CRM Merged Compressed

Customer Relationship
Management
(CRM)
Part Time MMS Sem V
Session no. 1 (17 July 2021)
Prof M R Koshti
mr.koshti@nldalmia.edu.in
97 69 26 21 06 (Call on WhtsApp if not approachable with normal call)
1
Semester plan
• Session 1 – Introduction, Evaluation process,
Class regulations, Introduction to CRM
• Session 2 - CRM in Marketing
• Session 3 - Strategies to build relationship
• Session 4 - Customer acquisition and retention
• Session 5 - Customer Loyalty X
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….Semester plan
• Session 6 - Customer Satisfaction
• Session 7 - CRM in B2B Marketing
• Session 8 - CRM in Services
• Session 9 – CRM in B2C (Business to
consumer/customer) markets
• Session 10 - Customer life time value, CRM Metrics
• Session 11 – Implementing CRM in an organization
• Sessions 12 to 15 – Case study / Analysis X
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Evaluation (Internal assessment)… 100
Marks
• Written exam …………60
• Attendance …………….10
• Class participation .…10
• Assignment / Case study analysis…. 20
• Total ……………………..100 X
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Today’s topic
Introduction to CRM
1. Class Participation
• If you have many Kirana stores in your
neighbourhood but you buy regularly only
from one shop, why ?
• 23 MM1922-624 Prajapati Asha
• In your organization what do you do to retain
customers?
• 27 MM1922-628 Shah Nimit
• If your organization uses CRM, what is your
experience?
• 31 MM1922-632 Upadhyay Hardik (CP not
done)
• Are you a member of any loyalty programme?
What benefits you enjoy?
• 35 MM1922-636 Thasal Aditya (CP not done)
• What products your organization produces?
Explain the selling process
• 40 MM1922-641 More Swaranjali (CP not
done)
• 43 MM1922-644 Dolas Tejas
• 46 MM1922-648 Poojari Akshay
• 2 MM1922-602 Angre Shweta
Video
• Ordering Pizza
Break
• 5 min
Selling process
• Make a list of the tooth-paste brands you know and put it in the chat box
alphabetically
• (Check chat box)
• GLISTER
• Amway
• Not sold in retail shops
• It is sold by Amway distributors (any body can become one, full time / part
time) on one on one basis
• It is 2-3 times costly than regular brands like Colgate X
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Selling process(Glister tooth paste)
• Suspects (no. of flats in say building no.1) 50 nos.
• Call on each flat to introduce Glister and book date for
demo (5 per day by working part time) …….10 days
• Prospects (No. of flats who showed interest and want to
see demo). 10 nos.
• Hold demo for these 10 flats (2 per day)…..5 days
• Qualified prospects (who liked demo)….5 nos.
• Give price, handle objections, negotiate, get order (Acquire
Customer) ….1 no. x
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Building
s
Bldg
No 1
0 15 30 45 Days
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Building
s
Bldg Bldg
No 1 no. 2
0 15 30 45 Days
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Building
s
Bldg Bldg Bldg

No 1 no. 2 No. 3
0 15 30 45 Days
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Building
s
Usilding
On day 45, just when

you are planning to
Bldg Bldg Bldg
No 1 explore building no. 4,
no. 2 No. 3 you come to know that
toothpaste bought by
customer no. 1 is getting
exhausted in next 4
days.
0 15 30 45 Days
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Building
s
Usilding
Options before you…

1 Go to building no. 4
Bldg Bldg Bldg
No 1 and spend 15 days of
no. 2 No. 3 effort to get 4th
customer
2 Go to customer no. 1
and sell him next tube in
just one call
0 15 30 45 Days
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This is said in all CRM books
• It is 8 to 10 time costlier to
sell to new customer as
compared to selling to an
existing customer. x
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Half True
• It is 8 to 10 time costlier to
sell to new customer as
compared to selling to an
existing customer. x
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Full True
• It is 8 to 10 time costlier to sell to new customer as
compared to selling to an existing customer,
• provided …..
• you have kept him (existing customer) happy in all the
previous encounters (pre-sale, sale, product quality,
product usage, service, complaint handling etc.
)….Touch points X
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CRM definition
• CRM is a management approach that helps in
creating, developing and enhancing relationship
with carefully targeted customers in order to
maximize customer value and long term
profitability for the organization.
• CRM primarily utilizes information technology to
implement relationship – marketing strategies
x
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Organization – Profit maximisation
• Revenue
• Cost (selling cost (To new & existing customers) + Other costs)
• Profit =Revenue-cost
• CRM increases revenue (Selling toothpaste tube in 1 call rather than 15 days)
• CRM reduces which costs?
• Some of them are…….
• Selling cost as you sell mostly to existing customers
• Promotion cost as it is precisely targeted and not carpet bombing
• Inventory carrying costs as you know when customer will require the products
• Obsolescence costs as you produce what customer wants and not which will not
sell at all X
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Evolution of CRM
• In practice CRM originated in industrial and business to business
markets where customers were a few and long term contracts were
quite common
• Merchants and traders have ben practicing customer relationship
for centuries, for the same reasons
• Their business was built on mutual trust
• They could customise the products and aspects of delivery and
payment to suit the requirements of their customers
• They knew their customers’ tastes, preferences, need and want
• They had a personal and emotional connection with
customers……..x
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Evolution of CRM….
• These relationship practices changed with industrial
revolution.
• New entities entered (distributors, wholesalers, retailers,
warehouses, transportation etc.) which reduced costs but
also the direct contact of manufacturer to the customers.
• Post industrial era saw the re-emergence of relationship
practices as transactional marketing proved to be not
sufficient to achieve organization’s goals of continuous
profits. x
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Hig
h
Relationship
orientation
Low
Pre- Industri Information
industrial era al era- relationship
Relationship Product centric –
centric-small centric Large scale
scale
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Factors leading to evolution of CRM
1. Rapid advances in technology
2. Intensive competition in most markets
3. Growing importance of the service sector – 50% GDP,
Direct interaction with customers, opportunity to
understand needs and expectations, help in emotional
bonding leading to relationship
4. Adoption of total quality management programmes
x
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Relationship - Concept
• Elements – Caring, support, loyalty, placing priority on
other’s interest, benefits accruing to both parties, honesty,
communication, respect, affection, helpfulness,
maintaining privacy, trust, understanding, desire to
maintain a long term relationship, interacting over time,
not criticising publicly, liking, reciprocation,
trustworthiness, working through disagreements, keeping
confidence, commitment
• Trust and commitment between two parties – critical (as
per several researches) x
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Trust and commitment encourages
partners to….
• Preserve the relationship through cooperation
• Resist attractive short-term alternatives in
view of expected long term benefits
• Take risks since they are confident that their
partner will not behave opportunistically
x
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Why the business needs CRM?
• Business environment competitive
• Customer has numerous alternatives / choices
• He can switch from one brand to another based on factors
like quality and price of the product
• Organizations must retain their customers as…
• To get/acquire a new customer is 7 to 10 times costlier than
retaining the existing customer
• 20% of customers account for 80% of your turnover (Pareto
principle) x
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Why the business needs CRM?......
• Converting unprofitable customers in to profitable ones
• Increasing value to the customers – A series of satisfying
experiences with the company lead to real-customer
relationship that result in the customer feeling a genuine
sense of loyalty to the firm. Relationships are not
developed overnight.
• Converting prospects in to customers
• Increasing revenue per customer ARPU (Average revenue
per user - mostly used in telecom industry) x
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Advantages of CRM
• Communicates customers the fact that company understands how
they wish to be served when they interact with company personally
or through automated systems
• Helps serve customers as per commitment
• Opportunity for cross selling / up-selling
• Provides product information, product usage and technical help
24x7 using internet
• Efficient registering and resolving customer complaints which are a
major source of customer dissatisfaction x
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Advantages of CRM…..
• Helps design service strategy customised to
individual customer (one to one marketing)
• Continuous customer feedback brings
improvements in products/ service
x
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Different forms of CRM
• PRM – Partner relationship management –
channel partners
• SRM- Supplier relationship management x
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To summerize..
• It is 8 to 10 time costlier to sell to new customer
as compared to selling to an existing customer
• CRM definition
• Why organizations need CRM, evolution,
advantages
• Different forms of CRM x
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Questions
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Management
(CRM)
Part Time MMS Sem V
Session no. 2 (25 July 2021)
Prof M R Koshti
1
Class Participation 1
• Define CRM……
• 47 MM1922-649 Kaginkar Sameer x
2
• How CRM helps in getting more profits?..
• 44 MM1922-646 Darji Jignesh (no class
participation) x
3
• What are the two most important elements in
Relationship? Explain why?....
• 33 MM1922-634 Vasani Sonali (no class
participation) x
4
• Why the business needs CRM? Give any two
reasons…..
• 24 MM1922-625 Sahu Subhash x
5
Last session in brief
• Introduction to CRM
• It is 8 to 10 time costlier to sell to new customer
as compared to selling to an existing customer
• CRM definition
• Why organizations need CRM, evolution,
advantages
• Different forms of CRM x
6
Today’s topic
CRM- A Strategic approach to
Marketing
7
Customer’s journey in an organization
CRM MIS
Marketing Selling Post sales
Service
Objectiv To make
To make To solve
es customer
customer customer’s
READY to buy BUY problems
(Customer while using the
Acquisition) product 8
Marketing Strategy?
• STP
• Segmentation, Targeting, Positioning
• 4 Ps
• Product
• Price
• Promotion
• Place
• Additional 3 P’s for services – Physical evidence, Process,
People X
9
TVC
• The following ad was shown on TV, at 9.40 p.m.
on Marathi channel Zee-Yuva during the
programme “Sangeet Samrat 2” on 25 July 2018
• Identify the target segment
https://www.youtube.com/watch?v=40vGzn1F59Y
10
Class participation 5
• Identify the target segment….
• 19 MM1922-619 Moriya Dharamprakash (no
class participation) x
11
This onwards the slides will be read by..
• 5 MM1922-605 Bhardwaj Surendra
12
CRM approach in Marketing ?
• Customer centric organizations gather
information about their customers and their
needs and then analyse this information to
develop CRM marketing plans that target the
customer groups with highest response rate
• This is a more personalised approach to
marketing and advertising and helps in increasing
the customer satisfaction X
13
CRM-oriented marketing
1. Web marketing
• Relatively inexpensive
• Large number of customers can be reached in a short duration of
time
• The data collected from any on-line marketing campaign can be
easily tracked, traced, analysed and interpreted
• Any on-line research and analysis techniques can help in the
selection process of any product or brand
• The reach of on line marketing campaign is more, thus, it is more
promotional in comparison to manual campaigns X
14
2. E-mail marketing
• Efficient and inexpensive compared to mail or
phone based marketing strategies.
• It is data driven (you need to know email id of
the customer) and can lead to more accurate
addressing and therefore high response rate
• More attractive features would include
newsletters, sending of e-coupons, e-cards etc.
X
15
3. Analysing customer’s buying
behaviour
• A CRM analytical tool provides a platform to analyse
the customers’ buying behaviour on-line as well as off-
line.
• E.g. an on-line selling website can analyse (with the
help of CRM) the buying pattern of consumers and
checks for the products that are purchased by
customers of a particular profile.
• It thus can predict the future purchase of a similarly
profiled customer X
16
Segmentation?
• Breaking the heterogeneous market in to
homogeneous groups using certain criteria /
basis (income – Low, medium, high)
• Targeting – Selecting a segment (e.g. High
income) for addressing the marketing program
X
17
Segmentation can be used for the
following
• Understanding customers would help in identification of new
marketing opportunities
• Designing and developing of new products / services targeted to
each segment’s specific requirement rather than mass market
• Designing customized product for existing customers according to
each segment’s identified wants and needs
• Offering customized rewards and incentives
• Selecting the preferred media package and channel
• Selecting the appropriate service channel X
18
• Determining the product features, benefits and
brand image that should be communicated based
on the specific characteristics of each segment
• Differentiation of customer service according to
each segment’s value
• Effective utilization of resources based on the
potential of each segment X
19
• Give any two purposes of segmentation..
• 7 MM1922-607 Butala Heth x
20
• 21 MM1922-622 Patel Dhaval
21
CRM approach to segmentations
(base?)
1. Behavioral segmentation
2. Value segmentation
3. Demographic or life style segmentation
4. Need and Attitudinal segmentation
X
22
1 / 4 Behavioral segmentation
• Occasion – When is the product consumed. Kellog’s
….breakfast cereal, now being projected as anytime snack
food by introducing variations in the product like new
flavors, shapes etc.
• Usage – Quantity consumed (light, medium, heavy
smokers)
• Loyalty –
• Benefit sought – Toothpaste (value for money, medicinal
value, cosmetic value, flavor), Car (mileage, safety, Look-
KWID Renault SUV-like look, prestige) X
23
• Explain behavioural segmentation….
• 1 MM1922-601 Almeida Loyd x
24
2/4 Value segmentation
• ABC analysis
• Gold – Top 20% of customers with the highest
value
• Silver – 30 % customers with second highest
value
• Bronze – 50% customers with lowest value
X
25
• Explain Value segmentation.
• 10 MM1922-610 Das Dibyojyoti (no class
participation) x
26
3/4 Demographic / life cycle
Life stage
segmentation -Bank
childhood Career Family Asset Asset Late career retirement
starts creation building protection
Special Driving Stable job Rise in Child Children Retirement

