CUSTOMER RELATIONSHIP MANAGEMENT

Submitted By: RAHUL ROY

PRISM SCHOOL OF BUSINESS & ENTREPRENEURSHIP

Introduction to CRM
Before we begin to examine the conceptual foundations of CRM, it will be useful to define, what is CRM? A narrow perspective of customer relationship management is database marketing emphasi ing the promotional aspects of marketing linked to database efforts! Another narrow, "et relevant, viewpoint is to consider CRM onl" as customer retention in which a variet" of after marketing tactics is used for customer bonding or sta"ing in touch after the sale is made! #hani and Chalasani define relationship marketing as $an integrated effort to identif", maintain, and build up a network with individuals consumers and to continuousl" strengthen the network for mutual benefit of both sides, through interactive, individuali ed and value%added contacts over a period of time&! 'he core theme of all CRM and relationship marketing perspectives is its focus on co%operative and collaborative relationships between the firm and its customers, and(or other marketing actors! CRM is based on the premise that, b" having a better understanding of the customers) needs and desires we can keep them longer and sell more to them! *rowth #trategies +nternational ,*#+- performed a statistical anal"sis of Customer satisfaction data encompassing the findings of over .,///0 customer surve"s conducted b" Angel Broking 1td! CRM ,customer relationship management- is an information industr" term for methodologies, software, and usuall" +nternet capabilities that help an enterprise manage
customer relationships in an organi ed wa"! 2or example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directl" could access information, match customer needs with product plans and offerings, remind customers of service re3uirements, know what other products a customer had purchased, and so forth!

According to one industr" view, CRM consists of4

 6elping an enterprise to enable its marketing departments to identif" and target their best customers, manage marketing campaigns with clear goals and ob7ectives, and generate 3ualit" leads for the sales team! Assisting the organi ation to improve telesales, account, and sales management b" optimi ing information shared b" multiple emplo"ees, and streamlining existing processes ,for example, taking orders using mobile devices Allowing the formation of individuali ed relationships with customers, with the aimof improving customer satisfaction and maximi ing profits8 identif"ing the most profitable customers and providing them the highest level of service! 9roviding emplo"ees with the information and processes necessar" to know their customers, understand their needs, and effectivel" build relationships between the compan", its customer base, and distribution partners! CRM%%Customer Relationship Management%%has entered the mainstream! :espite the uncertaint" of the econom", CRM is being thrust into corporate budgets and talked about as a critical initiative b" hundreds of 2ortune 1,/// and tens of thousands of other companies! +t has gone from being an important edge in the business world to a necessar" tool for survival! 'he notion of the customer as king or 3ueen is once again the rule! 6ow "ou treat this is a mission%critical business issue! But, what is CRM and how does it change the wa" companies do business? 'he changes in the world have been so d"namic and so dramatic that the path is not necessaril" all that obvious! 6ow CRM impacts that business path is a continuing source of debate in the world of corporate management

History of CRM
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Customer Relationship Management ,CRM- is one of those magnificent concepts that swept the business world in the 1<</)s with the promise of forever changing the wa" businesses small and large interacted with their customer bases! +n the short term, however, it proved to be an unwield" process that was better in theor" than in practice for a variet" of reasons! 2irst among these was that it was simpl" so difficult and expensive to track and keep the high volume of records needed accuratel" and constantl" update them! +n the last several "ears, however, newer software s"stems and advanced tracking features have vastl" improved CRM capabilities and the real promise of CRM is becoming a realit"! As the price of newer, more customi able +nternet solutions have hit the marketplace8 competition has driven the prices down so that even relativel" small businesses are reaping the benefits of some custom CRM programs! +n the beginning= 'he 1<>/)s saw the emergence of database marketing, which was simpl" a catch phrase to define the practice of setting up customer service groups to speak individuall" to all of a compan")s customers! +n the case of larger, ke" clients it was a valuable tool for keeping the lines of communication open and tailoring service to the clients needs! +n the case of smaller clients, however, it tended to provide repetitive, surve"%like information that cluttered databases and didn)t provide much insight! As companies began tracking database information, the" reali ed that the bare bones were all that was needed in most cases4 what the" bu" regularl", what the" spend, what the" do! Advances in the 1<</)s +n the 1<</)s companies began to improve on Customer Relationship Management b" making it more of a two%wa" street! +nstead of simpl" gathering data for their own use, the" began giving back to their customers not onl" in terms of the obvious goal of improved customer service, but in incentives, gifts and other perks for customer lo"alt"! 'his was the beginning of the now familiar fre3uent fl"er programs, bonus points on credit cards and a host of other resources that are based on CRM tracking ;;;; customer activit" and spending patterns! CRM was now being used as a wa" to increase sales passivel" as well as through active improvement of customer service! 'rue CRM comes of age

