SRM BUSINESS SCHOOL

LUCKNOW

Summer Training Project Report

On
“Customer Relationship Management”
Submitted in the partial fulfillment of the requirement
For the award of degree
Of
Master in Business Administration (MBA)

Under the Guidance of:

Industry Guide College Guide

Submitted By:

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COLLEGE CERTIFICATE

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ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr. ………………., for his able guidance,

continuous support and cooperation throughout my Summer Training, without which the present

work would not have been possible.

I would also like to thank Mr. ………… Faculty Guide, Department of Business Administration,

for his regular support and help in the successful completion of my summer training.

I would like to thank colleagues and friends for their help and assistance in the compilation of

this work.

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TABLE OF CONTENT

SR. CONTENT PAGE NO

NO.

1 INTRODUCTION

2 COMPANY PROFILE

3 THEORITICAL FRAMEWORK

4 RESEARCH METHDOLOGY

5 DATA ANLYSIS AND INTEPRETATION

6 CONCLUSION

7 LIMITATION

8 BIBLIOGRAPHY

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INTRODUCTION

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INTRODUCTION

Mahindra Tractors – Offering tough and Reliable Tractors to the farmers

Mahindra & Mahindra’s Farm Equipment Sector (FES), a part of the US $15.4 billion Mahindra

Group. As the market leader in India for the past 29 years, FES has helped bring Farm Tech

Prosperity to the Indian farmer with technologically superior affordable solutions. Mahindra has

achieved the distinction of being the largest tractor company in the world with tractor sales in

more than 40 countries.

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The FES vision is to deliver FarmTech Prosperity through a variety of existing and new agri –

initiatives to impact the lives of farmers, enabling them to RISE above their current realm of

possibility.

In its quality journey FES has won the Deming Application Prize in 2003, the second company

in India to win the Japan Quality Medal in 2007, followed by the TPM Excellence Award in

2011.

In 2007, Farm Equipment Sector, Mahindra & Mahindra Ltd. took over Punjab Tractor Ltd. and

added Swaraj to its brand stable. FES has 5 state-of-the-art manufacturing plants in India located

in Mumbai and Nagpur, Rudrapur, Jaipur & Mohali (Swaraj).

FES has a presence in around 40 countries across six continents with more than 1000 dealers

world-wide.  FES has a subsidiary agricultural tractor manufacturing company in India known as

Mahindra Gujarat Tractor Limited (MGTL). 

In order to enhance FarmTech Prosperity, FES offers services beyond tractors such as agri-

mechanization solutions under Mahindra AppliTrac, Seeds, Crop care solutions and market

linkages to high value markets through Mahindra Subhlabh and energy solutions through

Mahindra Powerol.

We began manufacturing tractors in the early 1960s for the Indian market.  Nearly 50 years

later, we are the number one tractor company in the world (by volume) with annual sales above

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200,000 and over 2.1 million tractors sold to date.  Our products are making farms more

prosperous in more than forty countries on six continents. Following our vision of Farm-Tech

Prosperity, we’ve also expanded into farm-support services, including agri-mechanization

solutions under Mahindra AppliTrac; seeds, crop protection, as well as market linkages,

distribution, agri-support information and counseling through the Samriddhi Initiative.

Through this network of services, we aim to empower the rural farmer and transform rural

productivity, income, and living standards.  We want to improve farm lifestyles by making hard

work easier, increasing yields, and increasing returns.  All our tractor brands, ranging from the

15 HP engine to 85 HP, have been designed in close communication with farmers about their day

to day tractor usage and farming practices.  From low cost tractors that cater to farmers with

marginal landholdings, to higher performance tractors with superior features, we've

revolutionised the farm equipment space. Our farm equipment and services provide a

comprehensive support system to help farmers prosper. 

Coupled with this is a comprehensive agri-support system ranging from water-management to

crop solutions— enabling farmers to rise beyond their current realm of possibility. Our continous

dedication in putting the farmer at the center of our products and services has led us be the

market leader in India for nearly three decades, with a market share above 40 percent.

This close relationship to Indian agricultural development has given us extensive expertise in

designing and manufacturing farm equipment in response to local conditions, enabling us to

enter foreign markets across the world.  Today, we have footprints in the United States, China,

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Australia, New Zealand, Africa (Nigeria, Mali, Chad, Gambia, Angola, Sudan, Ghana,

Morocco), Latin America (Chile, Argentina, Brazil, Venezuela, Central America and the

Caribbean), South Asia (Sri Lanka, Bangladesh, Nepal), the Middle East (Iran, Syria) and

Eastern Europe (Serbia, Turkey, Macedonia).

MAHINDRA GROUP

Founded in 1945 as a steel trading company, we entered automotive manufacturing in 1947 to

bring the iconic Willys Jeep onto Indian roads.  Over the years, we’ve diversified into many new

businesses in order to better meet the needs of our customers.  We follow a unique business

model of creating empowered companies that enjoy the best of entrepreneurial independence and

Group-wide synergies.  This principle has led our growth into a US $15.4 billion multinational

group with more than 144,000 employees in over 100 countries across the globe.

Today, our operations span 18 key industries that form the foundation of every modern

economy: aerospace, aftermarket, agribusiness,automotive, components, construction equipment,

consulting services, defense, energy, farm equipment, finance and insurance, industrial

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equipment, information technology, leisure and hospitality, logistics, real estate, retail, and two

wheelers.

Our federated structure enables each business to chart its own future and simultaneously leverage

synergies across the entire Group’s competencies.  In this way, the diversity of our expertise

allows us to bring our customers the best in many fields.

QUALITY ACCOLADES

We are the first and the only tractor company to have received the coveted Japan Quality Medal

and Deming Application Prize.

Quality is paramount at Mahindra and we are proud to be the first and only tractor manufacturing

company in the world to win the Japan Quality Medal (JQM), a laurel truly hard to earn. It is

universally acclaimed as the highest award presented to a company following Total Quality

Management (TQM) practices in their entire business operations. JQM recognizes a high level of

customer focus, improvements in overall quality and excellence in business processes.

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Also, Mahindra was the first tractor company worldwide to win the Deming Application Prize in

2003 for excellence in quality, making it the only tractor manufacturer to receive both

distinctions.

VISIT FACTORY

Research and Development Facilities

The Mahindra Research valley focuses on computer aided engineering and design.  An in-house

integrated approach incorporating all the details and specifics of benchmarking, aesthetics, style

feasibility, concepts, packaging, design & development, virtual validation, prototyping and

testing are carried out that effectively reduces manufacturing trials, experiments and evaluation

time in new product development.

J-Bar

The Engines are assembled in a closed environment, in an Air-conditioned plant. The Sequential

Engine Assembly works on an Automated Electrified Monorail conveyer system.  The assembly

line offers flexibility of different models with S.M.E.D concept and employs the Andon system

(Visual indication on line).

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Advanced Cold Testing For Engines

The Engine assembly lines employs DC Tools for critical joints.  It also works on No fault

forward principle and verification in process ( Advanced cold testing & Quality Points)

Extensive Testing And Quality Assurance Facilities

All new products go through an extensive field tests and also are tested on test beds/ labs by the

consistent use of simulation technologies.

CED Paint Shop

The Cathodic Electro Deposition (CED) paint shop allows an excellent corrosion resistance for

the sheet metal parts. It also provides a proper coverage of CED inside box sections and a allows 

a Uniform Dry film thickness of CED.

Tractor Assembly Line

The tractor assembly lines are universal model lines that accommodate all the different tractor

families and variants on the same line. Quick setup change is accomplished through   multiple

point docking fixtures & chassis resting pegs. Quality Point systems are established for 'Process

Quality assurance'. Modern material handling systems like manipulators, DC tools & dedicated

trolleys are employed. Roller tests are carried out, prior to the tractors departing the assembly

lines.

PRODUCTS

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15 -20 HP

A step towards tractorization for farmers with land holding of less than 5 acres. It comes at a cost

comparable to owing a bullock.  Performs a variety of agri and non agri applications. Owing to it

compact size it’s apt for inter-crop application. Yuvraj for Grapes – Specially Designed for

grapes orchards its unique design makes it enter  In the orchards for spraying and various critical

applications Yuvraj for Cotton – Specially  Designed adjustable axle makes it suitable for

intercultural applications In cotton Yuvraj for Sugarcane– Compact size  And 4 feet track width

makes  Suitable to enter in the 5 feet spacing of sugarcane for all the intercultural applications.

15 -20 HP - FEATURES

Compact Size

Fits in the tightest of fields especially designed to perform between two crops (Inter-crop).

Known for its track width and height its being liked primarily by grapes, sugarcane, cotton

growers.

Automatic dept and draft control

Providing precision hydraulics even in the 15 HP Tractor. Ensure automatic and uniform depth

throughout the field with any manual intervention

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Comfort seating

Functional yet comfortable seating with ergonomically placed controls and steering

Side shift gear

Enhances comfort while driving with its ergonomically designed side shift gears. It also adds

additional space for easy entry and exit

Single cylinder engine

India 1st 15 hp water cooled engine. Delivers superior performance and best in class fuel

efficiency

YUVRAJ 215

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Specifications

No of Cylinder 1
Capacity, cc 863
Engine Rated RPM 2300
Transmission Type Sliding Mesh
No of Gears 6F+3R
Brake Type Dry
Main Clutch Type & Size Single
Lift capacity at Hitch, KG 778
Steering Type Mechanical
Fuel Tank Capacity, LIT 24
Wheel Base, MM 1490
Tyre Size, Front/Rear 5.20 - 14/8.00 - 18

Disclaimer : This product information is provided by Mahindra & Mahindra Ltd. India, and is

generic in nature. Specifications listed herein above, are based on the latest product information

available at the time of release. Some images and product photos used are for illustration purpose

only and could show optional attachments available at extra cost. Please contact your local

Mahindra dealer for the most up-to-date information on product and the optional features and

attachments.

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20-50 HP - FEATURES

Bow type front axle

Compact designs are not just for cars tractors too aspire for that comfort turning on the roads.

With its advanced designs the bow type Front axle optimizes turning radius without

compromising on the seating space and comfort . Infact it also adds to the extra stability by

optimizing the centre of gravity of the vehicle

Comfort Seating

Entry and exit are key parameters for when it comes to Customer experience. Keeping this in

mind its wide entry and semi-platform gives easy access For seating. Ergonomically design

levers and steering column gives comfort while driving

Double acting balanced power steering

Enhancing comfort multi fold is its power steering which is a unique double action for that

additional comfort. Be it the long drive or that quick turns in the field or carry those additional

heavy duty loads

Mileage ka master engine

Mahindra Tractors are known as Mileage Ka Master in the tractor industry courtesy its highly

fuel efficient MKM engine. Delivers power with such great mileage that customers acknowledge

it by making it the most popular tractor in the complete range

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Bigger quadrant hydraulics

Ergonomically designed quadrant lever with precise control and fine adjustments for that close

finish of implement working in fields

MAHINDRA 265 DI

Specifications
No of Cylinder 3
Capacity, cc 2048
Engine Rated RPM 1900
Transmission Type PCM
No of Gears 8F + 2R
Brake Type Oil Brakes
Main Clutch Type & Size Single
Lift capacity at Hitch, KG 1200
Steering Type Power Steering
Fuel Tank Capacity, LIT 45
Wheel Base, MM 1830
Tyre Size, Front/Rear 6.00-16/12.4-28

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60-85 HP – FEATURES

Integrated AC Cabin

First of its kind Air Conditioned Cabin with cooling and heating options. Also enjoy your

favourite music in the sound proof cabin.

Tiltable Steering

First of its kind Steering. adjust the height of the steering wheel as per your comfort. Adds to

overall comfort while driving.

Suspended Pedals

Ergonomically placed and Comfortable. Add overall space and comfort to the operator.

Digital Dashboard

Precised and attractive looking dashboard with Digital Controls.

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Bottle Holder

Easy and Comfortably placed Bottle Holder.

