Customer Relationship Management

Chapter # 1

NATURE AND SCOPE OF CRM

“ CUSTOMER IS THE KING ”

- TODAY’S SELLER

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1. NATURE AND SCOPE OF CRM
The Customer is King! This credo is more powerful, relevant and true today than ever before. In a truly customer driven economy, success depends on a company's ability to be with the customer on a round the clock basis… satisfying all their product and service specific needs. Simply stated, Customer Relationship Management (CRM) is about finding, getting, and retaining customers. Customer Relationship Management is one of the hottest and most talked about topics in the industry today and for good reason. Industry analysts recently reported that CRM expenditures will grow from $2.8 billion in 1999 to $11 billion by 2003. CRM is all about building long term business relationships with your customers. It is best described as the blending of internal business processes: Sales, Marketing and Customer support with technology. CRM solutions empower businesses to more efficiently and effectively manage the activities that affect their relationship with their customers. The ultimate goal of CRM is to meet and exceed customer expectations, create a positive customer experience and build customer loyalty. CRM changes all of this and represents a continuing evolution in managing front office operations. With CRM, traditional departmental applications for sales, marketing and customer service are consolidated into a single unified system capable of managing the entire customer life cycle. This approach allows employees throughout an organization to have immediate access to a complete profile of important customer information. Organizations who are implementing CRM solutions feel confident that providing access to this level of information will assist their sales and support staff in better understanding the needs and buying patterns of their customers. CRM (customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way.

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CRM is at the core of any customer-focused business strategy and includes the people, processes, and technology questions associated with marketing, sales, and service. In today's hyper-competitive world, organizations looking to implement successful CRM strategies need to focus on a common view of the customer using integrated information systems and contact center implementations that allow the customer to communicate via any desired communication channel. What exactly is the definition of Customer Relationship Management? Ask a dozen professionals, get a dozen different definitions. Here's a general overview:  CRM is used to learn more about your key customers needs in order to develop a stronger relationship with them.  Customer Relationship Management can be defined as a companies activities related to increasing the customer base by acquiring new customers and meeting the needs of the existing customers. CRM is about building partnerships with your customers. It uses internal business processes from Sales, Customer Service and Marketing.  The philosophy of CRM is the recognition that your long-term relationships with your customers can be one of the most important assets of an organization, providing competitive advantage and improved profitability  The most important part of CRM is the "customer-focus". CRM uses technology, strategic planning and personal marketing techniques to build a relationship that increases profit margins and productivity. It uses a business strategy that puts the customer at the core of a companies processes and practices. It requires this customer focused business philosophy to support effective sales, marketing, customer service and order fulfillment.

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Regardless of company size or industry, businesses have begun to recognize the value and importance of customer retention and are embracing new technology for automating customer service and support. For the new millennium, it seems that the customer has finally become King!!!

WHY CRM Keeping in mind the pace at which technology is changing today, any company which is a step ahead of others because of some web product or service will not be able to hold on to that advantage for long. Key to stability in today's dynamic marketplace is forging long-term relationships with the customers. Customers can be divided into three zones: 1. Zone of defection where customers are extremely hostile and have the lowest level of satisfaction. 2. Zone of indifference where customers are not sure. They have a medium level of satisfaction and loyalty towards the company. 3. The third level of customers is in the zone of affection described as "Apostles". CRM focuses on bringing customers from level 1 to level 3 and retaining apostle customers. Customer demands for customization is increasing with every passing day. This has made companies shift their focus from "mass production" to "mass customization". The present scenario of companies using "poorly implemented" multi channel strategies for living upto the expectations of customers is bringing both customer satisfaction and customer loyalty down the ladder. Today any company can copy products or services offered by other companies. If the new entrant adds features like less order turn around time and direct communication then established players are bound to have sleepless nights. Organizations that implement
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CRM and turn their business into e-businesses will find their competitors' customers ready to welcome them with a "smile".

Take the example of a small enterprise. Here hard work reaps high quality service and over the years develops a database of loyal customers. In this enterprise computers are optional. Then why is the CRM industry attracting investments of millions and billions of dollars? The reason is simple. The concept of "Seller's Customer" has just rotated 180 degrees to become "Customer's Seller". This simply states that, now the customer is more powerful than the seller. Options for customers have increased with the cycle of innovation-to-production-to-obsolescence gaining momentum. On the other hand companies are finding it difficult to differentiate them in the marketplace. These factors are pushing companies into taking a closer look at their customer relationships. Organizing business to satisfy customer demands organizes/simplifies internal functioning of the organization. Implementing CRM brings to the front the "pits" that the organization had dug over the years, passing work from one pit to another. Workflows are reduced, cycle times become shorter, information flow of non-productive things gets eliminated and the most important thing - "pits" get covered automatically with all the positive features. Compact sized organizations get into a position of making more money. This in turn enables them to please more customers. For large enterprises, CRM has become a strategic initiative because of its potential for increased revenues and improved customer service. Smaller businesses are forging ahead as well, and are using CRM solutions to capture and share customer information across multiple departments and job functions. The top four reasons for implementing CRM are:

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gaining customer confidence and loyalty providing personalized service to customers acquiring better knowledge of customers and their buying habits differentiating themselves from the competition

Chapter # 2

BIRTH OF CRM

"CUSTOMER FOR LIFE THROUGH SYSTEMS AND SMILES SMILES". - MR. MAHESH. DADLANI CUSTOMER RELATIONS, ORANGE

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BIRTH OF CUSTOMER RELATIONSHIP MANAGEMENT

Throughout the 90s businesses were focused on improving internal operations. CEO’s tried to distinguish their company through operational excellence and product innovation. Middle management focused on automating departmental functions such as sales and help desk support. They believed that automation and better management of their sales and customer service process would lead to increased revenue and customer satisfaction. Vendors were all to happy to support this belief and raced to the scene with independent solutions for sales force automation, help desk and customer service functions. While many of these applications provided increased productivity, the approach of using independent solutions to address departmental needs served only to created islands of information and database duplication. Furthermore, the lack of system integration and workflow between these departments meant that vital customer information was unavailable to sales and support personnel without jumping from system to system. This did little to support cross selling opportunities or increase customer satisfaction. By the time customers walk into your business - or log-on to your website or call your sales center - most already know what they want and how much they're willing to pay. With easy access to mountains of information, today's customers do their homework, and they now have the upper hand in most purchase transactions. In response, sellers are bending over backwards to improve offerings and services. However, rather than adopt a streamlined "you-want-it-we've-got-it" approach,

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sellers have created a marketplace where products and services are sold, serviced and marketed in an increasingly fragmented and ultimately frustrating way. Never before has so much "clutter" bombarded consumers from so many online and offline sources. Trying to be all things to all buyers, sellers face a harsh reality that brings an old adage to life: You can please some of the people most of the time and most of the people some of the time, but you can't please all of the people all of the time. It wasn't supposed to be this way. Customer Relationship Management (CRM), which swept through the business landscape in the early 1990s, brought the promise of helping sellers please most of the people most of the time. Riding the coattails of customer satisfaction would come increased organizational efficiency and, better still, increased revenues. That dream has been slow in coming. While incremental improvements have occurred, CRM has not yet delivered its ultimate promise - the transformed customer experience. Yes, companies have implemented call centers and sales force automation software and customer sales representative training. However, while improving the sales and service components of customer transactions, companies have largely ignored the very piece required to attract customers in the first place. It's the piece that ensures sales and service efforts are effective and integrated. It's the piece that allows sellers to segment and analyze their customer information in order to create a more personalized, long-term relationship. It's the piece called "marketing" (see Figure 1). Figure 2.1 - Completing the CRM vision

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We're not saying that the last decade's investment in CRM has been wasted. Quite the contrary: what began as a solution for providing more efficient customer transactions evolved into a process by which companies could foster more meaningful customer interactions (see Figure 2). This was the right direction to take. However, companies haven't reached the end of the CRM road. Today, the challenge is to take this evolution one step farther - to focus on building lasting and profitable customer dialogues at all interaction and transaction touch points to build customer and brand value.