events license salary matures start career
Student Marriage Second Education Mortgage Birth of
child for child paid grand-
children
First Birth of a divorce Inherit
income child money
Bank focus Car loan Insurance Investment Investment Investment
program program program
Debit card Credit card Insurance Time Time
for children deposit deposit
First Personal Personal Real estate Real estate
savings loan loan 27
3/4 Demographic / life cycle
Life stage
segmentation -Bank
childhood Career Family Asset Asset Late career retirement
starts creation building protection
Age Up to 17 18-26 years 27-35 years 36-45 years 46-54 years 55-64 years 65 years
years and more
Special Driving Stable job Rise in Child Children Retirement
events license salary matures start career
Student Marriage Second Education Mortgage Birth of
child for child paid grand-
children
First Birth of a divorce Inherit
income child money
Bank focus Car loan Insurance Investment Investment Investment
program program program
Debit card Credit card Insurance Time Time
for children deposit deposit
First Personal Personal Real estate Real estate
savings loan loan 28
4/4 Need and Attitudinal
segmentation
• Based on the customer’s perception of the product / service
• Behavior is driven by attitudes
• Each company gets the information about customer needs by interacting
• Therefore an open dialogue between the customer and the company is
critical for needs segmentation
• Customer needs are complex and intricate
• Therefore, more a customer interacts with the company, the more
learning the company will gain about the particular preferences, desires,
wants, and whims of the customer
• Understanding different customers’ different needs is critical to any
serious relationship building program…. (example next slide) X
29
Toy blocks..spaceship..children 8-
10 yrs segment Marketing program
Some boys use the blocks to play a make-believe role, Actors Offer costumes and props along
assembling a spaceship and then pretending he is an with story books and CDs to do
astronaut on a mission to Mars their role-play
Other boys enjoy simply following the directions, Engineers Offer blueprints for additional toys
meticulously assembling the ship in exact detail that can be assembled using the
according to the instructions, once ship is built, they same set
may be least interested in it.
A third set of boys use the blocks to build something Creative / Offer pieces in unusual colors, or
entirely different, drawn from their own imagination. artists supplemental sets.
They simply don’t enjoy putting together a toy
according to the instructions
30
• 29 MM1922-630 Rathor Nisha
31
Characteristics of customer needs
• Customer needs can be situational in nature
• Customer needs are more dynamic and can
change over time
• Customer needs often correlate with customer
value (beliefs)
• The most fundamental needs are psychological
• There is no single best way to segment customers
based on needs X
32
Cross selling and up-selling
• Cross selling – the practice of promoting complimentary products which
are related to the product being sold (add on warranty)…+ non related
products
• Up-selling – offering customers upgraded or premium version of the
product being sold
• Selling more services / products to existing customers help in increasing
the revenue and costs less than acquiring a new one
• Not all customers are desirable for cross-selling
• Be proactive. Think “what is next?” for this customer and not the same old
things which are offered to everyone
• Customer support employees are best positioned to cross/up-sale X
33
Behavior prediction
• It helps in identifying the future behavior of the customers using
sophisticated modeling and data mining techniques. The analysis
could be of following types.
• Price elasticity modeling and dynamic pricing –Determines optimal
price for a product for a given customer segment
• Product affinity analysis – Which other products will be purchased
with a particular product?
• Propensity to buy analysis – which products a particular customer
is likely to purchase
• Next sequential purchase – what product / service a customer is
likely to buy next ….. X
34
..Possible marketing decisions
• Offering discounts or rebates to existing customers
who are at the verge of switching
• Designing refined target marketing campaigns to cater
to smaller customer segments or specific products
• Packaging certain products together to increase
profitability of certain products
• Cross-selling and up-selling products likely to be
purchased with other products X
35
Personalization
• Customer is delighted when he feels that
whatever is being communicated to him is “just
for me”.
• Customers not only expect personalized answers
like greeted by their name, but also personalized
services from company representatives viz.
tailored products or service X
36
Event based marketing (EBM) XXX
• It is a strategic process to ensure effective and automated dialogue that is
relevant, timely, and produces value
• It engages each customer based on his actual individual behavior and
interests rather than on a product-push marketing campaign or sales
promotion based on targeted segment
• It triggers helpful interaction with each customer at the time that
customer has implicitly signaled a clear and specific need or interest
(offers-sms by Airtel when the balance is exhausting)
• Storyboard - 17th November 2012 - Part 2 - Mktg Transformations:
Shopper's Stop……… 9.55 min (Please see this at home and come prepared
in next session)
• https://www.youtube.com/watch?v=OAEH3v_2r2g XXX
37
To summarize..
• How CRM can be used in Marketing function
• STP
• 4 Ps
• Individually targeted promotion rather can carpet
bombing
• Behavior predictions and marketing decisions
• Cross selling / up selling, personalization
• Event based marketing X
38
Management
(CRM)
Part Time MMS Sem V
Session no. 3 (1 August 2021)
Prof M R Koshti
1
News on CRM
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1/5 Karan Johar launches loyalty
program for fans
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Bombay Times, 3/7/2018, Tuesday, p 1
• Karann Johar’s Dharma Productions is launching an industry-first
exclusive loyalty program for its fans
• In partnership with Paytm, the program will reward their most loyal
fan family with exciting offers, experiences and tempting discounts
• The production house kick-started 2018 with blockbuster Raazi, and
has splendid releases line up for the rest of the year
• Joining the program will grant fans first access to all Dharma
movies, and they will also be eligible for exclusive rewards,
including trips to movie sets and locations where their films have
been shot. X
Of 46 4
• Talking about the loyalty program, Karan says,
“we have received unconditional love from
our fans over the years and this has indeed
been a blessed journey so far.
• This offering is our way of thanking them. X
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6
2/5 JPMiles part of Etihad, not affected
by Jet grounding
Of 46 7
TOI, Monday July 15, 2019, p 17
• Months after the demise of Jet Airways, big ads published recently
by JPMiles — the frequent flyer programme of the grounded airline
— have taken social media users by surprise .
• Jet Privilege Pvt (JPPL), which runs the JPMiles programme, is a
separate company and part of the Abu Dhabi-based Etihad Aviation
Group, which continues to run it even today after Jet has shut
down, and has almost a crore members.
• JPPL was formed as a fullyowned subsidiary of Jet Airways in 2012.
It was hived off as a separate entity in 2014 when Etihad bought a
50.1% stake in it for $150 million. X
Of 46 8
• JPPL says JPMiles “are now more powerful than ever”.
• “Our unique air reward offering ‘select flights’ powered by
EaseMyTrip.com empowers members to earn and redeem
JPMiles across airlines worldwide, to any destination, on
any flight and any seat in India or globally.”
• However, JPPL is currently facing regulatory heat in India as
part of the ongoing investigation into the Jet Airways saga.
The Enforcement Directorate is probing if FDI norms were
violated when Etihad took a stake in JPPL in 2014. X
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3/5 Amazon offers shoppers $10 to
hand over their data
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Mumbai Mirror, Wednesday July
17,2019, p21
• Amazon.com Inc has a promotion for U.S. shoppers on Prime Day, the 48-
hour marketing blitz that started Monday: Earn $10 of credit if you let
Amazon track the websites you visit.
• The deal is for new installations of the Amazon Assistant, a comparison-
shopping tool that customers can add to their web browsers. It fetches
Amazon’s price for products that users see on Walmart.com, Target.com
and elsewhere.
• In order to work, the assistant needs access to users’ web activity,
including the links and some page content they view. The catch, as
Amazon explains in the fine print, is the company can use this data to
improve its general marketing, products and services, unrelated to the
shopping assistant. X
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• The terms underscore the power consumers routinely give to
Amazon and other big technology companies when using their free
services. In this case, Amazon gains potential insight into how it
should tailor marketing and how it could stamp out the retail
competition.
• “This data is often used for training machine learning models to do
better ad targeting,”
• Amazon already has more than 7 million customers using its
assistant via Google Chrome and Mozilla Firefox, according to data
published by those web browsers. Other companies offer similar
shopping tools. X
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• While another technology known as tracking pixels shows Amazon
information from visitors to roughly 15 percent of the top 10,000
websites, the assistant lets Amazon follow a smaller set of users from page
to page, Cyphers said.
• Amazon’s combination of tools still pales in comparison to data collection
by Alphabet Inc’s Google, which has tracking pixels on most web pages.
• “Customer trust is paramount to Amazon, and we take customer privacy
very seriously,” a company spokeswoman said, noting compliance with the
assistant’s privacy policy, which says data collection is for websites that
users visit “where we may have relevant product or service
recommendations.” X
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4/5 How Google is listening to your
bedroom talk
Of 46 14
TOI, Friday July 12, 2019, p 14
• Third-party contractors working for Google are recording and
secretly listening to your bedroom conversations via Google
Assistant on smartphones, home speakers and security cameras, a
new report has claimed, stressing that such recordings raise serious
questions about privacy of users.
• According to Belgian broadcaster VRT NWS, users` conversations
with Google Home speakers are being recorded and audio clips are
being sent to sub-contractors who are "transcribing the audio files
for subsequent use in improving Google`s speech recognition". X
Of 46 15
• VRT NWS, with the help of a whistleblower, was able to listen to
more than 1,000 excerpts recorded via Google Assistant. "In these
recordings, we could clearly hear addresses and other sensitive
information. This made it easy for us to find the people involved
and confront them with the audio recordings," said the report on
Wednesday.
• The transcribers heard just everything: personal information,
bedroom talks, domestic violence and what not about Google
Assistant users in Belgium and the Netherlands. VRT "overheard
countless men searching for porn, arguments between spouses,
and even one case in which a woman seemed to be in an
emergency situation". X
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• In a statement, Google said it only transcribes
and uses "about 0.2 per cent of all audio
clips", to improve their voice recognition
technology.
• "The company has launched an investigation
because the contractor breached data security
policies," said the Google spokesperson. X
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5/5 Flipkart, Axis Bank launch credit
card
Of 46 18
TOI, Friday, July 12, 2019. p16
• Walmart-owned e-commerce marketplace Flipkart and Axis
Bank have partnered to launch a co-branded credit card.
• Enabled by Mastercard, the credit card will be available to
new-to-credit customers and help Flipkart reduce cash-on-
delivery orders.
• The card will be available to select users in July and will be
extended to all customers over the coming weeks.
• Under this card, customers will get cashback that is auto-
credited every month in the customer’s statement. X
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• The card will have partnership with MakeMyTrip, Goibibo,
Uber, PVR, Gaana, Cure.fit and UrbanClap for offers .
• The entry-level card with annual fees of Rs 500 will get
the holder four complimentary lounge visits across airports
in India.
• The annual fee will be waived on card annual spend of over
Rs 2 lakh. X
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• What is CRM approach in Marketing?
• 5 MM1922-605 Bhardwaj Surendra (not
done)x
21
• What is value segmentation?
• 12 MM1922-612 Dhikka Priyanka (not done) x
22
• What is cross selling and up-selling?
• 17 MM1922-617 Mishra Abhishek x
23
• Explain Event based marketing using the
Shoppers’ stop video
• 29 MM1922-630 Rathor Nisha x
24
• CRM-A Strategic Approach to Marketing
• Marketing Management
• CRM-oriented marketing - Web marketing, E-mail marketing,
Analysing customer’s buying behaviour,
• Customer Life Cycle CLC
• CRM approach to segmentations - Behavioral segmentation, Value
segmentation, Demographic or life style segmentation, Need and
Attitudinal segmentation
• Cross selling and up-selling
• Behavior prediction, Personalization, Event based marketing X
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Today’s topic
Strategies to build relationship
Of 46 26
Introduction
• Businesses are undergoing cultural shifts
• Mass marketing, product-centric approach of industrial
age ----à customer-centric culture of information era
where the main objective is to build relationship with
more profitable individual customers
• Organization will use the knowledge gained from these
relationships to improve overall quality of customer
experience and give value to the customers
• Relationship? X
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Relationship
• It is a state of affairs existing between the
parties having interdependence or dealings
i.e.
• It is a state involving mutual dealings between
various people or parties X
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Four levels of relationship
• Intimate relationship – It is personal and friendly, and generally
involves the disclosure of personal information
• Face to face customer relationship – It may or may not require
customer to reveal personal information. Such relationships occur
in retail stores
• Distant relationship – Has less frequent interactions and might
occur over the telephone, on-line or through videoconferencing
• No contact relationship – Rarely or never require a customer to
interact with the organization directly. Customers typically interact
with distributors or agents….cp5 X
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• Explain 4 levels of relationship.
• 41 MM1922-642 Pathak Prakash (not done) x
30
Customer’s expectations from
relationship
• Realize the cost savings
• Improve the decision making ability
• Reduce their risk by dealing with trusted companies,
services and products
• Acquire a solution that is tailored for their particular
needs and budget
• Realize the social and other value added benefits such
as simplifying their choice process X
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Organization’s expectations from
relationship
• Gaining an advantage that can not be easily
copied by the competitors
• Reducing the high cost of acquiring new
customers
• Improving the forecasting and efficiency of their
operations
• Reducing exposure to risks X
Of 46 32
Forming of corporate relationship
(basic assumptions)
Mutual Benefits
Seller / Enduse
Producer Mutual r/
commitment Buyer
Connective links –
Information, social, process
Result -Buyer’s
trust
Of 46 33
• This onward slides will be read by…
• 24 MM1922-625 Sahu Subhash
34
Relationship marketing concepts….
1. Pure transaction – A pure transaction, which occurs in a
perfect market could be defined as the one with large number
of competing sellers, each selling an undifferentiated product,
and a buyer with perfect information about all the product
offering, including prices.
• Each transaction is a completely independent event, not
influenced by the consideration of the past or future
transactions.
• E.g. Stock exchange, share taxi X
Of 46 35
Relationship marketing concepts…..
2. Repeated transactions – The repeated transactions
represent the beginning of a relationship
• The products are differentiated and the customers have
preferences
• With repeated transactions, a critical element has entered
the equation, “trust”.
• The familiarity of a brand name or salesperson contains an
implicit promise of a consistent product or service
performance, quality, and purchase experience that would
meet the expectations X
Of 46 36
Relationship marketing concepts……
3. Long term buyer-seller relationships – they help the
organization in being more effective and efficient
• Both can aim to achieve cost savings through reduction
in various types of costs associated
• Moreover the customers realize that the suppliers
create value
• The suppliers are integral part in the value chain
X
Of 46 37
4. Strategic partnership – A partnership with
mutual benefits is strategic.
• When both the buyer a seller enter into a
strategic partnership in order to leverage on
each other’s competencies to develop their
own competitive advantage, it is strategic
partnership X
Of 46 38
5. Strategic alliances and joint ventures – Any
relationship in business environment can be
taken to an alliance or joint venture when two
or more parties join together in any value chain
activity like R & D, etc.
• They are willingly ready to share the risks and
opportunities X
Of 46 39
6. Network organizations – They are a group of
legally independent companies or subsidiary
business units which want to appear as a large
entity by using various methods of coordination
and control in their interaction X
Of 46 40
CRM
• CRM can be defined as a process of managing detailed
information about individual customers and carefully
managing all customer “touch points” with the aim of
maximizing the customer loyalty
• (Earlier definition - CRM is a management approach that
helps in creating, developing and enhancing relationship
with carefully targeted customers in order to maximize
customer value and long term profitability for the
organization. CRM primarily utilizes information technology
to implement relationship – marketing strategies) X
Of 46 41
Five levels of investment in customer
relationship building
1. Basic marketing – here the salesman simply sells the
products
2. Reactive marketing – here the salesperson’s focus is not
only on selling the product but he encourages the
customer to call if they have any queries or complaints
3. Accountable marketing – here the salesperson calls the
customer to check whether the product is meeting the
expectations. The salesperson also asks for any
improvements in the product or service and any specific
reasons for dissatisfaction X
Of 46 42
4. Pro-active marketing – here the salesperson
contacts the customer from time to time with
suggestions about improved product uses or new
products (System integration)
5. Partnership marketing – here the company
works continuously with its large number of
customers to help improve their performance
(Portfolio management) X
Of 46 43
IDIC model for building relationship
• Identify->Differentiate-> Interact-> Customise
• Identify – locate and contact large number of customers, collect
information
• Differentiate – on the basis of the value (profit), standard products
or have specific needs
• Interact – Gather as much information as possible form every
interaction (transaction, while using the product/service, complaint,
etc.) with objective to focus on the valuable customers
• Customise – use all above to customise the product / service ..cp
X
Of 46 44
• What does IDIC stand for?
• 14 MM1922-614 Goswami Saurabh x
45
IDIC model to build relationship
Of 46 46
Interactive technology to build
relationship
CRM Software
solution
Of 46 47
Mass customization to build
relationship
Of 46 48
Mass customization
• “Build-to-order” rather than….
• “build-to-forecast/stock” Economies of scale –
standard product/communication/customer
(accurate demand forecasting required)
X
Of 46 49
Advantages of mass customization
• Increased customer satisfaction, reduction in
inventory cost
• Increase in customer loyalty
• Fast response
• Increased cash flow because of 1) lower
inventories 2) Advance payment from customers
X
Of 46 50
Approaches to Mass customization..cp
Transparent Collaborative
customisers customisers(Levi’
(to customers, s jeans, Dell,
Amazon) Nike)
Adaptive Cosmetic
customisers– customisers
customer makes (different
changes (SAP) packaging)
Of 46 51
• Who are collaborative customisers?
• 38 MM1922-639 Vishwakarma Vishal (not
done) x
52
Factors for mass customization to work
• Flexibility in internal processes, supply chain
etc.
• Capability to utilize mass components that can
be configured into numerous finished
products – modularity X
Of 46 53
• Just name the concepts that we learnt today.
• 21 MM1922-622 Patel Dhaval x
54
To summarise..XXX
• Four levels of relationship
• Customer’s expectations from relationship
• Organization’s expectations from relationship
• Relationship marketing concepts
• Five levels of investment in customer relationship
building
• IDIC model for building relationship
• Mass customization to build relationship XXX
55
Management
(CRM)
Part Time MMS Sem V
Session no. 4 (7August 2021)
Prof M R Koshti
1
News on CRM
2
1Netflix launches user interface in
Hindi, will be available on mobile, TV
and web
3
Economic Times, August 7, 2020
• NEW DELHI: Netflix on Friday launched its user
interface in Hindi, saying the move will enable
members who prefer the language to easily access
their choice of Indian and international films as well
as series.
• The Hindi user interface is available across devices
on mobile, TV and the web, it said in a statement. x
4
• "Netflix members can switch to the Hindi user interface
from the Language option in the 'Manage Profiles'
section on their desktop, TV or mobile browsers.
• On Netflix, members can set up to five profiles in each
account, and each profile can have its own language
setting," the streaming entertainment service said. x
5
• Netflix users outside India will also have the option to
switch their user interface to Hindi, it added.
• Netflix is investing heavily in Indian films and series
across genres and generations, including hits like
'Sacred Games', 'Bulbbul', 'Choked: Paisa Bolta Hai' and
'Mighty Little Bheem'. x
6
• The company recently announced a lineup of 17
stories, including 'Ludo', 'A Suitable Boy' and
'Mismatched' and the upcoming film 'Gunjan Saxena:
The Kargil Girl' which will release on August 12.
• "We believe the new user interface will make Netflix
even more accessible and better suit members who
prefer Hindi," Monika Shergill, VP-Content, Netflix India
said. x
7
• When In Quarantine, Binge-Watch!
• The Covid-19 pandemic has brought the world to
a screeching halt.
• With a large chunk of the global population
locked up indoors, a considerable number of
people are turning to OTT (Over the top)
platforms and streaming their favourite content
to make the most of their quarantine. x
8
2 US co. to pay $700 mln for exposing
private data
9
Mumbai Mirror, Wednesday, July 24,
2019 p 18
• US credit monitoring agency Equifax will pay at least $700 million –
and potentially much more – to settle lawsuits over a 2017 data
breach that exposed the Social Security numbers and similar
sensitive information of roughly half of the US population.
• It can't, however, guarantee safety for individuals whose stolen
information could circulate on the internet for decades.
• The breach was one of the largest ever to threaten Americans’
private information.
• The credit reporting company didn’t notice the intruders targeting
its databases, who exploited a known security vulnerability that
Equifax hadn’t fixed, for more than six weeks. X
10
• The compromised data included Social Security numbers, birth dates,
addresses, driver license numbers, credit card numbers and in some cases,
data from passports.
• The resulting scandal led to the abrupt dismissal of Equifax’s then-CEO and
many other executives at the company.
• “Companies that profit from personal information have an extra
responsibility to protect and secure that data,” said Federal Trade
Commission
• “Equifax failed to take basic steps that may have prevented the breach,” X
11
• Strategies to build relationship
• Four levels of relationship
• Customer’s / Organization’s expectations from relationship
• Relationship marketing concepts
• Five levels of investment in customer relationship building
• IDIC model for building relationship
• Interactive technology to build relationship
• Mass customization to build relationship x
12
Today’s topic
Customer acquisition
(pipe-line, information collection)
and retention
13
Customer acquisition
• It is the process of acquiring new customers for
business
1. Transaction acquisition – Ends with one-time purchase
2. Process acquisition – continues till the time the
customer does a repeat purchase
3. Although all companies need to focus on acquisition,
certain companies have more focus on acquisition
like…… X
14
………
1. Industries with once in life time use products (MBA course)
2. Industries with low retention rate (undifferentiated products, no
loyal customers)
3. Industries with low purchasing frequency (Durables, Flats)
4. Companies with exceptionally high retention rate (SAP)
• One of the traditional and best strategy to acquire new customers is
performing promotional campaigns
• For enhancing the revenue, the organization should always balance
the number of customers acquired with the number of customers
who divert to other organizations X
15
Four rules of Customer Acquisition
1. It is advisable to acquire any customer as long as the discounted
future value of that customer exceeds the acquisition costs for him.
2. As the acquisition effort increases, response rate reduces (Law of
diminishing marginal utility)
3. Higher the profits from retention, higher should be the customer
acquisition investment in the organization.
4. Greater the percentage of the initial acquisition investment that an
organization recovers in the first period, higher should be its
acquisition investment
• Rules 3 and 4 lead to four acquisition strategies……. X
16
Profits from retention High Low
Acquisition investment recovery

Fast (Low risk) - Low acquisition
cost
Slow (High risk) – High acquisition
cost
17

Fast (Low risk) LAC Full Throttle (Full capacity)
Slow (High risk) HAC
18
Acquisition Strategies
• Full throttle – high retention profit potential
with short term investment recovery – firm
invests as much as possible until NPV of
marginal customer is negative
• Utilise entire acquisition budget
• Component supplier factory X
19

Fast (Low risk) LAC
Slow (High risk) HAC Slingshot
20
• Slingshot – high retention profit potential
combined with a long investment recovery
• The firm must bet on high NPV driven by high
retention profits
• Many e-tailors invest heavily in acquisition
spending in spite of the risk associated with
lower-than-expected retention profits
• Amazon, Flipkart X
21

Fast (Low risk) - Low acquisition Pay as you go
cost
Slow (High risk) – High acquisition
cost
22
• Pay as you go – the firm invests as though all
profits will accrue in the current period
• The short term profit goals drive the
acquisition investment of the firm
• See that each sales transaction is profitable
• Durables (car, fridge) X
23

Fast (Low risk) LAC
Slow (High risk) HAC Divest / restructure
24
Acquisition Tactical Management
(ACTMAN) model
• Four critical elements
1. Targeting
2. Awareness building
3. Acquisition pricing
4. Product design and post-purchase service
X
25
1 Targeting
• Target the customers…..
• Who recognise that they have a need, and also….
• Who have not yet identified their needs or desires but
who could benefit from the firm’s offerings
• The second group may be more difficult to acquire as
the firm will have to aid their need recognition using
methods such as suggestive advertising or sampling
• Three methods exist for targeting customers….
X
26
1. Individual-customer targeting (First degree
targeting)
2. Segmented targeting (Second degree targeting)
3. Self-selection targeting (third degree targeting)
which relies on the customer to identify himself
by responding to the firm’s offer X
27
2 Awareness building
• Direct marketing communication (First degree targeting)
• Mass communication – less expensive, generates broad
awareness in 2nd and 3rd degree targeting environments…
• …or where the value of an acquired customer is relatively
low…
• e.g. many internet companies use mass communications
(TV, radio, billboards, and prints) to generate awareness
and to invite customers to log on to their websites to learn
more about products and services (Comicstan – Amazon
Prime ads on hoardings) X
28
• These companies have learnt that awareness
generation through direct communication
(portals, web services such as AOL ) tends to
America on line
push acquisition costs very high

• Instead these companies use lower-cost vehicles
for awareness generation and more targeted
communication for customers once they have
responded X
29
3 Acquisition pricing
• Acquisition pricing influences expectations about retention pricing
• The acquisition price acts as a reference price for customers in their
assessment of future prices
• If the retention price is too high in comparison to the reference price, the
customers are less likely to repurchase the product or service
• Therefore the pricing strategy should include how a firm will manage the
change in price between acquisition and retention
• If a very low acquisition price attracts the prospects who would not
otherwise try the product, then charging a significantly higher retention
price would cost the firm a large number of first time buyers X
30
Product trial
• Many firms identify the product trial as a key strategic
objective
• It marks the point at which the customers move from the
process of evaluating alternatives to the actual purchase
(Prime 128 x 12 > 999)
• This is often constructed as the first signal of interest that
the customers communicate to the firm
• From firm’s perspective, the goal of the trial stage, besides
generating revenue is to demonstrate to its customers that
the firm’s product or service can meet their needs X
31
4 Product design and post-purchase
service
• In addition to marketing communication, which plays a key role in
establishing the customer expectations two other critical activities
that significantly influence the customer’s product usage,
experience and satisfaction are……
• 1) Product design, and 2) provision of specified benefits post
purchase servicing of the customer
• The firm’s ability to meet the expectations depends on its research
and development team, which manages the product or service
design, operational staff, which controls production and delivery,
and customer service team which manages the post purchase-
servicing X
32
Operational CRM tools that help
customer acquisition
• Lead management – lead generation, lead qualification,
lead allocation and lead tracking
• Campaign management – This software is widely deployed
in B2C environment for new customer acquisition
• Event based marketing – It is also used to generate new
customers. At times, it provides companies opportunities to
approach prospects which have a higher probability of
leading to a sale
• Customer retention -----à X
33
Customer retention
• Customer continuing to purchase the product
with short life cycle over a specified period of
time and he indicates the intention to purchase
the products with long life cycle at the next
purchase occasion
• “Leaky bucket” theory (There will be enough
customers to replace the defecting ones)….no
more valid X
34
Customer Retention:
Determinants
• Customer has repeat requirements
• Customer expectations versus the delivered quality of
the product or service
• Value (Quality / Price)
• Product uniqueness and suitability as related to
retention rate
• Loyalty schemes
• Purchase process
• Customer service
• Exit barriers (reward based on historical usage)
X
35
Levels of Retention
Strategies xxx Ease of copying
1-4
Differentia
tion
1-4
1
4
2
Bonds
Social
Bonds
36
Management
(CRM)
Part Time MMS Sem V
Prof M R Koshti
1
1/4 FSSAI cracks whip on Swiggy,
Zomato, 8 others
Of 43 2
Business World, 21 July 2018,
Saturday, p 2
• The Food Safety and Standards Authority of India (FSSAI) on Friday directed
Swiggy, Zomato, Foodpanda, and seven other such apps to stop using edibles
supplied by non-licenced operators after series of consumer complaints of sub-
standard food being served through e-commerce platforms
• Food Business Operators (FBOs) listed on e-commerce platform need to display
their licence numbers
• E-commerce food service platforms are asked to initiate immediate action to delist
the defaulting FBOs and submit an action taken report by 31st July 2018
• Class Participation 1– How does this news item relate to ACTMAN covered in last
session?
• 6 MM1922-606 Bohade Rajan
• CRM implication – Acquisition tactical management ACTMAN point no. 4 Product
design and post-purchase service
TOf 43 3
2/4 NEET data of 2,50,000 students
being sold on-line
• Business Standard, 19 July 2018, Thursday, p 18
• In yet another case of potential breach of privacy, data of
students who took the National Eligibility –cum-Entrance
Test (NEET) this year is available for buyers through a
website
• The website claims to have access to records of 2,50,000
students along with their gender, roll numbers, rank in the
exam as well as their mobile numbers
• NEET is administered by the CBSE as the entrance exam for
medical colleges across the country X
Of 43 4
• The person behind the website claims that he runs a
legitimate business and owns this data
• He said the company collects data directly from
students through various means among which, social
media advertising is the biggest source of data
• The company claims to run ads on Facebook where
students are encouraged to provide their details to get
help from career counsellors X
Of 43 5
• The students are more than happy to provide their ranks as
well as their contact details in order to get free help from
career experts about their future
• The company uploads the data on their website for people
to see and those who pay Rs 10,00,000 are able to access
the complete database with phone numbers masked
• We get a lot of demand from education companies who are
seriously into the business of helping the students or selling
them their test preparation products X
Of 43 6
• These companies use our service to contact these students through
text messages which are enabled through our platform
• People can even drill down their target market by state and choose
to contact students from only specific states.
• Nari Technologies offers 1,00,000 free SMSes after which one needs
to pay Rs 14,000 more to buy another 1,00,000 messages
• CEO Chowdary accepted that he doesn’t seek explicit permission
from people before collecting their data to sell it to commercial
entities X
Of 43 7
• This is not the only source of data for the company
• He collects data at school level too by offering free mock tests to
the students
• These mock tests require students to provide their contact details
and other information which is used by the company to build and
aggregate databases even as students are unaware that their data
will be eventually sold for lakhs of rupees
• Class Participation 2 – which component of ACTMAN does this news
item relate to?
• 45 MM1922-647 Khan Sameer
• 1 Targeting - Individual-customer targeting (First degree targeting) X
Of 43 8
3/4 Ecomm wars are coming to
pharma retail
• Class participation 3
• Why e-com companies may be interested in
pharma retail? Think from CRM point of view.
• 42 MM1922-643 Goradia Foram
Of 43 9
3/4 Ecomm wars are coming to
pharma retail
• Easing regulations, potential to drive repeat orders make companies
such as MediPlus, 1 mg investment opportunities for Flipkart,
Amazon
• Eco Times, 20 July 2018, Friday, p 1
• Online pharma retail is becoming the next battleground for
ecommerce players seeking to build a high frequency play in India
• Flipkart, Amazon, Bigbasket and Swiggy are all in exploratory talks
to acquire partner or invest in online pharma players including
MedPlus, 1 mg, Medlife, PharmEasy and Myra X
Of 43 10
• For the ecommerce leaders, the online
medicine-delivery category represents a
significant strategic opportunity given easing
regulations and its potential to drive repeat
orders – a feature that has endeared grocery
to Flipkart and Amazon X
Of 43 11
4/4Amazon launches online pharmacy in India
12
14 August 2020 Business
• Online retail giant Amazon has launched an internet
pharmacy in India, marking its entry into the
country's online medicine market.
• Amazon Pharmacy will make its debut in Bangalore and
it may be tried in other Indian cities.
• The move comes as the online drugs business has been
given a major boost during the coronavirus pandemic.
x
13
• The Amazon Pharmacy service offers prescription,
over-the-counter and traditional Ayurveda medication
as well as basic health devices.
• “This is particularly relevant in present times as it will
help customers meet their essential needs while
staying safe at home," an Amazon spokesperson said.
• Amazon started its move into pharmaceutical retailing
in 2017. The following year it bought US-based home
delivery medications startup PillPack. x
14
• At the end of last year, the company introduced its
Amazon Pharmacy branding to PillPack's service.
• In January, Amazon filed to trademark the name
Amazon Pharmacy in the UK, Australia and Canada.
• The move was seen as a sign that the company was set
to significantly expand its prescription drugs business
outside of the US. x
15
• Which strategy is adopted by ecommerce
companies like Amazon and Flipkart to acquire
customers?
• 39 MM1922-640 Desai Chit
• Slingshot – Retention profits high, acquisition
cost recovery slow (others- Full throttle, Pay as
you go, Divest/restructure) x
16
• Customer acquisition and retention
• Four rules of Customer Acquisition
• Four acquisition strategies - Full Throttle, Slingshot, Pay as you go,
Divest/restructure
• Acquisition Tactical Management (ACTMAN) model – Targeting,
Awareness building, Acquisition pricing, Product design and post-
purchase service
• Operational CRM tools that help customer acquisition
• Customer Retention: Determinants
• Levels of Retention Strategies – Financial, social, customization bonds X
Of 43 17
Customer Retention:
Determinants
• Customer expectations versus the delivered
quality of the product or service
retention rate
• Loyalty schemes
• Exit barriers X
Of 43 18
Customer Retention:
Determinants
• Customer expectations versus the delivered quality of
the product or service
retention rate
• Loyalty schemes
• Exit barriers (long term contracts – holiday homes,
AMCs) X
Of 43 19
Today’s topic
Customer Loyalty
Of 43 20
Customer loyalty
• Loyal = true or faithful (to duty, love or obligation), steadfast in
allegiance, devoted to legitimate sovereign or government of one’s
country
• Loyalty is a characteristic of a person showing any relation with
objects – goods, services, or organizations…….Not going away from
• Customer loyalty is a measure of success of the company to retain
customers (B2B – easy to measure, B2C- loyalty applied to segments)
• Customer loyalty is the indicator of the trust that an organization gains
in making and developing mutual beneficial relationship with the
customer
• Loyalty is the customer’s voluntary decision to maintain long-term
relationship with any organization
• Customers will be loyal if they are offered more benefit in comparison
to any other competitive organization X
Of 43 21
Dimensions of loyalty
• Attitudinal – inclination
• Behavioral - Action
• Situational – propensity to stay loyal through a
variety of purchase and consumption situations
• Cognitive – rational
• Emotional- result of customer’s feelings,
expectations, interpersonal relationship with
employees X
Of 43 22
Types of loyalty
• Monopoly loyalty – No choice to customers (IA, AI)
• Cost-based loyalty – Switching cost high
• Incentivized loyalty – Earn loyalty points to get free goods / services
• Habitual loyalty – Time constraints / convenience
• Committed loyalty – routed in core value of the customer rather
than in their attitude (Tata’s club- Best)
• Customer loyalty not only involves repeat purchases but also
represents positive level of commitment from customer towards
the supplier, and it is this degree of positive commitment which
distinguishes the truly loyal customers X
Of 43 23
• Explain any two types of loyalties from the last
slide
• 34 MM1922-635 Vishwakarma Jugal
24
Loyalty Ladder Actively involved in decision making,
Gives referrals, proactively joint investments…..structural
works with the company to Partner bonding
improve products / Emphasis on developing and
service….Ambassador enhancing relationship (Loyalty
……benefits?)….next
Recommends to
others Repeat orders
First order
Emphasis on
new Wants product but not
customers necessarily from you
Suspect
Of 43 25
• Name the stages in the loyalty ladder
• 26 MM1922-627 Shah Harshil
26
Advantages of loyalty
New 3
1
produc
ts
4 2
Of 43 27
Drivers of loyalty Supplier
positioning
1.Emotional and 1.Highly