Independent PTO

Operate PTO with the comfort of a Single Lever and enhance the performance of PTO driven

implements

Automatic Depth & Draft Control

Precised Control of High End Hydraulics Over a Touch of a Lever.

Glove Box

Easy and Comfortably placed for keeping your useful

MEDIA GALLERY

India to harvest record Wheat crop on good weather

India may harvest a record crop this year on favorable weather and government supports, the

United Nations said.

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The country’s farmers may reap 90.23 million metric tons of wheat in 2012, up from last year’s

86.87 million tons, the UN’s Rome-based Food & Agriculture Organization said in a report on

its website today.

Planting of mainly rice and course grains during the monsoon season is off to a slow start

because of a scarcity of rain, the FAO said. A favorable monsoon last year boosted last year's

cereal production to a record 232.1 million tons including milled rice, up 5.5 percent from a year

earlier, it said.

India will have a surplus of about 13 million tons available to export in the 2012-13 season that

started in April, nearly double the five-year average, the FAO said. That includes wheat, corn

and rice.

"With high government procurement, lack of sufficient quality storage capacity is a primary

concern," it said.

Thai Rice output from main Crop may rise to 25.88 million tons

Thai rice production from the main crop reportedly may climb to 25.88 million metric tons this

year, more than a previous forecast.

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According to reports, Output from the main harvest, representing about 70 percent of annual

production, will probably increase from the 24.7 million tons forecast in May.

Production from the main harvest in the previous crop year was revised to 23 million tons, from

20.4 million tons.

Production of natural rubber may increase 8.3 percent to 3.63 million tons and palm oil output

may gain 7.8 percent to 11.6 million tons, reports added.

Maharashtra Govt to test Brazilian model in Vidarbha

Mumbai: The Maharashtra government is implementing a pilot project in eight districts of

Vidarbha region to increase the per-acre yield of cotton while reducing its per-acre cultivation

cost.

The project, being undertaken in collaboration with the Central Institute of Cotton Research

(CICR) over 160 acres of land belonging to 160 farmers in this region, is adopting the Brazilian

model of cotton cultivation where the per-acre density of cotton is double what it usually is in

India.

However, by promoting the Brazilian model which uses straight varieties of cotton and not the

hybrid or Bt (genetically-modified) ones, the government appears to be doing a rethink over its

policy of promoting Bt cotton, say experts.

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The world average is around 725 kg/lint per hectare (ha.) whereas India’s average is around 500

kg/lint per ha. and Maharashtra’s average is just around 350 kg/lint per ha., he added. In India,

the per-acre density of plants is around 4,000-5,000 plants per acre, whereas in the Brazilian

model it is around 8,000-9,000.

As cotton is the only cash crop in Vidarbha and the region’s economy depends upon it, living

standards of farmers will improve and the number of suicides will reduce if the experiment

succeeds, claimed Dangat.

CCIR director Keshav Kranthi was more optimistic than Dangat. “We can even match the world

average if our experiment becomes successful,” he said, adding that the Brazil pattern not only

increases the yield per ha. but also reduces the cultivation cost by almost two-thirds compared

with Bt cotton.

He explained that the cost of seeds of straight varieties is much lower than Bt varieties, besides

which these varieties become ready for plucking in just 150-160 days whereas BT varieties take

around 180-200 days, which reduces the need for fertilizers, pesticides and other nutrients

substantially. And unlike Bt cotton varieties, seeds derived from straight cotton varieties can be

used during the next season also, he said, adding: “All these factors reduce the cost of cultivation

from around Rs. 12,500 per ha. to under Rs. 5,000 per ha.”

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While welcoming the move, Shetkari Sanghatana leader Vijay Jawandhia said, “The government

must come clean on Bt cotton and admit that our policy of promoting Bt cotton in the rain-fed

areas was wrong, which prompted farmers to commit suicide across the country.”

The Vidarbha region has seen a large number of cotton-growing farmers committing suicide

since 2005. According to Vidarbha Janandolan Samiti’s (VJAS) president Kishore Tiwari, nearly

9,000 cotton growing farmers have committed suicide till date although official government

figures stand at 4,000.

According to Tiwari, the major reasons for the suicides of cotton farmers are crop failure due to

erratic rains, low yields and rising cost of cultivation coupled with faulty agricultural produce

export policies of the government.

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THEORETICAL FRAMEWORK

Customer Relationship Management (CRM) is the guiding principle of analytics today…

… But Technical Systems Still Lack the Ability to Manage CRM

2.1 ORIGIN OF CRM:

Relationships are the essence of life. It is difficult to think about any society or organization to survive without

relationships. They are the invisible threads, which build a unique bond between individuals and organizations. On

the one hand these bonds may be as strong as iron pillars lasting for lifetime, whereas on the other hand they are as

delicate as feather which may be broken within no time. Managing relationships is a very difficult and complex

phenomenon. Organizations are realizing the importance of the vital role played by relationships in achieving and

maintaining the cutting edge at the marketplace.

Long ago Peter F.Drucker had advocated that the purpose of any business is to create customers. It is the customer,

which gives an opportunity to the organization to serve him or her. The success of any organization primarily

depends upon the sustaining the customer advantage that is retaining the customers for lifetime. Growing

complexities and uncertainties at the market place along with intensifying global competition are forcing the

business organization to invest in building customer relationships. New and sophisticated marketing tool kits are

being designed to attract, satisfy and retain customers for achieving sustainable competitive advantage.

CRM has recently emerged as a strategic solution to modern business problems. It has its roots in the age old

business philosophy which recognizes that all business activities must revolve around customers.

The term CRM was first coined in the early eighties by academics at various business schools. One of the first on

the scene was Dr. Jagdish Sheth who was at the Goizeta Business School at Emory University in Atlanta.

CRM: Customer relationship management as coined by the Gartner Group, it compasses sales, marketing, customer

service, and support applications.

While the CRM term is fairly recent, it grew from a combination of terms like Help Desk,

Customer Support, ERP, Data mining. It evolved because none of the previous terms could cover

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the topic well enough and because some of the terms (ERP) have grown to be met with a great

deal of distaste in the mouths of the business world.

2.2 CRM DEFINED:

Customer Relationship Management (CRM) is the strategic application of people, processes, and

technology in an organization-wide focus on improving the profitability of customer

relationships - DM Martin and AM Peel, The Pace Setter Group, 2001

The infrastructure that enables the delineation of and increase in customer value, and the correct

means to motivate valuable customers to remain loyal, to buy back again. - Jill Dyche, The

CRM Handbook, 2000

CRM (Customer Relationship Management): A strategy (technology-enabled) in response to,

and in anticipation of, actual customer behavior. From a technology perspective, CRM represents

the systems and infrastructure required capturing, analyzing and sharing all facets of the

customer’s relationship with the enterprise. From a customer care perspective, it represents a

process to measure and allocate organizational resources to those activities that have the greatest

return and impact on profitable customer relationships.

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2.3 EVOLUTION OF RELATIONSHIP MARKETING

Competition Forces PRODUCT FOCUS

Sharper Marketing CUSTOMER FOCUS

Recognition that database and FULL CUSTOMER FOCUS

Contact lack coordination

FULL RELATIONSHIP MARKETING

Database integrated internally and externally

Enterprise boundaries blur, New digital products and Services

ENTERPRISE emerge
RELATIONSHIP MARKETING

Figure 1. Evolution of Relationship Marketing

Stage 1: Product Focus

In the early stages of the cycle, the leading supplier has the products or services that are

significantly better than those of its competitors. Customers are happy enough to obtain them. It

gains share and profitability. No matter how the other companies try to compensate for the

product or service weakness by relationship management, they will lose.

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Stage 2: Customer Focus

The high profits earned now attract competition, so several other companies begin offering a

similar product or service. Competition intensifies in the areas of features and price. Companies

try to maintain differentiation through the feature mix and through branding. In consumer

markets advertising expenditure increases dramatically.

Stage 3: Full Customer Focus

Initially, customer service focuses on the aspects such as product maintenance or customer

training. Eventually it moves to the areas of customer care. Here the aim is to ensure that the

benefits from the product or service are delivered reliably from the first point of contact. This is

not quite customer relationship marketing, since the customer may still be approached by the

same organization in a different guise with an attempt to sell the same product.

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Stage 4: Full Relationship Marketing

After branding and customer service the suppliers must aim to manage all aspects of their

relationship with customers in a coordinated way. It is now important to recognize that the

diversity in relationships with the customer must be given due importance.

Stage 5: Enterprise Relationship Management

The relationship marketing approach now has to permeate everything the enterprise does.

Observing customers closely, working directly with them to address their needs and

requirements.

From Selling to Relationship Marketing

Conventionally, the ‘supplier/buyer interface tends to be fairly limited with the one real contact

on a continuous basis between sales person and person responsible for purchasing within the

customer’s business. It is an interface between where both parties seek to maximize the outcome

in their favour, and rarely results in a win-win situation. This type of relationship is given in the

figure below. There is a single point of contact as two triangles that only connect to a single

point. It is a relationship that is easy for competitors to break because it tends to be based on cost

rather than business development.

The job of a relationship manager is to coordinate those multiple contacts and to seek new

ways in which further customer value can be created.

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Customers can be divided into three zones:

1. Zone Of Defection: where customers are extremely hostile and have the lowest level of

satisfaction.

2. Zone Of Indifference: where customers are not sure. They have a medium level of

satisfaction and loyalty towards the company.

3. The third level of Customers is in the Zone Of Affection described as “Apostles”. CRM

focuses on bringing customers from level 1 to level 3 and retaining apostle customers.

Customers’ demands for customization are increasing with every passing day. This has made

companies shift their focus from “mass production” to “mass customization”. The present

scenario of customers using “poorly implemented” multi channel strategies for living upto the

expectations of customers is bringing both customer satisfaction and customer loyalty down the

ladder.

2.4 THE BENEFITS OF CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

A recent article by the Harvard Business Review reported that increasing customer retention

rates by 5% increased profits by 25% to 95%! In fact, it determined that customer retention is the

key to increasing profits. The article continued by stating that quality customer support is one of

five primary determinants of loyalty. The number one reason why customers defect is the

perception of poor service.

Customer Relationship Management is, however, even broader in scope than improving

customer service: CRM is also about increasing revenue. In years past, businesses were

scrambling to implement costly Enterprise Resource Planning solutions (ERP), which were

mainly about the bottom line, cutting costs by improving the flow of data and interaction

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between business and customer. But understanding how technology can increase revenues

through better customer interaction is far more difficult.

Effective CRM enables sales reps, service reps, and administrative staff and often, accounting and executive

personnel, to do their job better, faster, and with less wasted paper and time. Prospects can be followed up quickly,

and sales reps have instant access to the exact data needed for effective closing. Marketing can be analyzed for

workability and improved to create the highest return possible on the marketing dollar. In service, customers can be

handled rapidly, and the exact nature of a problem can be quickly located and handled.

The right CRM solution enables data to flow easily and quickly within an organization, and in

most cases includes the entire organization. The net result is higher sales, happier customers and

a much-improved bottom line. The reduction in costs due to improved personnel productivity,

better sales follow up, improved marketing and service, and an overall impressive growth in

general organizational efficiency sometimes produces almost immediate economic benefits.

The figures that corporations report of increased profits due to successful CRM implementations

range from 25% to 95%, attributable in many cases to less wasted time and double work, and

better organized schedules and data flows from staff in every division of the company.

CRM and Executive Management

Managing the customer relationship enables a business to identify the right customers, target them with the right

offers at the right time, and deliver that information using the right channel; for instance, via an email campaign,

direct mail, phone calls, trade shows, etc. CRM software enables a business to retain valuable information and then

use that information to increase sales, handle specific customer service issues, and create databases of information

that reflect the specific consumer traits of its public.

Many people assume CRM is all about technology. That's only part of the story: CRM is also about the data an

organization has and the wealth of information in that data, and how an organization's people process and leverage

that data. While it is true that certain basic formulas exist for successful sales and marketing, nevertheless, the

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variance between different business models can vary hugely. A guitar manufacturer and a copier manufacturer do,

indeed, share many management points in common, but the sales cycle, the service cycle, and the customer

relationships of each are quite varied.

