also the first to launch repayment option that supported housing K. HDFC understands that buying a house is an event which happens once in a lifetime for most and is the single largest investment. At HDFC. It provides counseling through its property services on how and where to buy a house in India. this has helped it keep in touch with the changing trends and customer expectations. select the property and seal the deal immediately. It was the first company to offer floating rate loans when the interest rate scenario turned conducive for customers and introduce a part fixed part floating product enabling customers to hedge their risks in an uncertain interest rate environment. the real estate prices and trends in the real estate market and any assistance that may be required at various stages of property dealings. It has from time to time tied up with developers to bring special packages to its customers and reach out to them. where except in few cases the developers have established a brand. It conveys the properties to the customers by visiting companies to put up special counters displaying new projects of builders. it has a thorough understanding of the market and this is passed on to the customers. Since the company has always been dealing directly with its customers.------------------------. While buying a property. It believed that the best strategies are established with long-term commitment and relationships with the customers. product innovations are based on customer feedback and are aimed at customer convenience. so they don’t have to move out to locate a home and make presentations to address their financial concerns. most builders are local and relatively unknown. The company also arranges property fairs where customers can visit. hence buying the property with the fullest knowledge is vital. This approach is also used in colonies with a large number of families.Customer Relationship Management -----------------------------has always been on customer care and satisfaction. J.

discussing their repayment capacity – considering their income. technology has always been a focus area for the company in its endeavour to simplify transaction for customers. believing that individuals were basically honest and would pay back in time. As the first company to computerize the home loan process. and after ascertaining the facts and the reasons for default work out a solution. it has a strong value-based premise that ensures that the implementation will not be unduly coercive. Though the policy deals with a negative situation. All in all HDFC is a brand.------------------------. the necessity to ensure savings for emergencies and then arriving at the right amount for them to borrow. Infact. he nature of their expenses etc. K. the demands of their growing families. which not only offers Housing Finance but “Total Housing Solutions”. It follows a single window concept where customers get legal and technical approvals by its experienced in-house counsellors. with counsellors taking out time to understand the applicants’ needs.Customer Relationship Management -----------------------------loans on the basis of age and customer needs. From the beginning it followed a different model and setup a “follow-up” department to deal with delinquent borrowers instead of a “recoveries” section. Departing from the usual norm of providing just loans. Given the diverse portfolio of customers that HDFC caters to. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 71 . it offers customers a personalised counseling service to help customers encash on the vast pool of knowledge that comes with its experience. the counselors at HDFC are trained to understand customer requirements and structure the loan to match individual concern. Customer service at HDFC goes beyond process handling. the policy is built on courtesy. J. number f dependents. HDFC’s philosophy of care also engulfs its interaction with customers who have defaulted in repaying the loan. fair treatment and persuation. This usually saves a lot of time and efforts for customers of obtaining these clearances from other authorities and saves money as the processing and administrative charges cover all these expenses. Its debt collection policy emphasizes on fostering borrower confidence by understanding their crisis. even reschedule the loan if required.

However. Who’s in the CRM game? About 50% of the CRM market is currently divided between five major players in the industry: PeopleSoft. based on Linux and developed by an old standard.------------------------. Oracle. The task at hand is to bridge the gaps and to provide the common man access to resources to fulfill his basic dream. although Microsoft’s new emergence in the CRM market may cause a shift soon. SAP. Database Solutions. In its 28 years of operations it has assisted 27 lakh families own a home through loan approvals of over Rs. Whether Microsoft can capture a share of the market remains to be seen. their brand-name familiarity may give them an edge with small businesses considering a first-time CRM package. a sum of money depending on the insurance cover will be made available towards repaying the housing loan. As it moves along taking small steps in this direction what makes the effort truly worthwhile is when it ultimately benefits individuals and the society at large. They are the basis for all growth and development.Customer Relationship Management -----------------------------The Home Loan Protection Plan (a product of HDFC Standard Life) that HDFC offers to it home loan borrowers provides the customer the comfort of knowing that in case of the unfortunate death of the borrower. 1.00. Inc. Siebel and relative newcomer Telemation. For HDFC. J. K.000 crores. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 72 . its strength emanates from its intrinsic value of customer orientation and care. The other half of the market falls to a variety of other players.

In 1998. There’s no client software to maintain and it supports over 150 applications. Telemation’s ahead of the game. K. The system also provides a quick learning environment that newcomers will appreciate.000 dedicated developers and $500 million in research and development. PeopleSoft had evolved into a purely Internet based system. Telemation’s CRM solution is flexible and user-friendly. Will Linux be the wave of the future? We don’t know. Unfortunately they couldn’t follow up themselves on the incredible sales they garnered and ran into a few years of real problems. PeopleSoft 8 is the brainchild of over 2. Its uniqueness lies in that. cost of supplying them. the company aggressively marketed a small-to-medium business CRM solution. it was developed as a Linux program. J. with a toolkit that makes changing features and settings relatively easy. Its user-friendly system required minimal training is relatively inexpensive to deploy. PeopleSoft 8. Oracle built a solid base of high-end customers in the late 1980’s. and frequency of service.------------------------.Customer Relationship Management -----------------------------PeopleSoft was founded in the mid-1980’s by Ken Morris and Dave Duffield as a client-server based human resources application. One of PeopleSoft’s major contributions to CRM was their detailed analytic program that identifies and ranks the importance of customers based on numerous criteria. under Tom Siebel. but if it is. including amount of purchase. PeopleSoft branched out from their original human resources platform in the 1990’s and now supports everything from customer service to supply chain management. They continue to be one of the leaders in the enterprise marketplace with the Oracle Customer Data Management System. although compatible with Windows. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 73 . Oracle landed on its feet after a restructuring and their own refocusing on customer needs and by the mid-1990’s the company was once again a leader in CRM technologies. . then burst into national attention around 1990 when.