Apple Quality They are
sentimental differentiated
(Amul) contact
(Swadesi) 2.Multiple
point of
2.Rational products for the Mercedes,
Ray- the
3.Entrepreneur/ segment
Ban…lifesty company
adventurous 3.High service
component le
4.Inertia Of 43 28
Low Profitability
Loyalty strategies
Increase
transactional
loyalty rather
than In crease
attitudinal attitudinal &
Nomad Loyalists behavioural
loyalty
external skeleton that offers protection from predators.

No investment, just Crabs, lobsters
transact Alien Crustacean
1. Cross/up-selling for low wallet
share
2. Strict cost control if wallet is small
Of 43 29
Customer Loyalty Management (CLM)
1. Special attention
2. Communication
3. Emotion
4. Satisfaction
5. Transparency
6. Response
7. Differentiation
8. Comfort &
confidence
Of 43 30
Loyalty programmes
• They are structured marketing efforts that
help in increasing the retention rate and
encourage repeat buying which ultimately
increase the profitability of an organization.
X
Of 43 31
Loyalty Programs
1
Of 43 32
Types of loyalty programs
• Some of the most common types of loyalty programs could be as
follows
– Appreciations – more for no extra money (free talk time)
– Rewards – give products not related to company’s product mix
– Partnership – long term agreements (Extended warranty)
– Rebate – Discounts to chosen customers
– Affinity – Getting customer preference because of CSR (Portion of
price going to girl child education)
– Coalition – Two companies coming together to
share customer data
to jointly target a customer demography (Nykaa) X
Of 43 33
• Explain any two types of loyalty programmes
from the last slide
• 22 MM1922-623 Kunder Rahul
34
Steps in Designing Loyalty
Programmes (popular in consumer markets)
• Loyalty situation analysis
• Identifying a target group of loyalty program
• Gap/needs assessment – RFM / Research
• Structure and planning loyalty program
• Loyalty program communication
• Program investment estimates
• Return on investment projections
• Integrate the program
• Loyalty program test
• Evaluate the success of the program = (Additional units sold) x
contribution -cost of rewards – Administrative cost X
Of 43 35
Success of loyalty program
• Company A
• Yearly sale before loyalty program = Rs 10 Cr (GMV), Yearly sale after loyalty program = Rs
11 Cr (GMV)
• Contribution = 30%
• Sale of loyalty program = 5000 members, Rs 1000 subscription fee each
• loyalty program Administrative cost Rs 2,00,000
• discounts given as per loyalty program rate Rs 10 lacs,
• Cost of free delivery service offered in loyalty programme Rs 10 lacs
• Class Participation 8
• How does one calculate ROI of the loyalty programme in this example?
• 18 MM1922-618 Mishra Dayashankar
Of 43 36
Success of loyalty program
• Company A
• Yearly sale before loyalty program = Rs 10 Cr (GMV), Yearly sale after loyalty program = Rs 11 Cr (GMV)
• Additional sale due to loyalty program = Rs 1 Cr, Contribution percentage = 30%
• Contribution earned on additional sale = Rs 1 Cr x 0.3= 30 lacs
• Sale of loyalty program = 5000 members X Rs 1000 subscription fee = Rs 50,00,000, Total Earnings = Rs 80
lacs
• Costs incurred due to loyalty program = Administrative cost Rs 2,00,000 + discounts given as per loyalty
program rate Rs 10 lacs + Cost of free delivery service Rs 10 lac = Rs 22 lacs
• Profit due to loyalty program = 80 -22 = Rs 58 lacs
• ROI of loyalty program = 58 x100/ 22 = 263%
• Company B ROI = 150%,
• Company A’s loyalty program is more successful X
Of 43 37
Steps in Designing Loyalty
Programmes
• Loyalty situation analysis
• Identifying a target group of loyalty program
• Gap/needs assessment – RFM / Research
• Structure and planning loyalty program
• Loyalty program communication
• Program investment estimates
• Return on investment projections
• Integrate the program
• Loyalty program test
• Evaluate the success of the program = (Additional units sold) x
contribution -cost of rewards – Administrative cost X
Of 43 38
Structure and planning loyalty
program
• Quality offering – Quality of the reward could be matched with
expected quality of the product or service being delivered by the
company (Mercedes – Air Deccan?)
• Cash value – the value of the reward could be established as a
percentage of whatever the customer is spending to earn the
reward
• Perceived value – the overall perception for total reward mix should
be of high value (may vary from person to person) (car – Éclair)
• Aspirational value – the company should offer rewards that
motivate customers to increase their spending X
Of 43 39
• Redemption choice – the company should offer a variety
of reward items within a volume tier
• Convenience – of redeeming
• Time frame – the most profitable customers should be
able to accumulate enough points within 3-6 months of
their getting enrolled in such program in order to
redeem a reward which will encourage their further
spending
• Unique – difficult to copy for competitors
• Relevance – the company should develop offers,
messages, rewards, services which are relevant to the
targeted customers based on the subtle differences in
attitudes, preferences and intents X
Of 43 40
Obstacles in the success of the loyalty
program
• Lack of careful designing
• Ineffective execution of loyalty programme
• Ineffective communication
• The programme is not integrated with the organizational policies and goals
• Wrong selection of the targeted segment
• Offering too narrow a rewards earning period
• Not rewarding the right behavior
• Same treatment to all customers and not treating high-value customers
differently
• Having complex/confusing rules in place
• Making redemption difficult X
Of 43 41
Summary xxx
• Customer Loyalty
• Dimensions of loyalty
• Types of loyalty
• Loyalty Ladder – Suspect to Partner
• Advantages of loyalty
• Drivers of loyalty
• Loyalty strategies
• Customer Loyalty Management (CLM)
• Loyalty programmes xxx
Of 48 42
Management
(CRM)
Part Time MMS Sem V
Prof M R Koshti
1
1/3 Data enables relevance and context, says
Mindshare's CEO MA Parthasarathy
Of 48 2
Business Standard, 17 June 2019,
Monday, p 15
Mindshare's CEO
MA Parthasarathy
Of 48 3
Data enables relevance and context, says Mindshare's
CEO MA Parthasarathy
• Storytelling doesn’t have a leg to stand on in the
absence of insight, Parthasarathy tells Alokananda
Chakraborty
• Question 1/5
• With media fragmentation, people are getting
bombarded with content and advertisements from all
possible corners. In such a competitive space, what is
the right way to get your target audience's eyeballs on
your content? X
Of 48 4
• The key elements of the strategy to get eyeballs are relevance and
receptivity.
• It is critical to understand the consumers in a sharper manner than
ever before. What are they consuming, when and why.
• Today there is a plethora of data available from various sources that
gives us these insights into consumers.
• Data around what people are searching for, the content creators
and influencers they follow, the platforms on which they consume
the data, the nature of interaction, and so on. X
Of 48 5
• This knowledge empowers us to create
content that’s most relevant to our consumers
– more personalised, more topical and more
credible.
• It also helps us serve this relevant content to
consumers at a time and context where they
are most receptive to our message. X
Of 48 6
Qu. 2/5
• Which is more important, data or content, to the future of
marketing?
• While it may sound like a cliché, both are equally important
• A wonderful piece of content may draw attention. But without the
right backing of data which tells us who to target, when and in what
context, it may not result in actually moving the needle on brand
equity or business results.
• On the other hand, we may have all the right data and insights, but
if that is not leveraged with powerful and evocative storytelling that
is in synch with the brand, it will fail to make an emotional connect
or influence behaviour. X
Of 48 7
• When the two are deployed in tandem, then we see real
magic occur.
• Some recent examples from Mindshare India which have
won global recognition are the work done for the Lifebuoy
“Adoptive Data Lighthouse” where infection –related data
was obtained at a district level in near – real time and
customised communication was served to consumers in
those districts, and PepsiCo’s partnership with the Rail Yatri
app to target train travellers with customised food plus
Pepsi combinations. X
Of 48 8
Qu. 3/5
• How do you see the convergence of digital and TV playing out?
• Multi-screen behaviour of consumers is here to stay.
• The fluidity of content across screens is increasing exponentially
every day. We see examples of content working across TV and
digital screens, like the “No.1 Yaari” talk show created for Diageo
which was a major hit on TV as well as on a digital platform.
• At the same time we also see a lot of content repurposed for the
different environments – be it in terms of duration, format or
structure. X
Of 48 9
• One thing digital medium enables, which TV
hasn’t been able to, is the ability to target
specific, addressable audience segments based
on the behaviour (as opposed to pure
demographic segments).
• But with new advancements like programmatic
TV on the horizon, TV also give us ability to target
such addressable segments. X
Of 48 10
Qu.4/5
• What, according to you, are the top 3 mistakes committed by
organizations today in leveraging digital marketing?
• The biggest gap is in defining KPIs (Key Performance Indicators) and
benchmarks for digital marketing activities.
• With the ecosystem becoming so diverse – video, search, native,
influencer marketing and ecommerce – it is imperative to have an
aligned view of what constitutes success in what context.
• A related problem is the lack of investment in understanding the
relationship between digital metrics and business metrics. X
Of 48 11
• So agencies and marketers tend to revert to
trusted and proven media which is validated by
econometric studies.
• The final area which needs attention is the
creation of quality content that is specifically
designed for specific environments.
• We need to invest in not just repurposing, but
actual re-creation of content. X
Of 48 12
Qu. 5/5
• With every brand incorporating the latest technological
advancements into their digital media campaigns, what will
help organizations stand out and differentiate themselves
from the competitors in the long run?
• Technological advancements certainly give companies and
agencies a host of opportunities to engage and delight
consumers.
• But success in the long run still depends on how we use this
technology to address the basics of business. X
Of 48 13
2/3 SMS from Indian Bank, 7 July 2018
• Dear Customer,
• Mobile Banking & ATM services will not be available from 8th July
2018 from 4.00 a.m. to 8.00 a.m. due to maintenance activity.
Regret for the inconvenience caused – Indian Bank
• What do you think of this message?
• 9 MM1922-609 Daftary Rajvi
• I have closed my savings account with the bank two years
ago
• Misuse by hackers X
Of 48 14
3/3 Customer feedback – Ask for it, make it easy for
him to give (Customer centric organizations)
Of 48 15
• The online medicine-delivery category
represents a significant strategic opportunity
for ecommerce companies. Why?
• 11 MM1922-611 Devadiga Jyoti
16
• Monopoly loyalty, what does it mean?
• 13 MM1922-613 Doshi Rohan
17
• Stages in customer loyalty ladder?
• 15 MM1922-615 Hatiskar Karan
18
• Affinity based loyalty programmes?
• 20 MM1922-621 Pandey Aditya
19
• Customer Loyalty
• Dimensions of loyalty
• Types of loyalty
• Loyalty Ladder – Suspect to Partner
• Advantages of loyalty
• Drivers of loyalty
• Loyalty strategies
• Customer Loyalty Management (CLM)
• Loyalty programmes x
Of 48 20
Today’s topic
Customer Satisfaction
Of 48 21
Introduction
• Customer focused organizations …..Customer satisfaction
• Characteristics of customer focused organizations…tools and
techniques to monitor customer satisfaction…..Quality
improvement process to respond to consumer feedback
• It is a personal assessment of an individual …..expectations
• Varies with situations / product category
• Satisfaction (Vague) ….Overall experience with the
organization X
Of 48 22
Definition
• Satisfaction is the consumer’s fulfilment response
• It is a judgement that a product provided a
pleasurable level of consumption related
fulfilment
• Customer satisfaction is defined as a person’s
feelings of pleasure or disappointment that
results from comparing a product’s perceived
performance to his expectations X
Of 48 23
The customer's mind is still closed to us; it is a
`Black box' that remains sealed. We can observe
inputs to the box and the decisions made as a
result, but we can never know how the act of
processing inputs truly happens"
John E. G. Bateson X
Of 48 24
Customer Satisfaction (Macro) Models -
1/5 Traditional macro-model of customer satisfaction
Continue
Leave
Of 48 25
2/5 Model of linkage of value chain to
customer satisfaction
Of 48 26
3/5 Model of link between
satisfaction and value
Use of gross benefit-cost judgement by customers
Desired end
state
Cost Benefits /
compared cost
to
competitor
s
Of 48 27
4/5 Model of two levels of satisfaction and perceived
service quality
Of 48 28
5/5 Model of sources of customer
satisfaction
1. Customer
’s prior
experienc
e
2. Reference
Salesper Technical
son service quality
Of 48 29
Micro-models of customer satisfaction
• Expectations disconfirmation model (Pre-consumption
expectations vs post-consumption experiences)
• Perceived performance model (expectations play less important role)
• Norms models (perceived performance vs some standard for performance)
• Multiple process models (More than one standard of comparison)
• Affective models (beyond rational process, emotion, liking, mood etc) X

Of 48 30
Customer Loyalty and Satisfaction
• It is believed that loyalty and satisfaction are same – Do you think it true / false
• 25 MM1922-626 Sethuraman Ramprasad
• It is believed that loyalty and satisfaction are same – not true
• Customer Satisfaction is an emotional and sentimental issue. It is a feeling, a

feeling of satisfaction over a job well done in the past. Loyalty is related to the
act of the customer future.
• However, satisfied consumer will always be the prerequisite in most cases for a
supplier to ensure his loyalty. X
Of 48 31
State of loyalty
Loyal Disloyal
State of Satisfied ok ?
satisfaction
Dissatisfied ? ok
Of 48 32
Satisfied but Disloyal customers?
• Entrepreneur Customer (Experimenters/innovators)
• Pressure from Competitors

Loyal Disloyal
Satisfied ok ?
• Outdated Supplier X
Dissatisfied ? ok
Of 48 33
Unsatisfied but Loyal Customers?
• Class participation 7 – Give some examples
• 28 MM1922-629 Shetty Hitesh
• Lack of options Loyal Disloyal

• Improved Supplier
(Continues with the Satisfied ok ?
hope that supplier
will improve) Dissatisfied ? ok
• Customer Inertia X Of 48 34
Measuring
Customer
Satisfaction
(Anything that gets measured,
improves)
Of 48 35
Tools for measurement
• Direct Method
– Customer feedback surveys, complaints at call centre
– Informal chat/interview with the customer
– Surprise visits to market-consumer sector (Mystery
shoppers)
• Indirect Method
– Measurement using transient changes in complaints
– Measurement using transient changes in loyalty (RFM – Recency,
Frequency, monetary value) X
Of 48 36
Models for measuring customer
satisfaction
1. Customer satisfaction index (attributes,
weights, scores, average)
2. Net Promoter score
3. American Customer satisfaction index
4. Kano model X
Of 48 37
1/4 Customer satisfaction index (CSI)
Parameter P A (Score 1-10)
(Restaurant)
P1 (Ambience) 8
P2 (Employee 4
behaviour)
P3 (Food 8
quality)
P4 (Timelyness) 3
P5 (Billing) 4
Average=5.4
Of 48 38
Customer satisfaction index (CSI)
Parameter P A (Score 1-10) B (Importance C (Weight) Weighted score
of parameter 1- D=A*C
10)
P1 (Ambience) 8 7
P2 (Employee 4 5
behaviour)
P3 (Food 8 9
quality)
P4 (Timelyness) 3 3
P5 (Billing) 4 6
Average 5.4 Total 30
Of 48 39
10)
P1 (Ambience) 8 7 7/30 = 0.24
P2 (Employee 4 5 5/30=0.16
behaviour)
P3 (Food 8 9 9/30=0.3
quality)
P4 (Timely-ness) 3 3 3/30=0.1
P5 (Billing) 4 6 6/30=0.2
Average 5.4 Total 30 Total 1.00
Of 48 40
10)
P1 (Ambience) 8 7 7/30 = 0.24 8*0.24 = 1.92
P2 (Employee 4 5 5/30=0.16 4*0.16 = 0.64

behaviour)
P3 (Food 8 9 9/30=0.3 8*0.3= 2.4
quality)
P4 (Timelyness) 3 3 3/30=0.1 3*0.1= 0.3
P5 (Billing) 4 6 6/30=0.2 4*0.2= 0.8