Forethought needs be given to setting up the system in a logical and consistent method, enabling an organizational

entity to weave its own business plan into the framework of the software application. In this way the management of

the company directs the application to do its bidding, although the application must be flexible enough to enable it.

CRM, Sales and Marketing

The phrase, "know your customer, help your business," certainly applies to marketing and

CRM.

Without a doubt, a key component of CRM database analysis and implementation is marketing.

To be effective, one would hope to have marketing that reaches the right customer with the right

message at the right time using the right medium. But without having the data available

regarding one's public and buying patterns, marketing often becomes a black hole for wasted

money.

So an effective CRM application, one that enables an organization to easily gather critical sales

and marketing information, not only pays for itself very quickly, it becomes a valuable resource

for improving both the top (revenue) and the bottom (profit) lines. The top line is improved by

increasing sales through better data management, and improving marketing effectiveness by

collecting, analyzing, and using valuable customer information. The bottom line is improved by

reducing service times and costs, and by improving the general productivity of the staff as a

direct result of the CRM solutions of task management and contact management and, in some

cases, the interface to other software programs, such as accounting applications.

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Today's economy is demanding: as margins get squeezed, quality can deteriorate. Customers

don't want to spend hours on hold. Prospects often want a quote or invoice on the spot. Without

accurate record storage and quick access to information, sales reps get far behind on their call

lists and once "hot prospects" turn ice cold. Speed of particle flow and speed of delivery is vital

factors for survival, so access to data -- the same data, from a variety of positions -- is a must.

Sales, shipping, service, accounting and even the executive branch must all have the same data,

and often at the same time. CRM dictates that anyone who touches a customer shares the same

information and that information should be easy to access by others.

CRM and Service

Regarding service in general, the size of the organization has nothing to do with the need to give

its customers improved service. Although larger corporations do seem to "get away" with poor

service more easily than small to medium-sized businesses, most of whom are battling stiff

competition as the world becomes more automated and the choices more plentiful, even some of

the near monopolies will get the wake-up call from smaller, more aggressive, more service-

oriented companies who may wind up taking away significant shares of their business.

People love friendly, prompt, and courteous service. It's what keeps customers coming back year

after year. And CRM software does play a significant role in not only providing timely and

effective service, but in doing so at a price that most organizations can easily afford.

When a service call is handled the specific problem and its solution can be added to the database. Next time the

same incident occurs the service rep can locate the item and quickly provide the solution.

CRM software enables you to record each customer service as a Service Work Order, including

detailed records of how the Service Work Order was resolved. The system provides flexible

methods of billing, including by the hour, the month, the year, or by the Work Order (service

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incident). Contracts can be written for service or service and materials. Equipment can be tracked

by warranty and serial number. And a flexible service-scheduling feature enables you to easily

add, view, and delete scheduled service appointments. (For more detailed information about this

product, download the "Service Manager" tutorial and the live "Service Manager" demo.)

Service reps have easy access to sales, warranty, order, billing and inventory information, enabling them to evaluate

data and respond quickly to a customer's needs.

Purchasing a CRM application is a decision that takes some thought and consideration. Some of

the key elements that comprise CRM

 More effective reach and marketing

 Improved customer service and support

 Enhanced customer loyalty

 Greater efficiency and cost reductions

 Improved company communication and networking through better access to quality

information

 A better stand against global competition

2.5 CRM STRATEGIES

Benefits

Reduce costs through an optimal mix of channels and streamlined customer service operations.

 Strengthen customer loyalty and increase sales by delivering more personalized service and

information.

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 Improve customer service by providing representatives with integrated, up-to-date

information about each customer – from recent transactions to current service problems.

 Better manage the complete customer lifecycle across all touch points.

 Increase revenues by identifying and leveraging cross-selling opportunities that are rooted

in accurate customer data and solid employee training.

 Enhance profitability by gaining better insights into how the client’s customer approach is

helping – or hurting – the bottom-line.

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2.6 THE ROLE OF INFORMATION TECHNOLOGY IN CRM

In considering how CRM should be implemented, information technology has a pivotal role to

play in enabling companies to maximize profitability through more precise targeting of market

segments and the micro segments within them. We are now in a new era of technology-enabled

marketing, which involves leveraging relationships through the use of technology. Powerful new

technological approaches involving the use of databases, data marts, data warehouses, data

mining and one-to-one marketing are now assisting organizations to increase customer value and

their own profitability.

Technology can greatly assist in managing the data required to understand customers so that

appropriate CRM strategies can be adopted. In addition, the use of IT can enable the necessary

data to be collected to determine the economics of customer acquisition, retention and lifetime

value.

Given the dramatic effect that improved customer retention can have on business profitability,

organizations need an approach that leads to greater customer loyalty, enhanced retention and

profitability.

To improve customer retention; three steps are needed:

 Measurement of customer retention,

 Identification of root causes of defection and related key service issues;

 The development of corrective action to improve retention.

Measurement of existing customer retention rates is the first critical step in the task of improving

loyalty. This involves measuring retention rates and profitability analysis by segment. Managers

should determine the impact on profitability of various factors related to customer retention and

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acquisition. These include changes in: the cost of acquisition, the number of new customers

acquired, the profitability of retained customers, and the retention rate.

Besides acquisition and retention, lifetime value will need to be identified by market segment

and needs to address how to improve it. Clearly improving retention can have a huge impact on

lifetime profitability. The business will also need to consider how they will get the greatest

benefit from their acquisition activities. To facilitate improved acquisition, retention and lifetime

value, companies need to utilize the appropriate technology tools to assist this process.

In the business-to-business context an example of this would be sales force automation - creating

an information empowered sales force, which increases the sophistication of customer

management. This can dramatically improve sales force productivity and significantly enhance

the bonds with the customer.

In business-consumer organizations who are dealing with a large number of customers, a critical

issue will be increasing the quality of customer contact through tools such as sophisticated call

centers and electronics commerce.

Organizations will need to determine the appropriate customer management strategy and then develop the

appropriate information technology platform to suit their requirements, now and in the future. This may involve a

creative blending of a range of information technology infrastructures starting with databases and then progressively

moving towards data marts, enterprise data warehouse and integrated CRM solutions using electronic commerce. It

may also involve using approaches such as data-mining, event-driven marketing and channel optimization. The

ultimate objective of this will be to identify opportunities for increased profitability through enhanced customer

acquisition, improved customer retention and targeted cross selling.

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2.7 DEVELOPING APPROPRIATE METRICS

Central to achieving success will be the development of new metrics to measure performance in CRM across the

business. It is increasingly being recognized that there are linkages between employees satisfaction, employee

retention, customer satisfaction, customer retention, sales and profitability. A number of academics and

consultants have developed models based on these linkages.

2.8 CRM IMPLEMENTATION ISSUES

Customer Relationship Marketing is being increasingly viewed, as a major element of corporate

strategy, there is confusion about what it means in practice. Further, many organizations are

adopting CRM practices on a fragmented basis through a range of activities such as direct mail,

help desks, call centres and loyalty cards. These activities are often not properly integrated.

Where CRM is well understood as a concept, many board-level managers are still unclear as to how a particular

CRM approach should be cost-effectively implemented and what technology options should be adopted.

The starting point for introducing or further developing CRM must be determined from a strategic review of the

organization’s current position. Companies need to address four broad issues: what is our core business and how

will this evolve in the future; what form of CRM is appropriate for our business now and in the future; what IT

infrastructure do we have and what do we need to support the future organization needs; and what vendors and

partners do we need to choose?

An organization should first examine its core business and consider how will it evolve in the future. It then needs to

consider the form of CRM that is appropriate for their business now and in the future and what organization

resources does it have to support the business now and in the future.

Having identified the present and future focus of CRM, the organization then needs to address the appropriate

information architecture to enable their CRM strategy to be implemented. Stated simply the task is how can we

exploit technology for improved CRM.

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As organizations increase their sophistication they will need to creativity integrate these

technologies. “Planned evolution” is a good way of summarizing the technology approach to

building the backbone to support the relevant CRM strategy that has been mapped out for the

business.

An essential element of achieving successful implementation is to ensure that their strategy is

underpinned by viable and appropriate technology architecture. This involves the selection of

vendors and partners based on issues of customization capability and other appropriate

commercial factors including both technological and commercial criteria.

The new millennium, Customer Relationship Management will have advanced considerably and

we will have reached much more sophisticated level of one-to-one marketing and data mining.

There is now an enormous opportunity for organisations to improve their ‘customer ownership’

by building a co-ordinated and integrated set of activities which address all the key strategic

elements of CRM. Ultimately, however, organisations’ success in CRM will involve creating an

appropriate strategic vision for the future, making the appropriate choice of applications,

creatively using appropriate analytical techniques to exploit the data, and choosing the right

vendor for supply of the technology solution.

2.9 ELEMENTS FOR SUCCESS OF CRM

To ensure the success of CRM the following things need to be kept in mind:

• Define fewer high-priority business requirements.

Focus on the most pressing goals, such as reducing attrition among your most valuable

customers, or increasing revenue per customer. Only after these goals have been achieved should

the initiative be spread across the enterprise.

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• Communicate these immediate objectives to every member of the team.

Regardless of department, employees should clearly understand the business rationale and

desired results. Managers should include incentives, making the project a top priority.

• Do something near-term that demonstrates payback.

The most common complaint from business managers about software development is that results

– if they come at all – are not available until all the money has been invested. The greatest

complaint from developers is that business managers don’t understand that they can’t have

results until the software has been built. To maintain the support of senior management and key

investors, achieving a succession of short-term goals, with measurable results, is crucial in

moving forward with the long-term goal of true relationship marketing.

The Elements of CRM

Sales Force Customer Service/Call Marketing

Automation Center Management Automation

Call centers

Call center telephone sales managing aspects Campaign

of customer contact management

E-commerce

Web-based Content
Field sales
self service management

Retail

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Data analysis
Third-party brokers,
Field services and business
distributors, agents
and dispatch intelligence tools

Figure 4. Elements OF CRM

Source: Computer world Jan’02.

2.10 BENEFITS OF A WELL DEFINED CRM INFRASTRUCTURE

A well-designed CRM infrastructure will enable you to:

 Integrate and coordinate multiple customer touch points (e-mail, call center, direct sales,

POS, direct mail, etc.)

 Extend the definition of a customer or program without negatively impacting application

design;

 Add new system components and applications without redesign;

 Define new business processes and data;

 Add new data sources without compromising performance; and

 Support simultaneous users and add new business units.

Benefits of a well-constructed CRM infrastructure include:

 Reduced deployment capital and expense costs;

 Reduced ongoing management costs;

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 Additional revenue-generating opportunities and

 Customizable systems that leverage your existing CRM technology investments.

2.11 RELATIONSHIP MARKETING AND CUSTOMER LIFETIME VALUE FOR

CELLULARS

Relationship marketing is not about having a "buddy-buddy" relationship with your customers.

Customers do not want that. Relationship Marketing uses the event-driven tactics of customer

retention marketing, but treats marketing as a process over time rather than single unconnected

events. By molding the marketing message and tactics to the LifeCycle of the customer, the

Relationship Marketing approach achieves very high customer satisfaction and is highly

profitable.

The relationship marketing process is usually defined as a series of stages, and there are many

different names given to these stages, depending on the marketing perspective and the type of

business.

For example, working from the relationship beginning to the end:

Interaction > Communication > Valuation > Termination

Awareness > Comparison > Transaction > Reinforcement > Advocacy

Suspect > Prospect > Customer > Partner > Advocate > Former Customer

Using the relationship marketing approach, you customize programs for individual consumer

groups and the stage of the process they are going through as opposed to some forms of database

marketing where everybody would get virtually the same promotions, with perhaps a change in

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offer. The stage in the customer Lifecycle determines the marketing approach used with the

customer.