Figure 2.2: Evolution of CRM As CRM evolved, many companies assumed that just bolting on new technology (e.g., client/server, call centers, salesforce automation software, data warehouses, etc.) or adding new services would enhance customer relationships. This assumption was as pernicious as it was false. After all, you can't sell what people don't want to buy, no matter how efficient and service-oriented your sales channel. And as for gathering customer insights, be careful what you wish for. Many companies faced the unsettling paradox of having advanced data availability and analytic techniques that quickly

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outpaced their ability to absorb and apply the information. They were left with sophisticated tools that offered little real value.

The belief is that the third wave of CRM will bring about the ultimate transformation of customer experiences - not just by strengthening sales and service or even promoting interactions with your customers - but by creating a series of "intelligent conversations" that build over time into a long-term, meaningful dialogue. In this next evolutionary phase of CRM, information will be exchanged and acted on in real time. Consumer history will be recorded (and remembered) and the expectations of both parties will be met. Naturally, not every conversation will be profitable. But the series of conversations and the ongoing knowledge transfer will continue to grow, creating a memorable and differentiated customer experience, and, in the long run, a profitable relationship

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Chapter # 3

ROLE OF MARKETING IN CRM

"CRM IS ONLY A TOOL…………….., ATTITUDE IS EVERYTHING". -- MR. VINAY KULKARNI, , HEAD CRM & ERP, TATA INFOTECH
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2. ROLE OF MARKETING IN CRM

To continuously attract and retain the most valuable customers, companies must act aggressively to increase the economic value of both their brand and customer relationships. In addition, they must sustain bottom-line performance in the face of skyrocketing marketing costs. To realize these goals, companies must continue their efforts to maximize their investments in the sales and service technologies that help reach, understand and interact intelligently with customers. But they must also extend this traditional scope of CRM to reach a higher standard of excellence in three distinct disciplines: analytical, creative and operational marketing.

Figure 3.1 -The revitalization of marketing

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Once these improved marketing processes are linked with core CRM capabilities, companies will be able to drive seamless, consistent and real-time response across marketing, sales and customer service. The result will be a sustainable process that not only enables lasting customer relationships but also harnesses that elusive construct: superior brand value.

Analytical Marketing drives market segmentation and identifies your most profitable customers. Information from each customer interaction channel is collected, analyzed and used to develop predictions of your individual customer's behaviors. Analytical marketing utilizes those processes and sophisticated technologies that allow businesses to direct their overall marketing investment across the brand and customer. In a sense, analytical marketing tools are the "nuts and bolts" of the marketing engine. Specifically, analytical marketing converts customer data, gathered at various touch points, into relevant insights that direct market segmentation activities and feed into more effective campaign design. Through predictive modeling, analytics lead to a more robust understanding of customers and markets and an improved ability to make strategic and operational decisions about customer treatment. The ultimate outcome is increased profitability, based on customer differentiation, and more informed decisions related to the development of product, pricing, promotion, packaging, and channels. Without analytics, companies will keep investing in CRM without ever knowing where their money is having the greatest impact. In short, analytical marketing puts customer insights to work for the organization and prevents the company from delivering the wrong content to the wrong person at the wrong time.

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Creative Marketing relies on analytical tools and customer insight capabilities to improve marketing programs, optimize the overall marketing investment and deliver the brand promise. As the number of customer channels has exploded, so has the need for creative marketing, which involves all the activities associated with building and sustaining a compelling brand and ensuring that customer interactions reflect a satisfying brand experience. In the past, creative marketing efforts have been applied to CRM efforts in much the same way as technology. It's been far too easy for companies to develop a host of messages - from ad campaigns to customer service representative scripts - that are unintentionally inconsistent. Such inconsistent messages delivered via a number of different channels - when coupled with poor understanding of why brand and message consistency is so critical to the customer experience - often produce fragmented experiences that frustrate the customer who probably won't come back. Fortunately, companies are changing the way they approach creative marketing. By integrating its processes with those of analytical and operational marketing, and by focusing on the total customer experience, creative marketing can now be used to build a unified brand across all of a company's online and offline channels. In other words, creative marketing is no longer considered an "afterthought".

Operational Marketing relies on customer insight information to personalize interactions, differentiate sales and service across segments, drive continuous improvement across customer interaction processes and generate revenue lift. When these marketing disciplines work in tandem with your existing sales and service capabilities, your entire CRM effort becomes revitalized. Information becomes dynamic. Insights become powerful barometers of customers' likes and dislikes. Comprehensive marketing campaigns become targeted and compelling. The result is a customer base that is pleased with the unique and personalized interactions you provide. Customer loyalty rises, as does your brand value and, ultimately, your revenue.
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Its efforts encompass all the activities of data mining and data warehousing, which continuously harvest customer information from a variety of contact points. Leveraged by creative and analytical marketing capabilities, this information is assessed and converted into meaningful insights that drive ongoing, personalized marketing efforts. The goal of operational marketing is to enable ongoing "conversations" with individual customers across all channels.

Chapter # 4

CRM TO ICRM

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"CRM IS NOT JUST A GOOD IDEA……. BUT A MATTER OF SURVIVAL !"
--MR. KIRAN PRADHAN, ACCOUNT MANAGER, SAS

3. CRM TO ICRM (Integrated Customer Relationship Management) Customer Relationship Management (CRM) is developing into a major element of corporate strategy for many organizations. CRM, also known by other terms such as relationship marketing and customer management, is concerned with the creation, development and enhancement of individualized customer relationships with carefully targeted customers and customer groups resulting in maximizing their total customer lifetime value. Industry leaders are now addressing how to transform their approach to customer management. Narrow functionally-based traditional marketing is being replaced by a new form of cross functional marketing - CRM. The traditional approach to marketing has been increasingly questioned in recent years. This approach emphasised management of the key marketing mix elements such as product, price, promotion and place within the functional context of the marketing department. The new CRM approach, whilst recognising these key elements still need to be addressed, reflects the need to create an integrated cross-functional focus on marketing one which emphasises keeping as well as winning customers. Thus the focus is shifting from customer acquisition to customer retention and ensuring the appropriate amounts of time, money and managerial resources are directed at both of these key tasks. The new

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CRM paradigm reflects a change from traditional marketing to what is now being described as ‘customer management’. The adoption of CRM is being fuelled by a recognition that long-term relationships with customers are one of the most important assets of an organisation and that information-enabled systems must be developed that will give them 'customer ownership'. Successful customer ownership will create competitive advantage and result in improved customer retention and profitability for the company.