Real Customer Relationship Management as it)s thought of toda" reall" began in earnest in the earl" "ears of this centur"! As software companies began releasing newer,

more advanced solutions that were customi able across industries, it became feasible to reall" use the information in a d"namic wa"! +nstead of feeding information into a static database for future reference, CRM became a wa" to continuousl" update understanding of customer needs and behavior! Branching of information, sub%folders, and custom tailored features enabled companies to break down information into smaller subsets so that the" could evaluate not onl" concrete statistics, but information on the motivation and reactions of customers! 'he +nternet provided a huge boon to the development of these huge databases b" enabling offsite information storage, where before companies had difficult" supporting the enormous amounts of information! 'he +nternet provided new possibilities and CRM took off as providers began moving toward +nternet solutions! @ith the increased fluidit" of these programs came a less rigid relationship between sales, customer service and marketing! CRM enabled the development of new strategies for more cooperative work between these different divisions through shared information and understanding, leading to increased customer satisfaction from order to end product!

Definition: $CRM is concerned with creating improved shareholder value through the use of customer centric business processes and the development of appropriate relationships with consumers!&

Implementing CRM:

CRM re3uires an integration of a firmBs resources8 people, operations and marketing capabilities to deliver added value to the customers! CRM should provide businesses and organi ations with a Csingle view) of their customers and across irrespective of the interactive channel or medium through which the customer accesses the service or product! 2or example, a business ,e!g! hotel- customer)s profile and personal references should be accessible to the business ,or hotel- irrespective of channel i!e! whether the customer books online, calls in or walks into an" location should not make a difference to the service provided based on the personal profile of the business client! +t is enabled through4 +nformation 9rocesses 'echnolog" Applications

A firm that wants to implement CRM must align itBs business processes cross% functionall" in the best possible wa" to allow increased customer focus with an aim to deliver added value to the customer!

To implement CRM, the following steps must be followed:

:evelop a CRM framework Align current business processes :esign new cross%functional business processes ,where re3uired:evelop 2unctional #pecifications ,client%side services:evelop 'echnical #pecifications Match 'echnical #pecifications to available technolog" ,#"stems, software, etc9roduct Configuration :ata Migration and +ntegration

 #taff 'raining

Customer #egmentation4 2or CRM to be effective, the organi ation)s customer base must be stratified into segments based on commonalities amongst groups) of individuals and customers! 'his also re3uires the organi ation to have strategies to target consolidated customer segments! Reduced Cost of #ervice4 a customer relationship strateg" should reduce the cost of service for both the organi ation and it)s customers and increase satisfaction levels! #ervice as a differentiator4 'he more competitive a market becomes the more a business will need to rel" on its superior product 3ualit" and 3ualit" of service to differentiate itself from other businesses and providers! 'ie%in)s over time4 'he greater the effort a customer spends on a relationship over time, the greater the customer)s stake in helping to ensure that the relationship works and the more convenient and lo"al the customer becomes!

Pitf lls to !oid:

Man" CRM programs fail for two reasons4

1! 1ack of supportive business processes4 Because business processes and organi ational goals are not part of a strategic CRM plan tied to organi ational goals and ob7ectives! 5! 1ack of an enterprise perspective4 2or Relationship Marketing to be effective, it re3uires that the organi ation creates a seamless enterprise view! A lot of CRM programs fail because the" are assembled with disparate components that arenBt designed to work together as part of a complete CRM s"stem designed to meet organi ational ob7ectives!

