CRM THE WAY TO MANAGE THE BUSINESS

AUTHOR : PROF. B.C. Thimmaiah – Professor ( Assistant ) – Moskovskaya Shkoloo Upraveleniya

Scolkovo , Novaya Ulitsa , 100, SCOLKOVO , MOSCOW OBLAST , RUSSIA ,143025

ABSTRACT

CRM is new and emerging concept in today’s global scenario. It is seen as an answer and a
change to the traditional failing methods to improve business standards. It is basically customer
centric with an aim to improve customer loyalty and its impact is felt in all areas of a company.
CRM is the key to success of any business. The present paper examines the shift in business
focus from transactional to relationship marketing. It also focuses on CRM practices in India.

The present paper has the following research objectives

1) To study the need and importance of CRM in present day scenario

2) To explore the CRM practices being followed in India.
3) To bring out the role of technology in the CRM implementation.

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Key words: CRM, global scenario, relationship marketing, customer loyalty

INTRODUCTION

The concept of buyer and seller relationship is not new and has been practiced in one form or the
other since a long time; it is only in recent times that Customer Relationship Management
(CRM) has turned in to a buzzword. Customers loyalty has always been valuable, but today it
has become more vital for success. The concept of CRM is gaining wide acceptance and it is
recognized as a powerful tool for business development and to have a edge over the competitors
on account of the universal traits of the human behavior. People need to have social and
interactive relationships. So fast moving organizations believe in their customers, understand
their needs in advance before the customers give the feedback about their particular
requirements and design their products matching to such needs.

CRM Defined:

 CRM deals with long term mutually beneficial relationship among customers, companies
and other stakeholders.
 CRM is a well defined series of functions, skills, processes and technologies which
together will allow companies to more profitable manage customer as Tangible Assets.
 CRM is a new technology enabled way to do business that revives a simple, old-
fashioned notion:” keep pleasing customers they will keep coming back.”

THE CRUX OF CRM :

The crux of CRM is to direct all marketing efforts towards establishing, developing and
maintaining successful relationship exchange with the target customers.

The important factors responsible for the evolution of the concept of CRM are:

Shorter product life cycle

Brands generally have a shorter life span than the product category to which they belong. Advent
of new technology may lead to new product and consequently to the emergence of new brands.
Thus as there are many brands for the same product in the market, need arise to satisfy the
customer to the highest extent and thus need arise to manage a very good relationship with
customers.

Rapid new product offering

Firms nowadays introduce products using the latest technology . Some products are new to the
market, new to the world or new to the firm. As new products are been introduced, CRM will
help firms manufacture new products according to the need and expectations of the customer.

Growth of demanding
The overall demand is increasing in today’s world. But also the customers are demanding many
benefits from a particular product, e.g., for a face cream customer look for a good quality, good
fragrance, good packing, fairness economical and not harmful for skin and money back
guarantee-Amway.

Well informed and educated customers

Due to the media and print ads, the awareness level of customers is increasing. Now the
customers are aware of different type of products and brands available in market. Thus if a
company wants to have more customers it should develop good relationship with its present and
future customers. Thus CRM would help a lot.

Competitive market pressures

There is a stiff competition in the market. Take any product for e.g., soap there are more than 70
brands of soaps in the market. In this crowded market if our competitors make a good
relationship with the customer and you don’t, then you may loose the game. Thus a good
relationship is to be developed by firms with their customers with the help of CRM.

Decline in customers brand loyalty and company loyalty

In the present scenario, brand loyalty, especially in the FMCG category, is on the decline stage.
Newer and superior products are hitting the retail shelves all the time. Thus the firms have to
upgrade their products, improve service and create bonds of trust through proper care of
customer needs and regular communication.

THE CRM IMPORTANCE

Lower cost of marketing

As products manufactured with the help of CRM techniques the customers will accept it and they
will also be satisfied with the product. Also a good relationship will be maintained with the
customers and thus more and more will not be wasted in advertising and promotions.

Decreased cost for customers

As the marketing expenses of a firm will decrease in long run , firms can offer the same product
at a bit low cost, which will be in the benefit of the customers.

Common growth for marketers and customers

CRM will help customers to identify the right product will suit them; also the marketers will
know about their target audience and will not waste their time.

Customized marketing efforts

Much B2B marketing today is customized, in that a manufacturer will customize the offer,
logistics, communications and financial terms for each major account. Computers, database
email fax etc permit companies to get into customized marketing. Today customers are taking
more initiative in determining what to buy. CRM helps customize marketing to be more
effective.

Improve customer satisfaction

Companies now are trying to offer total customer satisfaction. Xerox guarantees total customer
satisfaction. As with the use of CRM firstly the customers will choose the right product offered
and also if they face any problems they will be solved quickly. Thus the level of customer
satisfaction can be raised with CRM.