In many companies there is still confusion as to what CRM is all about. To some it is about a loyalty scheme, to some it is about a help desk. To others it is about a relational data base for key account management and for others it is about mass profiling the customer base without undertaking detailed segmentation. Relatively few organisations have implemented an integrated approach, which addresses all the key strategic elements of CRM. Only a small number of businesses have a clear idea what should be done with information technology in order to successfully implement CRM. INTEGRATED CUSTOMER RELATIONSHIP MANAGEMENT (ICRM) The development of the Customer Relationship Management (CRM) marketing practice has made more and more people realize the importance of strong customer relationship in building sustainable competitive advantages in their market competitions and in generating sustainable profits in the long run. However, the currently popular CRM marketing practice often produces disappointing outcomes. Surveys after surveys, a surprisingly high rate of failure has been reported for CRM practices. The failure rate of CRM systems ranges from 50% to over 80%. The major CRM system developers received much lower Customer Satisfaction scores than companies in other industries did. The more popular this marketing practice gets, the more people who realize that the current CRM practice hardly manages customer relationship.
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The current CRM practice was originated from a combination of database technologies and database marketing (analytical techniques), so unavoidably, it inherits database as its only focus. When it gets into the spotlight and becomes a major marketing practice, its inherited characteristics become its limitations. It incorrectly defines customer purchase and contact behaviors as customer relationship, restricts its marketing scope within a company's database and ignores customers needs by focusing on purchase correlation in a company’s database.

Any good customer relationship management practice should start by answering the following 6 critical questions: 1. What is customer relationship? 2. What drives customer relationship? 3. How to measure customer relationship? 4. Which customers should you build relationship with? 5. How to improve customer relationship? 6. How to develop effective customer relationship management strategies? However, no existing CRM system is able to answer (or is designed to answer) these questions. Without clear answers to these critical questions, how could a company know what customer relationship it needs to manage? How could it know if it has a strong relationship with its customers under market competitions and how could it know with which customers it needs to build strong relationship? To effectively manage customer relationship, one should follow the following rules:

Rule 1: Building strong customer relationship should be set as the primary goal of a company’s marketing practice and all marketing functions should serve to the enhancement of a company’s customer relationship;

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Rule 2: Customer relationship should be defined and constructed based on customers’ basic needs. In the “Customer Centric” customer relationship management practice, needs construct value and value determines customer relationship;

Rule 3: Customer relationship should be measured and improved under market competitions. Customer relationship is competitive and a company should manage its Competitive Customer Relationship.

Rule 4: Customer relationship management practice should not be a subfunction of a company’s IT department. Customer relationship management should be an INTEGRATED part of a company’s marketing practices.

Integrated Customer Relationship Management (ICRM) is the latest marketing strategy, which has developed to meet the challenges raised from our daily marketing consulting services. It is our solution to overcome the limitations of the current CRM practice. ICRM provides a theoretical framework to define and to construct customer relationship based on customers’ needs under market competitions. ICRM also provides a practical guideline of a standard process for effective customer relationship management. ICRM is based on the very fact that by building a strong customer relationship, a company can build sustainable competitive advantages in the long run. Therefore, in ICRM practice, building strong customer relationship is set as the primary goal of a company’s marketing practices and it requires all marketing functions in a company to serve to the enhancement of its customer relationship. ICRM puts customer needs in the center of marketing practices and defines customer relationship based on customers’ basic needs under market competitions. It integrates all major marketing functions in the process of building strong customer relationship. ICRM manages Competitive Customer Relationship.

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CHAPTER # 5

CUSTOMER LIFE CYCLE MANAGEMENT (CLCM)

" CRM IS ALL ABOUT GETTING CLOSER TO CUSTOMER"

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Customer Relationship Management -- MR. BHASKAR BAGCHI, SR. VICE PRESIDENT, ICICI

CUSTOMER LIFE CYCLE MANAGEMENT
CLCM is a three-domain business system, aligning business processes, technologies, and the customer life cycle. This business system must integrate sales, service, and marketing processes as well as the CRM technology environment with the customer. To fully realize the potential of CRM, business systems must align these three domains in ways that are predictable, repeatable, and measurable. These systems should be clearly defined, thus enabling predictable business activities to be automated and leveraged by technology.

1. Customer Engagement Marketing Planning and Campaign Management
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2. Business Transaction
• • • • • • •

Order Acquisition Internet Pricing and Configuration E-Selling Telesales Field Sales Profitability Analysis One Step Buying and Selling

Telemarketing and Lead Generation Opportunity Management Sales Activity and Contact Management Customer Segmentation, Product, and Service Profiling

Collaborative Content Management 4. Customer Service

3. Order Fulfillment

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• •

Complete Order Life Cycle Process Real-Time Availability Checks Contract, Billing, and Financials Management Fulfillment Visibility and Order Tracking
• • • • • • •

Interaction Center Internet Customer Self-Service Service Management Claims Management Field Service -- Mobile Service Field Service -- Dispatch Integration of Marketplace Services

Customer Life Cycle Patterns
Engage

This is where advertising or marketing efforts create initial awareness of the organization or product offering. The Engage process is fundamentally about "funnel management," or generating leads and converting them into customers. However, there is a very important Engage activity that may start in the service process: cross-sell/up-sell. What may start as a service request may end as an Engage activity. This discipline falls predominantly into the domain of CRM, with sales automation and campaign management the principal technology applications. There are Engage activities, including Web-based personalized interactions and electronic catalogs, which primarily support the e-channel. However, some Engage functions cross all customer channels.

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In the customer engagement phase of the relationship life cycle Customer Relationship Management supports the following key functional areas: ● Marketing Planning and Campaign Management -- Enables complete marketing campaigns, including content development, audience definition, market segmentation, and communications ● Telemarketing and Lead Generation -Facilitates customer

segmentation, lead qualification, call list management, and monitoring of campaign progress by using integrated analytical CRM functionality ● Opportunity Management -- Provides sales tracking and sales forecasting; helps plan sales approaches, identify key decision makers, and estimate potential-to-buy and potential closing dates ● Sales Activity and Contact Management -- Organizes daily workloads and customer contact information for display in calendar application; provides links to Business Intelligence reporting capabilities Transact In the transact process, customers actually purchase the product offering. Related Transact activities include product and sales configuration, pricing, and order management. Tightly coupled, bi-directional integration with order management applications is a requisite technology step in the Transact process pattern to provide a seamless commerce environment, whatever the channel. In the business transaction phase of the relationship life cycle Customer Relationship Management supports the following key functional areas:

Order Acquisition -- Enables planning, organizing, and implementation of sales strategy; monitors sales pipeline, sales portfolio, and sales budget; facilitates coordination of budgets, forecasts, and reports on product and pricing trends

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Internet Pricing and Configuration -- Delivers online systems that allow users to configure products online and compare prices across different catalogs and marketplaces; includes shopping basket functions

E-Selling -- Provides solution for selling products and services via the Internet; covers all phases of sales cycle, including one-to-one marketing, catalog browsing, search, order placement, payment, contract completion, and customer support

Telesales -- Manages inbound and outbound calls; handles high call volumes; provides efficient user interface; integrates sales information from back-office systems and product information from online catalogs