Customer Rel tionship M n gement Model

CREATE A DATA BASE

ANALYSIS
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CUSTOMER SELECTION CUSTOMER TARGETING

RELATIONSHIP MAR ETING

PRI!ACY ISSUES

METRICS

Customer Retention Progr ms

2RGIEGJCK( 1FKA1'K 9RF*RAM# < RG@AR:# CE#'FMGR #GRH+CG 9RF*RAM# CFMMEJ+'K CE#'FM+LA'+FJ BE+1:+J*

CUSTOMER RELATIONSHIP MANAGEMENT SATISFACTION

"eeping #$isting Customers

*rading customers from ver" satisfied to ver" disappointed should help the organi ation in improving its customer satisfaction levels and scores! As the satisfaction level for each customer improves, so shall the customer retention with the organi ation!

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 M $imi%ing &ife time ! lue

Gxploit up%selling and cross%selling potential! B" identif"ing life stage and life event trigger points b" customer, marketers can maximi e share of purchase potential . 'hus the single adults shall re3uire a new car stereo and as he grows into a married couple his needs grow into appliances!

Incre se &oy lty

1o"al customers are more profitable! An" compan" will like its mindshare status to improve from being a suspect to being an advocate! Compan" has to invest in terms of its product and service offerings to its customers! +t has to innovate and meet the ver" needs of its customers so that the" remain as advocates on the lo"alt" curve! Referral sales invariabl" are low cost high margin sales!

' les force utom tion (')*+

#2A automates some of the compan"Bs critical sales and sales force management functions, for example, lead(account management, contact management, 3uote management, forecasting, sales administration, keeping track of customer preferences, bu"ing habits, and demographics, as well as performance management! #2A tools are

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designed to improve field sales productivit"! Me" infrastructure re3uirements of #2A are mobile s"nchroni ation and integrated product configuration"

Customer ser!ice nd support (C''+

C## automates some service re3uests, complaints, product returns, and information re3uests! 'raditional internal help desk and traditional inbound call%center support for customer in3uiries are now evolved into the Ncustomer interaction centerN ,C+C-, using multiple channels ,@eb, phone(fax, face%to%face, kiosk, etc-! Me" infrastructure re3uirements of C## include computer telephon" integration ,C'+- which provides high volume processing capabilit", and reliabilit"!

#nterprise m r,eting utom tion (#M*+

GMA provides information about the business environment, including competitors, industr" trends, and macro%environmental variables! +t is the execution side of campaign and lead management! 'he intent of GMA applications is to improve marketing campaign efficiencies! 2unctions include demographic anal"sis, variable segmentation, and predictive modeling occurs on the anal"tical ,Business +ntelligenceside! +ntegrated CRM software is often also known as Nfront office solutions!N 'his is because the" deal directl" with the customer! Man" call centers use CRM software to store all of their customerBs details! @hen a customer calls, the s"stem can be used to retrieve and store information relevant to the customer! B" serving the customer 3uickl" and efficientl", and also keeping all information of a customer in one place, a compan" aims to make cost savings, and also encourage new customers!

*-*&.TIC*& CRM
+n anal"tical CRM, data gathered within operational CRM and(or other sources are anal" ed to segment customers or to identif" potential to enhance client relationship! Customer anal"sis t"picall" can lead to targeted campaigns to increase share of customerBs wallet! Gxamples of Campaigns directed towards customers are4

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Ac3uisition4 Cross%sell, up%sell Retention4 Retaining customers who leave due to maturit" or attrition! +nformation4 9roviding timel" and regular information to customers! Modification4 Altering details of the transactional nature of the customersB relationship! Anal"sis t"picall" covers but is not limited to4 :ecision support4 :ashboards, reporting, metrics, performance etc! 9redictive modeling of customer attributes #trateg" and Research Anal"sis of Customer data ma" relate to one or more of the following anal"ses4 Contact channel optimi ation Contact Fptimi ation Customer Ac3uisition ( Reactivation ( Retention Customer #egmentation Customer #atisfaction Measurement ( +ncrease #ales Coverage Fptimi ation 2raud :etection and anal"sis 2inancial 2orecasts 9ricing Fptimi ation 9roduct :evelopment 9rogram Gvaluation Risk Assessment and Management

:ata collection and anal"sis is viewed as a continuing and iterative process! +deall", business decisions are refined over time, based on feedback from earlier anal"sis and decisions! 'herefore, most successful anal"tical CRM pro7ects take advantage of a data warehouse to provide suitable data! Business +ntelligence is a related discipline offering some more functionalit" as separate application software!