J. In a stroke of genius. so companies like NetSuite. Offered with the package was a set fee service for set-up and training for core business needs. Oracle released their Global CRM in 90 Days package that promised quick implementation of CRM throughout company offices.1 billion in 2001. NetSuite and SalesNet.------------------------. Siebel acquired UpShot a few months later to get them started and smooth their transition into the ASP market. especially with mid-sized businesses. . ASP’s will continue to grow in popularity as well. which worked for them to the tune of $2. With Microsoft now in the game. It was a successful move. employees. To some of the monthly ASP’s it was a call to arms. Siebel launched CRM OnDemand in collaboration with IBM. but it seems likely that they may get some share of small businesses that tend to buy based on familiarity and usability. In October of 2003. monthly CRM solution niche hit the marketplace with gale force. SAP America’s mySAP began using a “middleware” hub that was capable of connecting SAP systems to externals and front and back office systems for a unified operation that links partners. Siebel consistently based its business primarily on enterprise size businesses willing to invest millions in CRM systems. process and technologies in a closed-loop function. Their entry into the hosted. in 2002 and 2003 revenues slipped as several smaller CRM firms joined the fray as ASP’s (Application Service Providers).Customer Relationship Management -----------------------------The last few years… In 2002. However. offered businesses CRM-style tracking and data management without the high cost of traditional CRM start-up. SalesNet and Siebel’s OnDemand will thrive. These companies. Also in 2002 (a stellar year for CRM). including UpShot. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 74 . to others it was a sign of Siebel’s increasing confusion over brand identity and increasing loss of market share. CRM on the web has come of age! K. it’s too soon to tell what the results will be.

The data can then help market the company. J. CRM is a business strategy to create and sustain long-term. K.------------------------. understand customers better so that customers can be given better service and allows them to interact with the company by whatever means they wish. help up sell to existing customer. profitable customer relationships.Customer Relationship Management ------------------------------ Chapter 10: Conclusion CRM is basically the collection and distribution of “all” data to “all” areas of business. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 75 . Customer Relationships are achieved by the whole company working together to give customers what they really want.

products and services have a better chance of understanding their present as well as future consumers. Clearly. Only then can CRM technology be used as it should be used—as a critical enabling tool of the processes required to turn strategy into business results. Customer Relationship Management is a prerequisite for maneuver strategy as it provides customer information proactively for making swift moves. It is the various stages that lead to better understanding of all aspects of customer behavior. When there is a strong infostructure available for the firm through greater access of customer information that can be manipulated with changing time and market dynamics.------------------------. Tools of customer relationship management like data warehousing help in realizing optimal results when the manager understands the strategic paradox. interface points. J.Customer Relationship Management -----------------------------Successful CRM initiatives start with a business philosophy that aligns company activities around customer needs. it allows the marketer to make calculated judgments as to where and when to move. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 76 . Customer Relationship Management helps in developing the most important competitive advantage in the form making the desired consumer information available at the fingertips of the decision makers for taking optimum decisions. it is a matter of being in synch with customers’ changing needs that shapes business success stories. CRM is now an integral part of the business vision/strategic roadmap of companies in virtually every industry domain and feeder-linked sectors. transactional issues and “intangible” benefits proffered that helps a company differentiate itself from others in terms of leadership and market dominance in a particular space. K. The “We Care” principle has to be embedded in the very vitals of the organisation for long-term benefits to accrue and for “delighted customers to keep coming back. Total customer orientation centered on customer understanding is bound to provide long-term customer value and by inference superior company and shareholders value in terms of sustainable growth and profits. Companies that continuously align and re-align their brands.

and on to infinity.  Access to all the services customer need for news.  A set of measurements that reflects how successful (or unsuccessful) the collaborative value chain has been in fulfilling customer’s needs and the ability to adjust the processes to improve the rate of success.Customer Relationship Management -----------------------------It has been said that the most successful companies of the future won’t be the big ones. The power of the emergent social network will undoubtedly increase as global companies make their impact known. information.------------------------. K. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 77 . purchases. they’ll be the fast ones.  A collaborative value chain of all institutions and processes needed to fulfill business needs.  A system that provides insight into customers so that improvements can be made. and you can bet that social networks will try to keep up with even the fastest corporation. J. CRM applications will increasingly mimic the way our social environment works in the years ahead. concluding about CRM in the following points:  A strategy defined around producing value to fulfill business meeds. delivery. The Internet will be the lens used by social networks to monitor bad corporate behavior. from wherever customer are in whatever circumstances. and the wallet will be the stick to whip corporations into shape. business. Finally.

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