The major topics that have been covered in the whole semester:

Chapter 1: Introduction to customer relationship management

Definitions of CRM: CRM is the core business strategy that integrates internal processes and
functions, and external networks, to create and deliver value to targeted customers at a profit. It is
grounded on high quality customer related data and enabled by information technology.
Type of CRM:
Strategic CRM: Strategic CRM is a core customer-centric business strategy that aims at winning
and keeping profitable customers.
Customer-centricity competes with other business logics. Philip Kotler identifies three other major
business orientations:
1. Product-oriented: Product-oriented businesses believe that customers choose products with
the best quality, performance, design or features.
2. Production-oriented: Production-oriented businesses believe that customers choose low-
price products. Consequently, these businesses strive to keep operating costs low, and
develop low-cost routes to market.
3. Sales-oriented: Sales-oriented businesses make the assumption that if they invest enough
in advertising, selling, public relations (PR) and sales promotion, customers will be
persuaded to buy. Very often, a sales orientation follows a production orientation.
4. Customer or market-oriented: A customer or market-oriented company shares a set of
beliefs about putting the customer first. It collects, disseminates and uses customer and
competitive information to develop better value propositions for customers
Operational CRM: Operational CRM focuses on the automation of customer-facing processes such
as selling, marketing and customer service.
Some of the major applications within operational CRM are-
1. Marketing automation
a) Market segmentation
b) Campaign management
c) Event-based (trigger) marketing
2. Sales force automation
a) Account management
b) Lead management
c) Opportunity management
d) Pipeline management
e) Contact management
f) Quotation and proposal generation
g) Product configuration
3. Service automation
a) Case (incident or issue) management
 b) Inbound communications management
c) Queuing and routing
d) Service level management
Analytical CRM: Analytical CRM focuses on the intelligent mining of customer-related data for
strategic or tactical purposes.
An understanding of customer value or propensities to buy underpins many operational CRM
decisions, such as:
a) Which customers shall we target with this offer?
b) What is the relative priority of customers waiting on the line, and what level of service
should be offered?
c) Where should I focus my sales effort?
Collaborative CRM: Collaborative CRM applies technology across organizational boundaries with
a view to optimizing company, partner and customer value.
Misunderstandings about CRM:
Misunderstanding 1: CRM is database marketing
Database marketing is concerned with building and exploiting high quality customer databases for
marketing purposes. Companies collect data from a number of sources. These data are verified,
cleaned, integrated and stored on computers, often in data warehouses or data-marts. They are then
used for marketing purposes such as market segmentation, targeting, offer development and
customer communication.
Misunderstanding 2: CRM is a marketing process
CRM software applications are used for many marketing activities: market segmentation, customer
acquisition, customer retention and customer development (cross-selling and up-selling), for
example. However, operational CRM extends into selling and service functions.
Misunderstanding 3: CRM is an IT issue
Many CRM implementations are seen as IT initiatives, rather than broader strategic initiatives.
True, most CRM implementations require the deployment of IT solutions. However, this should
not be misunderstood. To say that CRM is about IT is like saying that gardening is about the spade
or that art is about the paintbrush.
Misunderstanding 4: CRM is about loyalty schemes
Loyalty schemes are commonplace in many industries, such as car hire, airlines, food retail, hotels.
Customers accumulate credits, such as airmiles, from purchases. These are then redeemed at some
future point.
Loyalty schemes may play two roles in CRM implementations.
First, they generate data that can be used to guide customer acquisition, retention and development.
Secondly, loyalty schemes may serve as an exit barrier.
Misunderstanding 5: CRM can be implemented by any company
Strategic CRM can, indeed, be implemented in any company. Every organization can be driven by
a desire to be more customer-centric. Chief executives can establish a vision, mission and set of
values that bring the customer into the heart of the business. CRM technology may play a role in
that transformation.
CRM constituencies:
There are several important constituencies having an interest in CRM:
1. Companies implementing CRM
2. Customers and partners of those companies
3. Vendors of CRM software
4. CRM application service providers (ASPs)
5. Vendors of CRM hardware and infrastructure
6. Management consultants
Commercial contexts of CRM:
We’ll consider four contexts:
1. Banks
2. Automobile manufacturers
3. High-tech companies
4. Consumer goods manufacturers.
The IDIC model:
The IDIC model was developed by Peppers and Rogers, the consultancy fi rm, and has featured in
a number of their books. The IDIC model suggests that companies should take four actions in order
to build closer one-to-one relationships with customers:
a) identify who your customers are and build a deep understanding of them
b) differentiate your customers to identify which customers have most value now and which
offer most for the future
c) interact with customers to ensure that you understand customer expectations and their
relationships with other suppliers or brands
d) customize the offer and communications to ensure that the expectations of customers are
met.