Advanced CRM

ADVANCED CUSTOMER
RELATIONSHIP MANAGEMENT
(FOR PRIVATE CIRCULATION ONLY)

2016
PROGRAMME COORDINATOR
Dr. Padmpriya Irabatti
COURSE DESIGN AND REVIEW COMMITTEE

Dr. Narendra Parchure Prof. Dr. Pramod Jogdeo
Dr. Shailesh Kasande Dr. A. K. Sood
Prof. Jayant Saha Dr. Avinash Joshi
Prof. Nazima Shaikh Prof. Avinash Nene
COURSE WRITERS
Mr. Abhay Kardeguddi Mr. Sanjeev Phatak
EDITOR
Ms. Kumkum Tripathi
Published by Symbiosis Centre for Distance Learning (SCDL), Pune

July, 2007 (Revision 01, 2015)
Copyright © 2016 Symbiosis Open Education Society

All rights reserved. No part of this book may be reproduced, transmitted or utilised in any form or by any
means, electronic or mechanical, including photocopying, recording or by any information storage or retrieval
system without written permission from the publisher.
Acknowledgement
Every attempt has been made to trace the copyright holders of materials reproduced in this book. Should any
infringement have occurred, SCDL apologises for the same and will be pleased to make necessary corrections
in future editions of this book.
PREFACE
CRM is a meaningful, ever evolving extension of Marketing. And this evolution seems
to be a non ending process. CRM fails at some places, gets modified at some and is
successfully implemented by others. It keeps getting better.
The primary purpose of any CRM strategy is to improve customer satisfaction or customer-
perceived value. What we found through our years of experience is that companies from
diverse fields not only need to measure the customer service index, but they also need to
measure the elements that make up customer service, that is, their people, process and
technology solutions.
In this SLM, we discuss ways to measure your customer satisfaction. We also provide
information and case studies to measure how you are delivering service and creating value
via people, processes and technology. CRM is commonly defined in two broad categories
of Operational CRM and Analytical CRM. Operational CRM generally refers to those
products, services and operational capabilities that enable an organisation to “take care
of its customers.” Contact centers, data aggregation systems and web sites are just a few
examples.
Analytical CRM can make a considerable contribution towards providing answers to
numerous business management questions and thereby support a whole range of business
decisions. Analytical capabilities allow you to identify new trends in the markets that are
most important to your company and then to channel your investments in these markets.
They also help you gain further insights into customer needs and preferences.
This SLM is a practical guide for students on how to select and implement CRM tools
successfully. Despite frequently repeated claims that CRM projects are more likely to fail
than to succeed, we believe that well-thought out, well-run CRM projects do succeed. Our
focus in this book is on the larger context of the business processes and the organisations
that use CRM. Every company has its own way of taking care of its customers. How you
treat your customers, what you offer them and what you ask them to pay are all driven out
of your business strategy.
We do not claim that this book is the ultimate on CRM, but surely wish to say that a sincere
effort is being made here to touch and explore most of the contemporary theories and
practices in CRM. Learning Advanced CRM deserves a richer and better understanding of
the subject. We have attempted to address this by providing greater width and depth to the
subject. We would like to help you develop a 360-degree view of CRM.
We hope you enjoy reading this book and learn from our combined expertise.
Mr. Abhay Kardeguddi

Mr. Sanjeev Phatak
iii
ABOUT THE AUTHORS
Mr. Abhay Kardeguddi is the founder director of KARWAK, a leading Marketing and CRM
consultancy firm in Pune, India. He has 23 years of rich experience and has guided many organisations
from diverse fields like Electromagnetics to Polymers and Nurseries to Software. Among his many
achievements, he is especially proud of having received a prestigious award for “The Best Salesperson
in India” from a European company, of successfully organising overseas collaborations for his clients
and presenting papers at conferences.
For the past 7 years, he has been successfully running ‘Karwak Eco Matters’, an organisation which
develops and manufactures eco-friendly products.
An experienced trainer, he conducts workshops in Sales, Marketing, Customer Service, Relationship

Marketing and CRM. As a visiting faculty at reputed business schools in Pune, he enjoys teaching
marketing related subjects.
Mr. Sanjeev Phatak is an electronic and telecom engineer and a Masters in Management Services
(Marketing). He has over 20 years of experience in business development, client acquisition and
client relationship management for domestic and overseas clients and markets.
His strength lies in solving business critical issues for CRM and profitability for his FMCG, IT and
Telecom clients.
iv
CONTENTS
Unit No. TITLE Page No.
1 CRM Concepts 1 - 28
1.1 Introduction
1.2 Basic Elements of CRM
1.3 Key Concepts of CRM
1.4 From Customer Service to Customer Care
1.5 Retention is the Key
1.6 Services Marketing and CRM
1.7 Data Information and Knowledge
1.8 Sales Force Automation and CRM
1.9 Effective CRM Implementation
1.10 Causes of CRM Failure
Case Study
Summary
Key Words
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading
2 CRM Through Effective Customer Complaints Handling 29 - 40
2.1 Introduction
2.2 Why Customers complain
2.3 Why Complaints matter
2.4 Designing and managing a Complaint Management System
2.5 Complaints and the Art of Customer Care
Case Study
Summary
Key Words
Suggested Reading
3 Call Centre to Contact Centre to Customer Interaction Centre 41 - 56
3.1 Introduction
3.2 Call Centre
3.3 Contact Centre
3.4 Technology at Call Centres
3.5 Criticism of Call Centres
3.6 Call Centre Terminology for Ready Reference
Summary
Key Words
Suggested Reading
v
4 Sales Force Automation 57 - 70
4.1 Introduction
4.2 Sales Force Automation (SFA)
4.3 Importance of SFA to CRM
4.4 Business Value through SFA
4.5 Management Belief in SFA
4.6 SFA + CRM = Value
Case Study
Summary
Key Words
Suggested Reading
5 Architectural Map for CRM Implementation 71 - 88
5.1 Introduction
5.2 The Challenges of Integration
5.3 Checklist for CRM Implementation
5.4 CRM and IT
5.5 Implementation Service
Case Study
Summary
Key Words
Suggested Reading
6 Industry Specific CRM Cases 89 - 104
6.1 Case from the Retail Sector
6.2 Case from the Manufacturing Sector
Summary
Key Words
Suggested Reading
vi
7 Operational CRM 105 - 120
7.1 Introduction
7.2 Operational CRM
7.3 Holistic Customer View
7.4 Sales Force Automation
7.5 Goals of Operational CRM
Case Study
Summary
Key Words
Suggested Reading
8 Analytical CRM 121 - 138
8.1 Introduction
8.2 Understanding Analytical CRM
8.3 Architecture of Analytical CRM
8.4 Value of Analytical CRM
8.5 Scope of Analytical CRM
8.6 Customer-Centric Enterprise Management
Case Study
Summary
Key Words
Suggested Reading
9 Customer Experience Management (CEM) 139 - 150
9.1 Introduction
9.2 Customer Experience Management
9.3 Commitment Top Management and the Team
9.4 Keeping Customer’s Emotional needs at the Core
9.5 Customer Defined Product / Service Standard
9.6 The People Factor
Case Study
Summary
Key Words
Suggested Reading
vii
viii
CRM Concepts
UNIT
1
Structure:
1.1 Introduction
1.2 Basic Elements of CRM
1.3 Key Concepts of CRM
1.4 From Customer Service to Customer Care
1.5 Retention is the Key
1.6 Services Marketing and CRM
1.7 Data Information and Knowledge
1.8 Sales Force Automation and CRM
1.9 Effective CRM Implementation
1.10 Causes of CRM Failure
Case Study
Summary
Key Words
Suggested Reading
CRM Concepts 1
Notes
Objectives
----------------------
---------------------- After going through this unit, you will be able to:
• Describe the importance of Customer Relationship Management
----------------------
• Discuss the benefits of customer care and customer service
---------------------- • Explain the services marketing triangle
---------------------- • Appreciate the importance of sales force automation
---------------------- • Critically evaluate the need for an integrated database
• Anticipate the reasons CRM may fail
----------------------
----------------------
1.1 INTRODUCTION
----------------------
CRM does not evolve as a distinctly separate theory; different than
---------------------- marketing. Rather CRM extends the marketing envelope in a more meaningful
(conceptual) and sophisticated (technological) way. CRM begins with a claim to
---------------------- bestow completeness on marketing and does so, to a great extent. Some authors
define it as '360 marketing'. Names and jargons can be many but the concept of
----------------------
CRM is simple:
---------------------- "CRM is to develop a good understanding of customer's evolving need
---------------------- and to strive to fulfil it. In the process, establish a dialogue with the customer in
order to establish a mutually beneficial long-term relationship"
---------------------- -Abhay Kardeguddi
---------------------- Let us quickly revise the basic elements and key concepts of CRM.
----------------------
1.2 BASIC ELEMENTS OF CRM
----------------------
1. CRM as a competitive strategy- a strategic view.
---------------------- 2. Customer satisfaction and loyalty.
---------------------- 3. Relationship: selection and retention.
4. Customer service and service marketing.
----------------------
5. Data base management and application.
---------------------- 6. Sales Force Automation (SFA)
7. Implementation of CRM.
----------------------
These are the absolute basic elements or essential to implement CRM. Following
---------------------- is a brief description of these basic elements of CRM:
---------------------- 1. CRM as a competitive strategy- a strategic view: CRM is a philosophy
and a function. It hence requires looking at CRM as a strategy. Develop
---------------------- a vision, culture and a clearly targeted plan in order to achieve success in
CRM.
----------------------
2 Advanced Customer Relationship Management

2. Customer satisfaction and loyalty: Customer is at the core of CRM. Notes
Customer satisfaction and exceeding the customer requirements, that too
on continual basis, will create customer loyalty. Customer loyalty will ----------------------
emerge only through the proposition of mutual benefit.
----------------------
3. Relationship: Selection and retention: It is not possible to serve or
to develop a relationship with each and every customer in your target ----------------------
segment. Selection becomes very crucial. It is advisable to retain these
----------------------
selected customers to develop a long-term relationship.
4. Customer service and service marketing: Understanding service which ----------------------
may be a standalone offer or part of a product is important to understand
----------------------
and absorb the intangible element of CRM. Transformation of customer
service to customer care is important. ----------------------
5. Data base management and application: Collecting customer
----------------------
information and creating a meaningful database is fundamental to CRM.
How will you write letters and E-mails without having postal address and ----------------------
e-address?
----------------------
6. Sales force Automation (SFA): Sales and services are the functions,
which work closely with the customers. You as a CRM initiator will be ----------------------
able to learn about customer through sales forces Automation. Of course
SFA is also about automating the sales and sales management process ----------------------
in order to give efficient and effective service to the customers and ----------------------
consumers.
7. Implementation of CRM: This is not exactly the element of CRM but ----------------------
a very essential aspect of CRM. Hence it is included under elements. A ----------------------
successful implementation, monitoring and evaluation are very critical
for CRM success. ----------------------
----------------------
1.3 KEY CONCEPTS OF CRM
----------------------
●● Comprehensive strategy
●● Acquiring ----------------------
●● Selection ----------------------
●● Retaining ----------------------
●● Partnering
----------------------
●● Interactive communication
----------------------
●● Technology + people
●● Mutually beneficial long-term relationship ----------------------
In order to understand CRM, it is important to understand key or core ----------------------

concepts of CRM. You will observe that together they help to develop the
definitions and basic explanation of CRM. ----------------------
----------------------
CRM Concepts 3
Notes 1. Comprehensive strategy: CRM at one end links itself to SCM- supply
chain management (describes a longer channel stretching from raw
---------------------- materials to components to final products that are carried to final buyers)
and on the other hand the customer service and customer care. This makes
---------------------- it a comprehensive strategy.
---------------------- 2. Acquiring: This is about prospecting i.e. finding the future potential
customers and converting them to use/apply your company’s products/
----------------------
services. Using effective sales promotion methods, prospective buyer can
---------------------- be acquired. It is about developing new customer as well as converting
competitor’s customers.
----------------------
3. Selection: You must have heard the English proverb that ‘You can’t
---------------------- please all the people all the times’- it applies to business proposition as
well:
----------------------
a) You may not be able to serve and satisfy each and every customer.
---------------------- b) Not all your customers will be willing to develop a long term
---------------------- relationship with your Organisation. So whichever way (seller or
buyer view point) you look at it, selection is very important.
---------------------- 4. Retaining: On selecting the right customer it is required to offer a product
---------------------- + service proposition that meets and exceeds customer requirements.
Only when the customer is satisfied, retention is possible.
---------------------- 5. Partnering: This takes the buyer-seller relationship to a higher level.
---------------------- Wherein both of them they co-create the service or product which is
happily used or consumed by the customer. Partnership is about constantly
---------------------- striving to create better value for each other.
---------------------- 6. Interactive communication: A meaningful communication will always
be Interactive Communication. Can you imagine communicating with
---------------------- your friends without interacting? This applies to the business relationship
also. A clearly planned and focused two way, interactive communication
----------------------
is very essential ingredient of CRM.
---------------------- 7. Technology + people: CRM is often misinterpreted as a technological
tool. Well, CRM is offered as a technology by various CRM software
----------------------
vendors. But unless this technology is integrated with people element of
---------------------- the offering it is difficult to get success with CRM.
---------------------- 8. Mutually beneficial long-term relationship: Friends, this concept is

self-explanatory. How about dealing with it through an activity?
----------------------
1.4 FROM CUSTOMER SERVICE TO CUSTOMER CARE
----------------------
Know thy customer: Satisfy her and develop loyalty
----------------------
Already discussed in the previous point-understanding the customer is
---------------------- vital to CRM. On developing a fairly good understanding of the customer; it
---------------------- is time to look inwards, look at what kind of organisational personality you

portray. Is it one of “Straight Jacket”- this-is-my-way-of-working” types or is it Notes
an image of an agile company to the possible extent of Customer satisfaction/
Customer care. ----------------------
You have already seen that customer delight needs to be created instead ----------------------
only satisfying the customer. Here is yet another approach unravelling the
nuances of CRM. ----------------------
Customer service is about giving facilities and services that the customer ----------------------
asks for, or delivering service that is expected in today’s competitive world.
Most products require additional or long-term support from the organisation. ----------------------
These traditional services include delivery, installation, lessons-in-usage,
----------------------
instruction manuals, repairs and maintenance etc. For example, you usually
expect 3 free servicing coupons after you purchase a car. ----------------------
●● Emphasis on customer.
----------------------
●● Focus on long-term profits and revenues.
----------------------
●● Enables responsiveness.
●● Supportive management. ----------------------
●● Commercial environment. ----------------------

Customer care (and also customer delight) is going beyond the ‘expectation ----------------------
check list’. You do not just tick mark; well did I do 3 free services, I did.
----------------------
Customer care is being proactive in developing relationship with your
customer. We will understand ‘retention’ in the next unit but we all know that, ----------------------
“Good customers are worth keeping for life”.
----------------------
●● Emphasis on tasks.
●● Focus on costs. ----------------------
●● Procedures restrict responsiveness. ----------------------

●● Hierarchical management. ----------------------
●● Technical / Administrative environment.
----------------------
Let us look at the example of new car being purchased from your
automobile showroom. How do we create that element of customer care and ----------------------
customer delight? How can you try to ensure that every customer thinking of ----------------------
buying a car thinks of your showroom?
The process of demonstration (pre-sales activity) of the car and the ----------------------
process of delivery (post-sales activity) should be will thought of, planned and ----------------------
executed with proper care and attention to details.
For you it is the nth car sold on that particular day. But for that individual ----------------------
customer it is a matter of pride, a matter of celebration. Can you creatively think ----------------------
of creating of a small occasion - a neat event around the delivery of car, which
your customer will remember and cherish forever! Rather than just performing ----------------------
customer service of delivering the car. ‘Take these keys, Good Bye and all the
best’. ----------------------
CRM Concepts 5
Notes Customer service is going through the ritual of explaining the customer about
different accessories/attachments/spares/facilities of the car.
----------------------
Customer delight will happen when your car delivery technician is
---------------------- as equally enthusiastic as your sales person was while selling the car. The
technician goes through minor details say for example the music system. He
---------------------- explains the customer about music system, demonstrates how to use all the
functions. Sets the functions and plays the effects, then asks customer to do
----------------------
the settings, guides him through the process. The whole exercise of training
---------------------- the customer effectively using the music system should be such that customer
understands it and be able to use it properly and enjoy his music without any
---------------------- trouble. In addition you could try the following:
---------------------- 1. Keeping in touch with the customer in the pre-sales and post-sales phase?
A professionally trained telemarketing person can be in touch with the
---------------------- customer to understand his concerns and needs. Try to explore and
understand the customer queries and doubts so as to bring customer closer
----------------------
to the car you are offering him.
---------------------- 2. Develop a ‘prime club’ of the customer who purchase a particular car and
develop an e-news letter.
----------------------
A printed news letter, carry out contest, rallies, free checkups and many
---------------------- such creative initiatives.
---------------------- They help customer to reinforce their belief that they have made the best
decision and that their car and the company is the best.
----------------------
3. Talk to your customers through - customer perception study. Customer
---------------------- feedback must be an ongoing process. It has to be a perpetual activity.
Remember Customer values your gesture of asking them about their
---------------------- opinion, your product and allied service.
---------------------- Great services can create a great experience and customer delight. Every
company is selling a car - can you sell the experience of buying a car and
----------------------
enjoying it!
----------------------
Activity 1
----------------------
---------------------- Visit a nearby car showroom. Be a silent observer of: a) The sales person
making the sale. b) The delivery process. Write down your observations
---------------------- on both the activities in the light of customer service customer satisfaction
---------------------- and customer care - customer delight discussion we had above.
----------------------
1.5 RETENTION IS THE KEY
----------------------
The point is established beyond doubt that, repeat customer is the best customer.
----------------------
6:1 is the ratio which means - If you are spending 6 rupees in getting new
---------------------- customer; you may spend 1 rupee in retaining the existing customer.