Field Sales -- Delivers key customer and prospect information to sales personnel at any place, at any time; facilitates planning and maintenance of sales activities, such as appointments, visits, and calls, and provides activity reports; creates quotations and takes orders; includes support for mobile and wireless devices

Fulfill The Fulfill category is where the offering is delivered to the client. This may consist of a product being physically shipped to the customer, or in the case of an electronic product, this may simply be an electronic transfer. Fulfilling a service may involve consultants coming onsite to complete a project, or a utility offering such as telephone phone or electrical service being turned on. In the order fulfillment phase of the relationship life cycle Customer Relationship Management supports the following key functional areas:

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Complete Order Life Cycle Process -- Provides the ability to track and trace orders at all points along order management, manufacturing, distribution, and service processes; proactively notifies customers of changes that affect delivery

Real-time Availability Checks -- Enables allocation of resources in real-time at the front-end; includes real-time access to inventory levels, production capacity, and lead-time requirements across the entire supply chain; enables visibility into product and service delivery dates

Contract, Billing, and Financials Management -- Provides information about customer contracts, billing status, and accounts; integrates back-office functions

Fulfillment Visibility and Order Tracking -- Enables real-time tracking of order fulfillment; provides unique, customized and "guided" content for customers; allows sharing of information with customers via the Internet

Service Another process predominantly in the CRM domain, Service is the final stage of the customer life cycle and typically involves helping the customer work with the product offering. To do this, the organization must provide support functions ranging from troubleshooting to replacement. Other Service activities include issue tracking/resolution, self-service, and cross-sell/up-sell. CRM technologies supporting this process pattern must support multiple points of interaction, so customers can use whatever interaction capability they find most appropriate. The notion of "continuous customer satisfaction" is fulfilled in this stage as well. The fundamental point here is that when a business interacts with its customers, customers inherently perceive the business as being able to support these four life cycle patterns. They also expect this support to be consistent, and the flow among the patterns to be transparent - in other words, they don't even realize it's happening. In the customer service phase of the relationship life cycle Customer Relationship Management supports the following key functional areas:
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Interaction Center -- Provides inbound and outbound call processing, e-mail management, and activity management to track, monitor, and enhance all customer contact; supports multiple channels for customer communication, including telephony and Web; integrates industry-leading eFrontOffice call center applications from Nortel Networks Clarify; provides certified interfaces to leading computer telephony integration (CTI) solutions

Internet Customer self-service -- Offers customers and prospects access to information and customer service functions via Internet; supports effective customer self service; includes case-logic system featuring advanced decision support for problem determination and resolution

Service Management -- Meets varied demands of service management business; handles customer installations; facilitates simple and complex services; supports services carried out at customer site or in-house repair center (depot); supports involvement of external service providers; integrates contract management; checks customer warranties when services are performed; calculates services charges; integrates information from materials management, cost accounting, billing, and accounts receivable; monitors day-to-day operations; helps decision makers with strategic management issues

• •

Claims Management -- Facilitates handling of entire claims process Field Service - (Mobile Service) -- Delivers and tracks customer and account information for field service personnel; provides service planning and forecasting, scheduling, and dispatching functionality through tight integration with fulfillment systems; includes support for mobile and wireless devices

Field Service - (Dispatch) -- Enables rapid allocation of service engineers and materials to meet incoming service requests

Integration of Marketplace Services -- Provides access to a broad range of applications and services hosted on virtual marketplaces

The next very stage in the cycle is

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Repeat customers At this level focus is on getting customers to return for a second, third, or fourth time. Customers may come back for the same purchase. The customers may turn for variety of products and services. For e.g. car insurance customer may come back to the agent for disability and life insurance. Repeat customers develop greater economic and emotional ties with you. Customer Advocates This level represents those customers who are not just satisfied and are willing to do business with you again. These customers actively tell others about their positive experience. They spread the good word. They maybe considered as active participants on your marketing team. Each level is build upon the level before. Without quality initial transactions, customers won’t want to do business with you again. And it’s the customers who sees himself or herself in a positive relationship with you who can provide the strongest advocacy for you and your products and services.

Customer value

Increased Sales & profit Com unity Building m Transacting Interacting Inform ing

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Figure 5.1- Customer life cycle stages

Chapter # 6

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CRM IMPLEMENTATION

“The single most important thing to remember about any enterprise is

that results exist only on the outside. The result of a business is a satisfied customer….. Inside an enterprise there are only costs.” --Peter F. Drucker, The New Realities

4. IMPLEMENTATION CRM

STEP I:
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Needs Analysis STEP II: Project Planning STEP III: Implementation STEP IV: Testing & Quality Assurance STEP V: Deployment & Training

Figure 6.1 -- STEPS IN CRM implementation

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STEP I: Needs Analysis This phase of the implementation consists of reviewing the strategic objectives of the CRM implementation and gaining management acceptance and commitment to the project. During this phase you will define the policies and procedures for managing customer interaction. Authority: Top management Duration: 12 - 16 hours per person Schedule: 15 days Concerned dept: Marketing, EDP(IT), finance, HR

STEP II: Project Planning The implementation plan will be created and finalized during this phase. A system administrator will be selected, as well as team members from each department, who will work in conjunction with the vendor or system integrator managing the implementation process. Authority: Middle management Duration: 8 - 12 hours per person Schedule: One month Concerned authority: Marketing, EDP (IT), Customer Support

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STEP III: Implementation It is during this phase that the software implementation will begin. System configuration and administration will be completed and customization will be identified.

Authority: middle / lower level mgmt Duration: 8 - 12 hours per person Schedule: 15 days Concerned authority: Marketing, EDP (IT), Customer Support, Corporate communication Software: Oracle, SAP

STEP IV: Testing & Quality Assurance An operational prototype of the system is up and running at this time. Operational issues are identified and resolved and basic modifications will be made.

Duration: 12 - 24 hours per person Authority: lower level mgmt Schedule: 15 days

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Concerned authority: EDP (IT), Quality Control, Marketing

STEP V: Deployment & Training During this phase the CRM system will be completely operational. There are no additional installation activities. Training will begin for all end users. The system administrator should provide ongoing support with telephone assistance from the vendor or system integrator. Duration: 24 - 40 hours Authority: Middle & lower level managers Schedule: 8 days Concerned authority: EDP (IT), Marketing, Call center operators, HR

One of the most important aspects of implementing a customer relationship management (CRM) system is ensuring that it meets the expectations of a variety of audiences within your company. More than 65% of CRM projects fail to meet expectations, so all of these concerns are valid. To make sure failure isn't the outcome of your hard work in building a

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CRM system, think through the consequences of the system from every angle. Here are some ways to do just that. Start with a clean slate, as if you're designing and selecting your first system Don't try to fit your current system to your new needs. If you do, you'll end up with quick fixes rather than true solutions. When designing your system, think about what will make the most difference in your organization. What's missing now? Are you looking for speed, ease of use or low maintenance costs? CRM systems track sales contacts and potential sales schedule appointments and calls so they don't fall through the cracks, keep notes and print out reports. They can also play a part in product development, targeting the right audience and shortening the sales cycle, and they can help your salespeople give dynamite presentations. Identify the most important of these features and priorities for your new system. Write down exactly what you want your system to do for you Write your list from the perspectives of everyone affected by the system -salespeople, sales managers, the CEO and the IT department. Look at your sales processes as well as the technology. Take time to put yourself in the shoes of people in your organization In order to design your new system from the perspectives of everyone affected, you need to get their input. Live a day in the life of several of your salespeople. Go with them for a whole day, if possible. Watch them work. Ask questions. Choose at least one sales star, someone who's been there a long time and one new salesperson. Do the same for your sales managers, regional managers, CEO, CIO, customer service people and telemarketing people. Ask them their ideas, and take them seriously. You may want to ask the following questions:   What do you want the system to do for you that the current one doesn't do? What are the top three challenges you face in your work?
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What are the top challenges your customers face?