Average 5.4 Total 30 Total 1.00 Total 6.06
Of 48 41
2/4 Net promoter score
• Net Promoter Score - Measure of customer
satisfaction
• Video 5.26
• https://www.youtube.com/watch?v=tUdJOLoXBO
g
• How is net promoter score calculated? x
Of 48 42
2/4 Net promoter score
• Net Promoter Score - Measure of customer
satisfaction
• Video 5.26
• https://www.youtube.com/watch?v=tUdJOLoXBOg
• How is net promoter score calculated?
• 30 MM1922-631 Tiwari Gaurav
Of 48 43
3/4 American Customer Satisfaction
Index (Interview)
B-C or B/C
Of 48 44
Attractive (A)
“Didn’t know I Satisfaction
requirements
• Not expressed
• Customer
4/4 Kano Model
wanted it but I
like it.”
tailored Satisfier
• Cause of delight One Dimensional
Desired Quality
Delighters
(Explicitly
Excited Quality
(O)demanded)
Service Service
Performance Performance
Dissatisfier
Must-be “Cannot increase
Expected Quality my satisfaction, but
can decrease.”
Must be / expected (E)
requirements
• Implied
Dissatisfaction
Of 48 • Self evident 45
Example: Requirements Survey
I like it that way
It must be that
A way
I am indifferent
I can live with that
way
I dislike it that way
Of 48 46
Functional vs. Dysfunctional Comparison
Of 48 47
Evaluation Customer Requirements No. of
Requirement Respondent
Product/servi categories & The category
s
ce attributes having highest
frequencies
C.R. A E O R Q I Total Grade frequency
1 3 6 14 23 O
2 5 6 11 1 23 O
3 6 1 4 1 11 23 I
4 13 10 23 E
5 11 1 2 9 23 A
Customer Requirement is:
A: Attractive R: Reverse Q: Questionable Result

Of 48 48
E: Expected O: One Dimensional I: Indifferent
Attractive (A)
requirements
• Not expressed
• Customer
tailored
Kano Model
• Cause of delight
“Didn’t know I Satisfaction
wanted it but I
like it.”
Satisfier (Explicitly
One Dimensional
Desired Quality
(O)demanded)
Delighters
Excited Quality
Service Service
Performance Performance
Dissatisfier
Must-be “Cannot increase Must be / expected (E)
Expected Quality my satisfaction, but requirements
can decrease.” • Implied
• Self evident
• Not expressed
• Obvious
Dissatisfaction Of 48 49
Videos
• Customer delight example by Louis Philppe
3.12
• https://www.youtube.com/watch?v=FkKTMn1
Day0
• Explains how social media is used by
marketers to build relationships?
Of 48 50
Summary XXX
• Customer Satisfaction – Definition
• Customer Satisfaction (Macro) Models (5)
• Micro-models of customer satisfaction (5)
• Customer Loyalty and Satisfaction
• Measuring Customer Satisfaction - Direct Methods, Indirect
Methods
• Models for measuring customer satisfaction - Customer
satisfaction index NPS, American Customer
(attributes, weights, scores, average),
satisfaction index, Kano model XXX
51
Management
(CRM)
Part Time MMS Sem V
Session no. 7 (4 September 2021)
Prof M R Koshti
1
1/3 Amazon smoothens way for offline
play
Of 48 2
Business Standard, 24 August 2019,
Saturday, p 2
• After More and Future Retail deals,
the e-commerce giant has access to
more than 2,100 offline stores
across the country X
Of 48 3
• With access to more than 2,100 offline retail stores spread across
the country, global tech and e-commerce giant Amazon has become
one of the largest retailers in the country.
• Late on Thursday evening, Kishore Biyani-led Future Retail, in a
filing to BSE, said that Amazon.com was acquiring 49 per cent stake
in a group entity — Future Coupons.
• Future group has over 1500 stores across various formats
• Future Coupons is engaged in developing innovative value added
payment products and solutions such as corporate gift cards, loyalty
cards, and reward cards primarily for corporate and institutional
customers X
Of 48 4
• Amazon, in September 2018, bought Aditya Birla
Group’s food and grocery retail chain, More, which
runs 523 supermarkets and 20 hypermarkets.
• According to experts this stake buy in Future Coupons
would help Amazon in its three-sided crucial battle
with Walmart and Reliance Retail
• It will help Amazon carve out a bigger slice of India’s
retail market pie. X
Of 48 5
• Over next few months, Amazon India may start building a fresh
produce supply chain for its two-hour delivery service Amazon-
Fresh at More and Big Bazar stores throughout the country.
• It may also start selling its private labels in apparel as well as food
brands that would make its way into the aisles of these stores
• Also, More and Future Retail would help increase Amazon’s online
selection, going forward.
• Also with help of 49% stake buy in Future Coupons, Amazon would
now be able to expand use cases for its wallet Amazon pay. x
Of 48 6
• From combined might of More and Future Retail would help
Amazon in more ways than one.
• From delivery logistics, supply chain for fresh produce, outlets to
sell its private labels to finally creating an offline footprint, these
stores would help amazon to go offline, if the regulators permit.
• Both More and Future Retail are planning to double their retail
foot-print over the next few years, which would immensely help
Amazon.
• In the long term, Amazon believes that this base of retail stores
would help it go offline in a big way when FDI norms in retail are
favourable x
Of 48 7
• This would be crucial for the tech giant to not only take
on Walmart but also Reliance Retail, which is planning
to go for a major expansion as part of its new
commerce initiative.
• Reliance, at the moment, has the biggest offline
footprint with 10,500 stores to over 3 million
merchants and kirana stores on its platform
• Reliance is planning to launch Jio e-commerce,
probably in the next few months. X
Of 48 8
2/3 Zomato revises scheme, but
eateries to stay logged out
Of 48 9
A file photo of Zomato CEO Deepinder
Goyal
Of 48 10
Mint, 22 August 2019, Thursday, p 5
• A key change includes curb on usage of
Gold scheme to one restaurant per day
• Zomato also puts a cap on the number of
Gold unlocks per table, restricting it to 2
X
Of 48 11
• Zomato has agreed to revise its Gold programme,
tightening the noose around the way members can use the
popular platform, a day after the National Restaurant
Association of India (NRAI) pressed food dining aggregators
to put an end to steep discounting on dine-in offers.
• The NRAI has, however, refused to accept Zomato’s
changes calling them a “reconstruct of gold" in what can be
seen as an escalation of tension between the company and
the restaurant association that represents half a million
members. x
Of 48 12
• Zomato Gold is a paid membership scheme that offers
complimentary food and drinks to diners.
• Zomato is modifying the Gold programme after talks with
the NRAI managing committee, and members of other
restaurant associations, who complained that such offers
were disrupting the industry with deep discounting,
• The key changes include Zomato restricting the use of the
Gold membership to one unlock per day. It has also capped
the number of Gold unlocks per table, restricting it to two.
An unlock is an offer that can be availed at an outlet. x
Of 48 13
• In his e-mail, Goyal has also urged restaurant partners
who had logged out of its Gold scheme last week to
sign back before 26 August.
• Zomato will roll out the changes before 15 September.
• These will be applicable to the 1.1 million existing
members of Gold, as well as new members.
• The programme has 6,500 restaurants as partner
members. x
Of 48 14
• Zomato’s move comes after more than 2,000
restaurants across India pulled out so far of
reservation- and membership-driven dining apps,
including EazyDiner (Prime), Zomato Gold, Dineout,
nearbuy and magicpin.
• The move that started last week and is called #Logout
is led by the NRAI and is largely aimed at ending steep
discounting by such platforms, which the NRAI says is
hurting business. x
Of 48 15
• “The biggest pain point we heard was that users hop
between places on a busy evening, claiming 1+1
starters at one place, 1+1 main course at another, and
2+2 drinks at some other.
• To solve this, we will limit Gold usage by a single user
to one unlock per day," Goyal said.
• The move was to ensure that customers complete their
dining experience at a single restaurant and will help
bring down the net effective discount, he said. x
Of 48 16
• The firm has also laid down new rules to curb
multiple Gold unlocks per table.
• “We are going to restrict the number of unlocks
to a maximum of two per table," he added.
• Currently, two guests are needed for one Gold
unlock without any restrictions on the number of
members and Gold unlocks per table. x
Of 48 17
• Interestingly, Zomato has also axed Gold ID sharing, a
practice used by many users.
• “Login sharing of Gold IDs leads to two things: orders
that shouldn’t be discounted get discounted and for
large tables, it leads to illegitimate Gold unlocks on a
single table thus leading to more discount per table.
• We will restrict a user’s login ID to a single mobile
device at a time so that login sharing becomes
impossible," Goyal noted in his e-mail. x
Of 48 18
• It also said the Gold membership will now be sold to diners at a flat
annual subscription of ₹1,800, doing away with other packages
priced under ₹1,000. Zomato has also discontinued trial packs of
Gold.
• Consumers have so far enjoyed the Gold scheme that came at a
time when India’s young population is increasingly socializing over
food and drinks.
• However, restaurants owners have been unhappy for a while
complaining that such offers are leading to steep discounting in a
market that is already burdened with higher taxes, and fixed costs
such as rentals. x
Of 48 19
• Members of the NRAI, however, said they will
continue with #Logout as a mark of protest
against discount-driven dining apps. “This is a
knee jerk reaction to the #Logout movement,"
the NRAI said. x
Of 48 20
3/3 It is all about consumer data.
Eateries chase direct orders
• Chains save on commissions by bypassing
food aggregators and gain consumer insights
21
The Economic Times, Wednesday 30
June 2021, p 10
• The “Order Direct” campaign, launched by
restaurants to resist steep commissions
charged and data masking by food
aggregators, is gaining momentum for reasons
beyond costs as the industry wakes up to the
possibilities of consumer data. X
22
• Multiple restaurant chains are now diverting their
energy into popularising direct ordering channels
like their own website, or listing it on platforms
like Dotpe, Peppo and Thrive, as they offer
identifying information of customers, which
restaurants say is helping them customise
offerings and drive higher sales from repeat
customers. X
23
• The Order Direct campaign promoted by
National Restaurant Association of India
(NRAI) gathered steam during the second
wave of the pandemic that further devastated
the restaurant industry. x
24
• Customer Satisfaction – Definition
• Customer Satisfaction (Macro) Models (5)
• Micro-models of customer satisfaction (5)
• Customer Loyalty and Satisfaction
• Measuring Customer Satisfaction - Direct Methods, Indirect
Methods
• Models for measuring customer satisfaction - Customer
satisfaction index American Customer
(attributes, weights, scores, average),
satisfaction index, Kano model X
Of 55 25
Today’s topic
Strategic CRM in B2B (Business
to Business) Market
Of 55 26
Industrial Marketing - Definition
• Industrial marketing consists of all activities involved in…
• marketing goods and services…
• to organizations, non-profit institutions, and government…
• that use goods and services, in production of consumer / industrial goods, services…
• and to facilitate the operation of their enterprises (Industrial marketing committee review board,
1954)
• Industrial marketing, also called business marketing, or business to business marketing (B2B), does
not include all forms of business marketing.
• E.g. a manufacturer selling consumer goods to wholesalers or retailers typically is not seen as an
industrial marketing activity X
Of 55 27
Industrial products (goods and services)
• Installations / major equipment / Capital equipment –
Very expensive large machines or other equipment like
blast furnace, drilling machine, cranes, airplanes, etc.
• Accessories or minor equipment – Less expensive small
machines like lathes, small motors, computers,
photocopiers
• Raw materials – The basic inputs to production, natural
state products like iron ore, bauxite, agriculture
products like sugar cane and fruits X
Of 55 28
Industrial products (goods and services)….
• Processed material – They become part of the finished product
after some processing like steel bars, leather, plywood, wires etc.
• Component parts – They directly become part of the finished
product e.g. batteries, compressors, motors
• Operating supplies – Items that are necessary for production and
administrative operations e.g. paints, soaps, oils, greases,
lubricants, stationary, floppies, CDs
• Services – These are the support services like construction,
transport, warehousing, consultancy, advertising etc. X
Of 55 29
Industrial vs consumer marketing
• Industrial marketing, like consumer marketing has
to define target market, understand buyer
behavior through information system and
research, develop marketing mix and offer it
effectively.
• However industrial marketing has certain
characteristics that contrast sharply with
consumer marketing (?)… X
Of 55 30
1/11 Market size / structure
• Industrial market • Consumer market
• Small number of large consumers X • Large number of small consumers X
Of 55 31
2/11 Geographical Structure
• Geographically concentrated X • Geographically dispersed X
Of 55 32
• What did we cover in last two slides?
• 32 MM1922-633 Upadhyay Pravin
33
3/11 Demand
• Derived demand, fluctuating • Mostly autonomous and price elastic
demand, price inelastic, cross X
elasticity and reverse elasticity
• OEM & Replacement X
Of 55 34
OEM and replacement demand (market)
Consumers
Bajaj require 5 lac
Auto two wheelers
MRF Tyres OEM
Hero Honda
Replacement demand
OEM – Original Equipment Manufacturer

Of 55 35
• Sudarshan engineering manufactures and
supplies car locks to Maruti Suzuki and also to
automobile service centres.
• Explain OEM using above example.
• 37 MM1922-638 Tattanvalpil Surabhi
36
4/11 Nature of products
• Technically complex • Technically less complex, standard X
• Tailor-made X
Of 55 37
• This onwards slides will be read by.. 31
MM1922-632 Upadhyay Hardik
38
5/11 Buying motive
• Rational / task based X • Socio-psychological,
• Emotional X
Of 55 39
Purchasing objectives
• Delivery / availability – should be available when needed
• Product quality – Should be consistent with specifications
• Lowest price – To maximize profits
• Services – should be available as and when wanted (information, technical assistance, training,
spare parts availability, etc)
• Supplier relationship – so that sometimes supplier goes out of the way to meet the contingencies of
the buyer
• Personal objectives – Higher status, job security, salary increments, promotions, social
considerations (friendship, mutually beneficial relationship, personal favors, kilobytes..) X
Of 55 40
• Explain different purchasing objectives in
industrial market.
• 16 MM1922-616 Hegishte Siddhesh
41
6/11 Buyer members
• Multiple, technically knowledgeable • Household family members, with less
X technical expertise X
Of 55 42
Buying Centers (or Decision making units)
• Initiators – usually users but not always (seller?, CEOs, top managers who are exposed to more
developed environment)
• Influencers – technical people, outside expert or consultant
• Users – Actual users of the product
• Buyers – These are professional buyers whose job is defined as purchasing job. Purchase Manager,
Materials Manager etc. Their responsibilities include a) Obtaining quotations from suppliers b)
Supplier evaluation and selection, c) Negotiation, d) Processing purchase orders, e) Expediting
deliveries, f) Implementing purchase policies of the organization
• Deciders – They make the decision to buy.
• Gatekeepers – People who control the flow of information to the above people
• Coach – A person in the customer organization who wants your solution (Your inside salesman) X
Of 55 43
• Explain gate keepers
• 46 MM1922-648 Poojari Akshay
• No class participation, marked absent
44
Organizational buying behavior models – 1) Webster and
Wind model
Environmental Variables – Physical, Technological, Economic, Political and legal,
Labor and unions, Cultural, Customer demands, competitive practices and
pressures, supplier information
Organizational variables – Objectives and goals, organization structure,
purchasing policies and procedures, evaluation and reward systems,
degree of decentralization in purchasing
Buying centre variables – Organizational buying decisions –
Authority, Size, Key Choice of suppliers, Delay decision and
influencers, interpersonal search for more information, Make or
relationship, communication lease or buy, Do not buy X
Individual variables – Personal goals, Education, Experience, Values, Job

Of 55 45 of 31
7/11 Buying factors
• Quality, service, price in that order X • Price, quality, service X
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8/11 Price
• Negotiation are inevitable (always • Standard price (MRP), standard
there) X discounts X
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9/11 Promotion
• Emphasis on personal selling, close • Emphasis on advertising X
supplier-customer relationship X
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10/11 Reciprocation
• Possible • Not possible X
• Company A buying some products
from B, and B buying some products
from A
• TCS, Tata Motors – TCS sells software
services to Tata Motors, while Tata
Motors sells cars to TCS for executive
vehicles X
Of 55 49
• What is reciprocation?
• 43 MM1922-644 Dolas Tejas
50
11/11 Distribution channel
• Mostly direct X • Mostly indirect with multiple levels,
except for direct sellers like Eureka
Forbes, Amway X
Of 55 51
Sell what is personally important to different
buyers in industrial marketing
Economic buyers
The technical buyers
User buyers
Of 55 52
Economic buyers (Purchase Dept)
• Their role is to screen out and place order on selected supplier
• The economic buyer can not say to user / technical buyer that they are buying a
product for them. The technical department or the user must place the request
first They can choose which supplier they will buy.
• The definitive quality of economic buyer is that they do not choose the product,
someone else specifies what is needed X
Of 55 53
• They specify what the product must have and
what it must not have
• They set criteria of the product to be
purchased
• E.g. Research dept, Quality control dept,
architects, consultants, etc… X
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User buyers
• The user buyer actually uses the product X
Of 55 55
Please draw this table in
your notebook
Most Second Third most Least

important most important
important
important
Economic buyer
(Purchase Dept)
Technical buyer
User buyer
Of 55 56
Important things for these buyers
• Price
• The features of the product (The facts that no
one would disagree with)
• The benefits of the product (What you think the
product will do for you, as a result people can
and do argue with them)
• The convenience of buying the product (How
easy it is to identify which model will be suitable)
• Relationship X
Of 55 57
Ranking exercise
• Rank (P) price, (F) features, (B) benefits, and
(C) convenience according to importance for
each of the three different types of buyer.
• Leave “relationship” as it will be first priority
for everybody. X
Of 55 58
P F B C

important
important
Economic buyer
Technical buyer
User buyer
Of 55 59
Economic buyer
• 40 MM1922-641 More Swaranjali
Of 55 60
Economic buyer P C B F
• Price is the most important thing when selling to economic buyer (???)
• Economic buyer can not say “yes”, they can only say “No”
• Price is a factor in “Not buying” but it is relatively unimportant factor in the decision to buy
• If you do a proper job with the technical and user buyer, the economic buyer has to buy the brand
even if it is costly
• In today’s environment of empowerment you should recognize that the user buyer is the most
important to your sale
• “Give away”s are normally given to economic buyers but they should be given to the user buyers
• In order to sell to economic buyer, you must use the user buyers X
Of 55 61
Technical buyer
• 35 MM1922-636 Thasal Aditya
Of 55 62
Technical buyer C F B P
• When you are trying to get your product specified by a technical buyer, your objective is to become
“Manual / Catalogue of Choice”
• The engineers normally only specify from the catalogues they are familiar with
• If they specify too many products then they have to test so many products.
• Never take a catalogue with you in to an appointment with them. Your job is first to find out …
• Do they know where your catalogue is? If they don’t, your product will not be in their recommendation
list.
• How often they use it? Is it in pristine condition or well thumbed?
• How familiar are they with it? Can they find things easily? Ask them to find out some technical information
on some pretext.
• Do a catalogue presentation to anyone who is not 100% ok on above.
• Show them how your catalogue is organized, sell the benefits of catalogues. X
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User buyer
• 31 MM1922-632 Upadhyay Hardik
64
The user buyer B F C P
• You should never discuss price with a user
buyer
• You must always talk about benefits with the
user buyers
• Ask them what benefits they will get out of a
feature instead of you specifying it
Of 39 65
Summary XXX
• Industrial Marketing
• Difference between industrial and consumer
marketing XXX
Of 48 66
Management
(CRM)
Part Time MMS Sem V
Prof M R Koshti
1
1/3 How a phone app and a database
served up Imran’s poll win
Of 54 2
1/9
• The small CMS (Constituency Management System) unit led
by Mughal, Umar’s personal secretary, was typical of how
Khan’s party set up teams in constituencies across Pakistan
to mine the database, identifying voters by household,
zeroing-in on “confirmed” PTI voters, tagging them on the
app, and ensuring they turned out on election day.
• “Work that would take days of weeks is being completed in
one to two hours,” Mughal told Reuters in Umar’s office
minutes after the polls shut. X
Of 54 3
3/9
• PTI was secretive about the technology plan ahead of
the July 25 poll, fearing rivals could copy it, but several
party workers showed Reuters how the app
transformed their campaign and gave them an edge.
• The phone app proved especially useful in getting
supporters to the polls when the government’s own
telephone information service giving out polling place
locations suffered major problems on election day,
leaving other parties scrambling. X
Of 54 4
2/9
• It partly explains why Khan’s party managed to win tight-
margin races in the nuclear-armed nation of 208 million
people, though Khan’s rivals allege he also benefited from
the powerful military’s support - an allegation he staunchly
denies.
• “It’s had a great impact,” said Amir Mughal, tasked with
using the app and database, known as the Constituency
Management System (CMS), to elect Asad Umar, a
lawmaker who won his seat in Islamabad and will be Khan’s
new finance minister. X
Of 54 5
Business Standard, 6 August 2018, Monday, p 7
4/9
• A phone app and a database of more than 50 million voters