Another view point is 5% increase in retention of customer can add 25% to Notes
125% increase in profit.
----------------------
Essentially retention is the key. However, not all your customers are
worth retaining. You should select the customer for retention. These customers ----------------------
should be the right ones with whom you wish to establish a long term benefit
for mutual benefit. ----------------------
Benefits of selection of right customer for an organisation are: ----------------------
●● It reduces cost.
----------------------
●● It increases profitability.
----------------------
●● Your cost benefit ratio looks upwards.
●● It helps create goodwill for your organisation. ----------------------
●● It gets you good word-of mouth publicity. ----------------------

●● It improves the possibility of greater customer satisfaction and loyalty. ----------------------
Thus we are saying - select the right customer, have the right understanding ----------------------
of their needs and evolve a right way to satisfy them.
----------------------
1.6 SERVICES MARKETING AND CRM
----------------------
‘All businesses are service businesses; argue the proponents of service
----------------------
marketing. And rightly so when the marketing guru Philip Kotler also says:
People do not want a ½” drill but a ½’’ hole’. ----------------------
Thus the output or the service given by the drill bit (a product) is what matters. ----------------------
We can find the ‘flakes’ of relationship between services & CRM in the
fundamental Marketing theory. ----------------------
Service is an act, a process, an experience. It happens (mostly) between ----------------------

people and people i.e. service provides a service receiver.
----------------------
Because of this people to people aspect or Interactive marketing that
happens in service business-CRM cohesively aligns with it. ----------------------
Technology as a solo player is insufficient to develop the right kind of ----------------------
music of customer satisfaction. Only when a meaningful human (and humane)
element is added to technology, the real symphony takes place. Technology and ----------------------
dialogue make CRM happen which is most important in service business.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
CRM Concepts 7
Notes The Service Marketing Triangle:
---------------------- Company
----------------------
----------------------
----------------------
Internal
External
---------------------- Marketing
Marketing
----------------------
----------------------
---------------------- Interactive
Employees Customers
Marketing
----------------------
Fig 1.1: The Service Marketing Triangle
----------------------
The service-marketing triangle in Fig 1.1 shows a path to the service
---------------------- marketer to handle the challenges typically faced by Service Businesses. It
shows the relationship and linkage between 3 elements of service marketing
---------------------- - Company, Customers and Employees i.e. the organisations which provide
---------------------- service such as Barista, Employees - front end and support staff. At Barista the
main coffee maker is called ‘Brew master’- which is a nice way of elevating
---------------------- importance of your own employee.
---------------------- Three types of marketing happen between these 3 elements.
●● Company to customers: External marketing
----------------------
●● Company to employees: Internal marketing
----------------------
●● Employees to customers: Interactive marketing
---------------------- 1. External marketing:
---------------------- It is the promise a company makes to a customer about the service and
its delivery. External marketing uses all the elements of communicating
----------------------
and reaching the customers through advertising, sales promotion, selling,
---------------------- merchandising and all.
Also we have seen the physical evidence, people and the actual process
----------------------
of service delivery also makes some promises to the customers. External
---------------------- marketing thus creates an opportunity to convey the customer and also
to be able to develop a 2-way communication - a dialogue with the
---------------------- customers.
---------------------- 2. Internal marketing:
---------------------- It is about applying marketing concept to your own employees. (Remember

the Stephan Page definition - Identification, Stimulation and Satisfaction
---------------------- of customers need at profit!)

You should be able to first convince or market your concept to your Notes
own employees and enable them to deliver the service to the customers.
For this it is important to identify and fulfill your internal customers i.e. ----------------------
employees needs.
----------------------
You will have to ensure that your employees have necessary skills and
capabilities, tools and motivation to deliver the promise you have made ----------------------
to your customer through External marketing. It becomes very crucial to
----------------------
take of following aspects:
●● Selecting the right people. ----------------------
●● Educating, training and developing them. ----------------------
●● Have proper system in place.
----------------------
●● Good internal communication.
●● Creating a vibrant and receptive team. ----------------------
Internal marketing is thus a key to meeting the promises made through ----------------------
interactive marketing.
----------------------
3. Interactive marketing:
----------------------
Service flows from people to people. The delivery or the actual service
experience happens between people (service employees) and people ----------------------
(customers). Interactive marketing thus means keeping the promises made
by the external marketing and completing the service-marketing triangle. ----------------------
It is through the moments of truth that happen during the interaction the
----------------------
service delivery is made.
----------------------
Check your Progress 1
----------------------
Fill in the blanks. ----------------------
1. _________ is about applying marketing concept to your own ----------------------
employees.
----------------------
----------------------
Activity 2
----------------------
Relate the Service Marketing Triangle with any one service business of ----------------------
your choice and elaborate on “Interactive Marketing” in this case.
----------------------
1.7 DATA INFORMATION AND KNOWLEDGE ----------------------
Here is a quote by the chief mentor and most respected icon of the IT ----------------------
industry - Mr. Narayan Murthy “Only in god we trust; for everything else give ----------------------
us data”.
----------------------
CRM Concepts 9
Notes But then data is data. It may, at the best, mean just nothing; unless it is
analysed, interpreted and leads to developing some insight concrete knowledge.
Diagnose
---------------------- Collected Problems
Diagnose
Collected Problems
----------------------
----------------------
---------------------- Information is Plan and

Processed Strategize
Data is created andis
Information Plan and
---------------------- Processed used to Strategize
Data is created and
---------------------- used to
----------------------
Control the
Analyzed business
---------------------- Control the
Analyzed business
----------------------
----------------------
----------------------
Fig. 1.2: Marketing Research creates Useful Information
----------------------
Data Drives Strategy:
----------------------
---------------------- S INTERNAL DATA SECONDARY DATA
---------------------- S INTERNAL DATA SECONDARY DATA
----------------------
---------------------- Product Customer / Other data /

D Database Prospect base information
Product Customer / Other data /
---------------------- D Database Prospect base information
Marketing knowledge
---------------------- Marketing knowledge
---------------------- Performance
Tier 1 Tier 2 Metrics
---------------------- Segmentation Marketing Performance
S Tier 1
Targeting Tier 2
Mix Metrics
---------------------- S
Differentiation
Segmentation CRM
Marketing
Targeting Mix
Differentiation CRM
---------------------- Fig 1.3: From Source to Databases to Strategy (SDS Model)
---------------------- Integration of Database:
In CRM integration of data is most crucial to the decision of delivery model.
----------------------
----------------------
----------------------

Marketing Research Notes
Feedback
Response to ----------------------
promotional
programmes.
Previous order data /
----------------------
buying behavior noted
----------------------
Customer complaints /
Product returns
----------------------
Integrated Database ----------------------

Statistical information
available through
Past financial data external sources ----------------------
Such as invoices /
payment details. ----------------------
Call center feedback / ----------------------

observations Internet based / Web
related data
----------------------
----------------------
Fig 1.4: Integration of Database ----------------------
Why is integration of data necessary?
----------------------
Imagine that you have just purchased a gift for your sister through a web
site say www.giftforu.com. However when you get the delivery of this gift you ----------------------
find that the size of the product as mentioned on the particular web page is not
----------------------
the same as the gift you received. You write an e-mail complaint to the company
and seek an explanation. You get no reply to your 3 consecutive e-mails and ----------------------
lead to a frustration over the deal. Over and above the same evening you get a
call by a sweet speaking lady who says, “Good evening sir, I am xyz, calling on ----------------------
behalf of giftforu.com. We have revised our products in the gift section and you
----------------------
are kindly invited to visit our site for any of your requirements”
If you are the person on the receiving end, think of how you will respond ----------------------
to this grave disrespect to you as a customer.
----------------------
But remember you as a CRM initiator are likely to make such a mistake.
It can be easily avoided by integrating the data as mentioned above. ----------------------
Don’t you think the case discussed above makes a strong point for an ----------------------
integrated database management? Data warehouse can effectively give solution
to such cases and avoid distortions happening across the different mediums of ----------------------
dealing with the customers. ----------------------
Again the example discussed above of no case in isolation. A leading firm
in Market and technology research - Forrester inc. of US puts forth following ----------------------
observation in its report of June 2000 titled “The Customer Conversation”: ----------------------
Only 37% of respondents knew if they shared customer information with
other division / departments of the organisation. ----------------------
----------------------
CRM Concepts 11
Notes Only 20% could tell if the customer had previously visited the company’s
website.
----------------------
Only 23% of CSRs could see a customer’s web activity.
----------------------
1.8 SALES FORCE AUTOMATION AND CRM
----------------------
SFA is Sales Force Automation. Today SFA is an integral part of CRM.
---------------------- History tells us that SFA was the first step taken by marketing company towards
---------------------- CRM. Understanding SFA begins with the study of basic selling process and
the importance of FAB (Features, Advantage & Benefits) approach to selling. It
---------------------- then moves into the technology of Automating Sales process.
---------------------- Why is SFA important to CRM?
SFA is technological tool to help sales people acquire and retain customers,
----------------------
which helps in reducing administrative cost and provides good basis for account
---------------------- management. It increases better selling chances for the Salesperson and more
business for the company.
----------------------
This helps in two ways:
---------------------- ●● It helps company get customer retention and increase profits.
---------------------- ●● Customers get better information, better products or services, faster
responses to their queries.
----------------------
SFA is a key link in developing the mutual benefit inherent of CRM.
---------------------- SFA products were initially meant to improve sales force productivity and
help sales manager have better control over their sales team. However, today
---------------------- SFA increasingly focuses on cultivating customer relationship and improving
---------------------- customer satisfaction leading to increased customer loyalty.
The reasons why SFA is important to CRM are:
----------------------
●● Reduction in cost of selling.
----------------------
●● Increased revenue.
---------------------- ●● Easy availability of customer information
---------------------- ●● Increased sales force mobility
---------------------- ●● Meeting increased customer expectations.
1. Reduction in cost of selling:
----------------------
The cost of maintaining a sales force is a major portion of the total cost of
---------------------- selling. It is thus logical that organisations seek to reduce the cost of selling
and SFA is one of the solutions. Indeed, implementing any SFA software
----------------------
is a costly affair; which spreads over certain time frame and is evaluated
---------------------- based on the gains created due to increased sales force productivity and
better customer information. It becomes a cost saving initiative over the
---------------------- long term.
----------------------

Example: A computer hardware selling company maintains detail records Notes
of enquiries received and follows through each enquiry till order is
received or lost. This small part of SFA leads to increased order book by ----------------------
7%-8%.
----------------------
2. Increased revenue:
----------------------
We have already said that SFA implementation is a cost incurring process.
But it has to be looked upon as an investment and not as a cost. Investments ----------------------
are supposed to create better profitability in present and future. With SFA,
this is what happens. A knowledgeable and empowered sales person is in ----------------------
a better position to close the sale. SFA is thus a vital tool to increase the
----------------------
productivity and revenues.
3. Easy availability of customer information: ----------------------
In any organisation there is a particular process through which an ----------------------
incoming order flows. Different departments (e.g., sales, commercial,
manufacturing, purchase, R&D, etc.) are involved in fulfilment of this ----------------------
particular order. These multiple departments may have an interest in ----------------------
viewing the customer status at any given time. A single window that
pops up in SFA becomes very handy and usable to different interested ----------------------
departments. This creates a kind of universal view of all the data available
to all the departments at all time pertaining to one particular customer. ----------------------
You will agree that more knowledgeable employee means more confident ----------------------
employee who is in a better position to serve the customer in a better way.
Please note the Business transaction history is as important as to the buyer- ----------------------
seller relationship. Rather it is the basis of building such a relationship. ----------------------
4. Increased sales force mobility:
----------------------
Thanks to improving infrastructure and increased competitive activities,
sales people today are always on the move. More fieldwork is need of ----------------------
the day. With the help of a modern laptop and a cell phone with internet
----------------------
connectivity it is possible for a salesperson to get real time information
about a particular account / segment / product / an order. You will agree ----------------------
that this will greatly equip a sales person to be able to deal and satisfy
customers better. ----------------------
5. To meet increased customer expectation: ----------------------
‘Yeh dil maange more’ is the catch line to explain ever demanding ----------------------
consumer today. More the customers demand, more the companies will
have to provide (remember if you don’t, somebody else will) and for this ----------------------
provision to customers requirement and equip sales force; SFA becomes
an absolute must. ----------------------
----------------------
----------------------
----------------------
CRM Concepts 13
Notes Sales process Sales activity
---------------------- Opportunity Sales information sent.

identified
----------------------
Lead More sales information sent.
---------------------- allocated
---------------------- Prospect Lead tracking process initiated.

contacted
----------------------
---------------------- Preliminary Prospect - Plan for enquiry

Prospect
qualified follow up.
----------------------
Firm lead? Schedule meeting (if required).
----------------------
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Solution
---------------------- identified Work out Solution and Price.
----------------------
Sign the contract.
----------------------
Order placed
---------------------- Approval by Management.
---------------------- Fig 1.5: SFA in Action

----------------------
----------------------
---------------------- Fill in the blanks.

1. _______ increases better selling chances for the Salesperson and
----------------------
more business for the company.
----------------------
---------------------- Activity 3
----------------------
Visit the website www.sfa.com and generate a detailed note on the
---------------------- offering.
----------------------
---------------------- 1.9 EFFECTIVE CRM IMPLEMENTATION
---------------------- What is the most difficult part of CRM? The answer surly is “Making it happen!”
Implementing CRM- making it a reality is the real challenge and the purpose of
---------------------- any CRM initiative. When do you say that CRM has happened? When:
---------------------- A. Your customer is more than satisfied; she is delighted.

B. Your customer attrition rate is at minimal. (Thus, you are retaining the Notes
select customer.)
----------------------
C. The bottom line improves: your profits multiply.
Implementing CRM is more, much more, than installing the CRM ----------------------
software. Implementation starts with questioning the basics of your business;
----------------------
defining your business, redefining your strategy, setting up plans, implementing
and evaluating the CRM as you go along. It is very important here that your ----------------------
employees own the CRM initiative because they are the ones who are going to
actually implementing the CRM. Otherwise CRM just remains a board level ----------------------
rhetoric and a revenue drain. Your organisation speaks a lot about it, spends a
----------------------
lot on it but the pipeline at the end is dry. The culture of CRM may not get be
imbibed in the organisational ethos, if you do not seek employee’s commitment ----------------------
and participation.
----------------------
You have already seen in this implementing CRM is about creating a
change and an urge in your organisation to become customer centric. ----------------------
The technology and the process play second fiddle to the far more ----------------------
important people element of CRM - the training, motivation and empowerment
of people, particularly your customer contact staff. ----------------------
The CRM readiness checklist given in this unit is a comprehensive way of ----------------------
judging whether your organisation is ready to take up the challenge of getting
into CRM mode. Once you are sure that your organisation is ready, you can start ----------------------
the implementation process of CRM. A good product or service, sound process,
technology and able people are some of the important baseline requirements to ----------------------
begin with a CRM initiative. ----------------------
Unless you have the CRM merits in place, it is not possible to judge if
you are going in the right direction. CRM evaluation has to be in place and ----------------------
predefined before you begin your journey. ----------------------
1.10 CAUSES OF CRM FAILURE ----------------------
Every new business management theory has its dark side and with CRM, ----------------------
it is a big black wall of failures and critics. This is primarily because it was ----------------------
perceived to be the ultimate answer to all prevailing questions for organisations
striving to be customer oriented. ----------------------
CRM is not the miracle cure everyone hoped for when the first solutions ----------------------
were introduced.
----------------------
Incidentally, as a theory and philosophy, CRM is very fundamental and of
great depth. But you cannot treat it as software and hope that it transforms your ----------------------
business totally.
----------------------
Marketing has evolved into ‘Database marketing’ into ‘Relationship
Marketing’ into ‘CRM’! ----------------------
Like it happens to most theories over time, the pitfalls get more evident. ----------------------
CRM of course has its share of criticism and for good reasons.
CRM Concepts 15
Notes ●● It helps theory and practice of CRM to redefine itself.
●● All companies would be worried if they spent a lot of money on some
----------------------
solution and it did not work. But you should be clear on one important
---------------------- point; CRM as a concept is not a failure but the wrong perceptions/
practices and implementation has reduced the success rate of CRM.
----------------------
Let us look at some of the common causes for CRM failure:
---------------------- 1. Treating CRM = Technology + Automation:
---------------------- This tendency to focus on Information Technology (IT) rather than
customer care is one of the most common problems. In many companies,
---------------------- CRM is being introduced and implemented by IT or EDP department
---------------------- with very little or no co-ordination with sales, marketing and customer
service.
----------------------
A V.P. of a well-known industrial products company, when questioned on
---------------------- his company’s CRM initiative, very confidentially replies, “Well, we are
doing very fine with CRM-we have out sourced it!”
----------------------
There are many companies who feel that IT- heavy, expensive version
---------------------- of CRM software will help them. These companies spend their time and
efforts in building perfect databases and acquiring modern modeling
---------------------- skills rather than developing the right mindsets.
---------------------- 2. Large-scale systems with long-term promise are better:
---------------------- Many companies get locked up in to the maze called CRM. They attempt
to install all the elements of CRM simultaneously like CRM: data
---------------------- warehouse, ACRM, campaign and channel management. But installing
and tying up all these element is very time consuming and difficult to
---------------------- integrate. Instead, an incremental, module-by module approach in
---------------------- establishing CRM is preferable. Here the employees get a chance to learn
fully each phase and then move on to the next.
---------------------- 3. Old Organisational mindset:
---------------------- A study by CRM-forum detailed the significance of nine different causes
of failures of CRM initiatives:
----------------------
Organisation change 29%
----------------------
Company politics and inertia 22%
---------------------- Lack of CRM understanding 20%
---------------------- Poor planning 12%
---------------------- Lack of CRM skills 6%