Be as complete and detailed as you can. Then, after you've made your notes about their answers, call in your CRM team and compare notes. Only after you and your team have done your homework can you call in consulting and software companies for sales presentations. Getting everyone's perspectives is important also because you will be "selling" them the new system, software, consulting company and your implementation plan at some point. Sales are a major component in CRM system implementation and project management. Your job is to sell the system throughout its implementation. A workshop, course or refresher in selling skills will give you tremendous payoffs as you go ahead with your new CRM system. Before you speak with them, list the reasons these same people won't want a new system. What will cause resistance? For example, a new system means change. People are usually more comfortable with the way things currently are, even though they can see in their minds that there may be better ways to do their work. Identify the success criteria for the project Define exactly what the system and the implementation will be measured on. For example, you might write: • • • • Do salespeople like and use the system? Is management getting the reports they want? Are there increased sales? By how much? How will these happen? Will there be more calls and more meetings?

Be careful here. "Increased sales" is too vague. To build success into your CRM implementation, you want to include specific, measurable goals. For example, you could decide one criterion should be "Sales should increase by XX% one year after

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implementation," or "Salespeople should contact twice as many people as they did last year." Identify the project killers List them so you will be more aware if these red flags appear. To carry through with our example, if salespeople liking and using the system is important, a project killer would be that the salespeople aren't using the system. There could be other project killers that aren't part of your success criteria, too: There might be interdepartmental synchronization problems (i.e., projects not done on time or according to plan). Once you've designed your "ideal" system on paper, find out how other companies managed their projects Learn from their experiences. Look for descriptions of successful projects. Look for companies in similar businesses or companies that have solved some of the challenges you want to solve with your system. Call them up and ask questions such as:    What advice would they give as you start your project? What would they have done differently? What were their key reasons for selecting the system, software and consulting company?   What were they most satisfied with? Who did they include on their implementation team?

Ask to visit and see exactly how their systems work. Talk about their projects and how they made their decisions. Ask their advice.

Figure 6.2--What CRM can deliver

Business Unit or Functional benefits

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Unique CRM benefits
Customer profitability Demand Chain Management Channel optimizing E-Business Enablement Increased Customer Knowledge

CRM

Complete View of Customer

Unique CRM Benefits

Chapter # 7

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E-CRM

“CRM IS A CORE ELEMENT IN ANY CUSTOMER-CENTRIC E-BUSINESS”
---ANON

E-CRM

The rules of the game have changed for CRM. Customer demand for increased value, greater convenience, and more control over products and services, along with heightened pressure from competitors, have increased customer acquisition costs and decreased customer and brand loyalty. At the same time, advancements in technology
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have enabled the cost-effective distribution of huge amounts of customer data, the delivery of customized products, and the efficient use of interactive channels. These technology developments are creating major opportunities to collect and use customer information to gain a better understanding of customer needs and to strengthen customer relationships. To take advantage of these opportunities and address the escalating demands of customers, companies are shifting the focus of their efforts to adopt a customer-centric approach. Product excellence, innovation, and operational efficiency are still important; however, successful companies are building on these existing business strengths as they shift their attention to their customers. E-CRM refers to the set of activities that enable a firm to utilize the power of the Internet and the electronic medium to implement CRM. Firms all around the world have realized the potential of the Internet as a medium for CRM and have been actively pursuing e-CRM strategies. The following statistics highlight the importance and potential of the e-CRM industry.

• General Motors (GM) receives about 100,000 emails from its
every day. • •

customers,

According to IDC and Forrester worldwide investment in ecrm solutions will reach $11 billion to $14 billion annually by 2003. And the payoff is significant. Jupiter Communications survey of companies who have implemented eCRM solutions found that, on average, companies were able to recover their investments in seven months. Even more impressive, the average return after one year was 300%.

Cisco Systems automated customer interactions with its one-to-one website, saving $270 million in annual operating expenses and significantly reducing the time required to place an order.

Amazon.com was able to achieve a repeat purchase rate of 78%, more than double the industry average, by building one-to-one relationships with its customers and targeting their individual needs. This customer loyalty has enabled

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Amazon to remain a viable e-commerce company at a time when so many other dot-coms have failed. • • Sears demonstrated the cross-channel benefits of eCRM by increasing Web shoppers' subsequent offline purchases by 27%. The volume of customer related email traffic is so much that almost 42% of the queries never get answered by the companies. To achieve positive results like these from their eCRM efforts, companies must develop a comprehensive strategy for managing and utilizing customer knowledge. This strategy should include three key objectives:

Know Your Customer

Reach Your Customer

Grow Your Customer

CHANGING NEEDS

Figure 8.1 --- Key Aspects of e-CRM

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Know Your Customer

Know Your Customer is about understanding your individual customer's value and needs. This understanding comes only from collecting information that customers provide in their interactions with your company, and developing a 360-degree view of customer behavior across all touch points. As you begin a dialogue with individual customers, you create a learning relationship with your customers; each interaction becomes an opportunity to build and extend your relationship with that customer. The more extensive the learning relationship, the more invested the customer becomes in the relationship and the more difficult it will be for the customer to switch to a competitor.

Reach Your Customer

Reach Your Customer is about reaching the right customers with the right offer at the right time through the right channel. Based on your knowledge of each customer, you are able to reach specific customers with targeted offers, information, products, and services. You reach each customer with a personalized message based on his or her needs, behaviors, and value.

Grow Your Customer

Grow Your Customer refers to your company's ability to effectively execute Marketing strategies based on your knowledge of customer share and customer lifetime value. You must use scarce investment dollars to target your efforts to your best, most valuable customers. Increasing the total value of your customer base by retaining and growing your best customers, is significantly less expensive than trying to generate the same amount of value by acquiring new customers. Focusing on your best customers

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requires you to re-examine and re-allocate total Marketing and sales investments from less profitable customers and the acquisition of new customers.

A complete e-CRM architecture would comprise of the following components 1. Sales Force Automation (SFA) 2. E-Mail Management System (EMS) 3. Interactive Voice Response (IVR) 4. Knowledge Management (KM) 5. Call Centers 6. Instant online querying through Chat

Managing a full range of customer relationship involves two related objectives 1. 2. Provide the firm and its customer-dealing personnel, a complete singular view of To provide the customer with the same singular uniform level of service in every each and every customer interaction with the company through every channel. The above-mentioned proposition can be illustrated with a simple example. A person dealing with a bank should be able to get the same level of service whether he contacts the bank through phone, the Internet or in person. This implies that all details about the person and his past transactions need to be consistent and available vis-à-vis every channel.