A simple example of this would be sending new customers a "Welcome Kit", which might have

an incentive to make a second purchase. If 60 days pass and the customer has not made a second

purchase, you would follow up with an e-mailed discount. You are using customer behavior over

time (the customer LifeCycle) to trigger the marketing approach.

Customer Lifetime Value for Cellular

We all know that today, marketing programs must include a measurable customer understanding

in order to be successful. One element that helps quantify our understanding of customer

profitability is Customer Lifetime Value (CLV). If carefully calculated, and with widespread

organizational buy-in, it becomes the first metric to turn to for all customer marketing and

planning.

However the Life Time Value concept has been misunderstood over the last several years. It may

not be necessary to figure out an absolute Life Time Value for a customer or wait "a lifetime" to

find out the exact value to use the concept in managing customer value in order to develop

successful marketing campaigns that effect the bottom-line quickly.

CLV as It Applies to Cellular

The obvious goal is keeping the customers with highest CLV as long as possible and determining

the attributes of those high CLV customers for use with prospects.

Basically, there are three main components to the CLV formula: revenues, customer tenure and

expenses.

1. Revenue: Revenue formulas of past behavior used to determine future revenues.

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2. Tenure: Retention modeling used to understand leading indicators for customer "churn."

3. Expenses: The major difficulty in computing CLV is not in computing customer income; it's

the expense. It is difficult to determine how to apply various departmental company

expenses to individual customers.

Unfortunately, almost ALL of the relatively "constant" figures that help calculate CLV in other

industries literally change as soon as they are calculated when it comes to cellular services:

1. Phone Equipment Costs and Revenue. The negotiated sales rates form the various phone

vendors changes based on supply, consumer demand and buying ability of the

telecommunications vendor.

2. Service Rates and Rate Plan Structures. Rates change almost monthly for most carriers.

Even the rate plan structures change as soon as you (and the consumers) understand them.

For instance, AT&T wireless's "all-you-can-eat" and Cingular's "roll-over Minutes" rate plan

structures obviously put a dent into calculating meaningful Customer Lifetime Valuation.

3. Mobile Phone Features and Usage. Everything from the amount of "Roadside Assistance"

packages to the incredible early mistakes of WAP pricing demonstrate just how volatile these

features can be to calculating anything resembling accurate CLV.

4. Service Contract Models. Tenure based on consumer contracts that vary from one to three

years; technology that changes as soon as the contract is signed, phone number

transportability issues, and more.

Additionally, most consumers have been affected by one of the consolidations, mergers, or

corporate "buys" that the industry has been witnessing recently.

As a result, consumer brand loyalty is at an all-time low.

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2.12 SCOPE OF CRM:

Customer Relationship Management (CRM) is developing into a major element of corporate

strategy for many organizations. CRM, also known by other terms such as relationship marketing

and customer management, is concerned with the creation, development and enhancement of

individualized customer relationships with carefully targeted customers and customer groups

resulting in maximizing their total customer life-time value.

Industry leaders are now addressing how to transform their approach to customer management.

Narrow functionally based traditional marketing is being replaced by a new form of cross-

functional marketing - CRM. The traditional approach to marketing has been increasingly

questioned in recent years. This approach emphasized management of the key marketing mix

elements such as product, price, promotion and place within the functional context of the

marketing department.

The new CRM approach, whilst recognising these key elements still need to be addressed,

reflects the need to create an integrated cross-functional focus on marketing - one which

emphasizes keeping as well as winning customers. Thus the focus is shifting from customer

acquisition to customer retention and ensuring the appropriate amounts of time, money and

managerial resources are directed at both of these key tasks. The new CRM paradigm reflects a

change from traditional marketing to what is now being described as ‘customer management’.

The adoption of CRM is being fuelled by recognition that long-term relationships with customers are one of the

most important assets of an organisation and that information-enabled systems must be developed that will give

them 'customer ownership'. Successful customer ownership will create competitive advantage and result in improved

customer retention and profitability for the company.

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In many companies there is still confusion as to what CRM is all about. To some it is about a

loyalty scheme, to some it is about a help desk. To others it is about a relational database for key

account management and for others it is about mass profiling the customer base without

undertaking detailed segmentation. Relatively few organizations have implemented an integrated

approach, which addresses all the key strategic elements of CRM. Only a small number of

businesses have a clear idea what should be done with information technology in order to

successfully implement CRM.

Traditional marketing is no longer enough. The amount an organisation spends on marketing is not necessarily

related to its marketing effectiveness. Some organizations undertake relatively little marketing activity and as a

result have a fragmented customer base, poor market positioning and low levels of marketing effectiveness.

Other organizations have been successful with relatively little expenditure on marketing. For

companies such as Virgin Atlantic, The Body Shop and First Direct, public relations and word-

of-mouth marketing have been very important to them, so that despite fairly low levels of

advertising spend they are highly effective in their marketing.

Many organizations, despite heavy investment in marketing departments and marketing

activities, have achieved poor results from their marketing effects; quite a number of financial

services companies fall into this category. We call this “marketing trappings” marketing.

Relatively few organizations have adopted relationship marketing and CRM approaches to

effectively harness the tools of marketing to deliver real increased customer value and, with the

help of technology, developing appropriate long-term relationships with customers.

To achieve success, businesses need to have the appropriate measurement systems and marketing

metrics in place to ensure there are effective in terms of their use of customer-focused resources.

Over the past two decades businesses have developed sophisticated approaches to measurement

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in other functional activities within their business - in Operations, Finance, IT and Human

Resources. However, the Marketing function may be the last bastion of inadequate and

inappropriate metrics

Traditional marketing activities, which emphasize customer acquisition, are no longer sufficient.

CRM recognizes that marketing starts after the sale is over, not when the sale is completed.

In future marketing will need to create much stronger metrics so that strategies can be evaluated

rigorously.

OBJECTIVES

 To identify the customer relationship management programs being run by Kanchal group.

 To study the impact of CRM on Kanchal group

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INTRODUCTION TO CRM

Evolution 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. In the short term, however, it proved to be an

unwieldy process that was better in theory than in practice for a variety of reasons. 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.

In the last several years, however, newer software systems and advanced tracking features have

vastly improved CRM capabilities and the real promise of CRM is becoming a reality. As the

price of newer, more customizable Internet solutions have hit the marketplace; competition has

driven the prices down so that even relatively small businesses are reaping the benefits of some

custom CRM programs.

In the beginning…

The 1980’s saw the emergence of database marketing, 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.

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In the case of larger, key clients it was a valuable tool for keeping the lines of communication

open and tailoring service to the clients needs. In the case of smaller clients, however, it tended

to provide repetitive, survey-like information that cluttered databases and didn’t provide much

insight. As companies began tracking database information, they realized that the bare bones

were all that was needed in most cases: what they buy regularly, what they spend, what they do.

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. Instead of simply gathering data for their own use, they began giving

back to their customers not only in terms of the obvious goal of improved customer service, but

in incentives, gifts and other perks for customer loyalty.

This was the beginning of the now familiar frequent flyer programs, bonus points on credit cards

and a host of other resources that are based on CRM tracking of customer activity and spending

patterns. CRM was now being used as a way to increase sales passively as well as through active

improvement of customer service.

Introduction

Customer Relationship Management - CRM

The generally accepted purpose of Customer Relationship Management (CRM) is to enable

organizations to better serve its customers through the introduction of reliable processes and

procedures for interacting with those customers.

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In today's competitive business environment, a successful CRM strategy cannot be implemented

by only installing and integrating a software package designed to support CRM processes. A

holistic approach to CRM is vital for an effective and efficient CRM policy. This approach

includes training of employees, a modification of business processes based on customers' needs

and an adoption of relevant IT-systems (including soft- and maybe hardware) and/or usage of IT-

Services that enable the organization or company to follow its CRM strategy. CRM-Services can

even redundantize the acquisition of additional hardware or CRM software-licences.

The term CRM is used to describe either the software or the whole business strategy oriented on

customer needs. The second one is the description which is correct. The main misconception of

CRM is that it is only software, instead of whole business strategy.

Major areas of CRM focus on service automated processes, personal information gathering and

processing, and self-service. It attempts to integrate and automate the various customer serving

processes within a company.

There are three parts of application architecture of CRM:

 operational - automation to the basic business processes (marketing, sales, service)

 analytical - support to analyse customer behaviour, implements business intelligence alike

technology

 cooperational - ensures the contact with customers (phone, email, fax, web...)

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Operational part of CRM typically involves three general areas of business. They are (according

to Gartner Group) a Enterprise marketing automation (EMA), Sales force automation (SFA) and

a Customer service and support (CSS). The marketing information part provides information

about the business environment, including competitors, industry trends, and macroenviromental

variables. The sales force management part automates some of the company's sales and sales

force management functions. It keeps track of customer preferences, buying habits, and

demographics, and also sales staff performance. The customer service part automates some

service requests, complaints, product returns, and information requests.

Integrated CRM software is often also known as "front office solutions." This is because they

deal directly with the customer.

Many call centers use CRM software to store all of their customer's details. When a customer

calls, the system can be used to retrieve and store information relevant to the customer. By

serving the customer quickly and efficiently, and also keeping all information on a customer in

one place, a company aims to make cost savings, and also encourage new customers.

CRM solutions can also be used to allow customers to perform their own service via a variety of

communication channels. For example, you might be able to check your bank balance via your

WAP phone without ever having to talk to a person, saving money for the company, and saving

you time.

Improving customer service

CRMs are claimed to improve customer service. Proponents say they can improve customer

service by facilitating communication in several ways:

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 Provide product information, product use information, and technical assistance on web sites

that are accessible 24 / 7

 Help to identify potential problems quickly, before they occur

 Provide a user-friendly mechanism for registering customer complaints (complaints that are

not registered with the company cannot be resolved, and are a major source of customer

dissatisfaction)

 Provide a fast mechanism for handling problems and complaints (complaints that are

resolved quickly can increase customer satisfaction)

 Provide a fast mechanism for correcting service deficiencies (correct the problem before

other customers experience the same dissatisfaction)

 Identify how each individual customer defines quality, and then design a service strategy for

each customer based on these individual requirements and expectations

 use internet cookies to track customer interests and personalize product offerings accordingly

 use the internet to engage in collaborative customization or real-time customization

 Provide a fast mechanism for managing and scheduling followup sales calls to assess post-

purchase cognitive dissonance, repurchase probabilities, repurchase times, and repurchase

frequencies

 Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going

support (improve efficiency and effectiveness)

 Provide a mechanism to track all points of contact between a customer and the company, and

do it in an integrated way so that all sources and types of contact are included, and all users of

the system see the same view of the customer (reduces confusion)

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 The CRM can be integrated into other cross-functional systems and thereby provide

accounting and production information to customers when they want it

Improving customer relationships

CRMs are also claimed to be able to improve customer relationships . Proponents say this can be

done by:

 CRM technology can track customer interests, needs, and buying habits as they progress

through their life cycles, and tailor the marketing effort accordingly. This way customers get

exactly what they want as they change.

 The technology can track customer product use as the product progresses through its life

cycle, and tailor the service strategy accordingly. This way customers get what they need as the

product ages.

 In industrial markets, the technology can be used to micro-segment the buying centre and

help coordinate the conflicting and changing purchase criteria of its members

 When any of the technology driven improvements in customer service (mentioned above)

contribute to long-term customer satisfaction, they can ensure repeat purchases, improve

customer relationships, increase customer loyalty, decrease customer turnover, decrease

marketing costs (associated with customer acquisition and customer ?training?), increase sales

revenue, and thereby increase profit margins.

Technical functionality

A CRM solution is characterised by the following functionality:

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 scalability - the ability to be used on a large scale, and to be reliably expanded to what ever

scale is necessary.

 multiple communication channels - the ability to interface with users via many different

devices (phone, WAP, internet, etc)

 workflow - the ability to automatically route work through the system to different people

based on a set of rules.

 database - the centralised storage (in a data warehouse) of all information relevant to

customer interaction

 customer privacy considerations, e.g. data encryption and the destruction of records to ensure

that they are not stolen or abused

rivacy and ethical concerns

CRMs are not however considered universally good - some feel it invades customer privacy and

enable coercive sales techniques due to the information companies now have on customers - see

persuasion technology. However, CRM does not necessarily imply gathering new data, it can be

used merely to make "better use" of data the corporation already has. But in most cases they are

used to collect new data.