were key weapons in the successful campaign of cricket
legend Imran Khan in last month’s general election, though
rivals allege Khan also received clandestine aid from
Pakistan’s powerful military.
• How Khan’s Pakistan Tehreek-i-Insaf (PTI) party used the
database and the associated app represents a sea change in
the antiquated way in which Pakistan’s biggest parties
conduct elections, from pre-poll targeting of voters to on-
the-day mobilization of supporters. X
Of 54 6
5/9
• Khan’s PTI surpassed expectations to scoop about 115 seats out of
272 elected members of parliament, while the party of ousted and
jailed premier Nawaz Sharif trailed in second with 64 seats.
• Developed by a small tech team, the CMS was a key response to
Khan’s bitter complaints after the 2013 poll loss that his party failed
to translate mass popularity into votes because it did not know the
“art of winning elections”.
• Sharif’s Pakistan Muslim League-Nawaz (PML-N) ran a more erratic
campaign, hurt by divisions within the party and the loss of key
leaders who were either disqualified or in case of Sharif and his
daughter, jailed. X
Of 54 7
6/9
• Weeks before the elections, Khan sent out a video via
WhatsApp urging PTI candidates to embrace CMS.
• “I have seen and experienced how it works and I’m using it
in all five constituencies I am contesting,” Khan said in the
video message, seen by Reuters. “The faster you apply this
system, the easier your life will become,” Khan added.
• Created by former U.S.-based real estate businessman Tariq
Din and Shahzad Gul, a tech consultant, the early version of
the system was not immediately embraced by PTI. X
Of 54 8
7/9
• But Umar, the incoming finance minister, and wealthy
politician Jahangir Tareen Khan, a close Khan ally, were
among the first to see its potential. After the software
helped deliver strong results in the 2015 local elections, the
party was won over, according to senior PTI officials who
work on the CMS software.
• For the national election PTI focused on 150 constituencies
it felt it had the best chance of winning. Party workers said
they used scanning software to digitize publicly-available
electoral voter lists to create the database. X
Of 54 9
8/9
• By typing in a voter’s identity card number into
the app, PTI workers could see details such as
family home address, who else lived in the same
household, and where they needed to vote.
• CMS architects say the system’s power was only
partly utilized as there was not enough time to
train workers across the country and some
politicians resisted using it. X
Of 54 10
ADVANTAGES
9/9
• In the run up to election day, PTI workers were also able to print out
“parchis”, or slips, that voters needed to enter the polling station.
PML-N workers had to help voters fill the paper slips with a pen.
• In a large nation where illiteracy hovers above 40 percent, that
meant PML-N workers had to write out millions of slips for the 12.9
million voters who backed Sharif’s party, stopping those workers
from canvassing or doing other vital work.
• “It’s a paradigm shift,” said another senior CMS operator. “We
changed the party, turning social media popularity into reality.” X
Of 54 11
2/3 Swiggy lines up $100M to deliver
milk, other essentials
Of 54 12
TOI, 10 July 2019, Wednesday, p 17
1/4
• Swiggy will invest $100 million (over Rs 680 crore) for its
subscription-based delivery business under Supr, which
delivers milk and other daily essentials to consumers,
according to two sources familiar with the development.
• Swiggy acquired Supr last year even though it hasn’t made
an official announcement on the same. The unit is already
doing more than 1 lakh deliveries per day in six cities
including Bengaluru, Mumbai and Delhi-NCR. X
Of 54 13
2/4
• The development comes as the online food delivery player has also
forayed into hyper-local delivery business under Swiggy Stores and
subscription-based home-cooked meal with Swiggy Daily.
• It aims to drive a higher frequency of orders, leverage its growing logistics
network as well as the brand built on food delivery.
• Swiggy’s investment in Supr, which is planned for two-three years, comes
at a time when the space is seeing heightened action in the micro-delivery
space from vertical players like Milkbasket and DailyNinja, along with
horizontal players like BigBasket.
• Swiggy is believed to have grown its monthly user base by 10 times to
about 1,50,000 in the last six months, the people mentioned earlier
added. X
Of 54 14
3/4
• Consumers, especially with a fast-paced urban lifestyle, can subscribe for weekly,
monthly or quarterly milk delivery service on Supr where they can add other
products like bread and eggs on a need basis. This could be for one-time delivery
along with the milk delivery subscription.
• For Supr, 70% of its gross sale is from milk while the rest comes from non-milk
products. This is similar for Supr’s rivals as well.
• The segment Supr is working in is serving such a necessity that it can be scaled up
beyond the top 10 cities. Swiggy has made in-roads in rural markets and Supr can
be taken there too based on the convenience this model offers,” a person aware of
the company’s plans said.
• Another person aware of the goings-on said 60% of the orders come from huge
gated societies, where it can serve a large set of customers, bringing down its
delivery costs. X
Of 54 15
4/4
• According to Sagar Yarnalkar, co-founder and CEO of
DailyNinja, which competes against Supr, the overall market
at present sees 2,70,000-3,00,000 orders per day.
• Yarnalkar said his daily order volume has grown to 90,000
from about 30,000 in January this year.
• These startups typically see an average order size of Rs 70-
90 per day since the focus is on milk primarily. The people
mentioned earlier said consumers tend to buy non-milk
products more often after subscribing to milk delivery. X
Of 54 16
3/3 Alexa’s discovery of India
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Business Standard, 1 July 2019,
Monday, p 15 1/8
• Less than two years since its journey
began in the country, Amazon's
voice assistant has picked up
thousands of new skills to appeal to
the desis X
Of 54 18
2/8
• It was in October 2017 that global e-commerce and technology
giant Amazon launched voice assistant Alexa in India. In a rather
brief span, the product has embraced the Indian way of life with all
its peculiarities and diversity, sometimes even surprising the user
with its “Indianness”.
• From cracking them up with superstar Rajnikanth jokes to providing
instant solution to their craving with a recipe for gajar ka halwa or
simply keeping one engaged with a game of tambola, Alexa can do
it all. It even goes beyond the earthly by invoking a deity with its
recital of Hanuman Chalisa X
Of 54 19
3/8
• As with any new market, Amazon had carried out an all India study before
launching but the sheer complexity that a multi-cultural environment offers, the
turf was always going to be challenging.
• This forced the company to keep adding to device’s learning on Indian culture and
customs
• Sample this: Alexa skills store has grown by 100% in a year.
• It started with 10,000 skills, and over 20,000 skills now, from radio, to quizzes to
utilities.
• It has ability to play music from Amazon Prime Music and Saavn, find restaurants
with Zomato, buy tickets from PVR, order food from KFC.
• The company is working with many Indian brands which have built skills for Alexa
across categories such as astrology, Bollywood, cricket, devotion, education, food
and recipes. X
Of 54 20
4/8
• Take cricket for example
• Knowing how India is cricket-crazy nation, Amazon realised that it could not afford
to have Alexa give out wrong or delayed information on the sport
• Before launching cricket on Alexa, they watched IPL matches with customers to
understand how they would like to interact with the device in various situations
• “One example of feature that customer asked for was to be notified of important
matches. We recently launched this feature and saw thousands of customers set
up these notifications for the recently concluded India-Pakistan match in the
ongoing ICC World cup”
• Alexa understood that the only way to get the device into Indian households was
to make it completely Indian and relatable, so a foreign accents talking device was
out of question. X
Of 54 21
5/8
• The company used automatic speech recognition with multiple Indian accents
• A customer from northern part of India is going to pronounce things very
differently than customer living in South India
• We did a lot of work to ensure that Alexa would pick up on proper nouns – names,
places, songs in Hindi, Tamil, Telugu, Kannada, Malyalam or Punjabi
• Alexa speaks English with an Indian accent but has also been taught Hindi and
regional language phonetics so she can pronounce names of important places,
people, events and short phrases properly
• Currently, Alexa understands Indian English and is beginning to understand a few
mixed language utterances. It is still day one, but you can try asking “Alexa, kya
time hai?” to know about current time X
Of 54 22
6/8
• To get better insights through feedback, the Cleo skill was recently
made available in the Alexa India store.
• It provides customers with opportunity to share more about their
languages and culture with Alexa
• Last year, Amazon’s CEO Jeff Bezos launched a grand local language
plan, aiming to turn things around in India
• In a sort of giveaway, in his fifth anniversary congratulatory letter to
customers, Bezos even referred to Amazon.in as “Indiaki Apani
dukaan” (The country’s own shop)
• The idea was to reach out to the next 100 million customers who
may be more comfortable conversing in their mother tongue X
Of 54 23
7/8
• In the past one year, Amazon has been combining various elements to
make its vernacular outreach a success instead of just converting English
text to local languages
• The product that is going through the most “Indianisation” is Alexa
• Amazon Echo led the Indian smart speakers market with 59% share in
2018, followed by Google Home with 39% unit share
• Amazon might have finally found a way to crack the vernacular puzzle
• The plan is simple – the e-commerce giant will help the next wave of
customers with 60-90 second videos that will have all information about
products.
• The videos will have chat assistance from Alexa in vernacular languages X
Of 54 24
Alexa fun facts 8/8
• India says “I love you” to Alexa at least once every

minute.
• Alexa gets asked “will you marry me/” at least once in
two minutes
• “why is the sky blue?” is the most asked question in India
• Alexa in India spends more than half day, every day,
telling stories. She spends the other half coming up with
new ones
• She spends nearly 15 hours a day singing songs in her
own voice X
Of 54 25
Strategic CRM in B2B (Business to Business)
Market
Industrial Marketing – Definition
Industrial products (goods and services)
Industrial vs consumer marketing
Of 54 26
Today’s topic
Strategic CRM in B2B (Business
to Business) Market…cont
Of 54 27
Sell what is personally important to different
buyers in industrial marketing
Economic buyers
User buyers
Of 55 28
Economic buyers (Purchase Dept)
• Their role is to screen out and place order on selected supplier
• The economic buyer can not say to user / technical buyer that they are buying a
product for them. The technical department or the user must place the request
first. They can choose which supplier they will buy.
• The definitive quality of economic buyer is that they do not choose the product,
someone else specifies what is needed X
Of 55 29
• They specify what the product must have and
what it must not have
• They set criteria of the product to be
purchased
• E.g. Research dept, Quality control dept,
architects, consultants, etc… X
Of 55 30
User buyers
• The user buyer actually uses the product X
Of 55 31
Please draw this table in
your notebook

important
important
Economic buyer
(Purchase Dept)
Technical buyer
User buyer
Of 55 32
Important things for these buyers
• Price
• The features of the product (The facts that no
one would disagree with)
• The benefits of the product (What you think the
product will do for you, as a result people can
and do argue with them)
• The convenience of buying the product (How
easy it is to identify which model will be suitable)
• Relationship X
Of 55 33
Ranking exercise
• Rank (P) price, (F) features, (B) benefits, and
(C) convenience according to importance for
each of the three different types of buyer.
• Leave “relationship” as it will be first priority
for everybody. X
Of 55 34
P F B C

important
important
Economic buyer
Technical buyer
User buyer
Of 55 35
Economic buyer
• 40 MM1922-641 More Swaranjali
Of 55 36
Economic buyer P C B F
• Price is the most important thing when selling to economic buyer (???)
• Economic buyer can not say “yes”, they can only say “No”
• Price is a factor in “Not buying” but it is relatively unimportant factor in the decision to buy
• If you do a proper job with the technical and user buyer, the economic buyer has to buy the brand
even if it is costly
• In today’s environment of empowerment you should recognize that the user buyer is the most
important to your sale
• “Give away”s are normally given to economic buyers but they should be given to the user buyers
• In order to sell to economic buyer, you must use the user buyers X
Of 55 37
Technical buyer
• 35 MM1922-636 Thasal Aditya
Of 55 38
Technical buyer C F B P
• When you are trying to get your product specified by a technical buyer, your objective is to become
“Manual / Catalogue of Choice”
• The engineers normally only specify from the catalogues they are familiar with
• If they specify too many products then they have to test so many products.
• Never take a catalogue with you in to an appointment with them. Your job is first to find out …
• Do they know where your catalogue is? If they don’t, your product will not be in their recommendation
list.
• How often they use it? Is it in pristine condition or well thumbed?
• How familiar are they with it? Can they find things easily? Ask them to find out some technical information
on some pretext.
• Do a catalogue presentation to anyone who is not 100% ok on above.
• Show them how your catalogue is organized, sell the benefits of catalogues. X
Of 55 39
User buyer
• 31 MM1922-632 Upadhyay Hardik
40
The user buyer B F C P
• You should never discuss price with a user
buyer
• You must always talk about benefits with the
user buyers
• Ask them what benefits they will get out of a
feature instead of you specifying it
Of 39 41
Consumer vs business market summery
• The business market generally consists of fewer but larger buyers

than the consumer market
• Business customers often need customised products and services
• Usage of product determines the value (Non emotional criteria)
• The entire selling process is lengthy and complicated
• Thus managing individual customers in business market is tough but
has become imperative
• The focus on developing individual relationships is important for the
business markets, so that each customer becomes a loyal customer
X
Of 54 42
• Summerize consumer vs business marketing
• 48 nikumbh
43
Buyer Seller relationship – distinctive
feature
• Types of relationships
1. Transactional exchange – timely exchange of basic products for
highly competitive price, no loyalty by the buyer
2. Value added exchange – complete understanding of the needs of
the customer and fulfilling these needs better than competitor, the
buyer may not be committed and show loyalty to 2 or more
suppliers
3. Collaborative exchange – complete collaboration and integration,
hard core loyal customers, buyer and seller bring their capabilities
together for mutual benefits X
Of 54 44
Creating value in business market
• Sellers rely heavily on direct channels and favour the sales force over more
impersonal communication media for promotion
• The variety and number of purchase influencers make the purchasing
process both complex and challenging
• The tools and knowledge needed to calculate, create, and claim value in
business markets need to differ from those in consumer markets
• An important phenomenon related to creating value in buyer-seller
relationships is that many buyers are developing single source suppliers
because of the pressure to increase quality, reduce inventory, develop
just-in-time systems, decrease time to market and increase overall value
X
Of 54 45
• The ultimate goal in developing above capabilities is to reduce costs
• The cost reductions can be obtained through one of two models
1. Adversarial model – buyer pits suppliers against each other to
achieve lower costs
2. Cooperative model – both parties achieve lower costs through
working together to lower both buyer’s and seller’s operating costs.
This reduction is achieved through better inventory management
and elimination of unnecessary tasks and procedures. X
Of 54 46
• But all the suppliers will not be appropriate
partners for the cooperative relationship
• The suppliers can be categorised for in-depth
relationship based on their value addition and
the degree of operating risk involved
• Operating risk may arise due to failure of the
supplier to adhere to quality, on-time delivery,
etc. X
Of 54 47
Creating value in buyers market
Value addition =
goods/services supplied by
Operating the supplier as portion of
risk your finished product
Preferred
suppliers for
Value
building
addition
relationship by seller Of 54 48
• What type of suppliers are appropriate to for
long term relationship?
• 2 MM1922-602 Angre Shweta
49
Findings in some research works…
• Though many sellers are working towards creating value for their
buyers they are not able to communicate such benefits to them
• They do not focus on individual relationships which lead to more
loyal customers
• Most of the sellers assume that the buyers will automatically grasp
the benefits offered by them
• If these benefits are communicated effectively to the prospective
buyers, it would increase the value and ultimately lead to more
loyal customers
• Some of the benefits which need to be communicated effectively
follow….
Of 54 50
1. Tangible financial benefits need to be focused in
communication as this factor can be easily communicated and
verified also. E.g. a supplier to automobile company can use
standard measures like horsepower and torque to claim that its
engines are more powerful than competitor. This can be easily
validated by using automobile for extra load
2. Certain non-tangible benefits can be easily conveyed but
buyers can not validate. In case of sales software, the
application may help the buyer in estimating the extra revenue
generated by using the application, but this value addition can
not be validated
3. There are some tangible non-financial benefits that are
difficult for the seller to quantify but can be easily perceived by
the buyers. These benefits could be like corporate reputation,
brand name, innovation capabilities, like Apple. X
Of 54 51
• Non-tangible and non-financial benefits
• They are not easily quantified or validated by
buyer as well as seller. These benefits can only
be experienced, like good behaviour of the
staff, delivery of the product on holidays to
keep the production line on for the buyers.
• These benefits increase the value of the
product or service being offered by the seller
and help in increasing long term loyalty of the
buyer X
Of 54 52
• What benefits must be conveyed to the
prospects?
• 27 MM1922-628 Shah Nimit
53
Creating CRM strategy in Business
markets
• The basic idea behind CRM is that if a seller can create a strong and
trusting relationship with its buyers, then these buyers are more
likely to perceive value in the relationship and may create a long-
term revenue stream for the seller
• The buyer also benefits because of the seller’s earnest attempts to
satisfy the needs of the buyer by becoming a dependable and high-
quality supplier
• Companies now recognise that CRM can contribute to a value-
creation strategy because of the advantages associated with being a
trusted participant in the network of the buyer X
Of 54 54
Creating CRM strategy in Business
markets
1. Acquiring the right customer
2. Crafting the right value proposition
3. Instituting best processes
4. Motivating employees
5. Learning to retain customers ………… X
Of 54 55
B2B CRM
CRM Imperative CRM Technology can help
1/5 Acquiring the right • Analyse customer revenue

customer and cost data to identify
• You have identified your current and future high-
most valuable customers value customers
• You have calculated your • Target your direct
share of their wallet for marketing efforts better X
your goods or services
Of 54 56
B2B CRM
2/5. Crafting the right value • Capture relevant product

proposition and service behaviour data
• You have studied what
products or services your • Create new distribution
customer needs tomorrow channels
• You have surveyed what • Develop new pricing
products or services your models X
competitors offer today and
will offer tomorrow
Of 54 57
B2B CRM
3/5. Instituting best processes • Process transactions faster

You have researched the best • Provide better information
way to deliver your products or to the front line
services to customers, including
the alliances you need to strike, • Manage logistics and
the technologies you need to supply chain more
invest in, and the service efficiently
capabilities you need to develop • Catalyse collaborative
or acquire commerce X
Of 54 58
B2B CRM
4/5. Motivating employees • Align incentives and

• You know what tools your metrics
employees need to foster • Deploy knowledge
customer relationships management system X
• You have identified the HR
systems you need to
institute in order to boost
employee loyalty
Of 54 59
B2B CRM
5/5. Learning to retain customers • Track customer defection

• You have learned why
customers defect and how to and retention levels
win them back • Track customer satisfaction
• You have analysed what your
competitors are doing to win levels X
your high-value customers
• Your senior management
monitors customer-defection
metrics
Of 54 60
Beware!!!
• The promise of CRM is captivating but in practice it can be
disastrous
• When it works, CRM allows companies to gather customer
data swiftly, identify the most valuable customers over
time, and increase customer loyalty by providing
customised products and services
• It also reduces the cost of serving these customers and
makes it easier to acquire similar customers down the road
• But when CRM does not work, it can lead to debacles and
loss of key customers. X
Of 54 61
Strategic imperatives for building loyal
customers
• Focus on key customers
• Proactively generate high-level customer
satisfaction with every interaction
• Anticipate customer needs and respond to them
before competition does
• Build closer ties with customers
• Create a value proposition x
Of 54 62
• How do you build loyal customers?
• 7 MM1922-607 Butala Heth
63
Building customer Loyalty in Business market – Become a customer centric
organization
• Collect customer information as a strategic asset – through sources like

sales, technical support, or logistics
• Identify customer expectations – Know their vendor evaluation method
• Align strategies and processes with customer value and expectations –
become indispensable partner to customer’s growth
• Manage customer experience – delight him in every interaction / touch
point (marketing and sales, billing/payment, customer support, dispute
resolution, product development and testing)
• Manage customer relationships on the basis of ongoing customer value -
identify profitable customers
• Embrace technology – e-commerce, digital media, CRM/Data mining tools
X
Of 54 64
• How does an organization Become a customer
centric?
• 10 MM1922-610 Das Dibyojyoti
65
Key Account Management
In order to build KAM portfolio, supplier/seller needs to pursue the
steps mentioned as follows
• Define key accounts which are to be used during analysis.
• Define criteria for key account attractiveness and assign
weights for all criteria.
• Score relevant key accounts out of 10 on attractiveness factors.
• Define critical success factors (from customer point of view) for
each and assign weights.
• Score the organization’s performance out of 10 on each critical
success factor relative to competition.
• Produce the position of key accounts in portfolio.
• Set out strategies to be implemented to achieve the objectives.
• Check financial outcomes resulting from strategies X
Of 54 66
Part 1
Criteria Weight Prospect 1 Prospect 2 Prospect 3 Prospect 4
Score Weighte Score Weighte Score Weighte Score Weighte

out of 10 d score out of 10 d score out of 10 d score out of 10 d score
1. 50% 10 10x.5=5 8 4 9 4.5 7 3.5

