Customer 

Relationship 
Management 
Naeem Shahzad
PIQC Institute of Quality

Learning Objectives

• Understand basics of CRM

• Understand market segmentation

• Understand tools for customers needs identification

• Understand Customer Feedback

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 1 Fundamentals of Customer 
Relationship Management 

Quality Management Principles

Customer‐focus
Relationship 
Management Leadership

Evidence based 
Decision Making Quality  Engagement 
Management 
Principles Of People

Improvement Process Approach

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Process Approach

Starting Point End Point

Receiver of 
Source of Input Inputs Activities Outputs
Outputs

Possible controls and check 
points to monitor and 
measure performance

Exercise: Quality of Service

You are working as a supplier for the following organization, write down
Output and Outcome for the following;

1) Mechanical Department

2) Logistic Department

3) Laboratory of Manufacturing unit

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Exercise: Dimensions Of Service Quality

Reliability

Tangibles Responsiveness

Empathy Assurance

Types of Customers

Customer

Organization or person that receives a product (ISO 10002:2004)

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Types of Customers

Internal
Internal customer generally refer to individuals or
groups within a process who are inside the
organizational boundaries.

External
External customers are located outside the
organizational boundaries and receive the end
product or service.

Types of Customers

• Distributor 

• Wholesale buyer

• Retailer

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Types of Customers

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Types of Customers

Primary
A primary customer is the individual or group who 
directly receives the output of a process.

Secondary
Secondary customers are those individuals or
groups from outside of the process boundaries
who also receive process output, but who are not
the reason for the process’s existence.

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Types of Customers

Indirect
Indirect customers are within the organizational 
boundaries. They do not receive process output 
directly, but are affected if the process output is 
incorrect or late.

Consumer/end user
Consumers, also called end users, are the final 
users of a product or service. This term describes 
where a product or service is finally used or 
consumed.
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Internal Customers

Individuals or groups within a process who are

inside the organizational boundaries.

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Exercise: Internal Customers

Production tickets, computer‐printed on light card stock, are attached by removable tape to each
module by the planning department.

When the module reaches the paint shop, it is given an acid bath, a rinse, high‐temperature
drying, painting, and high temperature baking. Very few tickets survive intact and readable.

The assembly operation following the paint shop requires attaching other parts to the painted
modules, depending on information contained on the ticket. Operators depend on their
experience to guess which goes with what.

How many internal customers can be identified in this case?

What is wrong with the process in given case with respect to internal customer requirements?

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Internal Customers

Step to improve internal process and services
• Identification of interfaces
• Establish requirements
• Perform gap analysis
• Set objectives
• Modify processes
• Establish system for tracking
• Document Quality‐Level agreement

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Quality‐Level Agreement

Quality‐level agreements (QLAs), 
also called service‐level 
agreements.

QLAs can be implemented on a 
gradual basis, starting with the 
most critical deliverables first

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Quality‐Level Agreement

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Quality‐Level Agreement

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Customer Relationship Management

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Customer Relationship Management

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Components of CRM

7.Service
CRM Technologies 4P & Segmentation
6.Analytics 1.EBS

Customers
5.CRM  2.Web 
applications Systems

CRM Organizational Structure 4.External  CRM Processes

3.Marketing
data

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Implementing CRM

• Align mission statement goals, organizational structure, 
and jobs to support a customer focus
• Increased customer retention

Monitor
Align  Create 
Identify  Implement , 
business to  customer 
customer  CRM  measure 
customer  Segment
needs strategy and 
focus map
report

Creating and Maintaining a Customer‐Focused Business 

2 Segmentation

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Customer Segments

Core/key customers typically are those customers most vital to

the organization’s economic success.

Noncore customers may or may not have requirements

unique from those of core customers.

Potential customers are not currently on the customer list, 
but could use the product or service offered.

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Patterns of Segmentation
Segmentation by product attributes is especially helpful to
Quality managers.

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Patterns of Segmentation

Homogeneous preferences
Customers with homogeneous preferences have roughly the 
same preferences. 

Diffused preferences
In this case no natural segments exist, but customer preferences 
vary greatly. 

Clustered preferences
For Natural market segmentation occurs,  distinct preference 
clusters exist, and competing products are expected to be 
dissimilar between clusters and similar within clusters.

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Segmentation

No segmentation (Undifferentiated)

Segmentation by a single criterion (e.g. age) 

**
**** B
* *         ** ***
* A
**   ***
** *   **

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Segmentation

Segmentation by multiple criteria (combination of factors 
income age)

Complete segmentation (every customer falls into group)

B
B
A A C
C

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Segmentation
Segmentation differentiating factors can be considered in creating 
customer or market segments.

Factors for Segmentation

1. Purchase volume 8. Demographic
2. Profitability 9. Purchase volume
3. Industry 10. Psychographic
4. Type of organization 11. Language spoken
5. Size of organization 12. Decision‐maker
6. Type of purchases 13. Occasion for purchase
7. Geographic 14. Potential or past customers

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Segmentation: Positioning

Positioning is not what you do to a product. Positioning is what you do to

the mind of the prospect.

Al Ries and Jack Trout, “Positioning” entered the marketing vocabulary in 1982 when they wrote Positioning: The 
Battle for Your Mind

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Segmentation: Positioning

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Segmentation: Positioning
What is meant by Positing

Volvo tells us that it makes “The safest car”. 

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Segmentation

“Demographics” originates from the word “demography’ 
which means “study of population’.

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Segmentation

“Demographics” originates from the word “demography’ which means 
“study of population’.

Demographic Segmentation
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Segmentation
Procter & Gamble, in selling its Duncan Hines cake mix, would 
define the target market as “married women between the 
ages of 35 and 50 with families.”

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Segmentation

Estée Lauder might design a product for “black American 
professional women between the ages of 25” and 35.”

Finally, some companies have moved to the ultimate segmentation 
scheme, segments of one, namely individual customers.
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Segmentation

Customer identification & Segmentation

• Create and maintain a customer information System

• Use SWOT analysis to determine competitive position

• Use survey to evaluate perceptions of your organization as well 
as your competitors

• Create a segmentation strategy that fits the strategic intent in 
the context of opportunity

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What ISO 9001:2015 Standard Says?

This International Standard specifies requirements for a quality management

system when an organization:

a) needs to demonstrate its ability to consistently provide products and services

that meet customer and applicable statutory and requirements, and

b) aims to enhance customer satisfaction through the effective application of

the system, including processes for improvement of the system and the
assurance of conformity to customer and applicable statutory and regulatory
requirements.

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Segmentation
SWOT Analysis

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Exercise: SWOT Analysis
Strength Weakness

Opportunity Threat

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Thank You

Muhammad Naeem Shahzad
PIQC Institute of Quality
www.piqc.edu.pk

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