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CRM Planning

CRM Planning: Keys for Project Success

Whether you're updating, upgrading, jump-starting, or restarting your CRM efforts, some basic

steps will help keep you on the path to a positive ROI.

Thinking about the potential ROI of your customer relationship management (CRM) project

should start during the selection process. Before you write an RFP or start talking to vendors,

you need to do some homework to ensure that you're on the right track to maximize ROI.

Identify the Problem — and the Solution

Before you start thinking about vendors, you should define your problem in clear business terms.

Do you need to improve management visibility into the sales pipeline? Reduce customer support

costs or improve customer support? Reduce customer-related administrative overhead? Making

your CRM challenges specific will help you determine which technologies or components are

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most likely to deliver ROI and how you can prioritize your development and deployment plans.

Most companies' CRM goals fall into a couple of main categories:

• Improved sales performance

• Improved management visibility

• Improved customer support

• Improved marketing

• Reduced costs

If your CRM goals fall into more than two of these categories, you'll likely want to prioritize one

over the other and plan a phased deployment. It's also a good idea to know at this point what

your likely budget is, how flexible it is, and what your procurement officer or CFO will be

looking for in terms of business justification. If you know walking into the project that you'll

need to show a six-month payback period, for example, you can plan accordingly.

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Make the Short List

Regardless of your relationship with existing vendors, previous experience, and technology

environment, you should make a short list of potential vendors and give them a fair evaluation

before you make a decision. Your short list should be easy to define based on these factors:

• Your CRM goals. The vendors whose functionality meets your needs will depend on

whether you're looking for improved sales, improved reporting and forecasting, improved

support, improved marketing, or a combination of different customer-related technology.

• Your existing environment and IT philosophy. Do you have existing databases, order

systems, or contact lists that will need to be integrated or migrated into your CRM solution? Do

you expect to do your own development or use consultants or systems integrators? Are you

comfortable outsourcing your sales and marketing data in its entirety - or in part? Answering

these questions will help you determine whether a large-scale CRM infrastructure, a hosted

solution, a point solution, or a broad solution is likely to deliver maximized ROI.

• Your user dynamics. Are the employees you expect to use the solution technology savvy

and open to change, or are they the ones still using pencils and paper to track leads? The greater

the magnitude of the change you expect them to make, the greater the risk that adoption will

slow the ROI of your project.

• Your budget. CRM solutions such as Siebel and SAP can cost millions of dollars to

deploy and require a team for ongoing support and maintenance. On the other end of the

spectrum, Microsoft CRM and FrontRange (for example) can cost considerably less. You can

expect a hosted solution to have a minimal upfront investment and from $500 to $1,500 per user

per year.

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Clearly defining your requirements and characteristics in each of these key areas will prepare

you for the next step - evaluating each individual solution's ability to deliver returns based on the

costs and benefits associated with a deployment.

Check Resumes

Once you've identified the likely vendors to deliver the best solution for you, you'll want to

check their references - and this doesn't mean just reading case studies on their Web sites. Look

to independently developed case studies and your own interviews with references to learn about

their decision process, project successes and challenges, and whether or not their spending - and

benefits - met expectations.

Find a Partner (Check Resumes, 2)

In the CRM world, few companies will deploy a solution without some help from external

consultants or systems integrators. Selecting and planning how you work with consultants is just

as important to your project's success as the technology you choose.

Justify Your Investment

Once you've identified your goals and selected a short list of vendors, you can use a structured

evaluation of costs and benefits to determine the best solution in terms of ROI and build the

business case for moving forward. On the costs side, you'll want to consider the initial and

ongoing software, hardware, consulting, internal personnel, and training costs associated with the

project.

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Here are a few guidelines to keep the ROI from your CRM project on track:

• You should spend less on software and consulting than 70 percent of expected annual

direct benefits.

• You should be able to deploy and achieve some returns in fewer than six months (even if

it's only a pilot).

• For a hosted solution, you should see benefits in fewer than 60 days.

• Consulting costs should not be more than twice your initial software investment.

• Training users should take fewer than four hours.

On the benefits side, you'll want to consider both direct and indirect benefits. Prioritize your

expected benefits from most direct to most indirect, and then work on your estimates, using

internal surveys, case study data, and reliable benchmarking information as a starting point for

quantifying expected benefits for your company.

Key Decision Factors

By and large, there's no such thing as a bad CRM solution. Most solutions deliver value when

they're chosen based on clear business needs and deployed correctly. Once you've identified your

CRM needs and your short list, there are a number of factors to consider to help you make the

right solution decision.

User Adoption

In evaluating the type of CRM solution that will be best for your organization in terms of user

adoption, you'll want to consider two key factors:

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• The willingness of users to adopt the application. Adoption can often be as much about

politics and culture as it is about technology. Successful adoption will also depend on how much

users will have to change their normal way of doing work to use the solution.

• The technology ability of potential users. Many CRM solutions are complex and difficult

to use; others have a more intuitive look and feel. Choose a solution that fits the abilities of your

users.

Once you've determined where your organization fits, you'll want to consider both the

complexity of the solution and ease (or difficulty) involved in adding and evolving functionality

over time as your needs change and your users become more comfortable with the solution. Here

are some red flags you should look out for in evaluating solutions in terms of user adoption:

• Plans for extensive customization

• Multiple components that will be integrated to meet your needs

• Lack of a track record supporting "your kind" of sales reps

• Functionality planned "for the next release"

• An extensive training program

• Ongoing consulting requirements for any changes or updates

Cost

In CRM, "you get what you pay for" isn't always true. In fact, many companies in the past have

overspent on CRM components and features that never delivered value to their users - if they

even made it out of the box. You'll have the most success with a measured approach that doesn't

have to include a hefty initial license fee.

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Existing Environment

What other solutions and data sources do your sales or customer support representatives use

today, what solutions are they most comfortable using, and what will need to be integrated in

some way into the CRM solution you choose to deliver value? How you integrate existing

resources and applications into a CRM project should not be an afterthought. In selecting a

vendor, you'll want to explore how it can integrate with your existing environment. Demand to

see a track record with reference customers in a similar situation.

Best Practice: Make a Match

One company chose Microsoft CRM because it would easily integrate with back-end office

applications, because the sales force was already familiar with the Microsoft interface look and

feel, and because the design of the application closely matched its existing business processes. It

achieved a payback of five months.

Flexibility

In addition to the initial development, integration, and deployment, when selecting a solution,

you should consider how easy it will be to make changes over time as your needs change. In all

likelihood, the way you use CRM will change over time - and the flexibility of the application to

enable you to support those changes can have a significant impact on the ongoing cost of the

solution.

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Best Practices

Once you've determined which solution is right for you and built the business case, you'll want to

make sure you have the key checkpoints in place so that the project delivers on your ROI

expectations.

Pricing and Purchasing

Before you sign on the dotted line, make sure you've done due diligence on your contract with

the vendor. Double-check the following:

• Is the initial license price per user in line with industry benchmarks?

• Are you paying less, more, or the average annual industry maintenance? If you decide to

stop paying maintenance in the future, does your contact support that?

• If you're purchasing multiple modules at the same time, do you have a clear view of the

cost of each item? Are you sure you should be buying them all now, or would a phased approach

be better?

• What commitment has the vendor made to your deployment time line? If a third party is

involved, how are the deployment risk and responsibility being shared?

Deployment

Piloting a CRM solution can be a great way to judge both whether or not the solution will work

for you and how flexible and agile the solution (and vendor) is in responding to specific needs.

Most hosted solution vendors offer a free or nearly free pilot option today; depending on the

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level of customization and integration needed, a pilot of an internal solution before you buy may

or may not be possible.

Best Practice: Pilot First

One company deploying an ePeople CRM solution used an initial pilot at one location to

evaluate the application and get valuable feedback on how and when the software should be

expanded to other locations.

Even after you've made the commitment, piloting to a select group of users before you complete

customization is a good way to determine whether or not the solution works - and to gain

valuable feedback on how and with what changes the solution should be rolled out to the broader

population.

Best Practice: Phase In Functionality

One company deploying a JD Edwards CRM solution found that while it achieved a positive

ROI, it could have accelerated user adoption and thus shortened its payback period by

introducing functionality to users in phases. A phased approach would have reduced initial

customization costs and the need to train users, who were somewhat overwhelmed by the

features of the solution.

Fine-Tuning Your ROI

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If you've picked the right vendor, planned a deployment with clear milestones, and gotten users

on board, you've probably received 70 percent of the ROI you can expect. The trick to really

successful CRM is continuing to evaluate and evolve your solution to deliver greater value.

You'll also want to keep track of potential upgrade opportunities and take a close look at the

business case - both the benefits of upgrading and the time and pain associated with the upgrade

- before you make a change.

CRM in Business

3.1 Introduction

In this day and age the use of internet sites and specifically e-mail, in particular, are touted as

less expensive communication methods, compared to traditional methods like telephone calls.

This revolutionary type of service can be very helpful, but it is completely useless if you are

having trouble reaching your customers. It has been determined by some major companies that

the majority of clients trust other means of communication, like telephone, more than they trust

e-mail. Clients, however, are not the ones to blame because it is often the manner of connecting

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with consumers on a personal level making them feel as though they are cherished as customers.

It is up to the companies to focus on reaching every customer and developing a relationship.

CRM software can run your entire business. From prospect and client contact tools to billing

history and bulk email management. The CRM system allows you to maintain all customer

records in one centralized location that is accessible to your entire organization through

password administration. Front office systems are set up to collect data from the customers for

processing into the data warehouse. The data warehouse is a back office system used to fulfill

and support customer orders. All customer information is stored in the data warehouse. Back

office CRM makes it possible for a company to follow sales, orders, and cancellations. Special

regressions of this data can be very beneficial for the marketing division of a firm.

CRM Software: A key to scalability and efficiency

CRM Software provides added strength to your existing plan. CRM software is not a "cure-

all" for the CRM program in your business. Successful launch of a CRM software campaign

requires a strong CRM plan for your business, with complete objectives and clear priorities.

CRM software can offer incredible accuracy, track-ability and detailed follow-up capabilities.

How do you choose CRM Software?

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 Does the emphasis of the CRM software package match the emphasis of your CRM

objectives? Identify your specific objectives and verify your CRM software can meet those

needs.

 Is your software user friendly? If you can't effectively use the software why use it? CRM

software training is usually available by contacting the vendor and asking for recommended

referrals.

 How do other companies feel about the software? Call the provider company and ask for a

number of preferrals, (preferably three or four companies in similar size and scope).

What are some key components of CRM software?

History and Trend Management

 History Tracking - get instant perspective into all customer interactions

 Trend Management- see the status of all pending sales and potential revenue of entire

pipeline

CRM Software Automated Processes

 Remote Web Synchronization- automatically follow-up with leads generated from your site

 Automated Process Management - allows consistent communication with customer based on

user-defined criteria

CRM software Data-base Information

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 Centralized Information - centralize, manage and simplify access to critical business

information

 Industry Templates and Form s- allows access to a database of industry specific CRM forms

CRM Software Sales and Marketing Analysis

 Sales & Quota Analyses - view forecasted sales, closed sales, and comparisons between sales

and quota

 Leads Analysis - track responses to identify effective campaigns

CRM Software Mobil Technology Capabilities

 Synchronization Wizard - keep calendar and contact information up-to-date on your PDA or

laptop while you travel

 Remote Access Capabilities - access your CRM software through the internet.

Not all CRM software packages are the same. They will greatly range in price and capabilities.

CRM Advisor suggests a thorough evaluation is done comparing multiple CRM software

packages.