Purchase
volume
2. 30% 5 5x.3=1.5 8 2.4 0 0 8 2.4
Repeat
business
3. 20% 1 1x.2=0.2 8 1.6 4 0.8 10 2
Reputati
on
Attractiv 6.7 8 5.3 7.9
eness
score Of 54 67
Part 2(Vendor evaluation metrics of Prospect 2)
Criteria Weigh You Competitor X Competitor Y
tage
Score out Weighted Score out Weighted Score out Weighted
of 10 score of 10 score of 10 score
1.Suppliers
reliability and
flexibility
2.Lead time
3.Quality
4.Price
5.Technical
support
6. Integration
with customers
process and
system
7. Post purchase
service
Of 54 68
Part 2(Vendor evaluation metrics of Prospect 2)
Criteria Weigh You Competitor X Competitor Y
tage
Score out Weighted Score out Weighted Score out Weighted
of 10 score of 10 score of 10 score
1.Suppliers
reliability and
flexibility
2.Lead time
3.Quality
4.Price
5.Technical
support
6. Integration
with customers
process and
system
7. Post purchase
service
Of 54 69
Supplier Relationship Management – SRM (Vendor Development – Technical
integration the key issue) XXX
SRM helps the company gain certain competitive advantages
as follows:
• Increased satisfaction of goods and services purchased by
sharing knowledge of suppliers and alternative
technologies.
• Increased satisfaction level of the suppliers to attract and
retain the most competitive ones.
• Lower prices for purchase and maintenance of goods and
services by improving business processes across the supply
chain. XXX
Of 54 70
Management
(CRM)
Part Time MMS Sem V
Prof M R Koshti
1
1/5 SMS from Airtel 1/5
– Tuesday 3 September 2019
– Recharge done on 03-09-2019 01.29 PM, MRP
499.00 X
Of 64 2
5 September 2019 10.08 a.m. 2/5
• Pack Samapt!
• Payein Unlimited call saath hi rozana 3 GB
data aur 100 SMS, 82 DIN TAK Rs 558 mein
• Click airtel.in/5/09
• Recharge kar liya, undekha karein X
Of 64 3
5 September 2019 10.55 a.m. 3/5
• Pack Samapt!
• Payein Unlimited call saath hi rozana 3 GB
data aur 100 SMS, 82 DIN TAK Rs 558 mein
• Recharge kar liya, undekha karein X
Of 64 4
6 September 2019 4/5
• Pack Samapt!
• Rs 199 mein payein unlimited call saath hi
rozana 1.5 GB data aur 100 SMS, 28 tak
• Recharge kar liya, andekha karein X
Of 64 5
6 September 2019 5/5
• Pack Samapt!
• Payein unlimited call saath hi rozana 2GB aur
100 SMS, 82 din tak Rs 499 mein
• Recharge kar liya toh andekha karein
• Customer Centric Organization? X
Of 64 6
2/5 Amazon wants you to take Alexa
on the road now
Of 64 7
Mint, 31 August 2019, Saturday, p 6
1/3
• Introduced almost a year ago and shipped to the first invited
customers in January, the sometimes-buggy Echo Auto is the most
visible element so far of Amazon’s ambition to take Alexa on the
road.
• The firm is trying to persuade automakers to bake the voice-
activated digital assistant into their entertainment systems.
• Those efforts are gaining some traction—earlier this year, BMW and
Audi began selling select models that integrate Alexa’s software.
• But Amazon is entering a market already contested by Google and
Apple Inc., not to mention automakers leery of ceding dashboard
control to Big Tech. X
Of 64 8
2/3
• The first tie between Alexa and an automaker was an experiment. In 2016,
Hyundai Motor Co. rolled out the first application linking Alexa to a big carmaker in
a tool that let owners of some models start their vehicle or set the climate control
from an Alexa device.
• Hanging over the exercise to take Alexa on the road is Amazon’s failure to build a
smartphone to rival Alphabet Inc.’s Google and Apple.
• About 62% of people who use their voice to control music or other applications in
their car today do so through a smartphone, a market dominated by Google and
Apple, according to a survey by voice technology news site Voicebot and
dashboard entertainment startup Drivetime.
• Another 32% opt for the software included in their car’s entertainment system
while 6% use different technology, including the Echo Auto. X
Of 64 9
3/3
• Reviewers said the device lacked polish, coming off at
times like a work-in-progress. A reviewer at tech news
site The Verge said some of the auto-focused
applications Amazon touts on its website “are
laughably bad right now".
• It’s harder to know how customers feel because
Amazon, which helped popularize online product
reviews, has disabled customer reviews for the Echo
Auto. X
Of 64 10
3/5 E-tailers look to beat slowdown
blues1/1
• TOI 4 September 2019 Wednesday p 20
• Over half a dozen industry stakeholders — e-tailers, brands, sellers,
analysts — told TOI the upcoming festive sales may not see
consumers hold back with their spending unlike in the automobiles
sector or fast-moving consumer goods in the rural areas.
• Kicking off the sale season will be Flipkart, which will hold its
flagship sale event Big-BillionDays from September 29 to October 2
• Amazon’s dates for its Great Indian Festival sale are not public yet
but it is usually in the same period X
Of 64 11
4/5 Swiggy gets into package delivery
space with Go
Of 64 12
TOI 5 September 2019 Thursday p 15
1/2
• Food delivery platform Swiggy on Wednesday launched
Swiggy Go which is an instant pick up and drop service
to send packages anywhere across the city.
• According to the company, Swiggy Go can be used to
pick up and drop off laundry, get forgotten keys, send
lunch boxes from home to office or even deliver
documents or parcels to clients. X
Of 64 13
2/2
• Similar to Swiggy Stores—which promises to deliver to
users' doorsteps household items like groceries, flowers,
and medicines among other things within an hour— Swiggy
Go will be part of the main app.
• "Swiggy's vision is to elevate the quality of life of urban
consumers by offering unparalleled convenience.
• Bengaluru will be the first city in the country to experience
Swiggy do the last-mile delivery for everything, not just
food. By 2020, we will expand Swiggy Go to over 300 cities
and Swiggy Stores to all the major metros X
Of 64 14
5/5 Amazon India raises food delivery
stakes with low restaurant
commissions
Of 64 15
Mint, 6 September 2019, Friday, p 1
1/4
• Amazon India, which is set to start its food delivery
service next month, is promising restaurants its
commissions will be a mere fourth of what rivals Swiggy
and Zomato charge, a move set to spark a spell of intense
competition in the business.
• Amazon is signing up restaurants across the country as it
seeks to start delivering food from October, first in
Bengaluru, and followed by Mumbai and Delhi, according
to three people aware of the development. X
Of 64 16
2/4
• Amazon is also in the final stages of acquiring
Foodpanda’s infrastructure from Ola, said one of the
people cited above.
• For its food business, Amazon is expected to utilize the
infrastructure and riders hired to deliver groceries and
other items as part of its Prime Now service.
• The company is signing up restaurants at a commission
of 5-6%, a fraction of the 20% or so charged by Swiggy
and Zomato. X
Of 64 17
3/4
• The entry of Amazon into the food delivery business has
enthused restaurant chains, who expect the new platform
to give them additional leverage while negotiating terms
with Zomato and Swiggy, which dominate the market now,
according to executives in at least half a dozen restaurant
chains.
• Restaurants have been at loggerheads with Zomato and
Swiggy over restrictive terms, high charges for listing on
their platforms and consequent lower profits. X
Of 64 18
4/4
• Globally, Amazon launched its restaurant
delivery business in 2015. It was shut down in
June this year. However, Amazon recently
invested in London-based food delivery start-
up Deliveroo, signalling that it hasn’t given up
on the business. X
Of 64 19
Strategic CRM in B2B (Business to Business) Market…cont
Buyer Seller relationship – distinctive feature
Some of the benefits which need to be communicated
effectively
Creating CRM strategy in Business markets
Become a customer centric organization
Key Account Management
Supplier Relationship Management – SRM X
Of 64 20
Today’s topic -CRM in Services
1. 7 P’s of services
2. Quality
3. Service recovery
4. Customer complaints X
Of 64 21
Of 64 22
Defining the Essence of a Service?
• An act or performance offered by one party to another
• An economic activity that does not result in ownership
• A process that creates benefits by facilitating a desired
change in:
– customers themselves (haircut, eyebrows…look better)
– physical possessions (Paint the house)
– intangible assets (Management consultancy….efficient managers) X
Of 64 23
• Define service
• 47 MM1922-649 Kaginkar Sameer
24
Elements of The Services Marketing Mix:
Traditional “4Ps”
• Product elements
• Place and time
• Promotion and education
• Price and other user outlays
Of 64 25
Characteristics of services - Difference between
physical goods and services - 4 I’s
Inseparability
Inconsistency Inventory
Of 64 26
Inseparability
• Inseparability is the characteristics of the service
indicating that it can not be separated from the
creator – seller of the product
• Customer must be present or in direct contact
(internet) X
Of 64 27
“7Ps” vs. the Traditional “4Ps”
Rethinking the original 4Ps

• Place and time

Adding Three New Elements (Inseparablity from 4 Is)
• Physical environment / Evidence / Proof of delivery
• Process
• People X
Of 64 28
The 7Ps: (5) Physical Environment
Designing the Service-scape and providing tangible
evidence of service performances
• Create and maintaining physical appearances
– buildings/landscaping
– interior design/furnishings (old clinics)
– vehicles/equipment (Doctor’s car outside the clinic)
– staff uniform
– sounds and smells
– Information (PNB, Nagpur, cash 20 mins wait)
– other tangibles (Old clinics)
• Select tangible metaphors (Modern jogging machine in the health club) for use in
marketing communications X
Of 64 29
7Ps: (6) Process
• Customers may be involved in production process
– Customer involvement includes self-service and
cooperation with service personnel
– Think of customers in these settings as “partial employees”
– Customer behavior and competence can help or hinder
productivity, so marketers need to educate/train customers
– Changing the delivery process may affect role played by
customers (Teller vs ATM)
– Design service facilities, equipment, and systems with
customers in mind: user-friendly, convenient
locations/schedules X
Of 64 30
7Ps: (6) Process
Method and Sequence in Service Creation and Delivery
• Design of activity flows (customer/employee do what , when)
• Number and sequence of actions for customers (customer’s competency, PNB, kiosk,
tension)
• Providers of value chain components (laundry supplying cleaned bed-sheets , FMCG
supplies to the hotel),
• Nature of customer involvement (passive, intelligent e.g. remembering 10 digit code for
money transfer)
• Role of contact personnel
• Role of technology, degree of automation X
Of 64 31
The 7Ps: (7) People
Managing the Human Side of the Enterprise
• The right customer-contact employees, performing
tasks well
– job design
– recruiting/selection
– training
– motivation
– evaluation/rewards
– empowerment/teamwork
• The right customers for the firm’s mission

– fit well with product/processes/corporate goals (Raj Tours politely refusing to take some travelers for their
nuiscence value)
– appreciate benefits and value offered
– possess (or can be educated to have) needed skills (co-production)
– firm is able to manage customer behavior (No credit cards to builders)
– Avoid inappropriate mix of customer segments at same time X
Of 64 32 of 35
“7Ps” vs. the Traditional “4Ps”
Rethinking the original 4Ps

• Place and time

Adding Three New Elements
• Physical environment
• Process
• People XX
Of 64 33
• What element of services give rise to
additional 3 Ps?
• 44 MM1922-646 Darji Jignesh
34 of 35
2. Service Quality
Of 64 35
Service Quality themes in CRM
• Evaluation of service quality is more difficult as compared to
goods quality
• Service quality is the comparison between expectation and
performance
• Service quality evaluations involve outcomes and processes
X
Of 64 36
Importance of Quality for Service Marketers?
Quality
• Satisfy customer need
• Gain competitive advantage, maintain loyalty
• Increase value (Benefits) (may permit higher
margins)
• Improve profits X
Of 64 37
Dimensions of Service Quality (RATER)
n Tangibles
n Reliability (Deliver as per
promise)
n Responsiveness
n Assurance
n competence,
n courtesy
n credibility
n security
n Empathy
n Easy access
n Good communication
n understanding of customer
Of 64 X 38
• What does RATER stand for?
• 33 MM1922-634 Vasani Sonali
39
Seven Service Quality Gaps
Of 48 40
Past experience
Personal needs Seven Service Quality Gaps
Word of mouth
Customer CUSTOMER
expectations
1. Knowledge Gap
Management definition
of these needs MANAGEMENT
2. Standards
Gap
Translation into
I C Gap
design/delivery specs
3. Delivery Gap
Execution of 4. I.C.Gap Advertising and
design/delivery specs sales promises
5. Perceptions Gap 6. Interpretation Gap

Customer perceptions Customer interpretation
of product execution of communications
7. Service Gap
Customer experience
I C Gap – Internal
relative to expectations communication gap
Of 64 51
• Explain any of the 7 services gaps
• 24 MM1922-625 Sahu Subhash (not done)
52
Prescriptions for Closing Service Quality Gaps
1. Knowledge: Learn what customers expect--conduct research, dialogue,
feedback
2. Standards: Specify Service Quality standards that reflect expectations
3. Delivery: Ensure service performance matches specs--consider roles of
employees, equipment, customers
4. Internal communications: Ensure performance levels match marketing
promises
5. Perceptions: Educate customers to see reality of service delivery (wrapper
“just cleaned for you”, it will take 20 mins- Pizza Hut))
6. Interpretation: Pretest communications to make sure message is clear and
unambiguous.
7. Service gap – Result of above six XX
Of 64 53
3. Service recovery
Of 64 54
Service recovery
• The first law of service productivity and quality might be – Do it
right the first time
• But we can not ignore the fact that failures continue to occur,
sometimes for reasons outside the organization’s control. X
Of 64 55
The Moment of truth
• Components of the service Railway travel (?)
• 19 MM1922-619 Moriya Dharamprakash (not done)
1. Book ticket on internet or at the reservation centre
2. Make payment by cash or credit card or account debit
3. Get delivery of the ticket by courier if internet ticket (vs e ticket)
4. Check status of the ticket if wait listed
5. Cancel the ticket if travel plan dropped / Get refund
6. Waiting at the platform if reached early / train late
7. Position of the compartment on platform
8. Porter facility at platform
9. Board the train, Train departs, runs, You get down at the destination
10. Cancel the ticket if train is missed, or the train itself gets cancelled
• Delete any one of the above 10 so that other 9 become irrelevant / non existent
• 1 MM1922-601 Almeida Loyd
Of 64 56
What is meant by service recovery
• Customer decides to buy service
• He enters in to “the moment of truth” in service encounter
• There is a service breakdown
• The firm handles the complaints, and resolves the problem (service
recovery)
• The customer in future decides to buy the service again from the
firm (Service recovery last time was successful)
• Service recovery is an umbrella term for systematic efforts by a firm
to correct a problem following a service failure and retain
customer’s goodwill. X
Of 64 57
Effect of defection (customer going away to another service
provider)
• The impact of defection can go far beyond the loss of that person’s future revenue
stream for the organization.
• Angry customers go empty hand, but not with empty mind.
• They often tell many other people about their problems.
• The internet allows unhappy customers to reach thousands of people by posting
complaints on bulletin boards or setting up web sites to publicize their bad
experiences with specific organizations
• Identify defection-intention and take action to retain customer XX
Of 64 58
4. Customer complaints
Of 64 59
One of the surest sign of a bad or declining
relationship is the absence of complaints from
customer. Nobody is ever that satisfied, especially
not over extended period of time – Theodore Levitt
To err is human, to recover, divine – Christopher

W.L.Hart
Why do customers complain? X
Of 64 60
1 Obtain restitution or compensation
• Customers complain to recover some economic loss by

seeking a refund, compensation, and/or have the
service performed again X
Of 64 61
2 Vent their anger
• Some customers complain to build self esteem and/or to vent their anger and
frustration.
• When service processes are bureaucratic and unreasonable or when employees
are rude, deliberately intimidating, or apparently uncaring, the customers’ self
esteem, self worth, or sense of fairness can be negatively affected (Office-Office)
• They may become angry and emotional (Saransh- father collecting son’s ashes)
X
Of 64 62
3 Help to improve service
• When customers are highly involved with a service (e.g. at a
collage, an alumni association, or their main banking
connection), they give feedback to try and contribute towards
service improvements.
• These customers are motivated by the prospect of getting
better service in future. X
Of 64 63
4. For altruistic (unselfish concern for others) reasons
• They want to spare other customers from

experiencing the same problems.
• They might feel bad if a problem is not
highlighted X
Of 64 64
• Why do customers complain?
• 5 MM1922-605 Bhardwaj Surendra
65
Components of an Effective
Service Recovery System
Do
Dothe
theJob
JobRight
First
Rightthe
FirstTime
Time
the
+
Effective
EffectiveComplaint
Complaint
Handling
Handling = Increased
IncreasedSatisfaction
and
Satisfaction
andLoyalty
Loyalty
4Conduct
4 ConductResearch
Research
Identify 4 Monitor Complaints
IdentifyService
Service 4 Monitor Complaints
Complaints
Complaints 4Develop
4 Develop“Complaints
“Complaints
as
asOpportunity”
Opportunity”
Culture
Culture
Resolve
ResolveComplaints
Complaints
Effectively 4Develop
4 DevelopEffective
Effective
Effectively System
Systemand
andTraining
Traininginin
Complaints Handling
Complaints Handling
Learn
Learnfrom
fromthe
the 4Conduct
4 ConductRoot
RootCause
Cause
Recovery
RecoveryExperience
Experience Analysis
Analysis
Close the Loop via Feedback
Of 64 66 of 36
Strategies to Reduce Customer Complaint Barriers
Complaint Barriers for Strategies to Reduce These Barriers
Dissatisfied Customers
Of 64 67
Inconvenience
Ø Difficult to find the right
complaint procedure.
Ø Effort, e.g., writing a letter.
Of 64 68
Inconvenience Make feedback easy and convenient by:
Ø Difficult to find the right Ø Printing Customer Service Hotline
numbers, e-mail and postal addresses on
all customer communications materials.
Ø Effort, e.g., writing a letter. Send self addressed no postage required
envelops to customers for sending
complaints
Of 64 69
complaints
Doubtful Pay Off

Ø Uncertain whether any
action, and what action will
be taken by the firm to
address the issue the
customer is unhappy with.
.
Of 64 70
complaints
Doubtful Pay Off Reassure customers that their feedback will be

Ø Uncertain whether any taken seriously and will pay off by:
Ø Having service recovery procedures in
place, and communicating this to
be taken by the firm to customers.
address the issue the Ø Featuring service improvements that
customer is unhappy with. resulted from customer feedback.
.
Of 64 71
complaints
Doubtful Pay Off Reassure customers that their feedback will be

Ø Uncertain whether any taken seriously and will pay off by:
Ø Having service recovery procedures in
place, and communicating this to
be taken by the firm to customers.
address the issue the Ø Featuring service improvements that
customer is unhappy with. resulted from customer feedback.
. Unpleasantness
Ø Complaining customers fear that Of 64 72
they may be treated rudely,
Complaint Barriers for Dissatisfied Strategies to Reduce These Barriers
Customers
Ø Difficult to find the right complaint Ø Printing Customer Service Hotline numbers, e-mail and postal
addresses on all customer communications materials. Send
procedure.
self addressed no postage required envelops to customers
Ø Effort, e.g., writing a letter. for sending complaints
Doubtful Pay Off Reassure customers that their feedback will be taken seriously
Ø Uncertain whether any action, and what and will pay off by:
Ø Having service recovery procedures in place, and
action will be taken by the firm to address
communicating this to customers.
the issue the customer is unhappy with. Ø Featuring service improvements that resulted from customer
feedback.
. Unpleasantness Make providing feedback a positive experience:

Ø Complaining customers fear that they may be Ø Thank customers for their feedback.
treated rudely,
Ø Train the frontline not to hassle and make customers
Ø may have to hassle, or
Ø may feel embarrassed to complai feel comfortable.
Ø Allow for anonymous feedback.
Of 64 73
Impact of Effective Service Recovery on Retention
No system
to
report 84%
Problem
Reported
Problem,
and effectively
92%
resolved
Problem
46%
Unresolved
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Customer Retention
Source: IBM-Rochester study
Of 64 74
Advantages of having
customer complaints
– Complaints identify faulty products
– Deficiency identification
– Complaints test internal systems and processes
– Feedback
– Complaints provide the opportunity for service recovery
– Customer need and perception X
Of 64 75
• Explain advantages of having customer
complaints
• 12 MM1922-612 Dhikka Priyanka (not done)
76
Handling customer complaints
• Acknowledge complaints (Say “I am sorry for inconvenience….”)
• A designated place to receive complaints
• System for record-keeping should be in place
• Investigate and analyse the complaint
• Resolve problems in a manner consistent with company policy
• Follow-up
• Act on social media X
Of 64 77
Customer Care and CRM
XXX
• Some key points for the customer
care are as follows
– Communicate with customers
– Deliver consistent service
– Handle complaints
– Choose appropriate customer-care strategies
to prevent defection
– Involve whole team in customer care XXX
Of 64 78
Management
(CRM)
Part Time MMS Sem V
Prof M R Koshti
1
1/4 Indians begin to buy premium
products online
• Average billing size for television sets sold online
has gone up by 50%, while for appliances and
smartphones it has increased by up to 20% X
Of 38 2
Eco Times, 31 August 2018, Friday p 7
1/5
• Indian consumers have started to buy premium smartphones, large
screen televisions, multi-door refrigerators and large capacity
washing machines online, pushing up average billing sizes for these
categories in the two largest e-commerce marketplaces, Flipkart
and Amezon
• Industry executives say that now consumers have shed the
inhibition to purchase costly products online which even last year,
was mostly for small-ticket items, and now the brands are launching
products priced even up to couple of lacs X
Of 38 3
2/5
• Samsung last month launched its global flagship refrigerator, Family
Hub, at Rs 2.8 lacs through Amazon and its own exclusive offline
stores and it was sold out
• Sony and Samsung are selling 4K TVs of 66-75 inches at Flipkart
priced at Rs 4.8 lacs
• Riding online sales, OnePlus became the largest smartphone brand
in the Rs 30,000 plus segment beating Apple and Samsung in the
April-June quarter
• Xiaomi’s Poco smartphone priced at Rs 20,999 and above sold over
a lac in less than five minutes on Flipkart on Wednesday X
Of 38 4
3/5
• Consumers are now ready to spend in lacs for on-line
purchases
• These are consumers who have already purchased
products online and have gained confidence
• Online alone now accounts for 60% of total premium
smartphone sales in India
• The rise of online is interesting, since most of the
consumers are technologically savvy and white collar
managers and it is not easy to hard sell to them X
Of 38 5
4/5
• A Flipkart spokesperson said the reason behind the surge in
average billing is due to expanded selection and several
premium launches by big brands poised to grow further
this festive season
• Even some of the overseas brands are now looking to enter
India through Flipkart
• Factors like no-cost EMIs, debit card EMIs, exchange and
buyback guarantee for smartphone, addition of customer
experience videos have helped increase our conversion rate
of premium products in the last one year X
Of 38 6
5/5
• An Amezon India spokesperson said the
demand for premium brands is high even in
tier 2 and 3 markets
• The spokesperson said increasing internet
penetration, mobile shopping and better
spending abilities have driven premium
products sale online X
Of 38 7
2/4 Customers want omnipresent brands,
convenience and on-demand service
• Young consumers want personalisation,