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Additionally, IT is expected to support the selection and implementation of the best management tools that not only provide an integrated solution, but also leverage prior and future IT investments. For both IT and Marketing, resource constraints make it critical that the technology solution enables Marketing to manage its increased responsibilities with minimal intervention and assistance from IT

Chapter # 8

CRM IN INDIA

“INDIA IS A BIG MARKET FOR CRM”
----DAKSH 43

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5. CRM IN INDIA
In India, CRM satisfies three basic objectives for companies that are keen on retaining customers and increasing market share. 1. It offers a 360-degree view a company should have a clear understanding of clients and their needs. It means that whoever the company speaks to, irrespective of whether the communication is from operations, sales, systems, finance or support, the company is aware of the interaction. This is one of the key steps in a CRM implementation. CRM give a complete set of tools that are required to improve efficiency. There are numerous channels of communication e-mail (eCRM), fax, telephone, Personal Data Assessments and many other wireless devices. In order to get a complete picture these must be integrated and tracked. 2. CRM optimizes processes and functions related to the customer All operations can be optimized and systematized to enhance efficiency and effectiveness. It is a matter of continuous improvement. This is why sales force automation became important and critical. Corporates began to realize that in the face of increasing competition, sales force automation is critical. The problem lay in convincing the sales guy who believed in his personal abilities. Sales automation results in more accurate predictions as well. Sales operations have to be organised to make customer-facing systems efficient and effective.

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3. To learn from integration-The learning process should be focused on bettering marketing, sales and any other function that interacts with the customer. The interaction will help an organisation to bring out better products that target potential and existing customers. The whole idea is that if you know your customer better, you can target them better.Their operations are aimed at getting the right customer and then retaining them by giving them the service they require. Some customers have preferred channels of communicating. Some customers may not like to transact over the Net and may prefer physical transaction. This varies from customer to customer. All these differences lead to the importance and need for CRM. Survey report on Indian CRM market • The need for improved customer service and high global adoption shall drive the Indian CRM market • The high cost of implementation and low awareness of benefits is going to prove a major deterrent The next two charts indicate the factors our respondents feel will drive acceptance of CRM in India, and the factors that will hold back acceptance. Figure 9.1—Acceptance of CRM in INDIA

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Observations and Inferences

A need for improved Customer Service shall be the main driver for Industry sectors that depend on the quality of their customer interactions to retain existing customers and win new ones. High Global adoption is likely to drive the MNCs to adopt CRM first in line with Global implementations.

While the first hurdle holding back the market is a lack of awareness, respondents have put high cost of implementation as the main inhibitor. Complete and comprehensive CRM packages such as those of Siebel and Oracle costing in the range of Rs. 1 to 2.5 Crores (and more) are too expensive for most Indian firms. However, with software vendors bringing down prices and offering relatively affordable packages bundled with integration and consulting services, this could soon change.

In the Indian context, lack of customer orientation and poor existing IT infrastructure can prove major factors. Firms need to evolve their customer thinking by a significant extent before they accept CRM as the strategic imperative it is, and internal systems and database management practices need to be upgraded before CRM software can be used to any effect.

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Another major inhibitor indicated by respondents was that Indian firms lack the skills and strategic vision required to successfully implement CRM.

Factors favorable for CRM in INDIA In order to meet the growing international demand for cost-effective, customerinteraction centers, many organizations worldwide are outsourcing these services from locations like India. India has intrinsic strengths which have made it a major success as an outsourcing destination for CRM.

A booming IT industry, with IT strengths recognized all over the world (65% of the The largest English-speaking population after the USA. A vast workforce of educated, English-speaking, tech-savvy personnel: A boon in a Cost-effective manpower: In a call interaction center operation, manpower typically

CMM level5 companies are in India).
• •

high-growth industry faced with a shortage of skilled workers.

accounts for 55 to 60 percent of the total cost. In India, the manpower cost is approximately one-tenth of what it is overseas. Per agent cost in USA is approximately $40,000 while in India it is only $5,000.

Technical support: India graduates about 100,000 engineers each year. These can

be used in call centers for troubleshooting/tech support as the salaries are dramatically lower than in Europe or the US.

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The Government of India has recognized the potential of IT-enabled services and has

taken positive steps by providing numerous incentives like Software Technology Park (STP), under this scheme Ministry of information and Technology gave 10

year of tax holiday on software product and subsequent technology required for CRM.

The presence of most international technology vendors and solutions would enable

creation of most advanced set-ups in this technology- intensive segment.

IT is a major thrust area for the Government of India
• •

IT is one of the Government of India's top five priorities. The National IT Task Force submitted its 108 point Action Plan to promote IT in the

country. The Government of India has approved the plan and is in the process of implementing it.

A separate Ministry of Information Technology is set up to expedite swift approval Information Technology Act 2000: The Information Technology Bill that was passed

and implementation of IT projects and to streamline the regulatory process.

in the Indian Parliament in May 2000, has now been notified as the IT Act 2000. The IT Bill brings E-commerce within the purview of law and accords stringent punishments to "cyber criminals". With this, India joins a select band of 12 nations that have cyber laws. As India emerges as a global outsourcing hub, the industry is forecast to explode at exponential rates - from 23,000 people and $ 10 million pa in 1998 to over a million people and revenues in excess of $ 20 billion by 2008. Pivotal segments are going to be back office operations, medical transcriptions, insurance claims processing, customer interaction centers and content development. Current trends suggest that the country is well on course for achieving the above target.

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Some Outsourcing Success Stories of India.

American Express processes internal financial transactions for all of Asia and employs 600 people - in country finance organization has shrunk by 60%. GE Capital employs 10,000 people and is expected to have 20,000 by the end of 200304 - Manages global payroll, call centers, mortgage and insurance claims. - Call center makes inbound and outbound calls for credit card collections and response to customer queries. British Airways employs 750 people to handle an array of back office applications. Strategy for small Indian companies who find CRM is good, but its expensive too… There is an inherent imbalance in the scheme of things in the world. And this imbalance is captured very well by 80/20 principle. Ever wondered why you wear only 20% of the clothes 80% of the time or why people spend 80% of their time with just 20% of their friends? Or the more popular example of unequal distribution of income across the world- 20% of the world population holds 80% of the wealth. This is where 80/20 principle comes to play. But this rule has extreme relevance in business. Most business would agree that 20% of their products bring in 80% of the revenues, 80% of the organizations salary budget goes to20% of the executives, 80% of the quality problems can be assigned to 20% of the causes and 20% of the customers bring in 80% of the revenues. The 80 and 20 are not a hard and fast set of numbers but the basic idea is to understand the imbalance between the things and that to your advantage.

