MANAGING

CUSTOMER
RELATIONSHIPS
Dr. Vandana Khanna
 Managing Customer Relationships
Sales

Channels

Marketing
Customers

Customer
Service

Customer
Data
Service is the One Differentiator a Business Can Provide its
3/9/2022 Customers. CRM atDr.the Core
Vandana Can Support this Goal.
Khanna
 Managing Customer Relationships
What Does it Entail?
CRM data warehouses customer information and
D historical buying patterns to understand buying
E behavior to provide enhanced services that drive
F revenue
I CRM is a critical component in building customer loyalty
and customer retention strategies
N
CRM is a tool that can drive high-value, loyal returns
I from customers that continue to purchase and do
T business with the company
I CRM provides opportunities for the organization to
O create a competitive differentiation with differentiated
N customer services targeted specific to high-value, long-
term customers
Why is CRM critical to customer loyalty and retention?
3/9/2022 Dr. Vandana Khanna
 Managing Customer Relationships
Challenges and Problems Solved by CRM
Lowers costs of recruiting customers through
S strengthened customer loyalty and retention strategies
O Can focus attention on high-value customers and
L provide preferred and customized services (e.g., high-
U value customers deserve high-value customer service)
T Reduced cost of sales (e.g., push marketing, selling to
I existing customer base, inside sales/telemarketing, etc.)
O Provides the foundation for long-term customer
N profitability
S Increases customer retention and loyalty through
“customized” services
How does CRM Increase Shareholder Value?
3/9/2022 Dr. Vandana Khanna
 Managing Customer Relationships
Who are the Customers? – Customer Types

Business to Business (B2B) – customers who

purchase a product or service and resale a finished
product to other customers or businesses – B2B
process flow
Consumer (B2C) – customers who buy the final
product or service (e.g., individuals, families, etc.) –
B2C process flow
Channel/Distributor – a person or organization that
resells or provides a value-added service around the
product or service for resale and distribution to their
customers and Channels
Internal Customer – a person or business unit within
the organization that requires your product or
service
3/9/2022 Dr. Vandana Khanna
 Managing Customer Relationships
Customer Service as a Competitive Advantage

Routed to
Preferred Agents IM
Who Respond High-Value
Directly Voice
E-Mail Customers
Real-Time
Access to Web Fax
Customer
Data
SMS Video

Chat

Service is the One Differentiator a Business

3/9/2022 Can Use to Build a Competitive
Dr. Vandana Khanna Advantage.
 Managing Customer Relationships
Acquisition, Retention, Customer Lifetime Value

Customer Customer Customer

Acquisition Retention Lifetime Value

The Value of a Customer is Based on the Amount of

Revenue and Purchases that the Customer Makes
over the Lifetime of the Relationship.

3/9/2022 Dr. Vandana Khanna

 Acquisition Vs Retention
Retention Acquisition
Nurturing Relationships Acquiring Potential
Relationships
Internal Analysis Internal Research

Demographic History Demographic Profile

Actual Needs Given Projected Needs Given

Contact Must be Personal Contact can be less personal

3/9/2022 Dr. Vandana Khanna

 Acquisition Vs Retention

Retention Acquisition

Accuracy Required Inaccuracy Tolerated

Other Relationships Given Offers Can Be Event

Relatively High Response Relatively Low Response
Supports Reactivating Supports Assimilation
Synergistic With Acquisition Synergistic with Retention

3/9/2022 Dr. Vandana Khanna

 Six Stage Model of Relationship
Contact

Involvement

Intimacy
Exit
Deterioration

Repair

Dissolution Adapted from DeVito, Joseph A. (1993)

3/9/2022 Dr. Vandana Khanna
 The Three Phases of CRM
Customer
Life Cycle

CRM
Functional
Solutions

CRM
Integrated
Solution

3/9/2022 Dr. Vandana Khanna 8-11

 Customer Life Cycle
Customer Need
Assessment & Acquisition

Customer Retention Customer Development

and referrals for new through personalization
customers and customization

Customer Equity Leverage

through Cross Selling and
Up selling
3/9/2022 Dr. Vandana Khanna
 The Customer Life Cycle
Acquisition Retention Winback
Suspect
Loyal
Prospect Advocate
Repeat
Customer: customer
1st Transaction Inactive
Regular
Customer