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Analytic CRM

Analytic CRM for Retailers: An ROI Perspective

The Retailers Data Challenge

Today’s retail environment includes increased competition among stores, a general economic

downturn, rising interest rates and higher gas and heating oil prices. All of these factors have

reduced the disposable income available to many retailers, core customers. In this economic

environment, retailers must learn to generate more business from their existing customers. To do

this they must first mine the data they have collected on customer purchases and loyalty

programs. Still, retailers are drowning in customer data.

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 Critical customer information is inaccessible and underutilized.

 More decision-makers need more access to consistent corporate data about their customers.

 Loyalty program, POS, and demographic databases exist, yet are not integrated within a retail

corporation.

 Merchandisers and direct marketers lack expertise in the standard analysis applications sold

by business intelligence vendors today.

 Current retail data analysis systems require heavy IT resources to maintain and utilize.

According to The Marriage of Category Management & Customer Management, written by Gary

Robins and published in RIS, July 1999, .Category Management and promotion management

need to include analyses of loyal customers. Failure to consider the effects on loyal customers’

means resources spent on category management and promotion might be and probably is in

some or many cases harming your business. Combining category and loyalty data analysis has

been done before, but with great difficulty. The biggest hurdle now is getting robust, fast

databases to handle the huge amount of integrated data.

CustomerView was designed to address these retail data challenges. CustomerView supports the

retailers. Top marketing objectives to solve these problems:

Reward loyal shoppers and get them to buy more

 According to Robert Blattberg, director of the Center for Retail Management at

Northeastern.s Kellogg Graduate School of Business, a study of a chain drug retailer showed a

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30%/70% split, meaning the top 30% of their customers generated 70% of their revenues. It also

revealed which categories were more important to top and bottom level customers.

 In another example, a small regional chain with seven stores targeted 18,000 of their best

customers based on recency and overall dollar amount spent. Of the 18,000 customers mailed,

921 responded, generating a 5.1% response rate. Total revenue brought in from this particular

promotion was in excess of $227,000 generating more than $22 for every dollar spent on the

promotion. The events average transaction was $24744 an almost $50 increase from their

normal average transaction.

Target top switchers

 If your firm is not the lowest cost producer in the category and your switchers are price

sensitive, the best marketing strategy for addressing price-sensitive purchasers is to attempt to

change their preference structure by raising their awareness of, and preference for, specific

brand/product attributes, whether they are tangible or intangible. Then try to persuade these Price

Sensitive Purchasers that your offering has the better value, all things considered. The goal is to

increase sales and market baskets of top switchers.

Optimize trade areas and improve assortments store-by-store

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 A leading supermarket chain recently used data from loyalty programs to edit which products

to delist in a category. .It is not just sales, it is how it is affecting loyal customers,. was the

mantra from the chain. In a test of the carbonated beverage category, the chain did not lose

customers even after eliminating 26% of the category.s SKUs.

Cross-sell the most profitable products and increase the average basket size

 A leading beverage company, which has been working with over 40 retailers, says that use of

loyalty data does help retailers increase basket size. According to a senior category manager,

.we did a presentation with a small chain in Houston, Texas, and this company had a 6.5%

increase in dollars per basket and a 9.8% gain in total dollars among their best shoppers.

Maximize ROI for programs funded with manufacturer co-op funds

 A national retailer recently completed a targeted promotion with a leading CPG company.

350,000 pieces were mailed bringing the retailer an additional $124,000 of co-op dollars. The

piece featured 10 different products, received 16.4% response rate, and the market basket of the

responders was 40% greater than the non-responders.

4.2 Who can benefit by using CustomerView?

CustomerView is targeted at five key audiences within the retailer’s organization:

Financial

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CustomerView enables retailers to take existing customer data and use it to drive revenue,

increase market basket size, and build market share with no additional capital expenses and labor

costs. It enables the CFO to show increased margins on current capital and enables profitable

growth.

Merchandisers

CustomerView enables merchandisers to improve the effectiveness of their staff. Using

CustomerView, merchandisers can quickly see how certain products can increase market basket

size. Using CustomerView they can see how merchandise mix affects customer loyalty and

adjust their assortment accordingly. CustomerView can help merchandisers measure and build

retention. It can show market basket value of loyal vs. non-loyal customers. CustomerView can

quickly help identify the value of a

consumer that shops in critical categories vs. the shopper that does not.

Operators

CustomerView can help Operations Executives make changes in an intelligent way. Using

CustomerView a retailer can keep labor constant while increasing margins. CustomerView can

help increase the depth of category purchases by turning cherry pickers into buyers, increasing a

loyal customers shopping trips to a category and increasing overall market basket size.

Consultants

Loyalty and POS databases tend to be stand-alone systems not integrated with category

management systems. Most data is uncleansed and hosted in many locations. This leads to

many opportunities for consultants to create systems to clean the data, aggregate the data, de-

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duplicate the data, household the data, etc. before the data enters the CustomerView system.

There are also many opportunities for consultants to use CustomerView to help the retailers

interpret, translate, and develop strategies based on the information and provide business practice

recommendations.

Vendors

CustomerView can help CPG manufacturers build category/brand sales by using real retail data.

CustomerView can help them build their share of market by identifying customers buying a

particular category of products, but not their brands. CustomerView can show the CPG

manufacturer how to increase multi-segment sales by identifying likely purchase behavior across

divisions, departments or categories.

4.3 Optimizing Customer Interactions and Marketing Analytics

Customer conversations and new analytical marketing techniques make dynamic customer

relationship optimization a new top priority. Business competence comes down to a

company’s ability to generate value by using meaningful propositions, relevant interactions,

messaging, information, and conversations that customers find compelling. The most important

thing that CRM can do for you today and tomorrow is help you create effective conversations

that are crafted with credible, holistic intelligence and delivered to the right customer on the right

channel at the right time. Businesses need to create economic value, which requires

understanding customers and then engaging them with value propositions. The single most

important event that happens in business is a customer conversation. The conversation is where

economic value begins – revenues, activity, paychecks, and shareholder value. Every company

should make the composition of those “value props” its highest priority. But are they doing so?

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How well do businesses create conversations? How much do firms optimize opportunities? What

are some of the best firms driving new customer value? This latest management challenge is

being addressed by the best of- breed CRM analytical tools that provide marketers with the

intelligence to understand customers so that value propositions are relevant and arrive at the most

opportune time for the customer. The new analytics provide capabilities for companies that wish

to make it a business priority to create uniquely effective value propositions. The interesting

thing is that customers expect it. Yes, customers expect you to know them – and to treat them as

persons and remember every contact and transaction they’ve ever made. This idea has been in

existence for a decade, since database marketing began to grow in popularity and use. B2B or

B2C or B2B2C buyers now instinctively believe that their providers should know them.

“Initially flattered by being treated less as a number and more as an individual with distinct

requirements, consumers are now communicating their demands back to their suppliers. Where

once they would not consider the idea of bargaining, they now tell the managers of brand retail

chains what they are prepared to pay and specify how they want products sourced, designed,

styled, combined, assembled, delivered, and maintained.”

Accelerating Customer Relationships, Swift As Internet communities of practice have grown,

people have become more vocal about what they expect from providers in many consumer

serving industries. More than two years ago, the book The Cluetrain Manifesto: The End of

Business as Usual discussed the new realities of value propositioning and marketing techniques

for the new millennium.

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Here are the pertinent highlights:

• Marketing is really various types of interaction or conversations.

• Technology is enabling conversations among human beings that were not possible in the era

of mass media.

• These networked conversations are enabling powerful new forms of social organization and

knowledge exchange.

• As a result, markets are getting smarter, more informed, and more organized.

• Already, companies that speak in the language of the pitch are no longer speaking to anyone.

• Companies can now communicate with their markets directly.

If they blow it, it could be their last chance. The opportunities for companies that leverage CRM

to interactively communicate with relevance and timeliness are enormous. Yet intelligence from

across the enterprise is required to understand and predict what customers will want to know

about and demand. The potential to generate dramatic ROI on such an investment is worth five

to 10 to 100 times the investment.

“Focusing on and predicting customer demand and making decisions both proactively and

scientifically is an opportunity worth hundreds of millions, if not billions, of dollars of

incremental revenue… starting with segmentation and improved forecasting, then shifting to

integration and alignment of functions based on demand, and finally reaching optimization,

which is the application of advanced mathematics to dramatically improve decisions.”

4.4 Manage Your Value Propositions to Better Manage Your Brand and Your Business

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A value proposition may be articulated in text on a Web site, catalog, or direct mail piece, or in a

telephone conversation. This is where brand differentiation first appears: the proposition is the

first impression of the brand and its value to customers. Thus it is critical in initiating

conversations, transactions, and relationships. But a value proposition is so much more than a

message. The value proposition drives the organization’s core logic for creating value.

Although it’s true that value propositions will naturally evolve over time as markets and

competitive conditions change, the competitive advantage belongs to companies that can

proactively and quickly adapt their value propositions for optimal business results. Professor Ari

Ginsberg of New York University’s Stern School of Business insists that companies can better

invent and reinvent value propositions by analytical means that center on customer behavior, in

his words, “analyzing dimensions of value.” It is specifically in this area – exploring dimensions

of value – that customer analytics can make an enormous difference in understanding customers

well enough to generate more effective value propositions.

For managing value propositions effectively, companies need to first understand what customers

value – by using analytical tools integrated with marketing automation systems for creating and

acting on customer intelligence. And to take this a step further, the analytics and automation are

best supported by an enterprise view of the business and customers, driven in real-time for

capturing, managing, and delivering data to marketers and analysts for decisioning.

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Market Automation

Marketing Automation - The CRM Vendor Solutions

The components offered in a front- office application suite fall into three general categories:

 Customer Service and Support: These applications automate the service and support

functions, including analytics, and they provide workflow engines that facilitate efficient

problem and inquiry escalation, tracking and resolution. They provide customizable, dynamic

scripting capabilities for the customer service representatives as well as the capability to record

customer responses in a shared contact repository. In a call center environment, they also

integrate with (or provide) computer telephony integration (CTI) capabilities that allow

automatic call routing and automatic screen pop-ups containing customer and product

information to agents' workstations as they are answering or initiating calls.

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 Sales Force Automation: These are tools that automate the collection and distribution of all

types of sales information. They allow for the design of sales teams based on defined criteria.

Calendar management, activity management, sales reporting and forecasting, lead distribution,

and tracking sales contacts with customers and prospects are some of the myriad of capabilities

offered within these solutions. Many also provide access to internal and competitive product

information as well as the automated collection and distribution over the Internet of relevant

external information such as breaking industry news and customer-specific events. Sophisticated

pricing and product configuration engines and third-party channel management capabilities are

also available.

 Marketing Automation: These applications provide the ability to create automated

marketing campaigns and track the results. Generating lists of customers to receive mailings or

telemarketing calls, scheduling automatic or manual follow-up activities and receiving third-

party lists for incorporation into the campaigns are all typical functions. Internet personalization

tools are offered here to track behavior on a Web site and allow tailoring of the contact

experience, or generation of specific cross-selling opportunities, based on this behavior. Inbound

and outbound e-mail management capabilities are also becoming popular components of the

marketing automation suites.

Let's take a closer look at the marketing automation component because it has been positioned as

the solution for all CRM analytics.

Campaign Management

Segmenting customers, generating targeted marketing campaigns for these segments and

tracking results are important parts of CRM analysis. Integrated MA tools provide these

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capabilities and provide campaign offers and results directly to the customer sales and support

processes. Incorporating offers and solicitations into the common contact repository and

prompting contact agents to follow-up on campaigns can yield dramatic benefits. Some of the

features provided are:

 Planning marketing activities and developing campaign hierarchies.

 Outlining marketing campaign objectives.

 Defining campaign success measurements.

 Coordinating multiple channels and event triggers to automate response actions.

 Building and testing sample campaigns on a subset of customers.

 Storing and reusing content from previous marketing campaigns.

 Measuring campaign effectiveness by linking directly to call center, front-line employees and

sales force.

 Importing third-party target lists.

 Tracking fulfillments supplied to the client via each channel to avoid duplication and

maximize effectiveness.

 Tracking customer inquiries related directly to campaigns.