20%

80 %

CUSTOMERS Shruti Kamat TYBMS

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Figure9.2— 80\20 principle One ready application to this rule is customer relationship management. Everybody knows how difficult it is to get a new customer than to retain a existing one. Wireless companies in US are spending more in finding new customers but 40% of their customers defect every year this has made bussines extremely difficult for them. Not only do they have to replace the defected 40% but also add more to show some growth. Another example of expensive customer service is in the banking industry. Most customers cost more than the returns on their deposits. Banks are figuring out how toserve their more valuable customers and retain them and cut the cost of serving the less valuable ones. CRM deployment is exorbitant and prohibitive for a small company. The 80/20 principle is a solid start for any company. One look at the customer file would separate your customers into the most valuable 20% and the other 80%. Most companies do not understand this imbalance and pay equal attention to every customer. This way they do disservice to those who deserve most attention and waste excessive time on less value-adding customer.This is not discrimination against certain set of customers. It is just proportional distribution of organizational effort. Companies are better able to retain their customers. Small companies don’t have resources to invest in CRM solutions and then to maintain them. What they need is a simple but yet effective way just to differentiate between their value adding so that they know where to concentrate their limited resources and energy. Identifying the most revenue generating 20% customers would immediately reduce the task to a more manageable level.

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Companies can further know more about what they buy, where they buy, how much do they pay, etc. Based on these answers, companies can then decide on their distribution, product development and pricing strategies. Companies consider in advertising and distributing equally to all the market. This has also created incentive issues with sales people who get assigned to the less valuable 80% customers. This has helped them to retain their profitable clients. There are standard services available to the other 80% customers There is no technology investment required for some basic analysis on customer file which can unravel tons of knowledge about customers. Simple mean and standard deviation of a normally distributed set of customer data would give important on pricing strategies. It would seem that big companies already analyse their customer files and use data for customer service. But that surprisingly not the case. Multi-million dollar companies often fail to do this simple analysis. But they have money to spend on CRM products. For small Indian companies who need a simple but effective substitute to CRM intelligence, the 80/20 principle is the way to go.

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Companies should think beyond merely selling products or services to their customers. They need to play the role of a customer’s consultant, problem-solver, coach, motivator and partner. Every company no matter what it sells, must adopt proven strategies and best practices to differentiate its selling efforts….. Nowadays, customers are demanding more while paying less for products and services. All companies are facing new and ambitious competitors. Moreover they are being challenged unusually to differentiate their products in a “commodity” market. The relationship between buyers and sellers is constantly changing. Sales personnel assume that lowering prices is the only way to attract customers. However, what customers are actually looking for is better value, better solutions to their problems, rather than doing business with the low cost provider. Smart companies must offer competitive prices and focus more on their value-added services to win and retain customers.

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Chapter # 9

CONCLUSION

“CRM is not simply about a system, it is about serving our customers, delivering on what we promise and having a shared vision on what it means having World Class Customer Service” -TOBY DETTER CRM HEAD,SHELL EUROPE

6.

CONCLUSION

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It used to be that one could think of marketing as totally separate from the rest of the business enterprise. But with the advent of CRM or one-to-one marketing or loyalty marketing, the dynamics have changed. CRM involves knowing your customers individually and having some mechanism for interacting with them or hearing from them, and customizing your business for them. This is an inherently integrative operation. If a company is going to treat a customer differently on what he is, then the back-end of the enterprise has to be capable of modifying its behavior on what the front end finds out about what the customer wants. So back end functions, such as product or service delivery, must be integrated with front-office functions such as sales, marketing, and customer service. One of the benefits of CRM is that it would make a company’s customers more loyal. Every time a company interacts with a customer, the company customizes its service to be a bit more closely suited to the customer’s needs. The company is getting a little higher up on the customer’s learning curve. Moreover the company is making the product more and more valuable to the customer. The relationship with the customer is developing in its own context. The future requires a new mindset. It will take nontraditional thinking for you to look at the way in which your company does business with your customer. Traditionally, customers have had to do all the work to get their problems solved. In many companies, the business units designed to serve the same customers rarely interact, and when they do, they seem at odds about how to handle problems or complaints. To remedy this lack of agreement, you need to look for ways to improve crossfunctional communication. Some assign customer accounts to teams of employees from various areas where contact with customers is paramount--for example, sales, marketing, product design, customer service and accounts receivable. A single company contact might have responsibility for all inquiries regarding credit, purchasing and order fulfillment.

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One of the major challenges in implementing CRM is resistance to change. Change does not occur in isolation. Only committed people implement CRM successfully. For a collection of people cutting across organizational boundaries to create the coordinated set of actions necessary to implement CRM, they must feel connected to each other. Building relationships across functions increases trust, and when trust is increased relationships are increased. This is a mutually reinforcing pattern. If the people that impact the customer improve their relationships by working effectively across functions, they learn how to do that with the customer too. Ultimately every organization must address what it's going to do differently so it can respond more effectively to its customers. This understanding cannot be spoon-fed. It occurs when people are actively engaged. It is seen repeatedly that as people come to understand the issues that are affecting them, they become excited about the possibilities for doing things differently. Creating this environment equalizes power. That's what makes CRM work. If you want to implement CRM successfully, you have to create this environment. There are no "ifs," "ands," or "buts." To implement CRM successfully, you'll have to reorganize your customer and change your organizational mindset. There are three important criteria. First, it is necessary to have a good design interface. It has to be easier for a customer to give a company its information and for the company to capture that information. Second, is to have a good memory. The company has to remember what the customer told them so that they don’t need to ask the customer same question again. And, Third the company has to have the ability to integrate the information into the way it handles that customer. These three criteria apply both on and off the Web. In the end, it is more than just technology. With CRM, one is operating in a different dimension of competition – finding products and services for customers, as opposed to finding customers for the products and services the company sells. The technology is crucial, but it’s also important to have managers with the vision to imagine what this technology enables the enterprise to accomplish ………..

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ANNEXURE

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Questionnaire and brief analysis of data ( ICICI bank account holders ) Name: Age: Occupation: Qualification: Are you aware of the services of ICICI bank? Most of the respondents are aware of services such as ATM, internet banking, phone banking, call centers,etc Are you able to make use of these services? Most cases the answer was yes. But only the highly literate people are making use of this service. The students group is attracted towards these services. The professionals are also making use of these services. But some of the uneducated businessmen are not able to make use of these services. Do the call centers of ICICI bank provide all the information that you require?

A very postive response ---which shows the efficiency the call center. What type of information you require the most? Most required information was about the balance in their account. Secondly whether their cheque has cleared or not. Next were the interest rates. Information about other services.

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Do you get the updated information regularly? Yes in most cases What sense of belongingness the bank shows towards you?

Mostly greetings on Diwali or any other festival. Informs about any new scheme suiting to customer needs Are you satisfied with the services of the ICICI bank? In almost 99%cases yes  Are the charges very high compared to public sector bank & Do you justify the Yes in many cases yes but compared to the services it is very much justifiable Is the bank able to satisfy you all the time? Yes in most of the cases Should the public sector banks improve their services on the lines of ICICI? Most of the respondents were in favor of this proposal, as this would benefit the existing account holders in the public sector banks. The of change in attitude towards customers of the is very essential.

charges with the service?

CONCULSION
ICICI bank is one of the private sector bank which is providing the customer value added services. They are not only able to satisfy the customer but they are successful in building a never-ending relationship with the customer. They are able to retain them and carry business with them to benefit both the organisation and the customer. Customer preferences and needs are very well understood by this bank. With the help of technology they are able to develop brand equity in the market and differentiate themselves from the competitors.

