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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In the mass markets individualized information on customers is now possible at low costs due to the rapid development in the information technology and due to availability of scalable data warehouses and data mining products.------------------------. Chapter 2: CRM Programs & Activities CRM Programs One-to-one Marketing Meeting and satisfying each customer’s need uniquely and individually. By using online information and databases on K. J. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 16 . The globalization of world marketplace makes it necessary to have global account management for the customers.Customer Relationship Management -----------------------------10.

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

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

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

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

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

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

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

ERP is back office automation solution. order fulfillment and human resource giving an integrated view of business. Data mining helps in the process of understanding a customer by providing the necessary information and facilitates informed decision-making. Chapter 4: Implementation of CRM How to implement CRM K. marketing and product knowledge. where as CRM automates the relationship with customer covering contact and opportunity management . inventory. CRM and ERP are complementary.------------------------. which can direct all customer queries and issues through appropriate channels to the right place for speedy resolution. Advances in data storage and processing technologies have made it possible today to store very large amounts of data in what are called data warehouses and then use data mining tools to extract relevant information. customer order processing and fulfillment. An ERP helps in automating business functions of production. J. sales force management. Somaiya College of Arts and Commerce(TYBMS)-------------------------------24 . finance. It is necessary that the two systems integrate with each other and complement information as well as business workflow. This will help the company in tracking and correcting the product problems reported by customers by feeding this information into the R&D operations via ERP. This integration of CRM with ERP helps companies to provide faster customer service through an enabled network. delivery. installation. presale and post-sale services and complaint handling by providing an integrated view of the customer. Therefore.Customer Relationship Management -----------------------------Systems Integration While CRM solutions are front office automation solutions. sales forecasting. Data Mining for CRM: Some Relevant issues Data mining is an important enabler for CRM.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Chapter 7: CEM: Future Concept

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SAP.------------------------. J. Somaiya College of Arts and Commerce(TYBMS)-------------------------------- 72 . Who’s in the CRM game? About 50% of the CRM market is currently divided between five major players in the industry: PeopleSoft. In its 28 years of operations it has assisted 27 lakh families own a home through loan approvals of over Rs. although Microsoft’s new emergence in the CRM market may cause a shift soon. their brand-name familiarity may give them an edge with small businesses considering a first-time CRM package. 1. K. its strength emanates from its intrinsic value of customer orientation and care. Whether Microsoft can capture a share of the market remains to be seen. However. Siebel and relative newcomer Telemation. Oracle. a sum of money depending on the insurance cover will be made available towards repaying the housing loan.000 crores. As it moves along taking small steps in this direction what makes the effort truly worthwhile is when it ultimately benefits individuals and the society at large.00. They are the basis for all growth and development.Customer Relationship Management -----------------------------The Home Loan Protection Plan (a product of HDFC Standard Life) that HDFC offers to it home loan borrowers provides the customer the comfort of knowing that in case of the unfortunate death of the borrower. Database Solutions. Inc. The task at hand is to bridge the gaps and to provide the common man access to resources to fulfill his basic dream. based on Linux and developed by an old standard. For HDFC. The other half of the market falls to a variety of other players.

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

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

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

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

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