Budget problems 4%
----------------------
Software problem 2%
----------------------
Bad advice 1%
---------------------- Other 4%

None of these causes suggest external reasons for CRM failure. With 29 Notes
percent of failure caused by problems with organisational change, it’s
clear that the most difficult step for customer-based initiatives is the ----------------------
cultural change required.
----------------------
Conventional marketing suggests product manger or brand manager; to
be at the helm of the marketing activity. This is purely organisation point ----------------------
of view.
----------------------
CRM suggest “A segment manager” to be the hub of the marketing wheel.
This clearly is a customer’s point of view. ----------------------
But for many companies; conventional product management is so ----------------------
entrenched in the culture that they may wear CRM cap but CRM wisdom
remains at large. ----------------------
Hence it is an absolute must to make a company genuinely customer- ----------------------
centric. It is about ‘Change management’ in the entire organisation’s
culture. While it is important to have exchange of information with ----------------------
customer - it is also necessary to have this exchange of information within ----------------------
the organisation. A clear purpose must be established and a transparent
implementation is carried through to CRM. ----------------------
4. Lack of CRM understanding: ----------------------
A holistic understanding of CRM is a must. It does not help to have one-
sided view or elemental thinking of CRM. Some companies think that ----------------------
CRM is a technology and miss out on relating it with strategy, some ----------------------
company think that CRM is cross-selling, up-selling, selling…. Selling,
some companies think it as an extreme form of segmentation. ----------------------
All this is far from the understanding of customer at the core of CRM. ----------------------
5. Poor strategy and planning:
----------------------
Many a company fails in developing a clear vision, goal, strategy and
planning for CRM. ----------------------
Strategy is to business what compass is to navigator. ----------------------
Goals are broad statements about where do you want to reach. ----------------------
Objectives/plans are specific measurable actions that will support your
----------------------
strategies.
For instance, Sales and Marketing objectives could be: ----------------------
●● Increase sales and marketing efficiency. ----------------------
●● Increase sales in volume and value per territory. ----------------------
●● Increase sales of products per purchase.
----------------------
●● Increase customer loyalty and retention.
----------------------
Poor strategy and planning may result in CRM addressing the wrong
issues. ----------------------
CRM Concepts 17
Notes 6. Lack of skills essential for CRM:
People are people and people are biased. They tend to think based on their
----------------------
experiences in past. And many managers have grown up using ‘selling’
---------------------- and ‘Marketing’ school of thought. For them it becomes difficult change
to new and different CRM challenge. So it is important that company
---------------------- while installing sophisticated CRM tools also have sophisticated men
and women to implement it. It needs a new orientation and training to
----------------------
create offering based on customer needs and to develop customer-centric
---------------------- strategies.
7. Inefficient or inappropriate software:
----------------------
Sometimes the CRM software provider does not meet the customer’s
---------------------- need. This is the last thing to happen.
---------------------- It is either inappropriate or simply faulty. It is important to check the
‘Track record’ before selecting a CRM vendor.
----------------------
8. Lack of commitment:
---------------------- Higher management needs to sanction the funds for CRM. But only that
---------------------- is not sufficient.
CRM needs a committed senior management - committed to customer
----------------------
thinking, customer care and customer delight. It is important that the
---------------------- proactive management sells CRM across the organisation. This helps in
getting companywide commitment to CRM.
----------------------
---------------------- Check your Progress 3

----------------------
State True or False.
---------------------- 1. Lack of CRM understanding is the cause for failure of CRM.
----------------------
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Notes
Case Study
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CRM: A Contemporary View
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Go through the Power point presentation given below and develop your own set
of examples to be given while presenting each slide. ----------------------
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CRM Concepts 19
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CRM Concepts 21
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CRM Concepts 23
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CRM Concepts 25
Notes Summary
---------------------- ●● ou have just had a review of the basic elements and aspects of CRM. It
Y
---------------------- was important to revisit these basic concepts on which lies the foundation
for the understanding of Advanced CRM practices. This unit thus
---------------------- establishes the fact that CRM is an effective business concept that can
give a sustainable competitive advantage to businesses across industry
---------------------- segments.
---------------------- ●● RM as explained is an all comprehensive concept that can help
C
organisations become Customer centric and remain ahead of Competition.
---------------------- Further in this book if you feel that you do not understand any particular
---------------------- concept for the want of basic fact on CRM – do come back to this unit
again. The purpose to make this unit elaborate is to help you understand
---------------------- the concepts and serve as a ready reckoner in case you need it.
---------------------- Keywords
----------------------
• Marketing: Identification, stimulation & satisfaction of consumer needs
---------------------- at profit.
• Need: A need is an absolute necessity essential to maintain life.
----------------------
• Wants: Wants are a desire for specific satisfiers.
----------------------
• Demand: Wants become demand backed by an ability and willingness to
---------------------- buy.
---------------------- • Value: Total worth of what customer gets in exchange of price paid for a
product or service.
---------------------- • Market: A lot or bunch of potential customers with needs and wants,
---------------------- who are able & willing to exchange for satisfying their needs & wants.
• Customer: The individual or organisation that actually makes the
----------------------
purchase decision is customer.
----------------------
---------------------- Self-Assessment Questions

----------------------
1. Discuss with examples relationship of Customer Care and CRM.
---------------------- 2. Explain the basics of Implementation of CRM.
---------------------- 3. Explain in detail the causes of CRM failure.
----------------------
----------------------
----------------------
----------------------

Answers to Check your Progress Notes
Check your Progress 1 ----------------------
1. Internal marketing is about applying marketing concept to your own
employees. ----------------------

1. SFA increases better selling chances for the Salesperson and more business
----------------------
for the company.
State True or False. ----------------------

1. True ----------------------
----------------------
Suggested Reading
----------------------
1. Batterley, Richard. Leading Through Relationship Marketing.
2. Garikaparthi, Madhavi. eCRM-Concepts & Cases. ----------------------
3. Sheth, Jagdish, Atul Parvatiyar. Handbook of Relationship Marketing. ----------------------

4. Sheth, Parvatiyar, Shainesh. Customer Relationship Management. ----------------------
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CRM Concepts 27
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CRM through Effective Customer Complaints Handling
UNIT
2
Structure:
2.1 Introduction
2.2 Why Customers complain
2.3 Why Complaints matter
2.4 Designing and managing a Complaint Management System
2.5 Complaints and the Art of Customer Care
Case Study
Summary
Key Words
Suggested Reading
CRM through Effective Customer Complaints Handling 29

Notes
Objectives
----------------------
• Discuss the importance attached to customer complaints
----------------------
• State the reasons behind customer complaints
---------------------- • Explain how complaints can act for the betterment of an organisation
---------------------- • Elaborate on how to manage a complaint handling system
---------------------- • Describe how complaints and customer care are related to each other
----------------------
---------------------- 2.1 INTRODUCTION
---------------------- CRM treats customer at the core of Business. His or her need is of
utmost importance. A complaint is essentially an unmet need. When a need
---------------------- is not satisfied dissatisfaction arises which leads to a complaint. The degree
of dissatisfaction is directly proportional to the unfulfilled need or expectation
----------------------
from an organisation, its products, service, people or from the entire set of
---------------------- offering.
Many dissatisfied customers prefer not to complain. A study reveals that 1
----------------------
in 39 dissatisfied customers complain. Far from ignoring, organisations should
---------------------- actually reward these complaints. They are indeed valuable.
---------------------- CRM looses a major advantage of building a meaningful relationship with the
customer by:
---------------------- ●● Not getting the complaints in the first place
---------------------- ●● Ineffective handling of Complaints
----------------------
2.2 WHY CUSTOMERS COMPLAIN
----------------------
CRM is about Customer Care. And those who care listen to the customer
---------------------- complaints.
---------------------- Good Complaints handling procedure puts Customer at the centre of your
Organisation. Customer complaints do not appear out of blue. They emerge
---------------------- out of a small dissatisfaction, an abrasion, an irritation, an unsatisfied need or
an unmet promise. Thus majority of times the organisation is the origin of the
---------------------- complaint which customer makes.
---------------------- Complaint is not a Complaint to begin with; it is to start with a grumble
or a grouse expressed with someone in the organisation who is responsible for
----------------------
neither creating it nor correcting it.
---------------------- Example: Complaining to a waiter in a restaurant about the untidy washroom
area.
----------------------

Customers are of different types. Some are more likely to complain Notes
than others. Those who complain believe in social benefits of complaining. At
a personal level they expect some compensation to be given for the product ----------------------
or service failure. Socially they believe that every future customer will get
benefited if the provider corrects the wrong, based on their complaint. ----------------------
Customers believe that a good product, a good service and a fair treatment ----------------------
is their right.
----------------------
Rarely people have the complaining nature and complain with or without
reason. According to a study only 1.5% of the customers are such nuisance ----------------------
creators across the industries. Best course is to ignore this minority. But surely
----------------------
the vast majorities who are the reasonable customers need real attention and
care. ----------------------
What people want from their complaints is a simple expectation of being
----------------------
taken seriously. To be given an explanation of what went wrong, an apology and
an assurance that the things will be put right for future. ----------------------
Let us look at why people do not complain: ----------------------
Majority of dissatisfied customers do not complain because they think
that it is not worth the time and efforts. ----------------------
Many do not complain because they believe, it will not change anything. ----------------------
At times customers do not complain because they do not know how to do ----------------------
it.
----------------------
Some of them do not complain because they sincerely believe that it was
their fault that things went wrong. ----------------------
Some of them do not complain simply because they are not interested and ----------------------
that there are many other suppliers of the product and service and tomorrow if
they need it they can easily get it from the others. ----------------------
CRM attempts to closely look at customer complain and to positively ----------------------
learn from it. To put this learning into the organisational offering and correcting
the way it is going wrong. ----------------------
Some of the common complaints about a call centre: ----------------------
“I entered my account number and the agent still asks me for it.” “It is
----------------------
frustrating to sit on hold for minutes on end.” “I hate being transferred from one
person to another.” “Why can’t everybody know my issue? This is the 10th time ----------------------
I have call about the same problem. Don’t they value my business?” “I might
not get a timely answer if I email. I’d rather call.” ----------------------
“How come when I go to the web site I get a different answer than when I ----------------------
call into your call centre?” “I just want to talk to a live person rather than enter
1, 2, or 3 on my touchtone phone.” ----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. People do not complain because they believe, it will not change
---------------------- anything.
----------------------
---------------------- Activity 1
----------------------
Visit any service establishment (a restaurant or a bank) and ask with the
---------------------- manager if the customers complain and reasons for it according to the
manager?
----------------------
---------------------- 2.3 WHY COMPLAINTS MATTER

---------------------- CRM begins and ends with the customer. It is the journey from satisfaction
---------------------- to satisfaction. Complaint is a hurdle in this path.
Complaints matter because they are the definite indicators of how much
---------------------- your organisation considers itself accountable to your customers.
---------------------- Complaints are important due to following factors.
---------------------- ●● It creates improved Customer Satisfaction Index.
●● It improves customer retention and loyalty.
----------------------
●● Avoids unfavourable or negative publicity.
----------------------
●● Getting more customers through word of mouth through satisfied clients.
----------------------
●● Saves time and efforts.
---------------------- ●● Avoids legal complications and costs.
---------------------- ●● It is an important input to management - for better understanding of
Customer needs.
----------------------
●● It saves money for the organisation.
---------------------- ●● Increased reputation for organisation.
---------------------- ●● They can give future direction and valuable insights.
---------------------- As mentioned above complaints can be a great source of learning for
an organisation. CRM believes in a dialogue with the customer. Complain is,
---------------------- although not so pleasant, an avenue for dialogue with the customer. The fact
remains that a well addressed complaint can not only develop a dialogue with
----------------------
the customer but also build a long term relationship with him.
---------------------- For an organisation deciding to adopt the CRM route an effective
addressing of complaint is a must. It as an opportunity of opening doors to
----------------------
customer intelligence.
For organisations it is definitely worth it to explore a possibility of a dialogue Notes
with the customers.
----------------------
1. It is the journey from ____________ to satisfaction. ----------------------
2. ________ believes in a dialogue with the customer.
----------------------
2.4 DESIGNING AND MANAGING A COMPLAINT ----------------------

MANAGEMENT SYSTEM ----------------------
A formal customer complaints handling system is more than training your ----------------------
staff to be nice with the complainants or handing over the information leaflet to
them. It should be set out in details in order of; how a complaint is registered, ----------------------
processed, stored and the learning integrated into the way organisation functions.
----------------------
Some of the integral parts of designing and managing a customer
complaints handling system are as below: ----------------------
●● Consult your staff. ----------------------
●● Ask your Customers.
----------------------
●● Register all the complaints.
●● Have an escalation procedure. ----------------------
●● Use technology. ----------------------
●● Lessons learned.
●● Learning communicated to Customers. ----------------------
●● Consult your staff: ----------------------

Your front line staff is the one who is handling customers on day to day ----------------------
basis and they more likely know ‘where the shoe pinches’. You need to
start designing the complaint handling from the front line. This will also ----------------------
ensure that they get more involved in the system they have suggested in
the making. ----------------------
●● Ask your Customers: ----------------------
Apart from you employees your customers are the one you need to consult
while devising a complaint handling system. Customers can give the other ----------------------
side view of what and where the organisation needs to look at and of how
----------------------
they can go about doing it. An informal dialogue with your customer will
give you loads of information about the issues at hand. ----------------------
●● Register all the complaints:
----------------------
It is important to register all the complaints and not only those, which you
think are important at a particular point in time. The complaint log and ----------------------
the subsequent action taken if documented well can become an excellent
training manual for future and serve as improvements for product / service. ----------------------

Notes ●● Have an escalation procedure:
An escalation procedure is the one where Customer can approach the
---------------------- senior officials for the concerns. When employees are not able to address
---------------------- a particular complaint it gets toppled between them and in the process
displeases the customer further. The customers as well as the employees
---------------------- must know the levels of approach in case if they are not satisfied with the
complaint being handled at a lower level.
----------------------
Example: You contact a call centre of a particular company and will be
---------------------- asked for details in a particular sequence. If your query or complaint is
not satisfied and you call up the same call centre again you will have to
---------------------- invariably go through explaining the same story again.
---------------------- ●● Use technology:
---------------------- A detailed system can be laid out using the suitable software and
hardware configuration. It will help store, analysis, retrieve and transmit
---------------------- the complaints in an organisation. Technology will help develop the cross
analysis that can give valuable information to be used in.
----------------------
●● Lessons learned:
----------------------
Going back to basic CRM definition will tell us that continuous learning
---------------------- of customer concerns is an integral part of CRM. Hence when a complaint
is satisfactorily or unsatisfactorily handled, the learning should be fed
---------------------- into the knowledge management system of your organisation. Only then
your organisation truly becomes a learning organisation; a pre-requisite
----------------------
for implementing CRM.
---------------------- ●● Learning communicated to Customers:
---------------------- The learning from customer complaints handling should be fed back into
an organisational learning, but it also has to be communicated to existing
---------------------- and prospective customers. This is an essential part of your intention of
establishing a dialogue with your customers.
----------------------
---------------------- Activity 2
----------------------
Visit a nearby retail store and enquire about their complaints handling
---------------------- system. Do you agree or disagree with the system developed by them?
----------------------
---------------------- 2.5 COMPLAINTS AND THE ART OF CUSTOMER CARE

---------------------- Long back we have argued and agreed that CRM is about Customer
Care and not mere customer service. Customer Service takes a very limited
---------------------- view of the customer management process. It is a way of administering your
way through, trying to handle customer complaints while Customer care is a
----------------------
professional way of looking at it as an opportunity of bettering the transaction
---------------------- and series of them to develop a long term relationship.