 Tracking sales force closures related directly to campaigns.

Internet Personalization

Personalization is the ability to track and respond to customers in an individualized fashion based

upon their past contacts and behavior. The true value of personalization in CRM is when it

extends beyond the Internet to encompass all customer contacts across the organization. By

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integrating personalization into the front-office applications, every contact with your customers

can be well planned and personalized. This is a good example of the acceleration of analytics

into action. Features of personalization tools include:

 Collecting information on Internet site visits.

 Addressing customers who visit the site by name and remembering their preferences.

 Allowing visitors to customize content to suit their purposes.

 Showing customers specific content based on who they are and past behaviors.

 Offering specific products (on the Internet or over the phone) based on past behaviors.

 Allowing for the possibility of self-adjusting campaigns and offerings based on customer

behavior.

 Integrating technologies and techniques for optimal customer understanding based on

transaction history, demographic analysis and collected information.

E-Mail Management

E-mail management capabilities are used in two ways in MA - inbound and outbound. Inbound

e-mail management capabilities assist organizations in handling inbound inquiries from

customers. While on the surface this would seem to be a purely service-oriented activity,

organizations are linking these facilities to their personalization technologies and thus tuning the

resulting communications on the basis of CRM analytics. Benefits of this can be quite high as it

offers a chance to extend personalization techniques to multiple communication types. Outbound

e-mail management capabilities provide the ability to construct and execute permission-based

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marketing campaigns (where the dialog has been started with a customer via e-mail

communications) and are said to be up to 20 percent more successful than traditional direct

marketing at a fraction of the cost. Features include:

 Automation of the targeting and sending of mass e-mails.

 Automation of mass e-mail responses.

 Use of decision engines to parse information from incoming e-mail correspondence.

Closing the Loop - Adopting an Architected Solution

Now that we understand the CRM analytic capabilities offered with MA solutions, what's the

catch? When MA modules are implemented as an integrated, open part of an enterprise business

intelligence environment, there may be no catch. The catch is the temptation to implement these

front-office product suites and bypass the enterprise as a whole and the data warehouse

specifically. While this automates certain types of marketing activities and integrates these

activities to the front line, it lacks the depth, breadth and share ability of an architected data

warehouse solution. The organization is deprived of the more sophisticated forms of CRM

analytics, forming yet another departmental silo of analysis, furthering the very data mart chaos

and inconsistency that the data warehouse is designed to prevent.

Let's examine the Corporate Information Factory (CIF) architecture to determine where the MA

integration points should be. Figure 1 illustrates the CIF. As stated earlier, the CIF provides a

high-level technology road map for organizations wishing to develop CRM initiatives. The CIF

is a logical architecture whose purpose is to provide a framework for implementing integrated

technology across all areas, all departments and all functions of an organization. Building a

framework such as the CIF enables organizations to share customer information freely and

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distribute analytical results to all individuals in the organization that need them. The CIF consists

of three primary types of CRM systems

Business Operations are the core operational systems (billing systems, product or policy

systems, call center and sales force automation systems, etc.) that run the day-to-day business

processes in an organization. Information originates in these systems and flows through a data

acquisition process into the rest of the CIF where it is consolidated and integrated for strategic

and tactical decision making. Front-office solutions generally reside here as they facilitate the

day-to-day sales and service processes.

Business Intelligence provides the capabilities required for the strategic decision making in the

organization. Business intelligence consists of the data warehouse, data marts and associated

analysis tools, and can provide the technology infrastructure and information necessary to

manage the complex relationships and analytics required to understand CRM interactions.

Properly architected, the MA components of the front-office applications would reside here.

Business Management enables organizations to act on the analytical results generated within

business intelligence. Business management consists of the operational data store (ODS) and its

associated transaction interfaces as well as the associated oper marts. Business management

systems are subject-oriented, integrated, current-valued and supply a single point of access for

information across the enterprise. An enterprise customer profiling system is a good example of

a CRM business management function.

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The primary integration point for the MA components is the data warehouse contained in the

business intelligence environment. The data warehouse is defined as a subject-oriented,

integrated, time-variant, cleansed and non-volatile collection of data for strategic analysis. You

can think of it as a big bucket of generic, detailed, enterprise-wide, static and historical data. The

data warehouse can serve as the source of data for data marts and for the MA components (which

are actually just another set of souped-up data marts). Unlike the data marts or MA components,

the data in the data warehouse is not set up for a particular application or department.

The data warehouse consists of standardized, consistent pieces of data. By constructing the data

warehouse in the most generic and flexible way possible, you can build just about any data mart

for CRM analysis. You are only limited by your technology and the data that you can acquire

from your operational systems.

 The data warehouse reflects the enterprise's view of data in terms of business rules and

strategic requirements. Because the data in the warehouse is to be used for multiple CRM

analytical purposes spanning multiple departments, it must accommodate and reinforce the

enterprise's vision of its CRM initiative.

 It is optimized for flexibility. The data must not display a bias or prejudice toward any one

kind of analytical processing. For example, if the data warehouse is designed using a data model

that is prejudiced toward known data relationships or certain business processes, then analytical

activities that search for unknown relationships are compromised or, in effect, eliminated.

 It provides detailed data for subsequent use by the data marts. Because the data warehouse

must be the source for data marts containing aggregated and summarized data, exploration

warehouses containing detailed data, data mining warehouses containing statistical samples of

data and MA components which fall somewhere in between in terms of detail and history

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required, it must contain the proper level of detailed data to satisfy these very diverse

requirements. The goal is for the data warehouse to have the "least common denominator" level

of data for the data marts and the MA components. It must serve star schemas, cubes and flat

files for statistical analyses, and subsets of data for ad hoc querying.

The Information Feedback loop, running across the top of Figure 1, is the other key component

of the CIF for integrating MA components. This is the set of processes that transmit the

intelligence gained through usage of the strategic CIF components to appropriate data stores.

This is the mechanism by which we push BI "out to the masses." It is also the mechanism by

which we allow the MA components to receive information from the data warehouse and to feed

information back into the data warehouse or on to the operational systems or ODS.

Examples abound of storing the results of BI analyses in operational systems such as the front-

line applications. One such example is to store the results of a customer lifetime value (LTV)

analysis - that is, the actual score given to each customer based on their calculated LTV to the

enterprise. The numerical values generated from such an analysis can be stored in the front-

office system and accessed by the MA components during the generation of campaigns or scripts

for call center agents. Behavior toward each customer is altered based on the knowledge of the

customer's LTV score. Higher valued customers may receive different campaign solicitations

than those with a lower score.

Conversely, the solicitations generated by the MA components should also be transported via

Information Feedback into the data warehouse. This allows all analytic applications in the

organization to take advantage of the valuable information generated by MA components.

Beware of vendor sales pitches that contain phrases such as "our MA module can drive your

entire marketing process," or "MA provides a direct link between CRM analytics and your

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customer contact points." While the capabilities embodied in the MA modules do provide

significant value, they do not provide sufficient sophisticated analysis capabilities to be your sole

vehicle for all CRM analytics. Instead, bypass the hype, implement MA capabilities that make

sense for your organization and ensure that MA modules use the information feedback

mechanism to feed information to and receive information from the data warehouse or

operational systems. Staying true to an architecture such as the CIF will provide you with the

guidelines necessary to build the integrated customer information environment required to drive

your CRM strategies.

5.3 New Customer Management Tools For Higher IQ and Peak Business Results

To create a sustainable competitive advantage through CRM or customer management and

marketing processes, a business must master leading-edge intelligence tools that raise its

organizational IQ (intelligence quality) to peak levels. Fully-informed business decisions, fully-

informed tactics, and relevant, right-time value propositions to individual customers – require an

integrated infrastructure that can capture, analyze, and optimize information from across the

extended enterprise including all customer channels – with increasing speed and synchronicity.

The best value propositions will be created when a business has the CRM tools to do the

following:

• Understand the economics of your customer relationships both today and in terms of

individual lifetime value – to better anticipate the migration of customer assets over time;

• Improve your ability to evaluate and use every customer interaction as actionable

marketing opportunities with rules driven lead management tools;

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• Cultivate highly relevant and profitable dialogues with customers across all channels,

including the e-channel, for better strategic brand and customer equity management;

• Align business resources and customer communications for effective tactical process

execution that balances customer expectations and company objectives;

• Master sophisticated multistep and event-based marketing and know when your customers

are most receptive to offers and messages;

• Intelligently manage the e-channel to drive revenue growth across all channels; and

• Leverage the full power of a real-time, enterprise-wide data warehouse.

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CRM Initiative

Implementing a CRM Initiative

According to the surveys, through the year 2004 only 35% of businesses will accurately forecast

the implementation cost and ROI projections before initializing a CRM strategy, and less than

20% will stick to the guidelines and initiative plans they’ve established without veering off the

designated course to an unsuccessful destination. This is an avoidable situation that mainly

illustrates the infant growing pains many companies have when trying to wrap their arms around

any new business strategy. Inexperience with such an important, yet often difficult, strategy

comes from it being a young and untested initiative. If a business has done their homework and

intelligently forecasted the resources needed to fulfill a CRM initiative, the pains and pitfalls

currently being experienced will lessen and the benefits will increase.

Initializing a CRM campaign and carrying it out for the long haul is a project that involves hands

from throughout a business, from customer support personnel, to IT professionals, to obvious

key individuals like CRM project managers. From the person taking incoming phone calls and

providing accurate service to the caller, to the database-analyzing software that efficiently and

smoothly manages and processes customer data, to the front-end Web site that is tailored to

individual customers through such things as preferred language and topics of interest, every facet

needs to work in conjunction. Being able to touch all points of customer interaction requires a

comprehensive set of software that is effective and comprehensive. An intelligent database

system that can support and store many users and their information is critical. This makes

customer management very streamlined and easier. Additionally, the ability to instigate highly

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specific queries that result in rich, pinpoint demographic information is also an invaluable part of

any CRM implementation. The cost of re-gearing a business to be customer-centric depends on

each case and can only be calculated with that in mind. There is no universal equation in which

to plug numbers or “general” projection figures that can be applied across the board. Fact is,

CRM initiatives are company-wide endeavors and become more elastic and abstract because of

this. Consequently, assessing costs is not as simple as checking the price tags on CRM software.

Predicting costs must be done through a unique look at every case.

In the end, the result of a successful CRM campaign will eventually minimize costs, such as the

high price of luring and enticing new customers, and won’t break the bank of any company. In

fact, businesses will see an extremely healthy increase in profits while their costs will level off

to a very manageable point if they’ve succeeded in their CRM goal.

6.2 Seven Steps to Managing Your CRM Initiative

1. Business analysis: Focus on your customer data-collection process

The first step in your CRM project should be business analysis. Take a step back and look at the

areas of your firm that deal with customer data (most of your firm, probably). How well are you

handling data right now? Are you collecting all the data you want from your clients or would you

like to collect more? Is this information accessible by all those who need it? Do you ever have to

reenter information as the client moves from Marketing & Sales through to Time & Billing?

2. Needs analysis: Make a list of your customers' needs

As you ask yourself these and other questions, make a list of your customers' needs. Start with

the absolute essentials at the top. Examples of these needs may include collecting certain types of

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information, a centralized database, scalability, and capability to access the system remotely. An

important note to remember—this list should include all your essential needs, even the needs met

by your current system. As you work through your list of essentials, begin to add nice to haves.

These are needs that you would like to meet but are not critical to the success of your CRM

system. Make sure your whole project team contributes to this list—you won't think of

everything on your own.

3. Product evaluation: Compare vendors and products

After you have your list of needs compiled, you can start comparing vendors and products. As

you are looking at features offered by the different products, try to cross the critical needs off

your list first before you look at nice to haves. There will undoubtedly be products that meet a lot

of your nice to haves, but are lacking in one or more critical needs. Critical needs must be met so

that the time, money, and ideas given to the CRM project do not change systems for the sake of

change. When you are making your project plan, allow plenty time for this phase. It is very

important not to rush through your evaluation. Take your time, view lots of demos, and ask lots

of questions.