Improved employee and customer retention

With the help of CRM customer retention will improve. As the old customers will be fully
satisfied they will buy the same companies products. If a person bought a color TV of Sony and
he is fully satisfied, as the company solved some small problems quickly, if he has to buy a C.D.
player he will buy of Sony. Thus CRM helps to retain new customers and maintain old
customers.

Strong customer loyalty

Today the loyalty of customers is decreasing for any brand. So if with the help of CRM good
relationship is developed with the customers than chances are less of customers not being loyal.
Thus CRM develops a strong customer loyalty and also a good company image.
CRM IN INDIA ORGANISATIONS

India is going through rapid changes in providing a better customer care. Today the customer is
looking for service and support to be made available anytime and anywhere. The companies are
not only making small adjustments here and there in marketing and sales departments but
pushing through fundamental changes that involve the whole company; the way people are
trained, evaluated and compensated. They are adopting a new mantra called Customer
Relationship Management. This can be observed from the following illustrations.

 The cosmetics category in India has remained relatively small compared to other world
markets. Indian women still lack knowledge about beauty products. Lakme Lever unveiled
the radically new customer service ie., interactive kiosks that allow women to choose
products that suit them. Lakme organize beauty clubs where experts offer beauty tips.
 Godrej Ge have also found that customer care starts much before the sales take place. To
offer innovative solutions to the customers it has started customer care call centers manned
by the executives who have complete description of all the appliances sold under Godrej Ge.
 Understanding buying patterns of customers is another important factor. RPG is putting
together a system to understand purchase patterns better. Apart from regular customer meets
and formal research , it has invested in data mining software that allows it to understand
product adjacencies. It allows them to understand the combination of products bought and
helps RPG formulate it’s product placements, undertake cross promotions, or develop new
pack sizes.
 In times of competition there is no guarantee that the customers will stay with the companies.
For the past few years, the oil companies have been under pressure to differentiate
themselves in the customer’s eyes. Bharat petroleum started Petro Bonus Programs to
establish a lock over customer so that he continues to buy at the petrol pumps of BPCL.
Every time when the customer uses the card, the value of the transaction is debited. The
customer gets points for transactions they made on the cards. The bonus points are
redeemable through gifts.
 Technology is also playing a major role in providing customers with the care they want.
Samsung electronics started call centers to help to reduce loop in the after sales service by
handling customers complaints and service requests effeciently. The customer is required to
 log on to the company’s website and key in the product serial number and address of the
customer.
 CRM plays an active role in the improvement of commercial scheduled banks too, this is an
important factor specially in the Indian scenario where 70%of the population live in villages.
Therefore these huge populations need an organized institutional credit. NABARD plays
quite an important role in this regard and CRM technology has helped the NABARD to a
great extent. The launch of Kisan credits has strengthened the bank - farmer relationship.
 HDFC bank was first private sector bank to be given permission to accept tax payments,
since HDFC offered better services both in terms of quality and speed. There are an increased
number of tax payers who preferred their tax payments through this bank and due to the
availability of a good database an effective relationship can be made with all the customers
thereby creating a healthy relationship between them.

There is a common thread passing through all these organizations. Talking,

listening, understanding what the customer is all about.

The role of technology in CRM

On the edge of 21st century internet technologes has become a new challenge and also as
opportunity for the way to business being done. A company, a customer and the business in
which they are predominant players the dynamics have change and having a paradigm shift. In
traditional or brick and motor era the customers behaviours are different and the monitoring
customers is also traditional in the sense the way customer expectations were satisfied.
Technology has an important role in CRM. The evolution of technology and the company’s
adoption of the same has occurred to different functional areas like production, product design,
accounting, marketing etc, the era of computerization has created a vast potential for all the areas
for tapping the information of the customers. The internet marketing is the latest happening for
the industry and here CRM plays an important role of tracking down the customer and target the
customer in precise way. Thus CRM became a strategic tool for marketer’s and it created a
platform to accuulate the information regarding the customers.

Conclusion:
CRM has become an increasingly critical means of developing and maintaining customer loyalty
while also helping business migrate to low value customer towards greater profitability.
Successful implementation of CRM requires a strategic approach, which encompasses
developing customer centric processes, selecting and implementing technology solutions,
employee empowerment, customer information and knowledge generation capabilities to
differentiate them, and the ability to learn from best practices. “CRM should be integrated in to
everything a company does, everyone it employs and every where it transacts”. CRM is not a
technology interest; it is a business strategy to select and manage the most valuable customer
relationships.

References:

1) Alvin Toffler- power shift & third wave

2) Philip kotler- marketing management
3) Business world – the joy factor, indrajit gupta
4) Marketing in the new era, J. S pawar, 1997
5) Simple ways to make your customers happy, Promod Batra.