Some of the important aspect of complaints and the art of customer care are: Notes
●● Begin at the top.
----------------------
●● Put customer in control.
----------------------
●● Take responsibility.
●● Do not point fingers. ----------------------
●● Hire the right people. ----------------------

●● Adopt an integrated approach. ----------------------
●● Begin at the top:
----------------------
Example: A CEO of a toys manufacturing company is particular about
the continuously learning through customer complaints and emphasises ----------------------
its important time and again in every forum. Actually, she goes ahead and
----------------------
talks to unsatisfied customers, involves her in getting complaints looked
after and monitoring them periodically. Sure enough this organisation ----------------------
will build a long term advantage of a quality product. And the route to
this quality leadership is through effective complaints handling which is ----------------------
spearheaded by the top.
----------------------
The example given above is self explanatory to highlight the importance
of complaint handling to begin at the top. ----------------------
●● Put customer in control: ----------------------
Let the customer take charge of the process of handling the compliant. ----------------------
On satisfactorily registering the complaint customer can be given choice
to resolve it within the time frame he expects and the manner in which he ----------------------
intends it to happen.
----------------------
It is ridiculous to then say that ‘it is against our company policy’.
----------------------
A noted guru on Change Management Sumantra Ghoshal said “Successful
professional is the one who breaks rules selectively”. It is thus when you ----------------------
want to keep your customer’s interest live you should selectively take a
route other than prescribed by the policy or procedures. ----------------------
In order to give Customer true control of the situation one needs to have ----------------------
trust on customers and believe that he / she will not take advantage of the
situation. ----------------------
●● Take responsibility: ----------------------
Always begin with a patient listening of a customer complaint. Let him ----------------------
vent out the frustration caused due to your product or service problems.
Secondly, never argue or take stands. Understand that it is company’s ----------------------
fault (if it is) and it is the company’s responsibility to fix it. ----------------------
Example: You are a courier company. You promise to deliver packages
----------------------
anywhere in the world within 72 hours. You do deliver the packet in time
but at the wrong destination. It is not the customers’ fault although he ----------------------

Notes will have to go through rigmarole of fighting with you to get the packet
delivered to the right destination again.
----------------------
●● Do not point fingers:
---------------------- In the example above about the courier company it is no point in pointing
to the airlines or your office abroad that may be at the fault. Customer is
---------------------- in no way concerned with the airlines or with your office abroad. He has
---------------------- dealt with you, given you the packet and expects you to deliver.
●● Hire the right people:
----------------------
It is essential that your people have the very basic skill of listening in
---------------------- order to take up the job at customer complaint handling desk. The right
people for such a job are the one with ample of patience and an empathetic
----------------------
attitude. It is not that everyone can wear this cap. It comes with its thorny
---------------------- feathers. He is the person who believes in solving people problems and to
derive great satisfaction out of it.
----------------------
●● Adopt an integrated approach:
---------------------- Let Customer support be an integral part of CRM exercise and not a
standalone activity. Integrate this with the entire gamut of CRM offering.
----------------------
It should not just remain a necessary evil in the organisation but an equally
---------------------- responsible like the Marketing or Sales function. After all this is one of
your customer facing department and its persona is as important as may
---------------------- be marketing communications department.
----------------------
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A CRM approach to customer complaints handling strategy: Notes
----------------------
1. Welcome/
Encourage ----------------------
Complaints
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7. Redesign 2. Help ----------------------
the offerings people
register ----------------------
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Complaints
handling ----------------------
Strategy
6. Communi- 3. Act ----------------------
cate the promptly
change ----------------------
internally &
externally ----------------------
----------------------
5. Learn 4. Be fair to ----------------------
from Customers
Customer ----------------------
Complaints
----------------------
----------------------
Activity 3 ----------------------
----------------------
The right kind of attitude is said to be the most important ingredient of
the Customer Complaints handling staff. Imagine you are the Customer ----------------------
Complaints executive at a Multiplex and somebody comes complaining ----------------------
about the noise made by some attendants. Explain how you will react to
this complaint? ----------------------
----------------------
Case Study ----------------------
Customer Complaint form Exercise: Study the form given below. Redesign it ----------------------
for your organisation. Talk to at least 8 -10 of your dissatisfied customers and get
it filled and analyse them for the results. Give suggestions to your organisation ----------------------
based your analysis.
----------------------
----------------------

Notes 1. Customer details
---------------------- Name:…………………………………………………………………………..
Street address:………………………………………………………………….
----------------------
…………………………………………………………………………………
---------------------- Phone No: (Res.) (Office)
---------------------- Mobile:
---------------------- Email address (if applicable):……………………………………………………
---------------------- 2. Details of goods or services supplied to the customer
---------------------- Date of purchase or service:
---------------------- Description of the goods or service including make, model, type of service, purchase
method, etc.
----------------------
………………………………………………………………………………….
---------------------- …………………………………………………………………………………..
---------------------- ………………………………………………………………………………….
3. Details of customer complaint
----------------------
……………………………………………………………………………………
---------------------- …………………………………………………………………………………….
---------------------- …………………………………………………………………………………….
----------------------
Office use only
----------------------
Complaint received by: Date received:
----------------------
In person In writing
----------------------
Action taken or required:
----------------------
Date of action completed:
----------------------
Signature:
----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------

Summary Notes
●● Customer complaints is the beginning of understanding customers and ----------------------

moreover using this opportunity as developing a long term relationship ----------------------
with the customer. As studied in the unit it is important to establish a
better complaints handling mechanism in your organisation. However ----------------------
it is important to understand the psychology of complaints and why
complaints matter. ----------------------
●● This unit thus can pave the initial path to getting the CRM way established ----------------------
in your organisation.
----------------------
Keywords ----------------------
• Consumer: Consumer is the individual or organisational unit that actually ----------------------
uses a product.
----------------------
• CRM: The establishment, development, maintenance and optimisation
of long-term mutually valuable relationships between customer and ----------------------
organisation.
----------------------
• Formal study: You employ an internal committee or an external
consultancy firm to institute a formal customer perception study. ----------------------
• Focus group: A group of existing / potential customers invited for a ----------------------
brainstorming group discussion.
----------------------
• Customer lifetime value: The total business generated by a customer
over his / her purchasing lifetime. ----------------------
• Structural bonding: That intimacy in your relationship with the seller
----------------------
that he gets into your structure. It is a symbiotic relationship - which
develops, nurtures and grows together. ----------------------
----------------------
----------------------
1. Why are complaints so important for today’s organisations? ----------------------
2. How can CRM strategies be used in Complaint Handling Management?
----------------------
3. Discuss the steps in Effective Customer Complaint Management.
----------------------
4. Discuss the relationship of Customer Complaints, Customer Care and
CRM. ----------------------
----------------------
----------------------
----------------------
----------------------

Notes Answers to Check your Progress
---------------------- State True or False.

1. True
----------------------
----------------------
Fill in the blanks.
---------------------- 1. It is the journey from satisfaction to satisfaction.
---------------------- 2. CRM believes in a dialogue with the customer.
----------------------
Suggested Reading
----------------------
----------------------
2. Garikaparthi, Madhavi. eCRM-Concepts & Cases.
---------------------- 3. Shajahan, S. 2006. Relationship Marketing. TMGH.
---------------------- 4. Sheth, Jagdish, Atul Parvatiyar. Handbook of Relationship Marketing.
---------------------- 5. Sheth, Parvatiyar, Shainesh. Customer Relationship Management.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Call Centre to Contact Centre to Customer Interaction Centre
UNIT
3
Structure:
3.1 Introduction
3.2 Call Centre
3.3 Contact Centre
3.4 Technology at Call Centres
3.5 Criticism of Call Centres
3.6 Call Centre Terminology for Ready Reference
Summary
Key Words
Suggested Reading
Call Centre to Contact Centre to Customer Interaction Centre 41

Notes
Objectives
----------------------
• Differentiate between a call centre, a contact centre and a customer
---------------------- interaction centre
---------------------- • Explain the use of technology at call centres
---------------------- • State why the call centres are transforming into customer interaction
centres
----------------------
• Elaborate on the criticism to call centre
----------------------
---------------------- 3.1 INTRODUCTION
---------------------- Dialogue with customer is the focal point of CRM. Today whether your
business is ‘brick and mortar’ or ‘click and mortar’-Technology plays a vital
---------------------- role. It is a conduit for that meaningful dialogue with the customer. Call centres
are changing fast and getting new lease of life as businesses invite customer’s
----------------------
to contact, comment, suggest and interact with them.
---------------------- Call centres have a unique advantage of being able to learn directly from
customers about their needs and wants. For this to happen it is not enough to
----------------------
dish out a scripted reply to a customer query. With good communication skills
---------------------- and knowledge of the subject, it is possible that a call centre representative
will be able to establish a dialogue with the customer. He / she must use this
---------------------- customer contact to make an engaging dialogue with the Customer.
---------------------- Call centre then emerges as a customer- interaction- centre!
----------------------
3.2 CALL CENTRE
----------------------
By definition a call centre is a centralised office used for the purpose of
---------------------- receiving and transmitting a large volume of requests by telephone.
---------------------- A call centre may be:

a. In-house department handling inbound and out-bound calls.
----------------------
b. Company owned activity remotely located and working as a call centre.
----------------------
c. Totally out sourced activity to third-party which manages the calls,
---------------------- received and made on behalf of a company.
---------------------- Traditionally, talking to customers is the expertise usually found with

sales and (partly) service departments. Call centres are now taking charge of
---------------------- this activity by taking and making customer calls.
---------------------- A call centre is often operated through an extensive open work space,
with work stations those typically include a computer, a telephone set, a head
---------------------- set connected to a telecom switch.

It may be an independently working unit or networked with additional Notes
centres. It may be networked with a corporate computer network including
mainframes, microcomputers and LANs. ----------------------
Today CTI-computer telephony integration links voice and data path ----------------------
ways into a centre using new technologies. More discussion on technology used
at Call Centre follows: ----------------------
In a call centre types of calls are divided into two types: ----------------------
●● Inbound
----------------------
●● Outbound
----------------------
Inbound calls are calls made by the consumer to obtain information, report
a problem or ask for help/advice. Outbound calls are typical telemarketing calls. ----------------------
They are made in order to sell a product or service, seek a feedback, to promote
a concept, for debt collection and so on. ----------------------
Call centre staff are often organised into a multi-tier support, system for a ----------------------
more efficient handling of calls. Multi-tier increases the efficiency and also the
effectiveness of a call. ----------------------
The first tier receives the incoming call and direct enquires to the ----------------------
appropriate department or the right desk. If the caller needs more information/
assistance, the call is forwarded to second tier where normally most issues are ----------------------
resolved. In some cases however third-tier support is required; this could be the ----------------------
senior management or highly-skilled technical support staff for a product or
service. ----------------------
Call centre performance is measured on the basis of certain performance ----------------------
matrics. There can be many different way of ‘traffic measurement’ at a call
centre. Following are certain performance measurement matrices: ----------------------
●● The average delay a caller may experience whilst waiting in a queue. ----------------------
●● The mean conversation time, otherwise referred to as Average Talk Time
(ATT). ----------------------
●● The mean dealing time, otherwise referred to as Average Handling Time ----------------------
(AHT-equal to ATT plus wrap-up and/or hold time).
----------------------
●● The percentage of calls answered within a determined time frame (referred
to as a Service Level or SL %) ----------------------
●● The number of calls / inquiries per hour an agent handles (CRH or IPH).
----------------------
●● The amount of time spent while an agent processes customer requests
while not speaking to a customer (referred to as Not Ready Time/NR, or ----------------------
After Call Work/ ACW or Wrap-Up).
----------------------
●● The percentage of calls which completely resolve the customer’s issue
(If the customer does not call back about the same problem for a certain ----------------------
period of time, it is considered a successful resolution or FCR-First Call
----------------------
Resolution).
----------------------

Notes ●● he percentage of calls where a customer hangs up or “abandons” the
T
call is often referred to as Total Calls Abandoned or Percentage of Calls
---------------------- Abandoned. Calls are often abandoned due to long hold times when a call
centre experiences a high call volume.
----------------------
●● Percentage of time agents spends not ready to take calls, often referred to
---------------------- as Idle time.
---------------------- ●● Quality Assurance monitored by a quality assurance (QA) team.

----------------------
Fill in the blanks.
----------------------
1. A call centre is a centralised office used for the purpose of
---------------------- __________________ a large volume of requests by telephone
----------------------
---------------------- Activity 1
----------------------
Develop a questionnaire using ‘performance measurement matrices’ given
---------------------- above. Visit a nearby call centre and interview the call-centre manager
based on the questionnaire you have prepared.
----------------------
---------------------- 3.3 CONTACT CENTRE

---------------------- A typical limitation of a call centre is illustrated in the activity discussed
---------------------- above.
Sometime back, Marketing literature has re-defined ‘Distribution’ as
---------------------- ‘Customer Convenience’. This is not a mere word play or yet another marketing
---------------------- jargon. CRM has to imbibe this Customer Convenience in its very offering. At
the Call Centre you need to have the approach that is convenient to customer.
---------------------- Thus if he needs some information over e-mail it has to be sent. What is so
difficult about this request; with technology at your disposal in a call centre?
----------------------
You will notice that we are now saying Call Centre can no longer remain
---------------------- just a Call Centre, but it should be a real ‘Contact centre’ for the customer.
---------------------- A Contact Centre is one which conducts all the activities of a call centre
and also has a possibility of handling letters, faxes, e-mails, sms and web as
---------------------- well.
---------------------- As the name suggests customer is now free to contact an organisation via
his/her convenient mode and also expect organisation to respect and respond
---------------------- through the preferred channel.
---------------------- Contact Centre thus works with two perspectives as the basis:
---------------------- ●● One point ‘Contact’ for the customer.

●● ‘Contact’ as a Touch Point with the organisation. Notes
Imagine that customer is on the move and his cell phone battery is
flowing. He does not have any means of charging it immediately till he reaches ----------------------
his home or office. But it is on urgent basis he wants to check his bank balance ----------------------
in his particular account. He wants the balance in the form of a printout to be
submitted for some transaction. ----------------------
He can do this using his laptop with in-built modem card and via internet. ----------------------
And then take a printout.
----------------------
Or From a nearby communication centre send a fax to the ‘Contact Centre’
of particular bank and request them to re-fax him his bank balance. ----------------------
The Contact Centre thus becomes a multi-purpose multi-utility contact
----------------------
point which can help customer’s transact in an efficient way.
‘Contact Centre’ takes away certain limitations of call centre, but in the ----------------------
process make the internal processing more complex which needs:
----------------------
a. Technology to handle multi-mode contact / interoperability.
----------------------
b. Trained manpower to operate & respond efficiently.
----------------------
CRM defines ‘touch points’ as customer contact points with the
organisation. These could be anyone or more of the following: ----------------------
1. Telephone
----------------------
2. Fax
----------------------
3. Email
4. Two Website ----------------------
5. SMS ----------------------
6. Retail outlet ----------------------
7. Road Show
----------------------
8. Exhibition
----------------------
9. Seminar
10. Personal Visit ----------------------
11. Two sales people ----------------------

It is a must that the CRM technology integrates all these and any other ----------------------
mode of contact by the customer at the ‘Contact Centre’. This contact is thus
used to fulfil CRM objectives of your organisation like: ----------------------
●● Greater customer loyalty. ----------------------
●● Personalised attention & reduced call transfers.
----------------------
●● Rapid introduction to new products.
----------------------
●● Reduced training for customer contact people.
●● Integration of customer touch points. ----------------------

Notes Customer Interaction Centre:
In the preceding part we have just now discussed the merits of a contact
----------------------
centre over call centre.
---------------------- Customer interaction centre takes this phenomenon to another level.
‘Contact’ in a contact centre has an undertone of a transaction. It is a kind of
----------------------
‘touch and go’ relationship. But interaction is about dialogue, it is about clear
---------------------- intentions of developing relationship with a customer.
Let us look at it in a different perspective. Imagine you have recently
----------------------
purchased a state-of -art ‘Digital Camera’. You have invested quite a sum to add
---------------------- this latest gizmo to your kitty. Brief round of introduction to camera working
and functionality was done by the retail sales person when he sold you the
---------------------- camera.
---------------------- However, once you start using it you face certain difficulties and would like to
have an advice. You choose to dial a call centre.
----------------------
You at this point have a clear inclination of having a dialogue with the
---------------------- organisation. A typical call centre will read out scripted matter to you and thank
you for your call and hang up.
----------------------
Customer Interaction centre’s representative on the other hand will:
----------------------
a. Understand your need.
---------------------- b. Support you with advice.
---------------------- c. Should be able to guide you to website.
---------------------- d. May indulge you in 3D-demo over computer.

e. Develop a meaningful dialogue with.
----------------------
f. Nurture relationship by being in touch with you later on to check if you
---------------------- are enjoying the gadget.
---------------------- And being in touch with you has to be through your preferred channel of
contact; either email of cell phone which was confirmed with you when you
---------------------- called last.
---------------------- At times customer says ‘Engage me in a dialogue’ and organisations loose
these opportunities. A real Customer contact centre will utilise and make most
---------------------- of this opportunity.
---------------------- Customer interaction centre is an ideal medium to build relationships
with individual customers through a mutually beneficial dialogue with them.
----------------------
(Look, we have come closer the definition of CRM at the beginning of the book)
---------------------- Customer interaction centre intends to increase the efficiency and
---------------------- effectiveness of interactions, thereby increasing efficacy of CRM.
As explained in previous part, technology will help you to identify the
----------------------
important customer (Remember selection of customers, remember 80:20- as
---------------------- CRM Fundamentals we have learned).