respect and transparency; are more likely to
cut all ties if brands don't comply: Adobe
Report
• Business Standard, 1 July 2019, Monday, p 15
x
Of 38 8
Experience matters 1/2
• Consumers in India most likely to want personal service,
Japan least likely
• 2 in 3 consumers in India would rather deal with a human
than a bot, this is less than 1 in 4 in Japan
• Bad customer experience drives 1 in 3consumers, in the
age group of 35+, to stop purchasing from the company
• The top three experience breakers for consumers are –
hidden fees after purchase, no cancellation policies for
travel packages and different returns policies for
marketplace sellers X
Of 38 9
• 2/2
• The focus on consumer experience is an imperative brands can not
ignore, irrespective of the medium or the platform the two engage on
• Hence the rush to set up experience centres and zones even among
traditional brands such as Fab India, Royal Enfield among others
• The other insight that brands are taking away from such reports is that
they need to be wherever the consumer is
• Hence digital brands must live in physical world (think Pepperfry and
Pepperfry Studio) as must a pure offline brand find its place online
• This is true even for the way they market themselves
• No campaign can afford to ignore traditional media, neither can brands
stay away from the social media timelines of their audiences X
Of 38 10
3/4 Google knows all about you even if
you don’t use its products
Of 38 11
TOI, 11 July 2019, Thursday, front half
page 1/10
• Google is everywhere. It is nearly impossible to go through a day
without interacting with a Google product -- from Maps to YouTube.
Google's video platform, email service, and map application have
over 1 billion monthly active active users each. It's sheer ubiquity
means the technology giant has ample opportunity to collect data
on you,
whether you like it or not.
• Here's a look at how much Google knows about you and what it
does with that data. x
Of 38 12
The two ways Google collects the data
2/10
ACTIVE COLLECTION:
When consumers consciously interact with a Google product and provide it with
personal information, like signing in to YouTube, Gmail or Search.
PASSIVE COLLECTION:
The less obvious method that sometimes collects data without the user's knowledge,
including apps running in the background, Google's advertising tools, platforms such
as Android and Chrome, and publisher tools.
With its two methods of data collection across its many products, Google is able to
learn about our behaviour, both online and in the real world, and build a
comprehensive profile on us. x
Of 38 13
• 3/10
• Combined with its expansive reach, with billions using
at least one of their products every day, Google not
only personalise your user experience but it is also
able to mint money from targeted ads based on data
it has collected on your activities and interests
• Share of ad revenue in total business?
• More than 80% of Google’s total revenue comes just
from its ad business
• In the last quarter, the company earned $32.6 billion
from ads and just $6.6 billion from other sources x
Of 38 14
WHAT GOOGLE LEARNS ABOUT YOU IN
AN AVERAGE DAY 4/10
• In a single day, Google can collect or infer over
two-thirds of the information through passive
means by collecting data at numerous touch-
points and identify a user's interest with
remarkable accuracy.
• Here's how... x
Of 38 15
Commute to work: You walk to the nearest Metro station to catch a train to
work. On the way you read the news and listen to music. 5/10
• METRO ROUTE: Google Maps tracks your location with the GPS
coordinates of your IP address. It can also use nearby cell
towers and WiFi access points to track you
• SEARCH FOR NEWS: Your search history is recorded by Google
and used to identify your interests and recommend similar
content or specifically target you with ads.
• LISTEN TO GOOGLE MUSIC: Much like Search, the music app
records the kind of music you're interested in to build its profile
on you to send targeted ads. X
Of 38 16
You walk out of work to buy lunch,
schedule an appointment 6/10
• GO OUT TO BUY LUNCH: Google collects enough location data to
tell if you're walking, running or in a moving vehicle.
• PAY THROUGH GOOGLE PAY: Google Pay not only has your debit and
credit card details, it also collects specifics of your transactions like
the products you bought, how many items you purchased, and
names and locations of the merchants.
• DOCTOR’S APPOINTMENT VIA GMAIL: Google scans your email to
identify your interests. It can even track appointments based on
contextual information in a mail. Google customises ads based on
the contents of emails you send and receive. X
Of 38 17
You book a cab to go home and watch
YouTube videos 7/10
• YOUTUBE: The video platform records what videos you watch and
where and when you watch them. It tracks you even if you watch a
YouTube video on a non-Google website.
• RIDE-HAILING APP: On Android devices, Google gets notified even
when you use third-party apps.
• A major part of Google’s data collection occurs while a user is not
directly engaged with any of its products….. Douglas C Schmidt,
Vanderbilt University x
Of 38 18
GOOGLE IS NEARLY IMPOSSIBLE TO
AVOID 8/10
• Google Android and Chrome are key platforms in Google’s data
collection drive. Android has over 2 billion monthly active
worldwide. Android helps Google collect personal user information,
monitor activity on the mobile phone (e.g. apps used, websites
visited), and determine location coordinates.
• The Chrome browser helps Google collect user data from both
mobile and desktop devices, with over 2 billion active installs
worldwide. Both Android and Chrome send data to Google even in
the absence of any user interaction.
• Even on a non-Google OS, like Apple’s iOS, Google has considerable
access to your data, largely through its advertising services. x
Of 38 19
Worldwide reach of Google’s top
products 9/10
Products Search YouTube Maps Android OS gMAIL Chrome
Browser
Monthly 1 1.8 1 2 1.2 2
active users
bn
Registered
users
Of 38 20
How much data Google collects
10/10
• Android to Google – 11.6 MB per day
• IOS to Google – 5.7
• IOS to Apple – 1.4 x
Of 38 21
4/4 Amazon - Great Indian Festival -
Sale
Very Attractive Website
Of 48 22
Excellent example of…
• Event based marketing – Start of Navratri
• Convenient loyalty programme – Rs 129 for a month, immediate
activation of loyalty programme
• Preferential treatment to loyal customers – Sale to open on 17
October, but for Prime users, it opened 24 hours early, free
deliveries
• Customer centric – Easy search of products (Casio CTX 9000 IN
Keyboard, 23495 …19700, product reviews, offers from various
suppliers in ascending order and delivery period, Delivery status
update, Delivery in promised time, OTP for delivery X
Of 48 23
CRM in Services
2. Quality
3. Service recovery
4. Customer complaints X
Of 38 24
Today’s topic
CRM in B2C (Business to
consumer/customer)
markets
Of 38 25
B2C Products & marketers
Services Physical goods / Products
• Telecommunication (MTNL, • TV, Fridge, Mobile handsets
Airtel, Vodafone, Reliance Jio etc.)
• Travel (Indian Railways, Airlines, • Kitchen-wares
Road transport, Water transport • Apparels
etc.)
• Hospitality (Hotels) • Automobiles
• Restaurants • FMCG (Fast moving
• Banks / Insurance / share-trading consumer goods) etc. X
etc.
Of 38 26
Objectives of B2C CRM
• Using customer relationship to ….
1. Understand customer requirements well
2. Address tailor-made promotional communication to
the proper customers (Segmenting) about your
product / service
3. Make Customer experience at all touch points
extremely satisfactory
4. Measure customer satisfaction / loyalty etc. and
ensure continual improvement in them X
Of 38 27
Various touch points
• Call centre
• Web portal
• E-mail / Fax
• Direct sales ( Personal selling, telemarketing, company
kiosks vending the products – Coca Cola, etc.)
• Product (physical goods) use / service encounter
(Moment of truth)
• Customer service (complaint handling) Etc. X
Of 38 28
ACQUISITION OF CUSTOMERS RETENTION OF CUSTOMERS
Service to Trust and privacy

customers
Campaign
Management Quality of
Advertising produce
Sales Analysis
Fulfillment
Segmentation of customers and Support of call
Merchandising
profiling centers
Fig-8.4: Understanding The Aspects Of Customer Acquisition And Retention

(Source: http://www.globalmillenniamarketing.com)
Of 38 29
Acquisition of Customers
It is necessary for companies to establish and build its market share
• Advertising – Advertising today is done online based on click
through rates.
• Segmentation of customers and profiling – for identifying and
understanding their consumers
• Campaign Management – by balancing offers with the profitability
earned determining its effectiveness and success
• Merchandising – an important aspect used efficiently in the brick
and mortar channels
• Sales analysis – in regards to the unpredictable customer behavior
in the web because of channel hopping X
Of 38 30
Acquisition
• Reliance (Textiles) ?
• Discount coupons to shareholders
• Titan X
Of 38 31
Retention of Customers
Retaining existing customers is also very important for
companies in this competitive atmosphere
• Customer service – an important aspect to satisfy and
retain them
• Fulfillment – delivering the product as quickly as possible
• Product quality – an important parameter to satisfy
customer and match the expectations of customers
• Call center support-for redressing the complaints
• Trust and privacy – two aspects which a company must
value for building loyalty and relationships X
Of 38 32
Traditional Channels and recent challenges for
firms
• Internet has revolutionized selling of products and services

online and has created new possibilities for its customers
and businesses employing its various channel formats
together.
• The customers therefore are now engaging more in
channel hopping from one to another and creating new
purchase patterns as well as mutual exchanges between
both the online and offline touch points. X
Of 38 33
Traditional Channels and Recent challenges for Firms
• In this the most visualized concept is the research

online, purchase offline (ROPO) shopping behavior
(Touch/feel/try products).
• Companies who do not employ multiple channels
might miss an opportunity to generate additional
sales with their most valuable customer segments.
• Presence online and offline – Omni-channel X
Of 38 34
Special feature of physical goods
marketing
• Distribution channel
• 1-2-3-4----- level channels (last member in the channel
being retailer)
• Although the channel facilitates the distribution, the
company looses contact with the customers
• The company has to depend on channels for the
customer feedback, needs, wants etc.
• The company has to track social media for customer
opinions X
Of 38 35
Organised retailing (Physical goods)
• Amazon, Flipkart, Shoppers Stop etc.
• Objectives
1. Product variety, well known brands, exclusive brands
2. Least price, other incentives (Prime membership)
3. Shopping experience (Ease of order placement)
4. Quick delivery
5. Easy product returns
6. Prompt after sales service X
Of 38 36
Case study – Everything You Wanted
To Know About India’s Biggest Beauty
Retailer – Nykaa! xxx
https://techstory.in/everything-you-wanted-to-
know-about-indias-biggest-beauty-retailer-nykaa/
Of 38 37
Management
(CRM)
Part Time MMS Sem V
Session no. 11(2 October 2021)
Prof M R Koshti
1
1/2 HSBC, Stanchart, Citi top the
charts
Of 47 2
Business Standard, 12 July 2019,
Friday, p 17
Banks say that their central
focus is always the customer,
but customers beg to differ X
Of 47 3
• Banking in India is known for its rather Kafkaesque (extremely unpleasant, frightening,
spin on regular everyday operations. Even a simple account

and confusing )
opening or closing experience can turn into a chain of meaningless

tasks and, as needs get more complex, matters get progressively
bizarre.
• Add to this the insouciant and obtuse
(showing a casual lack of concern) (annoyingly insensitive or slow to
nature of relationship management that most banks

understand)
encourage and customer experiences could easily fill up a book of

horrors.
• In this context, a survey and ranking of the retail banks on the
basis of customer experiences in India released by Kantar today
throws up interesting insights and also reflects the huge gap
between reality and perception that exists in the sector X
Of 47 4
• The power of online banking is on rise, 80%
of transactions in India are made via digital
channels
• Indian consumers are not as worried about
data privacy. They are more willing than
most to share their data with banks, in
return they want value-adding services and
more personalised banking experiences X
Of 47 5
• 91% of retail bank CEOs believe that
customer-centricity is essential for business
growth. But only 29% customers rate their
bank as truly customer centric
• There is a huge gap between promise and
customer experience
• The gap is visible when one looks at the
advertising narratives adopted by banks X
Of 47 6
Past experience
Personal needs
Word of mouth Seven Service Quality Gaps
Customer CUSTOMER
expectations
1. Knowledge Gap
Management definition
of these needs MANAGEMENT
2. Standards
Gap
Translation into
I C Gap
design/delivery specs
3. Delivery Gap
Execution of 4. I.C.Gap Advertising and
design/delivery specs sales promises
5. Perceptions Gap 6. Interpretation Gap

Customer perceptions Customer interpretation
of product execution of communications
7. Service Gap I C Gap – Internal

Customer experience
relative to expectations communication gap
Of 47 7
• RBI report on banking ombudsman (2017-
18) says more people are complaining about
banking services than ever before
• 21 offices of the banking ombudsman
received 1,63,590 complaints in fy 2018,
marking an increase of 24.9% over the
previous year.
• Most of the complaints were against public
sector banks including SBI X
Of 47 8
• Major complaints were over non-observance of fair
practices code 22.1%, ATM and debit card issues
15.1%, credit card issues 7.7%, failure to meet
commitments 6.8%, mobile and electronic banking
5.2%
• Few examples have worked well.
1. HDFC Bank’s 10 second personal loans
2. ICICI Bank’s paperless sanctioning of home and auto
loans
• They illustrate application of technology with a
customer first outcome X
Of 47 9
Top ten banks by customer experience
1. HSBC
2. Standard Chartered
3. CITI
4. Yes Bank
5. IndusInd Bank
6. ICICI Bank
7. Kotak Mahindra Bank
8. HDFC Bank
9. Syndicate Bank
10. Axis Bank X
Of 47 10
2/2 Digital Breakthrough for consumer
durables
• Business Standard, 19 July 2019, Friday, p 17
• With 28% of the purchase of durables
being digitally influenced, a number of
brands and retailers are finding ways
to expand their reach X
Of 47 11
• E-commerce and the growing influence of digital on purchase
behaviour for consumer durables is offering brands such as
Prestige, Crompton & Greaves, Philips and several local and
hyperlocal labels a new way to expand their footprint.
• By using the digital influencer route or working closely with local
retailers to help first-time internet users discover and buy their
brands.
• While most brands are still taking baby steps in this space, this is
where the future brands will be built believe experts.
• This marks a big shift. Time was when television and catchy
jingles were how durables pitched themselves
• Think of popular line “Jo biwise kare pyar, who prestige se kaise
kare inkar” that marked prestige’s journey in the pressure cooker
market. X
Of 47 12
• Now ask how many are aware of its move into smart appliance
and answer will probably be, barely a handful
• Digital is where these brands can build value and recall in near
future, say experts
• A sale is “digitally influenced sale “ if the buyer uses internet
during any stage of purchase cycle
• Digital influence varies by product categories today with it being
33% for high average selling price (ASP) durables like Acs, TVs,
Refrigerators and washing machines
• It is 20% for lower ASP products like small appliances water
purifiers and microwaves
• The number of digitally influenced consumers have doubled over
last 4 years X
Of 47 13
• Currently research for durables happens across the
reviews section of popular e-commerce platform, review
websites and YouTube
• There is a need to digitise the services (of durable makers)
as well in order to improve their reach
• A lot of brands in this space are rapidly scaling up their
digital presence thanks to e-commerce platforms,
however digitising servicing and maintenance post sales
with something like a digital warranty card for example
would make a huge difference to their usage
• This is one of the new ways to keep customers loyal in the
digital age X
Of 47 14
• CRM in B2C (Business to consumer/customer) markets
• B2C Products & marketers
• Objectives of B2C CRM
• Various touch points
• Acquisition of Customers
• Retention of Customers
• Special feature of physical goods marketing
• Organised retailing (Physical goods)
• Case study – Nykaa’s make-up for beauty retail X
Of 47 15
Today’s topics
• Customer life time value / customer equity
• CRM Metrics
• Data Management – Operational data base, Data
ware house, data marts, data-mining
• E-CRM, e-CRM
• CRM Planning / Challenges / Current trends
X
Of 47 16
Customer lifetime value (CLV or CLTV)
• CLV is an estimation of the revenue a company
anticipates during a lifetime relationship with
the customer
• The CLV is calculated using prediction model
and its accuracy varies based on the predictive
analytic technique used X
Of 47 17
How to calculate CLV
• Historical CLV=Sum of all transactions so far = (T1+T2+T3+… Tn)
= frequency of purchase x ATM (Average Transaction monetary value) x
no. of years shopping with the organization
• (Future) CLV=Average Expected transaction value x Frequency of