Lost
Customer

3/9/2022 Dr. Vandana Khanna

 CRM Process Framework
Management & Governance
Formation Performance
Team Structure
Purpose Role Specification
• Increase Effectiveness
• Improve Efficiency Relationship
Planning Process Performance
• Strategic
Process Alignment • Financial
Programs
• Marketing
• Account Management Monitoring Process • Retention
• Retention Marketing
• Satisfaction
• Co-op Agreements Communication • Loyalty
• Strategic Partnerships
Employee Motivation

Partners Employee Training

• Criteria
• Improve Efficiency Evolution
• Enhancement
3/9/2022 Dr.• Vandana Khanna
improvement
 CRM Process Cycle

Learning
1. KNOWLEDGE
4. ANALYSIS & DISCOVERY
REFINEMENT

2. MARKET
3. CUSTOMER PLANNING
INTERACTION

Action
CRM Process Cycle Links Customer-Centric Data
With a Continuous Learning and Action Cycle.
3/9/2022 Dr. Vandana Khanna
 CRM Process Cycle
Knowledge Discovery: this is the process of
analyzing customer information to identify specific
market opportunities and strategies.
Market Planning: this process defines specific
customer offers, delivery channels, schedules,
dependencies. A market plan or campaign that
drives revenue to existing customers.
Customer Interaction: this process aligns the
customer offers directly to the customer. This is
typically done from the Contact Center or where
Customer Service is performed.
Analysis & Refinement: this process conducts
Q&A and analysis of customer interactions, such that
messages and future dialogue can be refined.
3/9/2022 Dr. Vandana Khanna
Tactical Integration of CRM Process

Interact Connect

Relate Know

3/9/2022 Dr. Vandana Khanna

Tactical Integration of CRM Process

Interact: A series of transactions or interactions

that make up a dialog between the customer and
the organization (e.g., IM Chat messages,
recordings of customer service calls, e-mail dialog,
etc.)
Connect: The mapping and management of
interaction points between the customer and the
organization.

3/9/2022 Dr. Vandana Khanna

Tactical Integration of CRM Process

Know: The insight gained through capture and

analysis of detailed customer information to create
a continuous learning cycle from the data
warehouse.
Relate: The application of insight to create
relevant interactions or communications with
consumers, customers, channels, suppliers, and
partners that build value relationships.

3/9/2022 Dr. Vandana Khanna

 Key Goals and Benefits of CRM
Impacts Top Line Revenue

Value
Customer Customer Cost Drivers
Acquisition Retention Control
(Market share) (Customer share) (Scaling) Increase
shareholder
Value
Obtain More Cost Increase Lower Operational
Retention Ratio Costs
CRM Can be Directly Linked to Measurable Revenue and Lower
3/9/2022 Dr. Vandana Khanna
Costs Associated with Marketing, Sales, Customer Service, etc.
 Key Goals and Benefits of CRM

CRM Can Drive Revenue through creation and

execution of a targeted customer retention strategy
CRM Can Enhance Customer Loyalty by data
mining and creating customized service delivery
capabilities for high-value customers
CRM Can Lower Costs by creating, simplifying,
and targeting smaller marketing plans and
campaigns based on data mining intelligence and
customer buying analyses

3/9/2022 Dr. Vandana Khanna

 Key Goals and Benefits of CRM

CRM Can Provide Real-Time Access to

Customer Data by forcing a mapping and work
flow analysis of customer data and where it goes
and where it resides
CRM is a Critical Component when Delivering
a Customer Service Strategy Customer Service
without CRM is merely that, 1-dimensional

Real-Time Access to Customer Data – Regardless of

its Location must be Retrievable by the CRM
Application.
3/9/2022 Dr. Vandana Khanna
 Integrating CRM
Preferred Customer Service Agents can access CRM
system to gather specific information about the
customer as well as to service the customer’s call in
real-time. Access to customer information in real-
time via the CRM application is critical in order to
provide enhanced customer service and support.
Use of a CRM tool or application is critical to
consolidating customer data and for providing real-
time responsiveness to customer inquiries.
Integration of CRM with process flow and Customer
Service functions is part of the overall solution and
enhancement to Customer Service.

3/9/2022 Dr. Vandana Khanna

 Real-Time Access to Customer Data

Preferred
Manufacturing Call Centre
Database Agents

Customer IVR System

Field
Database
Engineering
Database
Customer Customers
Address Self Serve
CRM Information Website
3/9/2022 Dr. Vandana Khanna