Let us look at call centre performance metrics again. A closer look will Notes
tell you that the approach to performance measures is quantitative instead of
qualitative. This is logical since call centre are defined as cost centres. ----------------------
CRM suggest that customer-interaction -centre to be treated as a profit centre ----------------------
instead. This means your financial inputs in the call centre is not an expense but
an investment. ----------------------
A Customer interaction centre is an opportunity to improve your profits. ----------------------

It can:
----------------------
●● Prequantify a sales lead and reduce selling cost.
----------------------
●● Effectively support complex or expensive product and reduce service
cost. ----------------------
●● Increase customer loyalty to the product/service and company. ----------------------
●● Sell additional products/services. It will help in expanding your firms’
share of customer spending. ----------------------
●● Reduce the need to win new customers and improve overall unit margins. ----------------------
●● Perform ongoing market research; give valuable input to the organisation. ----------------------
●● Establish a meaningful dialogue with the customer thereby improve
customer satisfaction index. ----------------------
A best practice customer interaction centre is about: ----------------------

●● Understanding the internal and external communications and business ----------------------
objectives;
----------------------
●● Ensuring consistency of customer experience and delivery of the best
customer option across media chosen by the customer (for example call, ----------------------
letter, email). Integration, or at least co-ordination, and the relationship
between voice and other delivery channel is therefore essential; ----------------------
●● Process to underpin this goal of consistency by ensuring efficiency ----------------------
through their initial design and implementation;
----------------------
●● Technology to support, not lead, processes, measurement and control;
●● Standards and working frameworks to ensure ease of management and ----------------------
benched marked best practice; and ----------------------
●● Local and supported initiatives to address specific issues (such as
----------------------
motivation, recruitment, attrition, management availability, call flow
demands, etc.) ----------------------
If Call centres were for yesterday and Contact centres are for today,
----------------------
Customer Interaction Centres are for Tomorrow. And when we are talking about
as a differentiator we must work on initiatives of and for tomorrow. ----------------------
----------------------
----------------------

Notes
----------------------

1. Customer interaction centre is an ideal medium to build relationships
----------------------
with individual customers through a ___________________ with
---------------------- them.
----------------------
---------------------- Activity 2
----------------------
1. You get a call from an Insurance Co. to promote one of the ULIP-
---------------------- unit linked insurance plans. Because you are interested in some
investments and your friend has recently told you something about
---------------------- unit linked plans, you get into talking with the caller.
---------------------- She is well groomed in her script and communicates to you the
USPs of this plan and is generally successful in developing your
---------------------- interest in her offering. In the process of this dialogue you realise
that you are giving too much of your time and request the lady to
---------------------- e-mail you the information. She expresses her inability to send you
---------------------- anything over e-mail, solicits your permission to call you again and
puts an end to the conversation.
---------------------- Read the passage given above and write your opinion about what
---------------------- happened in the sales process:
2. Imagine that you are appointed as a Manager responsible for setting
---------------------- up a Customer Interaction Centre for a new hotel set up in an industrial
zone. Devise an outline of your plan.
----------------------
----------------------
3.4 TECHNOLOGY AT CALL CENTRES
----------------------
Call centre use a wide variety of different technologies to allow them to
----------------------
manage the large volumes of work that need to be managed by call centre. These
---------------------- technologies ensure that agents are kept as productive as possible, and that calls
are queued and processed as quickly as possible, resulting in levels of service.
----------------------
These include:
---------------------- ●● Automatic Call Distribution (ACD)
---------------------- ●● Agent performance analytics
●● Best Time To Call (BTTC) / Outbound call optimisation.
----------------------
●● Interactive Voice Response (IVR)
----------------------
●● Guided speech IVR
---------------------- ●● Computer Telephony Integration (CTI)

●● Enterprise Campaign Management Notes
●● Outbound predictive dialer.
----------------------
●● Customer Relationship Management (CRM)
●● Customer Interaction Management (CIM) solutions (also known as ----------------------
‘Unified’ solutions) ----------------------
●● E-mail management.
----------------------
●● Chat and web collaboration
●● Desktop Scripting Solutions ----------------------
●● Text To Speech (TTS) ----------------------
●● Workforce Management (WEF)
----------------------
●● Voice analysis
●● Voice recognition ----------------------
●● Voice recording ----------------------
●● Speech Analysis ----------------------
All the important terms have been explained in the Call Centre terminology
given below. ----------------------
Refinements of a call centre ----------------------
There are many refinements to the generic call centre model. Each ----------------------
refinement helps increase the efficiency of the call centre thereby allowing
management to make better decisions involving economy and service. ----------------------
The following list contains some examples of call centre refinements: ----------------------
●● Predictive Dialling - Computer software attempts to predict the time
----------------------
taken for an agent to help a caller. The software begins dialling another
caller before the agent has finished the previous call. This, because not ----------------------
every call will be connected (think of busy or not answered calls) and also
because of the time it takes to set up the call (usually around 20 seconds ----------------------
before someone answers). Frequently, predictive diallers will dial more
----------------------
callers than there are agents, counting on the fact that not every line will
be answered. When the line is answered and no agent is available, the call ----------------------
is hung up and classified as a nuisance call. The next time the client is
called an agent will be reserved for the caller. ----------------------
●● Multi-Skilled Staff - In a call centre, there will be members of staff that ----------------------
will be more skilled in areas than others. An ‘Interactive Voice Response’
(IVR) Unit can be used to allow the caller to select the reason for his call. ----------------------
Management software, called an Automatic Call Distributor, must then
----------------------
be used to route calls to the appropriate agents. Alternatively, it has been
found that a mix of general and specialist agents creates a good balance. ----------------------
●● Queuing Systems - The selection of a queuing system is a very important
decision in a call centre as it determines the level of quality of service. ----------------------
Queuing systems in call centres are usually described as M/M/N type ----------------------

Notes queuing where N is the number of agents. The preferred method of
queuing is a FIFO (First In First Out) model, as it causes minimum delay
---------------------- to callers.
---------------------- ●● Prioritisation of Callers - Classification of callers according to priority
is a very important refinement. Emergency calls or callers that are
---------------------- reattempting to contact a call centre are examples of callers that could be
given a higher priority.
----------------------
●● Automatic Number Identification - This allows agents to determine
---------------------- who is calling before they answer the call. Greeting a caller by name and
obtaining his/her information in advance adds to the quality of service
---------------------- and helps decrease the conversational time.
----------------------
3.5 CRITICISM OF CALL CENTRES
----------------------
Important issues while managing a call centre are:
----------------------
●● Planning for failure of equipment.
---------------------- ●● Need for flexibility of meal-times.
---------------------- ●● Need for job variety & training.
---------------------- ●● Job exhaustion & stress.

●● Staff turnover.
----------------------
●● Criticism of call centre.
----------------------
Let us look at this criticism:
---------------------- ●● From Callers:
---------------------- ●● Operators working from a script.
---------------------- ●● Non-expert operators (call screening)
●● Incompetent or untrained operators incapable of processing
---------------------- customers’ request effectively.
---------------------- ●● Overseas location, with language and accent problems.
●● Automated queuing systems.
----------------------
●● From Staff:
----------------------
●● lose scrutiny by management (e.g. frequent random eavesdropping
C
---------------------- on operator’s call)
●● Low pay.
----------------------
●● estrictive working practices (e.g. there isn’t much space for
R
---------------------- personal Creativity; many operators have to follow a pre-written
script).
----------------------
●● igh stress: a common problem associated with front-end jobs
H
---------------------- where employees deal directly with customers.
----------------------

As detailed above, none of these are inherent in the call centre model, although Notes
many companies will experience some or all of the above while implementing
a call centre approach. As the science suggest, done properly, a call centre can ----------------------
offer the quickest route to resolution of customer queries, capitalising on the
ready availability of highly skilled and intelligent people in some areas. ----------------------
----------------------
----------------------

1. Queuing Systems is an examples of call centre refinements. ----------------------
----------------------
3.6 CALL CENTRE TERMINOLOGY FOR READY REFERENCE ----------------------
Abandoned Call: Also called a Lost Call. The caller hangs up before reaching ----------------------
an agent.
----------------------
Analog: Telephone transmission or switching that is not digital. Signals are
analogous to the original signal. ----------------------
Announcement: A recorded verbal message played to callers.
----------------------
Answer Supervision. The signal sent by the ACD or other device to the local or
long distance carrier to accept a call. That is when billing for either the caller or ----------------------
the call centre will begin, if long distance charges apply.
----------------------
Answered Call: When referring to an agent group, a call counted as answered
when it reaches an agent. ----------------------
Application based Routing and Reporting: The ACD capability to route and ----------------------
track transactions by type of call, or application (e.g., sales, service, etc.), versus
the traditional method of routing and tracking by trunk group and agent group. ----------------------
Architecture: The basic design of a system. Determines how the components ----------------------
work together, system capacity, upgradeability, and the ability to integrate with
----------------------
other systems.
Automatic Call Distributor: The specialised telephone system used in ----------------------
incoming call centres. It is a programmable device that automatically answers
----------------------
calls, queues calls, distributes calls to agents, plays delay announcements to
callers and provides real-time and historical reports on these activities. May be ----------------------
a stand-alone system, or ACD capability built into a CO, network or PBX.
----------------------
Automatic Call Sequencer: A simple system that is less sophisticated than an
ACD, but provides some ACD-like functionality. ----------------------
Automatic Number Identification: A telephone network feature that passes ----------------------
the number of the phone the caller is using to the call centre, real-time. ANI
may arrive over the D channel of an ISDN PRI circuit (out of band signalling), ----------------------
or before the first ring on a single line (inbound signalling). ANI is delivered
from long distance companies. Caller ID is the local phone company version of ----------------------

Notes ANI, and is delivered in band. ANI is a North American term, and Calling Line
Identification (CLI) is an alternative term used elsewhere.
----------------------
Base Staff: Also called Seated Agents. The minimum number of agents required
---------------------- to achieve service level and response time objectives for given period of time.
Blockage: Callers blocked from entering a queue. See Blocked Call.
----------------------
Blocked Call: A call that cannot be connected immediately because a) no
---------------------- circuit is available at the time the call arrives, or b) the ACD is programmed to
block calls from entering the queue when the queue backs up beyond a defined
----------------------
threshold.
---------------------- Busy Hour: A telephone traffic engineering term, referring to the hour of time
---------------------- in which a trunk group carries the most traffic during the day. The average busy
hour reflects the average over a period of days, such as two weeks. Busy hour
---------------------- has little use for incoming call centres, which require more specific resource
calculation methodologies.
----------------------
Call: Also called Transaction and Customer Contact. A term referring to
---------------------- telephone calls, video calls, Web calls and other types of contacts.
---------------------- Call Blending: Combining traditionally separate inbound and outbound agent
groups into one group of agents responsible for handling both inbound and
---------------------- outbound contacts. A system that is capable of call blending automatically puts
agents who are making outbound calls into the inbound mode and vice versa, as
---------------------- necessitated by the incoming call load.
---------------------- Call By Call Routing: The process of routing each call to the optimum
destination according to real-time conditions. See Percent Allocation and
----------------------
Network Inter-flow.
---------------------- Call Centre: An umbrella term that generally refers to reservations centres,
help desks, information lines or customer service centres, regardless of how
----------------------
they are organised or what types of transactions they handle. The term is being
---------------------- challenged by many, because calls are just one type of transaction and the word
centre doesn’t accurately depict the many multi-site environments.
----------------------
Caller ID: See Automatic Number Identification.
---------------------- Centum Call Seconds: 100 call seconds, a unit of telephone traffic measurement.
---------------------- The first C is the Roman numeral for 100. 1 hour = 1 Erlang = 60 minutes = 36
CCS.
---------------------- Chief Information Officer: A typical title for the highest ranking executive
---------------------- responsible for an organisation’s information systems.
Cost Centre: An accounting term that refers to a department or function in the
----------------------
organisation that does not generate profit. See Profit centre.
---------------------- Unit 3 Call Centre to Contact Centre to Customer Interaction Centre
---------------------- Cost of Delay: The money you pay to queue callers, assuming you have toll-
free service.
----------------------

Cost per Call: Total costs (fixed and variable) divided by total calls for a given Notes
period of time.
----------------------
Customer Contact: See Call.
Delay: Also called Queue Time. The time a caller spends in queue, waiting ----------------------
for an agent to become available. Average Delay is the same thing as Average
----------------------
Speed of Answer. Also see Average Delay of Delayed Calls.
Delayed Call: A call which cannot be answered immediately and is placed in ----------------------
queue.
----------------------
Dialled Number: The number that the caller dialled to initiate the call.
----------------------
Flow-chart: A step by step diagram of a process.
Gateway: A server dedicated to providing access to a network. ----------------------
Handled Calls: The number of calls received and handled by agents or ----------------------
peripheral equipment. Handled calls do not include calls that abandon or receive
----------------------
busy signals.
Handling Time: The time an agent spends in Talk Time and After-Call Work, ----------------------
handling a transaction. Handling Time can also refer to the time it takes for a
----------------------
machine to process a transaction.
Help Desk: A term that generally refers to a call centre set up to handle queries ----------------------
about product installation, usage or problems. The term is most often used in ----------------------
the context of computer software and hardware support centres.
Incoming Call Centre Management: The art of having the right number of ----------------------
skilled people and supporting resources in place at the right times to handle an ----------------------
accurately forecasted workload, at service level and with quality.
Monitoring: Also called Position Monitoring or Service Observing. The ----------------------
process of listening to agents’ telephone calls for the purpose of maintaining ----------------------
quality. Monitoring can be: a) silent, where agents don’t know when they are
being monitored, b) side by side, where the person monitoring sits next to the ----------------------
agent and observes calls or c) record and review, where calls are recorded and
then later played back and assessed. ----------------------
Outsourcing: Contracting some or all call centre services to an outside company. ----------------------
Overflow: Calls that flow from one group or site to another. More specifically, ----------------------
Intraflow happens when calls flow between agent groups and Interflow is when
calls flow out of the ACD to another site. ----------------------
Profit Centre: An accounting term that refers to a department or function in the ----------------------
organisation that does not generate profit. See Cost centre.
----------------------
Queue: Holds callers until an agent becomes available. Queue can also refer to
a line or list of items in a system waiting to be processed (e.g., e-mail messages). ----------------------
Service Level: Also called Telephone Service Factor, or TSF. The percentage ----------------------
of incoming calls that are answered within a specified threshold: “X% of calls
answered in Y seconds.” See Response Time. ----------------------

Notes Talk Time: The time an agent spends with a caller during a transaction. Includes
everything from “hello” to “goodbye.”
----------------------
Telecommuting: Using telecommunications to work from home or other
---------------------- locations instead of at the organisation’s premises.
Telephone Service Factor: See Service Level.
----------------------
Trunk Load: The load that trunks carry. Includes both Delay and Talk Time.
----------------------
Uniform Call Distributor: A simple system that distributes calls to a group of
---------------------- agents and provides some reports. A UCD is not as sophisticated as an ACD.
---------------------- Universal Agent: Refers to either a) An agent who can handle all types of
incoming calls or b) An agent who can handle both inbound and outbound calls.
---------------------- Virtual Call Centre: A distributed call centre that acts as a single site for call
---------------------- handling and reporting purposes.
Voice Processing: A blanket term that refers to any combination of voice
----------------------
processing technologies, including Voice Mail, Automated Attendant, Audiotex,
---------------------- Voice Response Unit (VRU) and Faxback.
Voice Response Unit: Also called Interactive Voice Response Unit (IVR) or
----------------------
Audio Response Unit (ARU). AVRU responds to caller entered digits or speech
---------------------- recognition in much the same way that a conventional computer responds to
keystrokes or clicks of a mouse. When the VRU is integrated with database
---------------------- computers, callers can interact with databases to check current information
(e.g., account balances) and complete transactions
----------------------
(e.g. make transfers between accounts). See Voice Processing.
----------------------
Unit 3 Call Centre to Contact Centre to Customer Interaction Centre
---------------------- Wide Area Network: The connection of multiple computers across a wide
---------------------- area, normally using digital data circuits.
Workforce Management Software: Software systems that, depending on
----------------------
available modules, forecast call load, calculate staff requirements, organise
---------------------- schedules and track real-time performance of individuals and groups.
Work Load: Often used interchangeably with Call Load. Work load can also
----------------------
refer to non-call activities.
---------------------- World Wide Web: The capability that enables users to access information on
the internet in a graphical environment.
----------------------
----------------------
Activity 3
----------------------
Read the e-mail feedback received by a foreign customer of a particular
----------------------
Call Centre. Develop a set of suggestions you wish to offer to them in
---------------------- order to improve its performance.
----------------------