Coll bor ti!e CRM

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Collaborative CRM facilitates interactions with customers through all channels ,personal, letter, fax, phone, web, e%mail- and supports co%ordination of emplo"ee teams and channels! +t is a solution that brings people, processes and data together so companies can better serve and retain their customers! 'he data(activities can be structured, unstructured, conversational and(or transactional in nature!

Collaborative CRM provides the following benefits4 Gnable efficient productive customer interactions across all communications channels Gnables web collaboration to reduce customer service costs +ntegrates call centers enabling multi%channel personal customer interaction +ntegrates view of the customer while interaction at the transaction lev

CRM nd the /oods to 'er!ices 'hift

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'hree essential rules for successful shifts exist that should be followed b" managers

Rules to reduce or elimin te the c p bility ris,:

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Mandate a centrali ed administration of services O putting different services in one location or separate organi ation

O O

:esign services that build on existing product platforms 'o build re3uired capabilities ensure access to resources, such as data about O +nstalled base product usage and process O 9roduct development and manufacturing assets O #ales force and distribution networks O 2ield service organi ation

Rules to reduce or elimin te the fin nci l ris,:

O identif" the most profitable product(service and combine it with the most commonl" bought product(service Ese the +nternet to link goods and services and thereb" lower the total unit costs of the offering 2ind opportunities to balance the timing and magnitude of cash flows from products and services 9erform robust, earl", and fre3uent economic value anal"ses

IMP&#M#-T*TI0- 0) TH# "*M PR0/R*M

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Activities P @hat is done? O #uppliers can offer special activities for ke" accounts, for example, special pricing, product customi ation, 7oint coordination of the workflow, information sharing, and taking over outsourced business processes O +ntensit" and reactiveness of these activities distinguish them from those offered to an average account O An intensive and proactive MAM shows the bu"er that the supplier is willing to invest in the relationship leading to deepening trust in the ke" account and strengthening the bu"er%seller relationship Actors P @ho does it? O #pecial actors represent the personal coordination mode of MAM entailing top management involvement, the use of teams, and ke" account managers O @ith senior%level involvement in MAM, the firm can displa" its commitment to ke" accounts leading to greater involvement and strengthening of the bu"er%seller relationship O 'he use of team can ensure a broader set of skills and resources and thus, dedicated teams preferabl" should be composed of members from various functions and backgrounds O Me" account managers are the main point of contact for the ke" account

O 'hese managers need specific skills, including integrit", extensive product(service knowledge, communication skills, selling and negotiating skills, and a deep understanding of the bu"ing compan")s business and environment O Gxhaustive training of ke" account managers is necessar" Resources P @ith whom is it done?

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#uccessful MAM re3uires the coordination of activities within the organi ation

O +mportant assets for building strong, collaborative bu"er% seller relationships4 access to ,non-marketing and ,non-sales resources and esprit de corps of the selling center O Gsprit de corps of the selling center is the extent to which members of the selling center feel linked to common goals and to other members 2ormali ation P 6ow formali ed is it? O 2ormali ation refers to the extent to which ke" account handling has been formali ed through rules and standard procedures established in the seller)s organi ation O A high degree of formali ation leads to bureaucrac" and a lack of flexibilit" in responding to the different needs of heterogeneous ke" accounts

BIBLIOGRAPHY
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Marketing Management Research Methodolog" 6uman Resource 9roduction and Fperation 9hillip Motler Mooper Aswathapa Adam Q Abert

Web Site
www! oho!com(CRM www!crm%resources!net(CRM%#oftware%Hendors!php www!sugarcrm!com https4((www!vtiger!com

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