4. Product configuration: Make the system fit your firm

No matter what product you choose, there will most likely be some configuration that needs to

be done to make the system fit your firm. Treat this as a subproject with its own project plan that

includes timelines and milestones. Many products are highly customizable at the front end, but

far less so when they are implemented. Don't get poor results because you sped through this step.

Customization may not be all at the software end; you may have to do some process

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reengineering in your firm, as well. Remember to document everything. Make a user's manual

for the software, and a process manual with flowcharts for the business processes.

5. Pilot implementation: Roll out a small pilot to marketing first

After you have customized the system to your specifications, roll it out in a small, pilot

environment. Start with your Marketing users; they will use the software heavily and will be able

to provide you with some high-quality feedback. Keep it in a small group until you have the

system customized the way you want it. When you have reached that point, roll it out to all users.

6. Full implementation: Communicate with users to explain the change

As you roll the system out to all users, this will be a significant change for most of your users. In

addition to learning a new software interface, many users will be faced with entire new business

processes. The biggest factor here is communication. Make sure your users understand why this

change is taking place; don't just mandate the change. Use training sessions and documentation

to assist the users with the new system.

7. Evaluation: Follow-through for a successful implementation

As more and more firms are implementing CRM systems, plenty of success stories are emerging.

The firms that experience successful implementations have a plan from the beginning and follow

it through to the end. Failed implementations often are the result of choosing a product that does

not meet the firm’s needs or poor communications between project teams and end-users. Follow

these 7 steps to managing your CRM initiative for a successful CRM implementation experience.

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RESEARCH

METHODOLOGY

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RESEARCH METHODOLOGY

The method used for data collection is Survey Research, which is Exploratory in nature.

1.4 DATA COLLECTION PROCEDURE:

Sampling Method

Universe: Lucknow

Size Of Sample: 100 respondents

Basis of Sampling: Convenient Sampling and judgmental sampling

Data sources:

Primary Data : The information was obtained by means of the following tools for data collection:

 Interview Schedule

 Structured Questionnaires

Secondary Data: Relevant data collected from:

a. Journals and Business Magazines.

b. Text books

c. World Wide Web

d. Company Brochures, pamphlets etc.

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CRM AT MAHINDRA TRACTOR

ANALYSIS AND FINDINGS FROM THE CUSTOMER CARE DEPARTMENT

On talking to the employees of the customer care department the following things were found

out:

 MAHINDRA TRACTOR started its CRM programs in May2002.

 The main objectives of CRM are as follows:

 Personalized and customized service.

 Regular updates.

 Track of regular interactions.

 The major CRM strategy is increased customers through increased Customer

Satisfaction.

 The company is making use of e-CRM for customer satisfaction.

 A special database of customers is maintained and this database is updated weekly.

 The customers are divided into different segments on the basis of the amount of billing

received from them.

 The four categories of customers are:

 Corporates-These include the top 200 Corporates, which form about 40% of the

segment of the client base.

 Enterprise- These are the customers from the enterprise.

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 VIP’s- These include the top-notch people, the ministers, actors and other famous

people.

 Club- These include all the general customers other than those included in the

corporates and the High profile customers with whom around 60% of the business

is done.

 The customer care cell has been divided into four departments:

 Hotline- This department handles the start-up customers.

 Care Touch- This department takes care of the Corporates and Executive Class

for maintaining Customer Relationships.

 Retention- This department takes care of the churn and takes special care to

retain the existing customers.

 Outbound- This department takes care of the back-end processing.

 The CRM is implemented through the customer Care Executives. There are around 100

Customer Care Executives at MAHINDRA TRACTOR.

 The effectiveness of CRM is measured through CSMM (Customer Satisfaction

Management and Measurement), an external research agency, IMRB has been given the

task of doing this.

 Special Loyalty Programs and incentive schemes are designed for the privileged and the

regular customers. Initially these programs were for the Upper Base of Customers,

Usually the one’s from whom the billing was of more than Rs. 1500 but now these are for

all the customers. One of the recent CRM programs includes “Rewarding Relationships”.

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 There is a special complaint handling system, The Customer Help and the response time

for handling these complaints varies depending on the nature of the complaint. The

maximum time that can be spent on handling a complaint is 10 days.

 Regular suggestions and feedback is incorporated in their service offering. The people

from the Retention Department call up the customers from time to time to find out their

view points.

 A special Training is given to the employees at the time of induction.

 Also a 4-5 Day training is given to these people on using the e-CRM systems.

 As a result of the CRM initiatives taken by MAHINDRA TRACTOR Net Churn has

gone down to 3782 people in January ‘2003 from 15,000 people in October ‘2002.

 Today MAHINDRA TRACTOR has 20 Customer Care Touch points called "Connects"

and over 350 dealers in LUCKNOWand NCR towns

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ANALYSIS OF

CUSTOMER SURVEYS

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ANALYSIS OF CUSTOMER SURVEYS

Q 1. MAHINDRA TRACTOR gives you prompt services.

70

60
60

50

40

30

20
20

10 10
10

0
Disagree Can't Say Agree Strongly Agree

Figure: 5: Prompt Services

Analysis:

On the basis of the responses obtained from the people it was found that 60% of the

respondents agree that MAHINDRA TRACTOR gives prompt services and 20% strongly agree

on this point thus indicating that in terms of service delivery, MAHINDRA TRACTOR has a

high rating. There are some people i.e only 10% who disagree on this and 10% responded by not

saying anything on this aspect.

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Q 2. Employees at MAHINDRA TRACTOR are always willing to help you.

80
75

70

60

50

40

30

20

10 10
10
5

0
Disagree Can't Say Agree Strongly Agree

Figure: 6: Employees willingness to help

Analysis:

75% of the respondents agree that Employees at MAHINDRA TRACTOR are always willing to

help the customers and 10% strongly agree to this point. Only a 5% of respondents disagree on

this point and 10% people did no want to say anything on this particular aspect. Thus, we can say

that the employees at MAHINDRA TRACTOR are willing to help the people indicating the

responsiveness of the company.

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Q 3. Your queries and complaints are handled immediately by the Customer Care

Department.

70

60
60

50

40

30

20
15
13 12
10

0
Disagree Can't Say Agree Strongly Agree

Figure: 7:Immediate handling of queries and complaints

Analysis:

About 60% of the respondents agree that the customer care department handles their complaints

immediately. 15% of the people strongly agree on this point. 12% of the respondents can’t say

anything on this aspect as they did not feel the need to complain and only 13% of the

respondents disagree on this point, probably due to some kind of delay in their complaint being

handled. Thus we can say that MAHINDRA TRACTOR people are responsive enough and make

attempts to handle the complaints on time.

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Q 4. MAHINDRA TRACTOR provides its services at the time it promises to do so

90
84

80

70

60

50

40

30

20

10
10 6

0
Disagree Can't Say Agree

Figure: 8: On time services

Analysis:

About 84% of the respondents feel that MAHINDRA TRACTOR delivers the services at the

time it promises to do so. Around 6% of them disagree on this particular aspect and only a 10%

were not sure as to what could be said abut this. Thus, we can say that MAHINDRA TRACTOR

is a reliable service provider and provides the services at the time it promises to do so.

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Q 5. MAHINDRA TRACTOR keeps its customers informed about all its services and how

they will be delivered.

90

80 78

70

60

50

40

30
22
20

10

0
Agree Strongly Agree

Figure: 9: Keeping customers informed

Analysis:

On the basis of the responses received, it was found that 22% of the people strongly agree that

MAHINDRA TRACTOR keeps its customers well informed about the services it offers and 78%

of the people agree to this point. There were no respondents who disagree on this aspect. Most of

the people feel that MAHINDRA TRACTOR has very good advertising and also MAHINDRA

TRACTOR makes people aware of all its services from time to time by means of giving them

regular calls also.

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Q 6. When you have a problem, the company shows a sincere interest in solving it.

90

80
80

70

60

50

40

30

20
20

10

0
Agree Strongly Agree

Figure: 10: Company’s interests in solving problem

Analysis:

On the basis of the responses, it was found that 80% of the respondents agree that the company

shows a sincere interest in solving their problems and 20% strongly agree to this point. There

were no respondents to disagree on this aspect thus indicating that the company is highly

responsive and empathetic towards its customers

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Q.7 MAHINDRA TRACTOR gives you individual attention.

70

60 58

50

40

30
30

20
12
10

0
Can't Say Agree Strongly Agree

Figure: 11: Individual attention

Analysis:

On being asked about whether the company gives individual attention to its customers, we see

that about 58% of the people were not in a position to say anything on this particular aspect. 30%

of the people agree to this point and 12% strong agree. Thus, we can say that most of the people

either did not feel the need for individual attention or are not aware of it. But, nobody wanted to

disagree on this aspect.

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Q 9. The web site of MAHINDRA TRACTOR is interactive and user-friendly

60
56

50

40

32
30

20

12
10

0
Can't Say Agree Strongly Agree

Figure: 13: Interactivity of MAHINDRA TRACTOR’s website

Analysis:

Around 56% of the people did not feel the need to visit the website of MAHINDRA TRACTOR

so they could not say any thing about how interactive it was. There were 32 % respondents who

felt agreed to it and 12% who strongly agree with this.

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Q 11. You feel that the employees at MAHINDRA TRACTOR are courteous with you.

60
55

50

40

30
24

20
12
9
10

0
Disagree Can't say Agree Strongly Agree

Figure: 15: Courteous employees

Analysis:

55% of the respondents agree to the statement that the employees at MAHINDRA TRACTOR

are courteous and 24% of them strongly agree to it. 12% of the respondents did not say anything

about this whereas a 9% of the people disagree with it. The reason could be some kind of bad

experiences that they had with the employees.

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Q 12. Employees at MAHINDRA TRACTOR have the knowledge to answer your

questions.

80

70 67

60

50

40

30
19
20
14
10

0
Disagree Agree Strongly Agree

Figure: 16: Knowledgeable employees

Analysis:

Talking about the knowledge of the employees in handling customer queries, we can say that

most of the people agree that MAHINDRA TRACTOR has the employees who are trained well

to answer the queries of the customers. 67% of the respondents agree to this and 19% strongly

agree with this. A very few people disagree with this statement. The reasons for this could vary

from individual to individual. Thus, overall we have the expression that the employees are good

and knowledgeable also.

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CONCLUSION

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CONCLUSION

 The initiatives taken by MAHINDRA TRACTOR in CRM have helped MAHINDRA

TRACTOR to achieve a great amount of success.

 On measuring the effectiveness of the services provided by MAHINDRA TRACTOR in

terms of responsiveness, reliability, empathy, assurance and tangibles it was found that the

overall perception about its service quality is quiet high.

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LIMITATIONS

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LIMITATIONS

 The study was limited only to LUCKNOW region due to constraint of time.

 The sample size taken for the study was small as the time allotted for the study was very less .

 Problems were faced in getting the appointments of the employees of MAHINDRA TRACTOR.

 The employees at MAHINDRA TRACTOR were not willing to disclose the details about the

functioning of the CRM database.

 At times the customers using MAHINDRA TRACTOR services were not willing to respond,

hence lots of efforts were made to convince them to fill the questionnaires.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

BOOKS

 Burnett, K. (2001), “Handbook Of Key CRM” Addison Wesley Longman , Delhi.

 Greenberg Paul (2001), “CRM At The Speed Of Light” Tata McGraw Hill Publishing Company,

New Delhi

 Seth Jagdish N & Parvatiyar ( 2002) “Handbook Of Realationship Marketing” , Response Books.

JOURNALS AND ARTICLES:

 Jain Rajnish & Jain Sangeeta , Journal Of Service Research (0ctober ’02- March ’03)

“Measuringb Customer Relationship Management”, pp: 97-107.

 Jaiswal M.P & Sharma Anjali, “The Business And Strategic Need”, e-Commerce (January

2002).

WEB SITE LINKS

 www.CRMassist.com

 www.adaptcrm.com

 www.crmcommunity.com

 www.crmguru.com

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