Summary Notes
●● Every organisation wishes to be futuristic and would like to have processes ----------------------
and systems which not only meet today's requirements but also meets ----------------------
tomorrow's needs. And these needs are not only organisational needs,
they are primarily customer needs. ----------------------
●● While on the topic of futuristic organisation, it can be seen as studied in ----------------------
this unit that your Call Centre has to think of evolving customer needs
and it can do it only when it will intend, develop, plan and implement a ----------------------
Customer Interaction Centre with a clear view of developing dialogue
with the customers. ----------------------
----------------------
Keywords
----------------------
• Customisation bonding: Bonding which is developed through an
intimate knowledge of individual customers in developing a product to ----------------------
suit his/her requirements. ----------------------
• Client: When customer regularly starts buying from the same supplier
----------------------
he/she becomes a client.
• Operational CRM (OCRM): About developing and automating the ----------------------
process of ‘Touch-Points’ with customers. Touch points are the contact
----------------------
points an organisation has with the customer.
• ACRM: The capture, storage, extraction, processing, interpretation and ----------------------
reporting of customer data to users for redefining the business actions, ----------------------
processes and strategies.
• eCRM: “Electronic” customer relationship management or, more simply, ----------------------
CRM that is web-based. ----------------------
• ERM: “Enterprise” CRM, meaning a CRM program that spans an
enterprise–wide view of a customer. ----------------------
----------------------
----------------------
1. What is customer interaction centre?
----------------------
2. Explain why the concept of call centres is moving towards customer
interaction centre? ----------------------
3. What is virtual call centre? ----------------------
----------------------
----------------------
----------------------
----------------------


1. A call centre is a centralised office used for the purpose of receiving and
---------------------- transmitting a large volume of requests by telephone.
1. Customer interaction centre is an ideal medium to build relationships with
----------------------
individual customers through a mutually beneficial dialogue with them.
---------------------- 1. True
----------------------
Suggested Reading
----------------------
---------------------- 2. Garikaparthi, Madhavi. eCRM-Concepts & Cases.
---------------------- 3. Jaiswal, M.P. & Anjali Kaushik. e-CRM: Business & System Frontiers.
---------------------- 4. Rust, Roland T. and P.K. Kannan. e-Service-New Directions in Theory &
Practice.
----------------------
5. Shajahan, S. 2006. Relationship Marketing. TMGH.
---------------------- 6. Sheth, Jagdish, Atul Parvatiyar. Handbook of Relationship Marketing.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Sales Force Automation
UNIT
4
Structure:
4.1 Introduction
4.2 Sales Force Automation (SFA)
4.3 Importance of SFA to CRM
4.4 Business Value through SFA
4.5 Management Belief in SFA
4.6 SFA + CRM = Value
Case Study
Summary
Key Words
Suggested Reading
Sales Force Automation 57

Notes
Objectives
----------------------
• Relate SFA to CRM
----------------------
• Describe how SFA can create value in business
---------------------- • Explain the different strategies in SFA
---------------------- • Critically assess how SFA and CRM both create value for organisations
----------------------
---------------------- 4.1 INTRODUCTION

----------------------
Customer demand for instant information and faster service alongside
---------------------- competitive prices and narrower margins continues to pressure your sales
force for higher productivity at lower costs. Yours company’s ability to equip
---------------------- its field sales team to more efficiently handle scheduling, order entry, order
status, promotions, and pricing requests is determining competitive advantage
----------------------
between it and its competition.
---------------------- Your deployment of mobile computing solutions to your field sales force
may be the difference between winning or losing business in today’s fast-paced
----------------------
marketplace.
---------------------- The move toward extending Supply Chain Management out to the Field
Sales Force is a function of the emphasis your customers are putting on reliable
----------------------
and timely service. With a greater selection and choice of providers and a greater
---------------------- availability of products from which to choose, customers are expecting more
bang for their buck. That puts you in the position of having to meet ever-higher
---------------------- expectations while still containing costs. SFA could be one of your answers to
the emerging situations.
----------------------
---------------------- 4.2 SALES FORCE AUTOMATION (SFA)

---------------------- Sales Force Automation is abbreviated as SFA – a technique of using
software to automate the business tasks of Selling which includes Contact
----------------------
management, Order processing, Order tracking, Information sharing, Sales
---------------------- forecast, Sales analysis, Sales performance evaluation, Inventory control and
Customer Management.
----------------------
SFA is technological tool to help sales people acquire and retain customers,
---------------------- which helps in reducing administrative cost and provides good basis for account
management. It increases better selling chances for the Salesperson and more
---------------------- business for the company.
---------------------- This helps in two ways:
---------------------- ●● It helps company get customer retention and increase profits.

●● ustomers get better information, better products or services, faster
C Notes
responses to their queries.
SFA is a key link in developing the mutual benefit inherent of CRM. ----------------------
SFA products were initially meant to improve sales force productivity and ----------------------
help sales manager have better control over their sales team. However, today
SFA increasingly focuses on cultivating customer relationship and improving ----------------------
customer satisfaction leading to increased customer loyalty.
----------------------
----------------------
1. SFA increases better selling chances for the Salesperson and more ----------------------
business for the company.
----------------------
----------------------
Activity 1
----------------------
Write in your words your understanding of SFA and how it applies to your ----------------------
organisation.
----------------------
----------------------
4.3 IMPORTANCE OF SFA TO CRM
----------------------
The reasons why SFA is important to CRM:
----------------------
●● Reduction in cost of selling.
●● Increased revenue. ----------------------
●● Easy availability of customer information. ----------------------
●● Increased sales force mobility.
----------------------
●● To meet increased customer expectation.
1. Reduction in cost of selling: ----------------------
Cost of sales force is a major portion of the total cost of selling. It is ----------------------
thus logical to reduce the cost of selling and SFA is one of the solutions.
Indeed, implementing any SFA software is a costly affair; which spreads ----------------------
over certain time frame and is evaluated based on the gains created due ----------------------
to increased sales force productivity and better customer information. It
becomes a cost saving initiative over long term. ----------------------
EXAMPLE: A computer hardware selling company maintains detail ----------------------
records of enquiries received and follows through each enquiry till order
or disposal. This small part of SFA leads to increased order book by 7% - ----------------------
8%.
----------------------
----------------------

Notes 2. Increased revenue:
We have already said that SFA implementation is a costly process.
----------------------
However, it has to be looked upon as an investment and not the cost.
---------------------- Investments are supposed to create better profitability in present and
future. With SFA, this is what happens. A knowledgeable and empowered
---------------------- sales person is in a better position to close the sale. SFA is thus a vital tool
to increase the productivity and revenues.
----------------------
3. Easy availability of customer information:
----------------------
In any organisation there is a particular process through which an
---------------------- incoming order flows. Different departments (e.g.; sales, commercial,
manufacturing, purchase, R&D, etc.) are involved in fulfilment of this
---------------------- particular order. These multiple departments may have an interest in
viewing the customer status at any given time. A single window that
----------------------
pops up in SFA becomes very handy and usable to different interested
---------------------- departments. This creates a kind of universal view of all the data available
to all the departments at all time pertaining to one particular customer.
---------------------- You will agree that more knowledgeable employee means more confident
employee who is in a better position to serve the customer in a better way.
----------------------
Please note the business transaction history is as important as to the buyer-
---------------------- seller relationship. Rather it is the basis of building such a relationship.
---------------------- 4. Increased sales force mobility:
---------------------- Thanks to improving infrastructure and increased competitive activities,

sales people have to be on the move. More fieldwork is need of the
---------------------- day. With the help of a modern laptop and a cell phone with internet
connectivity it is possible for a salesperson to get real time information
---------------------- about a particular account or a segment or a product or an order. You will
---------------------- agree that this will greatly equip a sales person to be able to deal and
satisfy customers better.
----------------------
5. To meet increased customer expectation:
---------------------- ‘Yeah dil maange more’ is the catch line to explain ever demanding
consumer today. More the customers demand, more companies will
----------------------
have to provide (remember if you don’t, somebody else will) and for this
---------------------- provision to customers requirement and equip sales force; SFA becomes
an absolute must.
----------------------
Other benefits to SFA:
---------------------- Improved collaboration -Your salespeople will be better able to work with
---------------------- each other, your sales managers, and if appropriate, other departments, thanks
to built-in workflow and routing, shared contact databases, and improved
---------------------- reporting.
---------------------- Enhanced sales productivity -You could see 15% to 35% gains in sales
productivity due to improved efficiency and better targeting of leads. This
----------------------

increase is larger in sales organisations that deal with lots of paperwork or high Notes
volumes of prospects.
----------------------
Improved reporting - SFA systems typically include reports that analyse
revenue, forecast opportunities, rate sales campaign effectiveness, and track ----------------------
each sales rep’s success.
----------------------
Prospect security - An SFA system will make sure that if any of your sales reps
leave the company, you will still have detailed information on all their leads ----------------------
and clients.
----------------------
Repeat sales opportunities - Existing customers are often a great source of new
sales. SFA systems can help you capitalise on this opportunity by improving ----------------------
ongoing communication.
----------------------
----------------------
Fill in the blanks.
1. Easy availability of customer information, __________, ----------------------
______________ and increased sales force mobility etc. because of ----------------------
these reasons SFA is important to CRM.
----------------------
----------------------
Activity 2
----------------------
Conduct an informal interview of any Industrial or Consumer goods’
----------------------
salesperson you know who is working with a reasonably big company.
Ask him if he has SFA in his company; if yes, get details of the same. If ----------------------
no, ask him why he thinks his organisation has not yet implemented it.
----------------------
4.4 BUSINESS VALUE THROUGH SFA ----------------------
----------------------
Sales Force Automation plays an instrumental role in boosting the
profitability of your organisation by increasing revenues and reducing ----------------------
operational costs.
----------------------
It is possible to improve the Sales Performance with effective use of right kind
of SFA solution that is suitable for your specific requirement. ----------------------
Ink more deals by imparting more visibility into your company’s sales processes:
----------------------
Window to opportunity with recording of every lead and its subsequent
tracking. ----------------------
Customer management with access to data to facilitate collaboration ----------------------

between sales, customer service & support, and marketing.
----------------------
Market trend analysis to spot shifts in market indicators.
----------------------

Notes Is SFA about deployment of Laptops? This is a question often thrown at the
proponents of SFA.
---------------------- True, many companies embark on SFA/CRM projects simply because
---------------------- they wanted to effectively deploy laptops, and it seemed to make sense to
put something on them that would somehow help the business grow. But
---------------------- SFA is not about deploying laptops. That is merely one of the benefits of an
implementation. If the tools, training and support do not make selling easier,
---------------------- if they do not lower the costs of new customer acquisition or old customer
retention and sales proliferation. If they do not show some meaningful level of
----------------------
return on investment, then the project will never achieve its goals.
---------------------- Going out into the field to study how sales representatives sell and how
managers manage is also required. In order to have a greater acceptability on
----------------------
your SFA solution you need to spend time in the following activities:
---------------------- ●● First, this time investment demonstrates to your sales force that you are
not assuming anything and that you are willing to learn from them in
----------------------
order to build the best possible solution.
---------------------- ●● Second, it gives you a chance to identify your potential early adopters and
superstars for your pilot.
----------------------
●● Third, it gives you the necessary information to more accurately formulate
---------------------- your course of action. Here is a typical step by step process of taking your
team through the preparation for SFA:
----------------------
●● Develop a basic version based on a limited set of simple tools.
---------------------- ●● Determine requirements for training and design curriculum.
---------------------- ●● Establish support procedures.
●● Deploy laptops.
----------------------
●● Train on Microsoft Office basics.
---------------------- ●● Train on email and Internet basics.
---------------------- ●● Introduce simple contact management.
●● Introduce sales letter library for correspondence.
----------------------
●● Measure results after six months and refine solution.
---------------------- The steps given above should serve as a preparatory ground for you to
take up SFA initiative in future.
----------------------
Back in the early 1990’s everyone was talking about re-engineering the
---------------------- corporation. Then after many people tried to and failed, it became apparent that
re-engineering was far more difficult to do than expected. In fact, some might
----------------------
say that it is largely unnecessary. What is really essential in automating your
---------------------- business processes is that you do not automate bad processes. That is the key.
All this accomplishes in making a poor process work much faster – not better.
----------------------
Thus the key to good SFA solution is that your Sales force defines it. It
---------------------- is only they who know and can determine the shape and focus of SFA in you
organisation. Of course the Sales Manager (who has mostly traveled the selling
---------------------- route to become a being a manager) will be a critical contributor.

Before you deploy your first automation tool, you need to make sure that Notes
every step you ask a sales rep or manager to feed back some immediate benefit
to them. Of what use is it to a rep to fill a database full of contacts if it creates ----------------------
more work for him in the long run? It may benefit management to have this
information readily at their fingertips, but of what benefit is it to the person ----------------------
entering the data? ----------------------
It is essential for them to understand the real value and benefits to them in
----------------------
their day to day working.
----------------------
----------------------

1. Sales Force Automation plays an instrumental role in ____________ ----------------------
of your organisation by increasing revenues and reducing operational
costs. ----------------------
----------------------
4.5 MANAGEMENT BELIEF IN SFA
----------------------
It is just not always possible to tangibalise benefits of every new initiative.
----------------------
It is critical to gather feedback from management during the first few
weeks they have the tools. Take note of their suggestions or complaints, and ----------------------
then refine it, and test it again. Remove the excuses to not use it, and they ----------------------
will have no choice but to embrace it. Once embraced, they can then begin to
enforce its use among their sales force. ----------------------
Too many times tools get deployed without manager buy-in. Then when ----------------------
the troops rebel against the technology, the managers blame the failure either
on the developers or their sales force. In either case, the blame is being passed ----------------------
unfairly.
----------------------
Before management can enforce a tool, management must embrace it
themselves. Now there are those who might argue vehemently that management ----------------------
doesn’t need to embrace it – they just need to use it if they know what is good for
----------------------
them. Nobody wants to be told what to do or how to sell, especially if they are
being successful without the automation. You need to sell them on automation. ----------------------
Find their levels of pain in the sales process, create intelligent solutions to ease
that pain, and then show them how the tools resolve their problems. If done ----------------------
properly, they will embrace it.
----------------------
Now it is equally important to note that not everyone learns at the same
speed, and this impacts how quickly he or she accepts automation. To this end ----------------------
you must give management time to play with the tools and to experience the ease
----------------------
of use, the benefits and the return on investment (more selling time, etc.). If you
deploy the tool to management and expect them to embrace it immediately, you ----------------------
are setting yourself up for failure. For this reason, you should always deploy to
management first, then to the field second. Allow a few months to pass between ----------------------

Notes these two deployments. And make sure that you deploy to an entire arm of
an organisation rather than scatter the automation across an enterprise. In this
---------------------- fashion you will be able to demonstrate the benefits of automated sales roll-ups
and reporting more efficiently.
----------------------
Take note, also, of the difference in comfort levels between personnel of
---------------------- varying ages. Typically, those in management are older than their field sales
---------------------- force personnel. Depending upon management’s age and their generation’s
respective level of PC literacy and training, they may not readily grasp the
---------------------- benefit of automation, and may actually favour manual methods over automated
ones. Care should be taken here to spend extra educating this group of people
----------------------
to make them converts.
---------------------- Management must use these tools to manage better:
---------------------- It seems that what is good for the field is not necessarily good for sales
management and vice versa.
----------------------
For instance, a tool is deployed and its use is mandated: a contact manager
---------------------- must be used to track all business. But management fails to use the tool for
---------------------- reasons too numerous to mention.
If management does not use the same tool to manage their business
----------------------
accordingly, the circle is broken, and the process grinds to a halt as manual
---------------------- processes and automated processes collide. This creates confusion, extra work
and tremendous frustration between reps and managers.
----------------------
One explanation for this problem tends to be the difference in ages of
---------------------- the people involved and their varying degrees of PC literacy. People under 40
have been raised in a PC-dependent world; people over 40 tend to be more
---------------------- PC-illiterate. For this latter group, computer studies were not offered during
---------------------- their school years, comfort with computers was not a required skill when they
embarked on their career, and computing has never been mandated that they use
---------------------- it until now. You must be sensitive to these cultural differences, and address the
varying training and support (hand-holding) requirements accordingly.
----------------------
The analytics, the lead tracking and Contact management are some of the
---------------------- strong tools useful in management understanding sales performance better and
---------------------- faster. Management must use these opportunities effectively to improve their
Sales management process.
----------------------
A sales force requires constant communication with the home office
---------------------- for sales leads, invoicing, inventory tracking, order fulfillment, and other
supporting information. Until recent advances in wireless technology field staff
---------------------- had to make do with laptops that required a physical connection and voice-
---------------------- based mobile phones neither providing the added value of mobility.
A new breed of user friendly Internet capable applications on smart phones
----------------------
and mobile devices are freeing the traditional sales force from their desks and
---------------------- allowing them to be incredibly effective.