purchase (yearly) x Customer life expectancy in years
• E.g. mobile user of Airtel (Current age 25 yrs, will use service till 70
yrs)
• CLV = Rs 400 pm x 12 months x 45 years = Rs 2,16,000 X
Of 47 18
Average customer life-time for the
company - ACLT
• ACLT= 1/(1-retention rate)
• If the retention rate is 80% pa, i.e. Out of 100 customers who were
with the organisation in the beginning of the year, 20 left during the
year, and at the end of the year there were 80 customers, who
were retained, or the company was successful in retaining.
• The customers who joined newly during the year are not
considered for this calculation, as it would give false indication of
retention rate. E.g. If 20 new customers join, the retention rate in
above example will be 100% whereas in reality, the company lost 20
customers.
• ACLT=1/(1-0.8)= 1/0.2 = 5 Yrs X
Of 47 19
Average customer life-time for the company - ACLT
entry
Customer *
satisfaction of *
one particular *
customer * left
* Time
• ACLT= 1/(1-retention rate) in
1 2 3 4 5
• If the retention rate is 80% pa years
• ACLT=1/(1-0.8)= 1/0.2 = 5 Yrs
• Average customer is expected to be with the company for 5
years and not for his lifetime
• Airtel customer CLV = Rs 400 X 12 X 5 (Instead of 45) = Rs 24,000
X
Of 47 20
• Calculate the Average Customer Life it
retention rate is 95%
• 45 MM1922-647 Khan Sameer
• 20
21
• 42 MM1922-643 Goradia Foram (Not done)
• 10
22
• 41 MM1922-642 Pathak Prakash (Not done)
• 5
23
• 39 MM1922-640 Desai Chit (Not done)
• 2
24
Use of CLTV
• Indicates how much revenue company will
loose if that customer switches to competitor
• Indicates the maximum marketing expenses /
efforts which could be used to acquire the
particular prospect (Stan-chart Credit card)
• Helps in segmenting the market for
appropriate actions X
Of 47 25
Customer equity
• How do you achieve accountability?
• One key is customer equity.
• Customer equity is equivalent to lifetime customer
revenue minus cost-of-sales/service.
• Mint 28/7/2016….Airtel EBIDATA per mobile user rose
8% year on year
• Customer equity is a core CRM benchmark that makes
organizations accountable for retention, recovery,
service, and most importantly profitability. X
Of 47 26
Example
• For a health club which offers only yearly membership (to
be renewed every year), the following data is given.
• Yearly club fees = Rs 55,000
• Average monthly cost to service a member = Rs 3,000
• No. of members at the beginning of the year = 800
• No. of members at the end of the year = 810
• Number of fresh members who joined during the year = 50
• Calculate Retention rate, customer life, customer life time
value, and, customer equity X
Of 47 27
• No. of customers at the beginning of the year = 800
• No. of customers who left during the year = Opening no. + New
Joiners – closing no. = 800 +50-810 = 40
• No. of customers retained from the opening population = 800 –
40 = 760
• Retention rate = 100 x retained customers / opening number =
100 X (760/800) = 95%
• Customer life = 1 / (1- retention rate) = 1/ (1-.95) = 20 years
• Customer life time value = life x yearly fees = 20 x 55000 =
11,00,000 = Rs 11 lac
• Customer equity = life x yearly profit = 20 x (55000 – 12x3000) =
20x(55000-36000)=20x 19000 = 3,80,000 = Rs 3.8 lac X
Of 47 28
• No. of customers who left during the year = Opening no. + New Joiners –
closing no.
• Calculate the members left
• 38 MM1922-639 Vishwakarma Vishal
• 800 + 50-810 = 40
29
closing no.
• 37 MM1922-638 Tattanvalpil Surabhi
• 820 + 50-810 = 60
30
closing no.
• 34 MM1922-635 Vishwakarma Jugal
• 800 + 50-820 = 30
31
closing no.
• 32 MM1922-633 Upadhyay Pravin
• 800 + 40-810 = 30
32
CRM Metrics
• Marketing operations
• Sales force operations
• Service centre operations
• Field service operations
• Supply chain and logistic operations
• Website operations
• Net Promoter Score NPS (video) X
Of 47 33
Data Management
• Operational data base
• Data ware house
• Data marts
• Data-mining X
Of 47 34
Historical
data
Data Data
warehouse warehouse
Of 48 35
Data Warehouse (OLAP)
• On Line Analytical Processing
• A data warehouse is a database, which is kept separate from the
organization's operational database.
• There is no frequent updating done in a data warehouse.
• It possesses consolidated historical data, which helps the
organization to analyze its business.
• A data warehouse helps executives to organize, understand, and
use their data to take strategic decisions.
• A data warehouse system helps in consolidated historical data
analysis. X
Of 47 36
Why a Data Warehouse is Separated
from Operational Databases?
• An operational database is constructed for well-known tasks and
workloads such as searching particular records, indexing, etc. In contrast,
data warehouse queries are often complex and they present a general
form of data.
• Operational databases support concurrent processing of multiple
transactions. Concurrency control and recovery mechanisms are required
for operational databases to ensure robustness and consistency of the
database.
• An operational database query allows to read and modify operations,
while an OLAP query needs only read only access of stored data.
• An operational database maintains current data. On the other hand, a
data warehouse maintains historical data. X
Of 47 37
Data Marts
• Data Mart - Data marts contain a subset of
organization-wide data that is valuable to specific
groups of people in an organization.
• In other words, a data mart contains only those
data that is specific to a particular group. For
example, the marketing data mart may contain
only data related to items, customers, and sales.
• Data marts are confined to subjects. X
Of 47 38
Points to Remember About Data Marts
• Windows-based or Unix/Linux-based servers are used
to implement data marts.
• They are implemented on low-cost servers.
• Data marts are small in size.
• Data marts are customized by department.
• The source of a data mart is departmentally structured
data warehouse.
• Data marts are flexible. X
Of 47 39
Data-mining
• Data mining (DM) refers to extracting or “mining”
knowledge from large amounts of data.
• DM is the science of finding new and interesting
patterns and relationship in huge amount of data.
• Data mining is defined as “the process of
discovering meaningful new correlations,
patterns, and trends by digging into large
amounts of data stored in warehouses”.
Of 47 40
Data mining characteristics
• Data mining is an interdisciplinary field taking its input from diverse
but related disciplines such as statistics, artificial intelligence,
machine learning and large databases, among others.
• Data mining tools and techniques operate on large and very large
databases.
• Data mining is usually done on data that has been collected while
undertaking the day to-day transactions of a company.
• It aims to facilitate the involvement of the end user in the discovery
process without need for trained experts either for running the
various techniques or for interpreting the results. X
Of 47 41
Data mining tasks in CRM framework
• Customer retention – Analyse defected customers, identify patterns
that led to defection, identify current customers who are likely to
defect, take preventive actions
• Sales and customer services – rule based software to recommend
products (market-basket analysis)
• Marketing
– Segmentation
– Direct marketing campaigns
• Risk assessment and fraud detection – area-wise credit card
defaulters, refuse credit cards in that area X
Of 47 42
Applications of Data mining
• Retail
– Performing basket analysis
– Sales forecasting – time based demand patterns,
when customer will need that product next
– Database marketing – cost effective promotions
– Merchandize planning and allocation X
Of 47 43
E-CRM & e-CRM
• E-CRM : Enterprise-wide CRM (like ERP)
• e-CRM : Electronic CRM (CRM using Internet
in some way)
(Departmental)
CRM
• e-CRM
E-CRM
Of 47 44
CRM for SMBs and Mid-Market
• Systems such as Nimble, Capsule CRM, and Highrise are typically
targeted toward smaller, less complex organizations. With smaller
businesses, there are usually fewer people who interact directly
with the customers.
• In most small-business settings, the bulk of customer interactions
are carried out by the sales and marketing departments. As such,
these CRM vendors focus more on the needs of the salespeople
with features like contact management and calendars.
• These standard CRM editions have a limited feature set, and are
primarily useful for businesses with a single sales department and a
small number of salespeople. x
Of 47 45
Enterprise CRM
• Enterprise CRM solutions, like Salesforce, Microsoft Dynamics CRM, and SAP, are
designed for larger, more complex businesses with more customer-facing
departments larger databases, and more robust needs.
• In an enterprise setting, it’s not unusual to have multiple departments and sales
teams, all of which need instant access to customer and company data.
• Everyone from management to shipping is involved in the business process
workflow, so it makes sense for all of them to be working with the same
information.
• Enterprise CRM also allows for a greater degree of automation, such as logging
customer interactions or generating alerts when problems arise.
• Enterprise CRM can be substantially more expensive than standard CRM. Much of
the cost can be attributed to the time and effort involved in customizing the
system and deploying it throughout the enterprise. x
Of 47 46
Of 47 47
Choosing an appropriate CRM solution
• Price – as an important element in selection
• Clear business objectives – with well defined goals
• On demand (Cloud) CRM vs onsite – to understand its
positive and negative implications
• Scalability – to enhance its growth in business
• Vendor strength and reputation – in regards to their
experience in regards to seamless functioning, as well
as strengths and weaknesses of the application etc.
X
Of 47 48
Choosing the right CRM vendor
• Profile of the customers and industry – where they have
implemented CRM
• Experience and expertise in its business – to gauge the
success of their earlier deployments
• Networks and associations – of their local partners in the
implementation history, certification status etc.
• Choice of technology – options needed for deployments
• Free trial/Demo – to check its functionality and its utility
X
Of 47 49
CRM implementation Roadmap
Of 47 50
CRM planning steps
• Form cross-functional teams that represent the whole
enterprise and are driven by the CEO.
• Have these teams jointly develop a strategic CRM vision.
• Make sure this vision is based on customers’ needs.
• Analyse CRM strategies of current and potential competitors.
• Identify the capabilities needed to provide superior customer
value.
• Assess the capabilities you already have.
• Identify business process changes, such as by mapping
customer flow.
• Build a change management plan
• Implement CRM. X
Of 47 51
Reasons for CRM failure
• Data is ignored / not captured
• Politics rule (dept vs organization needs, unwillingness to share
customer data)
• The Information System (IS) department and business users cannot
work together
• There is no plan
• CRM is implemented for the organization, not the customer
• A flawed process is automated (Business process Reengineering)
• No attention is paid to skill sets X
Of 47 52
Recent trends in CRM xxx
• (Operational to ) Analytical CRM
• CRM—Mobile and Social Networking
• Outsourcing CRM
• CRM and cloud computing xxx
Of 47 53
Management
(CRM)
Part Time MMS Sem V
Session no. 12 (9 October 2021) Last session
Prof M R Koshti
1
1/4 TOI 24 September 2019
Tuesday
P 13
Explain why?
MM1922-613
13
Doshi Rohan Of 16 2
2/4 Flipkart, Amazon craft a new
engagement code
Of 16 3
Business Standard, 17 September
2019, Tuesday, p 15
• Keen to convert first-time users
into avid online shoppers, e-
commerce platforms rethink the
digital experience
Of 16 4
• While the aggressive push towards digital inclusion may have
driven millions to explore the cavernous depths of internet, it has
not been easy leading them down the gilded hallways of e-
commerce
• A plethora of reasons keep customers disengaged from the final
transaction
1. Ignorance about the product
2. A complex payment process
3. Varying levels of literacy
• All above turn into a friction point that e-commerce companies
are now trying to tackle.
• It accounted for 19% of consumer dropout in apparel and 22% in
accessories in 2018 X
Of 16 5
• The problem is not a new one and fashion and beauty platforms such as
Nykaa were early to adopt the “how-to” tutorial blogs and videos into a
sales pitch
• Nykaa network (discussion platform) and Nykaa TV (video content) are
popular among users.
• Both Flipkart and Amazon are looking at ways to guide shoppers from
the process of discovery to purchase through dedicated platforms with
the use of video, blogs and other forms of persuasion
• Flipkart Ideas, a curated selection of content on the e-commerce
platform is expected to do handhold customers through purchase
process
• It will provide information, explore alternative uses of a product or
manifestations of an experience while tackling problems that cusomers
face. X
Of 16 6
• Amazon has got a similar offering called Magazine where
influencers and bloggers review and recommended products on
the sidelines of lifestyle and travel blogs.
• Myntra (Flipkart) has taken this initiative a step forward by
launching a reality show called Fashion Superstar aimed at
identifying India’s next big fashion influencer.
• CleverTap, a full-stack customer retention platform used by
several e-commerce companies found that customer retention
was impacted by high customer acquisition costs and price-
sensitive buyers
• Customers have a plethora of options to choose from
• By taking early users through the paces online, e-com companies
expect to create a loyal base of users. X
Of 16 7
3/4Amazon vs Flipkart: It’s a war
Great Festival
Big Billion Day Sale
Of 16 8
Business Standard, 28 September
2019, Saturday, p 1 “War Room”
Amazon Flipkart
• War rooms are equipped with • 700 cots procured for
gourmet food, snacks, energy Bengaluru campus for
drinks, bean bags, and foot employees to rest
massagers
• Has 24 hour cafeteria, kiosks
• Anytime pick up and drop service
with food from around the
• Teams at fulfilment centres have world
customised T-shirts, disc jockeys,
and 24 hour cafeteria • Music on demand
• 90,000 temporary employees are • 50,000 additional staff hired
deployed X X
Of 16 9
4/4 Amazon India sees 2x Prime user
growth in Aug sale
Of 48 10
TOI October 31, 2020
• Amazon India added twice as many Prime subscribers in this year’s
Prime Day sales even in August than previous year, the e-tailer has
said in its quarterly earnings for July-September period.
• In 2020, only the Indian market went ahead with Prime Day in India
in August with record sales.
• The marquee sale event had been pushed to October in the rest of
the world, including US
• Amazon India also hosted Prime day on August 6-7, during which
twice as many customers became Prime members compared to
previous year x
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• For the September quarter, its overseas sales,
which includes India, grew close to 40% to $25
billion with $407 million in profit.
• This is the second consecutive quarterly profit
for Amazon in its international business as it
clocked profits of $345 million in June quarter.
x
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• Globally, Amazon has over 150 million subscribers but it
does not disclose country-specific subscriber numbers
• It is expected to reach 180 million by 2020 –J P Morgan
• Prime enables one-to two days deliveries and gives users
access to video and audio streaming services
• In August TOI REPORTED THAT Amazon India has seen
record sales to the tune of $600 million in 48 hours
• Meanwhile, the pandemic induced demand for e-
commerce continued to grow for Amazon x
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• Customer life time value / customer equity
• CRM Metrics
• Data Management – Operational data base, Data
ware house, data marts, data-mining
• E-CRM, e-CRM
• CRM Planning / Challenges / Current trends
X
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Today’s topics
1. CRM Metrics
2. Assignment to be submitted on or
before 18 October 2021 X
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CRM Metrics
• Marketing operations
• Sales force operations
• Service centre operations
• Field service operations
• Supply chain and logistic operations
• Website operations X
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a. Marketing operations
• Software that manages marketing
operations lets companies plan,
schedule, execute and track their
marketing campaigns. Several key
metrics from the marketing automation
function include……. X
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1/10 reach
• How many potential customers have been
reached by the campaign X
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2/10. Response rates
• What percentage of the total campaign
population (who have been reached)
responded to the campaign e.g.
• Clicked the given link
• Called on the given number
• Downloaded the app x
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3/10. RFM
• Stands for Recency, Frequency, Monetary value
• This is a calculation for scoring a customer based on
past behaviour
• The recency of past interaction (purchases), the
frequency of that type of interaction, and the
monetary value of those interactions are added
together, with specific weightage applied
• This composite score is used to predict customer’s
involvement with a campaign X
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4/10 conversion rates
• What percentage of the total campaign
population bought something or completed
an activity (e.g. enrolled in a sweep-take) as a
result of a campaign x
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5/10 customer acquisition costs
• How much did the company spend to acquire
a new customer?
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6/10 average customer interaction
costs
• The total cost of interacting with a customer
as part of a campaign, divided by the number
of interactions
• Useful for comparing costs of interacting with
customers across multiple media x
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7/10 attrition, churn
• How frequently do customers terminate the
relationship by opting out, stopping
purchases, or choose a competitor x
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• Health club
• No. of members at the beginning of the year=900
• No. of members newly joined during the year = 40
• Calculate attrition rate
• 28 MM1922-629 Shetty Hitesh
• No. of members left = op + newly joined – cl
• = 900+40-910=30
• Attrition rate = 30x100/900=3.33% X
25
8/10 share of wallet, share of
requirements
• How much of the purchases from his total
budget for a product category does a
customer make from the company? x
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9/10 average order size
• The average amount spent by the customer
per order
• Many companies have goals of increasing
average order size through marketing (ARPU-
Average Revenue Per Customer – metric used
by TELECOM companies like Airtel, Jio etc.) x
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10/10 Category involvement
• The amount of money a customer spends or
the interest (time spent on the website of the
product) that a customer shows within a
product category
• Customers with high involvement in a product
category frequently buy more than those with
low involvement X
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b Sales force operations
• This CRM area is perhaps the most mature.
• Companies have been deploying sales force
automation solutions long before CRM became a
popular buzzword
• The rise of sales force automation (SFA) parallels that
of the portable and laptop computers and the hand
held devices.
• Some measures in sales force operation follow……..x
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1/10 Sales quota
• The amount of sales each sales executive,
team, product or product category has
committed or is assigned to solicit x
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2/10 Close percentage
• This metrics goes by many names
• The purpose is to score a lead with a percentage
of its likely-hood to turn into a sale.
• As sales person works with the customer to
answer questions, exchange information, prepare
legal contracts etc. the percentage is adjusted up
or down X
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3/10 Customer score
• It is not only the leads (prospects) that are
scored, but the existing customers are scored
too with their probability of repeat purchase.
• This helps in segmenting the existing
customers x
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4/10 Sales expenses
• This metric includes all expenses related to
the sale, such as travel, entertainment,
printing, shipping, use of other internal
resources, third party expenses etc. x
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5/10 Close rate
• The percentage of sales leads that convert to
sales (hit ratio).
• This is often tracked at the sales
representative, team, customer segment, and
product/category level x
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6/10 Sales total
• The total number of sales represented by all
the leads
• This metric is often multiplied by the close
percentage for a weighted sales leads number
• The metric is used to predict future sales x
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7/10 Sales lost
• The number (or percentage) of sales lost,
broken down by reasons, which can include
loss to competitor, loss of customer funding
etc. x
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8/10 Cross sale rate
• The percentage of sales totals that include
items not specifically requested by customer
but recommended by the sales force or
through marketing x
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9/10 Number of calls
• The number of calls made by a sales
representative or sales team
• This can be broken down by new account calls
and existing account calls X
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10/10 Number of new customers
• How many new customers have been added
during a period of time? x
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c. Service centre operations
• In the recent years there has been an increased
use of phone technology for handling incoming
phone calls and managing outbound sales calls.
• Companies have long housed those resources
into a single functional group called the call
centre, service centre or interaction centre
• Some metrics to manage call centre are……x
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1/13 call counts and duration
• The number and duration of calls either
received or sent, often broken down into call
type, which is input by the call centre
representative after completing the call x
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2/13 average hold time
• The amount of time a customer has to wait
before being served by an agent (employee
handling the call) x
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3/13 abandonment rate
• The number of calls abandoned while waiting
for an agent, expressed as percentage of the
total calls
• These are customers who hang up or get
disconnected while waiting for the agent x
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4/13 Average abandonment time
• The average time a caller waited before
abandoning a call x
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5/13 Adherence
• The amount of time the agent is “in his seat”
ready to take calls
• Expressed as percentage of his total time in
the office x
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6/13 wrap up time
• After a call is completed, it is amount of time,
the agent needs to complete the
administrative tasks related to the call x
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7/13 Average cost per call
• The sum of all costs for running the centre
divided by the number of calls served x
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8/13 Average talk time
• The amount of time an agent spends on a call
talking to the customer x
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9/13 average handle time
• The sum of the talk time and the wrap-up
time x
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10/13 Agent utilization
• The amount of time agents spend on calls
versus other internal tasks, expressed as a
percentage of available time x
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11/13 Blocked call
• The number and percentage of calls that
receive a busy signal and can not get to the
automatic call distribution system (ACD) x
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12/13 service level
• A goal for call centre performance
• A widely used format for the goal and values
of a call centre is to answer 80% of calls within
20 seconds x
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13/13 Call quality
• Companies have devised ways to monitor the
quality of a call and an agent’s abilities
• Scores can include vocal intonation,
friendliness, promptness, knowledge, and
adherence to the procedures x
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d. Field service operations
• They include a host of post-sales activities such as
warranty and service contract management, scheduling
and dispatching field service agents, service call routing
for customer premise service, problem tracking and
resolution management, service inventory
management, managing the logistics of part fulfillment
and replacement,
• Measures are less standard than call centre measures
but can cover a wide variety of areas x
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1/6 Response time
• Amount of time it takes service agent to
respond x
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2/6 Completion time
• Amount of time taken by service agent to
resolve a customer’s problem x
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3/6 Repair fulfillment time
• The amount of time it takes to deliver a
requested part or service needed for a repair
x
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4/6 service level
• Identical to call centre metric when applied to
inbound calls
• It includes additional measures when applied
to support calls x
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5/6 customer satisfaction score
• Many companies routinely survey their
customer after a service call to verify
satisfaction x
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6/6 service call priority
• Service calls are frequently prioritized to
comply with service contracts or warranty
terms or to indicate the importance of the
request x
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e supply chain and logistics operations
• How quickly and efficiently the products flow
through the value chain is of importance
(Prime deliveries Amazon)
• Especially when the time it takes a product to
be delivered is a key component in improving
customer satisfaction….x
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1/7 Fill rate
• The number of items shipped compared to the
items ordered
• Fill rate can be calculated on a line item, SKUs,
case or value basis
• 8 items of ordered 10 delivered – Physical fill rate
80%
• Rs 600 worth products delivered against ordered
Rs 1000 – Value Fill rate 60% x
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Sr Item Qty Unit Subtotal Delivere Subtotal
No rate d qty
1 CPU 8 15000 1,20,000 7

2 Display screen 5 1000 5,000 5
• Calculate value fill rate

• 29 MM1922-630 Rathor Nisha
• 100x(7x15000+5x1000)/(120000+5000)=110000x100/125000
=88% x
63
No rate d qty
1 CPU 8 15000 1,20,000 7
• Calculate physical fill rate

• 26 MM1922-627 Shah Harshil
• 100 x(7+5)/(8+5)=100x12/13=92% x
64
No rate d qty
1 CPU 8 15000 1,20,000 5
• Calculate value fill rate
• 30 MM1922-631 Tiwari Gaurav
• 100x(5x15000+5X1000)/125000=80000x100/125000=64
% x
65
2/7 on time ship rate
• What percentage of orders were shipped on
or before the requested ship date x
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3/7 performance to promise
• What percentage of orders were shipped on
or before the promised ship date x
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4/7 Back orders
• The number (or percentage) of unfilled orders
x
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No rate d qty
1 CPU 8 15000 1,20,000 7
• Calculate value Back orders

• 25 MM1922-626 Sethuraman Ramprasad
• 100x(1x15000)/125000=12% x
69
No rate d qty
1 CPU 8 15000 1,20,000 7
• Calculate physical Back orders

• 15 MM1922-615 Hatiskar Karan
• 100x1/13=7.7% x
70
Sr Item Q Unit Subtotal Delivere Subtotal
No ty rate d qty
1 CPU 8 15000 1,20,000 5
• Calculate value Back orders

• 17 MM1922-617 Mishra Abhishek
• 100 x 3x15000/125000=36% x
71
5/7 customer order cycle time
• The average time it takes to fill a customer
order x
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6/7 perfect order measure
• The error-free rate of each stage of an order
• Error rates are captured at each stage (order
entry, picking, delivery, shipped without
damage, invoiced correctly) and multiplied
together x
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7/7 up-side-flexibility
• The ability of the supplier to meet additional
demand requirements x
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f web site operations
• With the advent of internet, companies have
launched web sites for variety purposes e.g.
marketing, sales, support,
• Because of the heavy use of marketing on the
internet, web site operational measures
include many marketing operations measures
• Some of them are…..x
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1/9 visitor count
• How many people visited the site x
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2/9 unique visitor count
• How many unique people visited the site
• This measure does not double count users
who visit a site multiple times in a period x
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3/9 page hits
• How many pages have been downloaded from
a site, or how many times a single page has
been visited in a site x
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4/9 duration
• Total time a visitor spent on a page or a site
x
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5/9 CTR
• Clock-through-rate
• What percentage of visitors clicked on a
banner or other form of internet marketing to
visit the advertised web site x
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6/9 impressions
• How many visitors viewed a page that
contained an advertisement of some kind x
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7/9 registered users
• How many visitors are registered with a site x
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8/9 breakage
• What percentage of visitors started interaction
with a site (e.g. starting a survey, or
purchasing a product) but chose not to
complete it x
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9/9 click stream
• Not a measure per se, but a source of many
measurements
• The click stream is the sequential history of all
interactions a visitor on a web site
• Usually stored within log files in the web server
• The behavioral data is used to derive page hits,
visit counts, etc. x
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Assignment xxx
• Prepare a hand-written note of 2-3 pages on one CRM
software package
• 601-610 ….SAP CRM
• 611-620…..Oracle Siebel
• 621-630 ……SalesForce.com
• 631-640……Microsoft Dynamics CRM
• 641-650……. Sugar CRM
• Individual assignment
• Scan and mail on or before 18 October 2021 xxx
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Customer Relationship

Bldg Bldg Bldg

On day 45, just when

Options before you…

Special Driving Stable job Rise in Child Children Retirement

Acquisition investment recovery

Acquisition investment recovery

Acquisition investment recovery

Acquisition investment recovery

Acquisition investment recovery

push acquisition costs very high

1.Emotional and 1.Highly

external skeleton that offers protection from predators.

• Perceived performance model (expectations play less important role)

• Norms models (perceived performance vs some standard for performance)

• Multiple process models (More than one standard of comparison)

• Affective models (beyond rational process, emotion, liking, mood etc) X

• It is believed that loyalty and satisfaction are same – not true

• Customer Satisfaction is an emotional and sentimental issue. It is a feeling, a

• Pressure from Competitors

• Lack of options Loyal Disloyal

P2 (Employee 4 5 5/30=0.16 4*0.16 = 0.64

P5 (Billing) 4 6 6/30=0.2 4*0.2= 0.8

A: Attractive R: Reverse Q: Questionable Result

satisfaction index, Kano model XXX

satisfaction index, Kano model X

OEM – Original Equipment Manufacturer

Individual variables – Personal goals, Education, Experience, Values, Job

Most Second Third most Least

Most Second Third most Least

• A phone app and a database of more than 50 million voters

• India says “I love you” to Alexa at least once every

Most Second Third most Least

Most Second Third most Least

• The business market generally consists of fewer but larger buyers

1/5 Acquiring the right • Analyse customer revenue

2/5. Crafting the right value • Capture relevant product

3/5. Instituting best processes • Process transactions faster

4/5. Motivating employees • Align incentives and

5/5. Learning to retain customers • Track customer defection

• Collect customer information as a strategic asset – through sources like

Score Weighte Score Weighte Score Weighte Score Weighte

1. 50% 10 10x.5=5 8 4 9 4.5 7 3.5

Rethinking the original 4Ps

• Price and other user outlays

• The right customers for the firm’s mission

Rethinking the original 4Ps

• Price and other user outlays

5. Perceptions Gap 6. Interpretation Gap

To err is human, to recover, divine – Christopher

• Customers complain to recover some economic loss by

• They want to spare other customers from

Close the Loop via Feedback

Doubtful Pay Off

Doubtful Pay Off Reassure customers that their feedback will be

Doubtful Pay Off Reassure customers that their feedback will be

. Unpleasantness Make providing feedback a positive experience:

• Young consumers want personalisation,

Very Attractive Website

Service to Trust and privacy

Fig-8.4: Understanding The Aspects Of Customer Acquisition And Retention

• Internet has revolutionized selling of products and services

• In this the most visualized concept is the research

spin on regular everyday operations. Even a simple account