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ICICI bank is an live example for the public sector banks to understand the needs of the customer and change themselves to satisfy most of the customer most of the time. It is very necessary to integrate the needs of the customer with the technology and continuously monitor the same. It also necessary to upgrade the system from time to time. CRM AT ICICI BANK Even as the Indian IT community ushered in the year 2000, a steady and silent revolution on the e-commerce front failed to catch much attention. On the 19th of January 2000, a click and mortar made an announcement that offered a clear but early measure of the impact of the "e" in e-business. On that day the ICICI Bank released performance figures related to its previous year’s dotcom initiatives. The company reported a staggering 500% increase in Internet customers during the period from March 31, 1999 to December 31, 1999 – from 4000 to 24,000 customers in 9 months. While the absolute number of 24,000 or the growth of 500% might not mean much, it does speak volumes of the nascent potential. ICICI Bank and the ICICI Group as a whole has been striding purposefully down the e-pathway. The group prefers to call it a "clicks and bricks" strategy that provides multiple access points to its customers. For its traditional customers there are the lean and mean brick and mortar branches propped by ATMs, call centers and direct selling agents. Internet banking and WAP enabled services take care of the yuppy and technology savvy professionals of today. The rise in Internet banking customers is a result of the Infinity, Internet banking facility launched by the bank. The facility, initially made available to NRIs and later to resident Indians permits online opening of accounts, bills payment, account information. Call centers ICICI Bank is certainly juggling some interesting numbers. Its Bombay call centre handles 25 different products, for 10 million customers, with 620 positions. Two years ago, before its current call centre operations had been established, 97 per cent of customer transactions took place in one of its branches. Now ICICI Bank’s branch
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network handles less than half of all transactions – a shift which has taken an axe to the company’s cost-to-serve. ICICI appreciated early on that by centralising their service infrastructure, and centralising their service expertise, they created a new level of service for our customers. The call centre has played a leading role in transforming the bank’s value proposition for its customers: “Now ICICI is saying to the market ‘whatever your financial need, come to us and we can fulfill it at your convenience’. This is part of a far reaching policy to deepen the product-per-customer ratio, rather than just going out into the marketplace and trying to find new prospects.” The call centre also provides an opportunity to shift the qualitative nature of the relationship between bank and customer to a new level. Much of the extra leverage with customers that the call centre brings is tactical. A customer is a lot more receptive to up selling and cross selling when they’re phoning ICICI. The humble call centre is ICICI Bank’s means of shifting away from a market share based product-as-commodity mindset, to those stresses the importance of deepening exiting customer relationship.

ICICI used to expend a lot of energy trying to make sales. Now thier emphasis has changed – they expend their energy to get to know the customer better. It is when a customer feels comfortable with the relationship they have with ICICI that they are likely to deepen their commercial relationship with them. The call centre is our new tool to getting to know the customer better. The speed of the shift away from the branch as the primary means of interacting with the bank shows the receptiveness of Indian consumer behavior to the use of new channels. Nobody is afraid of the phone in India, and this gives us a much better environment to deal with the customer. The technology usage is far higher in a call centre compared with any other environment.

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The call centre is a cheaper channel than the branch, and often it is more convenient for the customer. This convenience can be supported by technology to provide a higher level of service than was possible previously. All the products and process are unified in the single call centre – allowing the customer to get a seamless service. So ICICI is therefore able to truly take a customer centric customer view. ICICI is able to get a customer who has been rejected from taking a credit card, they immediately offer a debit card." The ability to serve across all product categories from a single location has enabled the bank to provide a level of service qualitatively superior to its competitors, and this is offered as a complementary extension of the branch capabilities. Even the branches are moving very rapidly towards offering seamless service to all the customers. The relationship between the branches and the call centre is very good, and the branches are discovering how to focus their efforts on more rewarding service relationships. Of course ICICI’s branches are spread over 400 cities, so it takes a little bit longer to create a consistent level of service. The surprising thing about ICICI Bank’s call centre is that it has only been up-andrunning for eight months. ICICI has understood the importance of customer service over the phone, but it was only fairly recently that they began the task of consolidating their resources on customer service and customer relationship enhancement. The bank takes people who are first class graduates with a lot of yearning to learn. Following a selection process that includes telephone, personality and literacy tests, there is a post-recruitment process embracing a continuous learning program. ICICI Bank's product range isn't static, which means that they are also expected to use a web-based knowledge system to keep themselves abreast of the latest service developments. ICICI had to think about our CRM initiative very carefully, marrying strategy, technology and internal processes. The biggest challenge is the people management side of the equation: your call centre service is going to be as good as your people. They have to be motivated, they have to empathize with the customer.

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E-marketing The e-initiatives of the ICICI group have not been limited to customer servicing. The marketing activities for its various products are also taking the online route. A while ago the ICICI Bank joined hands with Satyam Infoway Limited for on-line distribution of the Bank's retail products. As part of this initiative ICICI Bank will also open ATM centres and cash dispensers at Satyam Infoway’s Cyber cafés across the country – creating yet another chain of access points for new generation customers, seeking to do business with the group. Mobility In April 2000, through tie-ups with Orange and Airtel, ICICI started offering limited WAP based services for customers on the move. A month later, on its way towards a fullfledged online mobile commerce service, the company commenced offering services like balance updation, request for cheque book, details of last 5 transactions, request for statement etc. Corresponding services are also available for the bank’s credit card customers. On the anvil are personal banking services, payment services for utilities, travel and ticketing information etc. Modus Operandi The group has leveraged on a number of tie-ups to come up with its various offerings. For its Internet banking offering the ICICI Bank uses Infinity from Infosys, for its credit card business it uses Vision Plus from PaySys, USA. For WAP services the tie-up with cellular service providers Orange and Airtel helps reach out to these users, while the WAP technology is being implemented by the in-house ICICI Infotech Services. To leverage the Net for its marketing initiatives, ICICI Bank and Satyam Infoway have jointly set up a ".COM" company to promote banking products on the Net. The bank has also entered into agreements with leading corporates like BPL, Rediff.com, Usha Martin and Tata Communications for B-to-C solutions in a bid to further strengthen its Internet banking product offering and services

Shruti Kamat TYBMS

63

Customer Relationship Management

Payment systems are perhaps the bane of any financial services company looking to move online. Security and privacy are issues that every bank looking to move online is grappling with. The ICICI Group has come up with its own answer to the problem. ICICI joined hands with a consortium led by Compaq to take the lead in offering a solution to the Indian e-commerce community. This consortium offers a B2B and B2C e-commerce payment gateway within India. The B2C payment gateway will help the Internet shopper, the web merchant and the banks to engage in e-commerce, while the B2B payment gateway will facilitate virtual transactions in the corporate world. Cash Register The numbers seem to vouch for the fact that this financial services intermediary is on the right track. The bank's net profit for Q3: 99-2000, more than doubled to Rs. 282.6 mn as compared with Rs. 140.4 mn for the corresponding quarter in the previous year. Net profit during the first nine months of FY99-2000 increased by 64 percent, from Rs. 441 mn to Rs. 723.6 mn. During the same nine months the number of depositors with the bank doubled to about 4,80,000. ICICI Bank's deposits increased substantially by 83 per cent from Rs 46.4 bn as on December 31, 1998 to Rs 85 bn as on December 31, 1999. Today it lays claim to being India's largest new private sector bank in terms of deposit base.

Shruti Kamat TYBMS

64

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