Sales personnel now have access to the same information and tools as their Notes
peers back at the office. Wireless devices have the ability to synchronise with
real time and localised data in a more efficient manner than other devices. ----------------------
Benefits to an organisation include: ----------------------
●● I mproving supply chain efficiency by integrating various levels of
----------------------
corporate activity
●● I mproving productivity and lowering costs by increasing efficiency in ----------------------
everyday work processes.
----------------------
●● I mproving cash flow by accelerating payments from customers –
increasing the efficiency of gathering the data needed to create and deliver ----------------------
invoices to the customer.
----------------------
●● educing paperwork and double handling by using wireless interfaces to
R
capture data and immediately store it in back office systems. ----------------------
●● I mproving response time and co-ordination between mobile workers and ----------------------
those at fixed locations to maximise efficiency.
“What is my ROI on SFA investment?” ----------------------
In most cases, during initial project development, management will be ----------------------

tasked with demonstrating a tangible return on their investment in SFA software,
hardware, training and support. There is a certain amount of mysticism attached ----------------------
to Return on Investment (ROI) analysis. Some of it is very straightforward ----------------------
while other portions of the analysis can take on an almost mystical importance.
Tangible ROI should not be taken too literally. If you manage such a project ----------------------
to the last penny, expecting to see Rs. X in increased revenue or decreased
expenses within a particular time frame, you are once again setting yourself up ----------------------
for false expectations and disappointment. More importantly, if you are part of ----------------------
the implementation team, you will be putting your career and credibility at risk.
Too often management puts the onus for achieving ROI on the development or ----------------------
implementation team. However this is not justified; it is up to sales management
and their sales team to use it and achieve the proposed ROI. ----------------------
This brings us to the undeniable importance of intangible benefits. ----------------------

Imagine that SFA leads to half an hour of saving for a salesperson per ----------------------
day. Over a period of one year this can be an additional 2 months of productive
selling time available for him or her. ----------------------
This extra time represents a huge amount of potential revenue. ----------------------
There are other intangible benefits that include being able to push a sale ----------------------
through the process faster. This allows a company to deliver their product or
service faster resulting in greater levels of customer satisfaction – intangible. ----------------------
If the customers are happier, they will stay longer and buy more products or
services from you – a little more tangible. CRM thus happens on the terrain of ----------------------
visible and invisible. More importantly, by turning up a customer faster, you ----------------------
can bill them sooner for the product or service. This can generate huge cost
savings and improve cash flow very quickly – very tangible! ----------------------

Notes The flip side of improving customer satisfaction is improving morale
among the sales force. A happier rep usually stays longer thus lowering account
---------------------- churn, employee attrition, and retraining costs. The longer a rep has stayed with
a company, the greater the chance for improved year over year performance.
---------------------- Tenure has a definitive, positive impact.
---------------------- So remember, tangible returns on investment are required, but there are
degrees of tangibility. The ROI must look at the whole picture and not a portion
----------------------
of it.
----------------------
4.6 SFA + CRM = VALUE
----------------------
Here is an interesting extract from a weekly magazine:
----------------------
(Adapted from an article in Express Computer dated 27.11.2006)
----------------------
Business heads and CEOs have now started realising the importance of
---------------------- SFA tools and integrating them with their CRM systems. It is being realised
that the customers are the most important assets even at the pre-sales stage and
---------------------- it is necessary for a company to comprehend the productivity of its sales force.
---------------------- Bosma of Oracle feels, “Organisations are integrating SFA with CRM to
ensure customer retention and give their customers a seamless experience by
----------------------
utilising customer-centric information”.
---------------------- Organisations want to maintain a central repository of information for
---------------------- prospects and customers so that anyone can look at what is going on with regard
to a particular lead. They also want to thoroughly evaluate the productivity of
---------------------- each sales representative through an efficient SFA system.
---------------------- Companies want to use their prospects database for future marketing
campaigns and manage the sales pipeline more effectively and do better
---------------------- sales forecasting. If done right, the results are great and this is helping many
---------------------- companies increase the sales force.
Chan of Infor says, “SFA tools are particularly important where a company
----------------------
has the opportunity to cross-sell and the up-sell products and services to the
---------------------- same customers. Typical examples of these would be in the services industry,
such as financial services and telecommunications”.
----------------------
The hosted SFA model seems to have caught the attention of the large
---------------------- business. About 7,000 users at Cisco systems and 4,500 at Symantec are using
Salesforce.com’s SFA tools.
----------------------
Jeremy Cooper, Vice-president, Marketing, Asia-Pacific and Japan,
---------------------- Salesforce.com Singapore says, “Large enterprises want faster implementation
---------------------- schedules and as they have a large sales team, they want faster scalability
and upgrades. Since every scale-up or upgrade takes place online it is a quick
---------------------- process. All this is helping organisations focus more on their core businesses
rather than spending time upgrading their process”.
----------------------

SFA tools integrated with CRM systems are helping organisations define Notes
revenue per sales person and average sales cycle. It is now possible to accurately
get the average deal size and a sales representative’s turnover rate. ----------------------
Organisations are in a position to view the percentage of a sales ----------------------
representative’s quota achievement over a period of time and the average number
of calls taken by him to close a deal and the least number of presentations ----------------------
necessary to close it along with the average success rate. Accurate sales forecasts
have become a reality with efficient collaboration of SFA and CRM tools. ----------------------
As per market sources it is being felt that CRM systems will evolve as ----------------------
additional functions are subsumed into the core CRM tool.
----------------------
Activity 3 ----------------------
----------------------
Visit a couple of sites offering SFA solutions and collect at least 5 reasons
to substantiate the fact that SFA is a very important aspect of CRM. ----------------------
----------------------
Case Study ----------------------
----------------------
Ping An’s 95511:
SHENZHEN, China - (BUSINESS WIRE) -April 22, 2005 -PacificNet Inc. ----------------------
(Nasdaq:PACT ) announced today that its PacificNet Epro subsidiary has ----------------------
been selected by Ping An Insurance (“Ping An”), the second largest life insurance
company in China, to provide CRM consulting and call centre training services ----------------------
to Ping An’s main customer service centre located in Suzhou with 300 seats and ----------------------
500 customer service representatives.
----------------------
Established in 2000, Ping An’s 95511 info hotline was the first customer
service centre in China’s insurance industry. The initial functions of the 95511 ----------------------
hotline were to provide basic customer service such as customer inquiry, order
processing, and complaint hotline. Beginning in 2005, Ping An initiated a new ----------------------
corporate drive to improve its competitiveness by enhancing the functions and
----------------------
quality of its 95511 CRM service center with a mission to turn it from a cost
center into a profit center. PacificNet Epro was selected as Ping An’s CRM ----------------------
consulting and training partner, to help Ping An improve its CRM services scope
and quality with a goal to generate profit through CRM services, telemarketing ----------------------
and outbound telesales.
----------------------
“We are proud to be retained by Ping An, a leader in China’s insurance
industry, as their CRM contact center consulting and training provider,” said ----------------------
Joyce Poon, General Manager of PacificNet Epro’s CRM Consulting and
----------------------
Training Services Division. “We value this opportunity to be of service to Ping
An for this important project on enhancing customer services quality. We plan ----------------------
to continue our efforts in building PacificNet as one of the leading brands and a
leading CRM service provider in China.” ----------------------

Notes Tony Tong, Chairman and CEO of PacificNet, stated, “During the last
three years, Chinese companies are gradually discovering that their customers
---------------------- are no longer solely satisfied with low prices as the only factor in making
purchasing decisions, and that low-cost pricing cannot be the sole competitive
---------------------- advantage. The emergence of competition based on customer service quality,
---------------------- customer loyalty and retention, customer relationship management, and pre-
sale / post-sale services have prompted the rapid demand and deployment of
---------------------- large scale customer contact centers. We believe that the CRM contact center
has emerged as the new core competence for the market leaders in China. To
---------------------- become a market leader in China, whether as a product or service provider, you
---------------------- need to devote resources to CRM and customer service. With over 10 years as a
leading provider and the experience in CRM and contact center management in
---------------------- Hong Kong and China, we believe PacificNet is well positioned to capture this
rapidly growing demand for the CRM contact center services and call center
---------------------- management systems such as IVR systems.”
---------------------- About PacificNet:
---------------------- PacificNet Inc. (www.PacificNet.com; NASDAQ: PACT ), through its
subsidiaries, invests in and operates companies that provide Outsourcing and
---------------------- Value-Added Services (VAS) in China, such as call centers, telemarketing, CRM,
business process outsourcing (BPO), interactive voice response (IVR), mobile
----------------------
applications, and communications product distribution services. PacificNet’s
---------------------- clients include the leading telecos, banks, insurance, travel, marketing, and
business services companies, and telecom consumers, in Greater China.
---------------------- PacificNet’s corporate clients include China Telecom, Netcom, China Mobile,
Unicom, PCCW, Hutchison Telecom, Coca-Cola, Bell24, SONY, Samsung,
----------------------
TCL, Huawei, TNT Express, American Express, Citibank, Bank of China, DBS,
---------------------- Hong Kong Government, and Hong Kong Post. PacificNet is headquartered
in Minneapolis USA and Hong Kong employs over 1,200 staff in its various
---------------------- subsidiaries throughout China with offices in Hong Kong, Beijing, Shenzhen,
Guangzhou, Macau, Guangdong, Guangxi, Hubei, Hunan, Jiangsu, Zhejiang,
----------------------
Shanghai, Henan, Anhui, Yunnan, Gansu, Ningxia, Inner Mongolia, Guizhou,
---------------------- Tianjin, Qinghai, Hainan, Heilongjiang, Shanxi, Chongqing, Jiangxi, Hebei,
Liaoning, and Jilin.
----------------------
PacificNet’s operations include the following three groups:
---------------------- 1. Outsourcing Services: including Business Process Outsourcing (BPO),
---------------------- call centre, IT Outsourcing (ITO) and software development services.
2. Value-added Telecom Services (VAS): including IVR, SMS, WAP, 3G
---------------------- and related VAS.
---------------------- 3. Communication Products Distribution Services Group: including calling
cards, GSM / CDMA /XiaoLingTong, and multimedia self-service kiosks.
----------------------
PacificNet Epro (www.EproTel.com.hk) is the industry leader and leading
---------------------- provider of outsourced call centre, telemarketing, CRM, SMS, Interactive voice
response (IVR) services, and other value-added telecom services (VAS) with
----------------------
over 13 years of field experience in Greater China.

Epro Telecom’s business consists of the following three major categories: Notes
1. Outsourced Call Centre Services: Epro’s ISO 9001 certified outsourcing
----------------------
contact center hosts over 1000 workstations staffed by 600 agents and
provides 24x7x365 multi-lingual inbound and outbound services. ----------------------
2. Training and Consulting Services: The Epro Call Centre Training Institute
----------------------
(ECCTI) is a leading provider of contact center management consulting
and training services that help clients maximise the return on investment ----------------------
in their CRM operations.
----------------------
3. Call Center Management Software Products and Solutions: Epro’s
software products include: WISE-xb Call Center agent performance, ----------------------
management, and reporting software, and Automatic Call Distribution
(ACD) System, UMS, and SMS. ----------------------
EPRO TELECOM successfully enhanced the Transformation of 95511 Call ----------------------
Centre of PING AN LIFE INSURANCE through our Telemarketing Skill Training
----------------------
Exercise:
Visit the website of PacificNet Inc. www.PacificNet.com and study the ----------------------
relationship of the particular case in relation to the other leading SFA solutions ----------------------
being offered in the Chinese market.
----------------------
Summary
----------------------
●● You can see in this unit how CRM revolves around SFA. Sales force ----------------------
has to be automated in order to function effectively and be able to
serve customer in a better way. SFA aims to achieve both these aspects. ----------------------
However it will be a limited view of SFA if we say that it is only related
to or helps Selling. SFA also helps management to be able to manage ----------------------
better. It provides various tools for effective handling of Sales force in ----------------------
terms of analysing the sales, the trends, customer buying patterns, about
intermediary et all. ----------------------
●● Like the unit explains CRM begins on the foundation laid by SFA and
----------------------
gives it a meaningful edge by being closer to the customer which is
absolutely an integral part of CRM. ----------------------
Keywords ----------------------
----------------------
• Partner Relationship Management (PRM): Managing the company’s
alliance partner and reseller relationships to provide customers with the ----------------------
optimal sales channel while streamlining the sales process.
----------------------
• Collaborative CRM (cCRM): A situation in which customers can
interact directly with the organisation, usually through the web. ----------------------
• Supply Chain Management (SCM): Evaluating and categorising ----------------------
suppliers for given projects to optimise supplier qualification and
selection, thereby streamlining the supply chain. ----------------------

Notes • Mobile CRM (mCRM): The provision of data to customers, suppliers,
and business partners via wireless technologies.
----------------------
• Enterprise Relationship Management (ERM): Solution that enables
---------------------- the enterprise to share comprehensive, up-to-date customer, product,
competitor and market information for the end goal of long-term customer
---------------------- satisfaction, increased revenues, and higher profitability.
----------------------
----------------------
1. Write a detailed note on SFA.
----------------------
2. Discuss in details importance of SFA to CRM.
----------------------
3. Elaborate with examples the intangibility of ROI in SFA.
---------------------- 4. Why it is important for Manager’s to use SFA tool in a better way.
----------------------
----------------------
----------------------
---------------------- 1. True

1. Easy availability of customer information, increased revenue, reduction
----------------------
in cost of selling and increased sales force mobility etc. because of these
---------------------- reasons SFA is important to CRM.
----------------------
Fill in the blanks.
----------------------
1. Sales Force Automation plays an instrumental role in boosting the
---------------------- profitability of your organisation by increasing revenues and reducing
operational costs.
----------------------
---------------------- Suggested Reading

---------------------- 1. http://searchcrm.techtarget.com/tutorial/Sales-Force-Automation-
Learning-Guide.
----------------------
2. Agnihotri, Raj and Adam Rapp. 2010. Effective Sales Force Automation
---------------------- and Customer Relationship Management. Businessexpert Press.
---------------------- 3. Colombo, George W. 1994. Sales Force Automation: Using the Latest
Technology to Make Your Sales Force More Competitive. McGraw-Hill.
----------------------
----------------------

Architectural Map for CRM Implementation
UNIT
5
Structure:
5.1 Introduction
5.2 The Challenges of Integration
5.3 Checklist for CRM Implementation
5.4 CRM and IT
5.5 Implementation Service
Case Study
Summary
Key Words
Suggested Reading
Architectural Map for CRM Implementation 71

Notes
Objectives
----------------------
• Describe the process involved in CRM implementation
----------------------
• Suggest the do’s and don’ts for effective CRM implementation
---------------------- • Design a check list for CRM implementation
---------------------- • Assess the role of IT in CRM
---------------------- • Analyse how organisations actually implement CRM through a case
----------------------
5.1 INTRODUCTION
----------------------
---------------------- With the accelerating pace of technological change, shrinking product

lifecycles, commoditisation of products and services, and increasing competition,
---------------------- companies are struggling to maintain competitive advantage. Add to this that
customers are becoming more demanding, sophisticated and selective.
----------------------
No CRM development is easy, it has to go through the hazards from
---------------------- technology glitches to hiring freezes, but “CRM Implementation” is the hub in
the CRM wheel when it comes to ensuring a smooth rollout.
----------------------
---------------------- 5.2 THE CHALLENGES OF INTEGRATION

---------------------- While every organisation is unique in its use of products, data formats, naming
standards and hardware, the challenges of integration are the same:
----------------------
●● Data formats
---------------------- ●● Changing infrastructure
---------------------- ●● Unique business processes
●● Heterogeneous systems
----------------------
●● Data integrity requirements
----------------------
●● The future unknowns
---------------------- ●● The complex market place.
---------------------- As in many other areas of IT and business, the use of a methodology and
the reuse of knowledge and components will facilitate a faster and less risky
---------------------- implementation. Naturally, this must be performed in a manner that considers
the needs of the business and technical constraints, both in the short and the
---------------------- long terms.
---------------------- However, a methodology is not enough on its own. Wherever possible, tools
and products should be selected to minimise the cost of internal development
----------------------
and customisation.
----------------------

The common integration challenges and issues can be resolved through Notes
the use of generic architecture patterns and templates. They can provide out-of-
the-box proven solutions to problems such as real-time data updates across a ----------------------
heterogeneous infrastructure, and many others.
----------------------
5.3 CHECKLIST FOR CRM IMPLEMENTATION ----------------------
Before choosing a vendor, however, a CIO must answer an increasingly ----------------------
critical question: hosted or in-house? The hosted market, which uses an
application service provider (ASP) model of “renting” software to customers, ----------------------
has been heating up in the past year, and many companies have started moving ----------------------
to hosted offerings for their CRM needs. Other firms still prefer the tried-and-
true approach of rolling out CRM software in-house. Although more expensive, ----------------------
this method allows for better customisation and control. To ease the decision-
making process, here are some basic questions that should be on every IT ----------------------
decisionmaker’s checklist when the CRM discussion starts. ----------------------
1. What business issue are you trying to address?
----------------------
Some companies begin investigating CRM simply because they want
better return on investment (ROI) and happier customers. While both of ----------------------
those goals are important, there are more factors involved, and a company
----------------------
should know what it wants before even approaching vendors.
For an implementation to succeed, you need to have a clear understanding ----------------------
of what you want to accomplish. Unless you do this, a vendor will be
----------------------
the one to help you define your needs, and for sure it’ll be based on their
product ----------------------
2. How quickly does your CRM system need to be deployed?
----------------------
One advantage of hosted solutions has proven to be speedy implementation
time. A company that wants to try a new CRM strategy can call a hosted- ----------------------
solutions vendor and get hooked up within days, sometimes even faster. ----------------------
Businesses with limited resources that need to get their CRM up and
running quickly are often better off with a hosted offering. ----------------------
It’s very compelling to a company that needs to meet a certain business ----------------------
requirement in a short time frame; it gives them a turnkey approach to
getting started. ----------------------
On the other hand, an in-house approach makes more sense if what is ----------------------
desired can best be described by the old chestnut, slow and steady wins
the race. Some firms can benefit from taking an incremental approach that ----------------------
lets them slowly build out a suitable CRM system, rather than signing on
for a hosted solution that allows them to be using CRM tomorrow. ----------------------
3. Do you need customisation? ----------------------

