Introduction to CRM

CRM has been in use since the early 1990s. There have been many attempts to define the domain of
CRM, a number of which appear in the table below.

Apart from that, the meaning of the 3 letter acronym CRM is contested. Many people state that it stands
for Customer Relationship Management, others have used the acronym to refer to Customer
Relationship Marketing.

Apart from this, there also exists ambiguity about what connotes CRM. Information technology
companies tend to use the term to refer to s/w applications that are used to support the marketing, selling
and service functions of business. CRM s/w boom with the commercialization of the same in 1993 when
Tom Siebel founded Siebel systems (now part of Oracle). So the use of the word of CRM to refer to
s/w apps can be traced back to that period. Others with managerial emphasis claim that CRM is a
disciplined approach to developing and maintaining profitable customer relationships, and that
technology may or may not have a role.
This debate between Managerial and Technological schools can be resolved by conceiving of CRM as
taking 3 main forms - Strategic, Operational and Analytical
Strategic CRM – focused upon the development of a customer centric business culture dedicated to
winning and keeping customers by creating and delivering value better than competitors. The behavior
is reflected in leadership behaviors, the design of formal systems of the company and the myths and
stories that are created within the firm – in short customer centric. But customer centricity competes
with other business logics like product orientation – which Apple is known for, or production orientation
eg Big Bazaar’s of the world, or sales orientation – which is more on the lines of product orientation.
Operational CRM
Automates customer – facing business processes. CRM s/w applications enable the marketing, selling
and service functions to be operated and integrated.
Eg:
Marketing automation – campaign management (Sales promotion campaign eg Super markets sending
out sms), Marketing optimization (media mix optimization)
Sales force automation – The original form of Operational CRM. SFA applies technology to the
management of a company’s selling activities. Account management, lead management etc
Service automation – involves the application of technology to customer service operations. Service
automation helps companies to manage their service operations, whether delivered through a call center,
contact center, field service, the Web or face to face with high levels of efficiency, reliability and
effectiveness. Case management, Queuing and routing etc.
Analytical or Analytic CRM
Concerned with capturing, storing, extracting, integrating, processing, interpreting, distribution, using
and reporting customer related data to enhance both customer and company value. Builds on Customer
related information – available in the form of sales data, financial data (payment history, credit source),
marketing data (campaign response, loyalty scheme data) and service data. To these are added data from
geo – demographics and lifestyle.
Eg; a mobile CRM called MyMagic+ at Disneyland. has drastically changed the way Disney world
guests(some 30 million People per Year) do just about everything. The intent of MyMagic+ is to make
the experience of visiting Disney parks less difficult and more reflective of modern customer behavior.
Disney is betting that MyMagic+ will make guests happier and less stressed, so they will spend more
money at company’s park. Advantages:- 1) My Magic+ allows users of new Website and app- called
My Disney Experienceto preselect 3 FastPasses before they leave home. Customers can use this passes
for rides or V.I.P seating for parades, fireworks display etc. 2) With MyMasic+, Disney World has no
turnstiles and guests donot need cash.Guest Magic Bands are enclosed with credit card information so
that they can buy Mickey Mouse ears with the tap of wrist. 3) Smartphone alerts signal when it is time
to ride Space Mountain without standing in line. 4) MagicBands are also encoded with personal details
which allow customers to interact with Disney employees in more personalized manner. 5) Disney
World also use these data to make waiting areas for rides less boring.
Where does Social CRM Fit?

Some common misunderstandings:

• Misunderstanding 1 – CRM is database marketing

• Misunderstanding 2 – CRM is a marketing process

• Misunderstanding 3 – CRM is an IT issue

• Misunderstanding 4 – CRM is about loyalty schemes

• Misunderstanding 5 – CRM can be implemented by any company

CRM Constituencies –

Company implementing CRM

Customers and partners of the above company

Vendors of CRM

Management Consultants

CRM cloud solution providers

Social media players

Vendors of CRM h/w and infrastructure

Models of CRM
The IDIC Model developed by Don Peppers and Martha Rogers of the Peppers & Rogers Group.

Gartner model