Indeed, for companies that require specialised features in a CRM solution, ----------------------
an in-house strategy tends to be better than trying to haggle over such
details with a vendor. ----------------------

Notes Certain types of firms, especially those on the cutting edge of technology,
are better off implementing CRM in-house because doing so gives them
---------------------- more control over their strategy. It could be that they have a certain
need, like for a collaboration product. If there are very specific features
---------------------- necessary, it’s often easier to just do it in-house. It saves time and, in the
---------------------- long run, money.
4. What is the breadth of your IT resources?
----------------------
Relatively small companies should take yet another consideration into
---------------------- account: Implementing in-house CRM with a small IT staff is like trying
to stop the MyDoom virus by posting a security-policy note on the
----------------------
company bulletin board. It may work to some degree, but it certainly is
---------------------- not the most efficient method.
A CRM implementation decision is largely determined by funding,
----------------------
benefits and operations. For the operations component, having a robust IT
---------------------- department is usually considered a must for in-house CRM.
---------------------- The IT department not only must control the technical aspects of rolling
out and maintaining an in-house application, but also is in charge of security,
---------------------- management and connectivity.
---------------------- If an IT department is already overtaxed or otherwise unable to handle

a sweeping CRM implementation project, a hosted solution likely is a more
---------------------- attractive option, because all technical aspects are handled by the vendor and
management is done remotely.
----------------------
Overall, the choice between a hosted or in-house CRM strategy is not one
---------------------- to be taken lightly. However, if a CIO asks the right questions up-front, he or
she can find answers that will benefit the company -- and keep ROI rolling in.
----------------------
---------------------- 5.4 CRM AND IT

---------------------- Exploitation of IT that will facilitate the use and management of information
is regarded as one of the key contributors to future marketing success, both
---------------------- for large and small firms IT plays an important role in CRM, enabling the
---------------------- assembly of customer information and the creation of customer knowledge,
which is critical for maintaining customer relationships. CRM seeks to provide
---------------------- a strategic bridge between IT strategies and marketing strategies in building
long-term relationships and profitability.
----------------------
The trend toward IT-enabled management of customer relationships has
---------------------- different origins, of which a principal one is a supply-side push from the IT
industry. Moreover, technological advances have increased the number of
---------------------- marketing channels, and also have precipitated changes in shopping behaviour.
---------------------- At the same time, developments have increased the potential for data capture
and extended the capabilities of data management. IT-enabled channels, such
---------------------- as the Internet, have made it possible to deal with a segment of one, and allow
one-to-one dialogue with current or prospective customers in which the product
---------------------- configuration, price and required service can be negotiated individually.

CRM technological initiatives most commonly are implemented in Notes
functional areas such as customer support and service, sales and marketing, so
as to optimise profitability and revenue. The software and hardware applications ----------------------
for CRM are focused upon automating primarily three areas: (1) business
operation processes (operational CRM), such as order management, customer ----------------------
service, marketing automation and field service; (2) business performance ----------------------
processes (analytical CRM), such as campaign and data warehousing; and (3)
communication and coordination processes (collaborative CRM) such as voice ----------------------
mail, e-mail, the Web, and portals.
----------------------
CRM technology applications link front office (e.g., sales, marketing
and customer service) and back office (e.g., financial, operations, logistics ----------------------
and human recourses) functions to the company’s customer “touch points”.
----------------------
Customer touch points can be the Internet, e-mail, fax, call centres, voice
response systems, kiosks, ATM, advertising, stores, etc.. Fig 5.1 demonstrates ----------------------
how CRM technology applications link customer touch points to front and back
office functions. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 5.1: CRM Applications Supported by ERP / Data Warehouse ----------------------
----------------------
----------------------
1. CRM technological initiatives most commonly are implemented in ----------------------
functional areas so as to ___________________ and revenue.
----------------------
----------------------
----------------------
----------------------

Notes 5.5 IMPLEMENTATION SERVICE
---------------------- More and more organisations are turning to Customer Relationship
Management (CRM) solutions to drive revenue growth, productivity, and
----------------------
customer satisfaction. A great number of these organisations have achieved
---------------------- significant results. Some organisations, however, have not achieved all of the
benefits they had hoped for. Instead, they have encountered problems ranging
---------------------- from cost overruns and integration challenges to poor user acceptance. The good
news is that all of these of problems are avoidable-if the CRM implementation
----------------------
is well designed and executed. Indeed, when properly deployed, CRM solutions
---------------------- produce a significant return on investment by streamlining business processes
and providing frontline employees access to richer and more integrated customer
---------------------- information.
---------------------- Basically there are 10 Critical Success Factors for Successful CRM
implementation:
----------------------
1. Establish measurable business goals.
---------------------- 2. Align business and IT operations.
---------------------- 3. Get executive support up front.
---------------------- 4. Let business goals drive functionality.
5. Minimise customisation by leveraging out-of-the-box functionality.
----------------------
6. Use trained, experienced consultants.
----------------------
7. Actively involve end users in solution design.
---------------------- 8. Invest in training to empower end users.
---------------------- 9. Use a phased rollout schedule.
---------------------- 10. Measure, monitor, and track.
1. Establish Measurable Business Goals:
----------------------
It is critically important to define the specific business benefits you expect
---------------------- your CRM project to deliver. This may sound painfully obvious, but many
---------------------- projects fail because this “obvious” success factor is not observed. Push yourself
to clarify exactly what you are trying to achieve with your CRM solution.
---------------------- ●● Are you trying to increase average revenue per sale?
---------------------- ●● Improve customer retention rates?
---------------------- ●● Lower customer acquisition costs?

●● Improve forecast accuracy?
----------------------
●● Improve customer response times?
---------------------- ●● Improve sales close rates?
---------------------- There are CRM solutions to address all of these objectives, so you
must prioritise what you want to accomplish and select the CRM technology
---------------------- accordingly. “The key is to understand which applications are most important

to your business.” Successful customers shop for CRM solutions with a list Notes
of detailed business requirements-not generic wishes like “Improve customer
service,” but specifics like “Reduce service response times by 25 percent.” The ----------------------
deployments that work best target concrete pain points.
----------------------
2. Align your Business and your IT Operations:
----------------------
While CRM is driven by technology, it’s not about technology. The point
of CRM is to improve your customer-facing business processes; technology is ----------------------
only a means to achieving that end. Every successful implementation begins by
recognising this fact and by creating operational structures that reinforce it. In ----------------------
successful CRM projects, responsibility for the design and implementation of
----------------------
the system rests with both business sponsors and technical personnel. Marriott
International, which has deployed CRM applications to several thousand users, ----------------------
insists on this joint accountability to ensure that technology initiatives are
aligned with corporate objectives. Bring business and IT together. But make ----------------------
business the driver.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 5.2
3. Get Executive Support up Front: ----------------------
Because CRM projects are strategic initiatives, top management must ----------------------
actively support them. Without executive endorsement-including an explanation
of how the new system will support organisational goals-a CRM initiative can ----------------------
be read as a gimmick or a fad. If CRM is critical to your company’s survival- ----------------------
which is increasingly the case for organisations everywhere-top executives,
from the CEO down, must drive that message. ----------------------
4. Let Business Goals Drive Functionality: ----------------------
Just as a CRM project needs to be driven by business goals, so must every
configuration decision. If a feature doesn’t directly help your company better ----------------------
serve customers, you probably don’t need it. Basic five criteria against which ----------------------
any company assesses eBusiness solutions are
----------------------
●● improve profitability
●● enhance customer value ----------------------

Notes ●● support process integration
●● reduce technology costs
----------------------
●● improve systems performance.
---------------------- Insist on functionality that enhances the ability of customer-facing
---------------------- personnel to perform their specific job function. Organisations may also use
CRM technology to expand the scope of a functional area. For example, the
---------------------- Belgian bank Banque Brussels Lambert recently used CRM technology to
enable agents in its contact center, BBL Direct, to perform outgoing sales calls
---------------------- as well as answer incoming service calls. “With this change,” says BBL Direct
---------------------- Manager Catherine deBatty, “our employees are able to move from quantity to
quality. We can concentrate less on how many calls are being handled and more
---------------------- on gathering information that will improve performance and productivity.”
Here the adoption of CRM technology actually changed the job function, but
---------------------- again, the implementation was driven by business considerations.
---------------------- 5. Minimise Customisation by leveraging out-of the- Box Functionality:
---------------------- Over-customisation is one of the most common causes of budget overruns

and missed deadlines in CRM implementations. A project team sets out to adopt
---------------------- a “vanilla” application but quickly falls victim to “feature creep” and ends
up with a more specialised product than business functions require. Or, the
---------------------- project team falls into the trap of customising the CRM software to mirror the
---------------------- customisations made to legacy systems.
Many of these experiments are abandoned midstream. But even those that
----------------------
succeed do so by straining budgets and trashing schedules.
---------------------- These common scenarios are unnecessary if you avoid imitating legacy
solutions too closely and take care in selecting a CRM solution that provides
----------------------
out-of-the-box functionality that meets your organisation’s needs. Before you
---------------------- start customising your CRM application, first consider the application’s existing
functionality. You may find that the vanilla product supports your business
---------------------- requirements much more thoroughly than you had anticipated, eliminating the
need for expensive customisations. Indeed, customisation is often the most
----------------------
costly, time-consuming, and complex component of a CRM implementation.
---------------------- So choosing a CRM application that meets your requirements out of the box
can dramatically lower the total cost of ownership over the life of the solution.
---------------------- At IBM-which is rolling out one of the most extensive and comprehensive
CRM implementations ever, targeted to eventually reach more than 100,000
----------------------
field salespeople, call center representatives, marketing personnel, and business
---------------------- partners-software customisation is minimised through a “Fit Gap” methodology.
Before rolling out any IT solution, the company runs business scenarios for the
---------------------- solution’s end users to determine where the projected software is helpful and
where there are gaps. Then, to address each gap, managers decide whether the
----------------------
software must be customised immediately or whether that gap can be resolved
---------------------- by a later release. “The overall goal,” says IBM Director for CRM Architecture
Gary Burnette, “is to keep customisations to an absolute minimum.”
----------------------

6. Use Trained, Experienced Consultants: Notes
Software consultants frequently make bold claims regarding their
----------------------
ability to meet a company’s implementation requirements. To ensure that your
systems integrator can actually deliver a CRM project on time and on budget, ----------------------
look for consultants who are not only thoroughly trained in implementation
methodologies for the applications you are considering, but also have real ----------------------
experience in deploying those applications.
----------------------
How do you know that a potential integration partner meets these criteria?
Hire consultants who have been certified by your software provider. It is ----------------------
difficult to overstate the importance of following this practice. “When you use
----------------------
certified consultants, you know you’re working with people who understand the
software inside and out”. “Certified consultants are able to translate business ----------------------
requirements into software configurations far more effectively than non-
certified consultants. They can also provide a much more realistic forecast of ----------------------
what your CRM project will entail in terms of time and resource requirements.”
----------------------
New releases of CRM applications come out frequently. Be sure the
consultants are certified on your software’s latest release. ----------------------
7. Actively involve end-users in Solution Design: ----------------------
“If we don’t have our end users involved in design and deployment of ----------------------
our eBusiness applications, we won’t be successful-period.” So says Eloise
McNeal, Vice President for Business Markets Sales and Services Systems at ----------------------
WorldCom, which has rolled out CRM solutions to several business units,
including a 3,100-person deployment to its Global Accounts sales organisation. ----------------------
McNeal is on target for a simple but often overlooked reason: Unless you solicit ----------------------
and act on end user input, you run the risk of implementing systems that confuse
and alienate the very people they are meant to help. ----------------------
Take this lesson to heart: Incorporate the knowledge of frontline ----------------------
professionals into your system design.
----------------------
In interface design, for example, the goal is to make the user interface
as intuitive and user-friendly as possible. But the only people who can tell an ----------------------
engineering department what is intuitive are the people who will actually be
using the software. This is why, before WorldCom went live with its Global ----------------------
Accounts call center solution, IT ran a prototype past the company’s call center
----------------------
agents and made adjustments to the screens based on their recommendations.
The result was a better, more intuitive screen design and a high level of user ----------------------
acceptance. Even when the modifications made in response to user input are
relatively minor, the sense of ownership generated by their involvement can ----------------------
significantly boost enthusiasm for the solution.
----------------------
8. Invest in Training to empower end-users:
----------------------
Providing adequate training to end users is critical to the success of a
CRM project. Training should not come as an afterthought. Moreover, training ----------------------
should not merely focus on demonstrating how to use the software’s features
and functionality. Instead, training should teach employees how to effectively ----------------------

Notes execute the business processes enabled by the CRM system. Given that a CRM
implementation often entails changes to a company’s business processes, end
---------------------- user training should also focus on “change management.” Employees need to
understand how the new processes and CRM technology will help the company
---------------------- better serve customers. If employees understand how the system will make
---------------------- them more effective in the long run, they will be eager to adapt. But to garner
that degree of employee support and buy-in, the organisation must involve end
---------------------- users from the very beginning-both in designing the CRM solution itself and in
developing the associated training.
----------------------
9. Use a Phased Rollout Schedule:
----------------------
Most successful CRM projects follow a phased deployment schedule:
---------------------- Each phase is focused on a specific CRM objective and is designed to produce a
“quick win”-that is, meaningful results in a reasonable amount of time (typically
---------------------- three to four months).
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 5.3

Phased deployment where the solution is deployed to a targeted user
---------------------- audience. The targeted group might be a department experiencing a specific point
---------------------- of pain and likely to see quick benefits from the CRM solution. It might be a
department that is highly enthusiastic about the new system and therefore eager
---------------------- to put it to use. It might be a functional area from which management has reason
to anticipate the quickest rate of return, or an area that could most readily profit
---------------------- from out-of-the-box functionality. Or it might be some combination of all four.
---------------------- Phased rollouts also provide the advantage of allowing you to learn along
the way. They enable you to test new ideas in a low-risk format, to incorporate
----------------------

customer feedback into the developing design, and to avoid repeating errors Notes
that you may make early on. At Dow Chemical-which has rolled out a
multichannel CRM solution to more than 2,000 users-this eBusiness philosophy ----------------------
is encapsulated in the phrase “Think big, start small, and scale fast.” Phasing
should not be confused with moving back a deadline. Each phase of a multiphase ----------------------
project should have its own tight schedule, so that the overall rollout design ----------------------
still hits its deadlines. Most of our deployments finish the initial phase in one
quarter and finish a complete, multiphase rollout in under a year. We’ve seen ----------------------
initial deployments completed in as little as one week. No rollout, if properly
managed, should exceed six to eight quarters. And the ROI ought to be visible ----------------------
even earlier than that. ----------------------
10. Measure, Monitor and Track:
----------------------
Once a CRM system goes live, the organisation must measure, monitor,
and track the system’s effectiveness, with an eye to continuously improving ----------------------
performance. Companies that gain the greatest benefit from CRM applications
----------------------
benchmark their business processes early on, identify the performance metrics
for those processes, and measure how the CRM system affects those metrics. ----------------------
Organisations must also periodically survey their customers to determine
----------------------
the impact of the CRM solution on customer attitudes and behavior. In
implementing customer surveys, use an independent service. Not only will such ----------------------
outsourcing leverage specialised skills and access to industry benchmarks, but
you will be more likely to secure “unfiltered” customer responses that are more ----------------------
reliable.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 5.4
----------------------
Finally, you should report the results of your monitoring to all managers
and personnel that have a stake in your CRM system. ----------------------

Notes
----------------------

1. Invest in training to empower end users, use trained and experienced
----------------------
consultants, get executive support up front and let business goals
---------------------- drive functionality are some of the ______________ for successful
CRM implementation.
----------------------
----------------------
Case Study
----------------------
---------------------- CRM Implementation in Rockwell Automation:

Customer, Strategy, People, Process and Technology
----------------------
Background
----------------------
Rockwell Automation, based in the United States with headquarters in
---------------------- different geographical regions, concentrates its business into three major
divisions, the Control System, the Power System and the First-Point of Contact
---------------------- System. Hong Kong is the headquarters of the company in the Asia Pacific
region, covering major cities in China, Taiwan, Korea, Japan, Singapore,
----------------------
Malaysia, Thailand, Philippines, Indonesia, India, Australia and New Zealand.
---------------------- The main business in the Asia Pacific region is Rockwell Automation Control
System (RACS) and therefore, the CRM model implementation will be based
---------------------- on the business structure of RACS.
---------------------- RACS delivers complete automation solutions through four global brand
names? Allen-Bradley, Reliance Electric, Dodge and Rockwell Software.
---------------------- These four brands provide over 500,000 different products, covering the major
---------------------- technologies required for industrial automation solutions in literately every
industry. The business model of RACS concentrates on authorised distributors.
---------------------- There are also direct customers who usually are Original Equipment
Manufacturers (OEM) and large individual engineering companies etc.
----------------------
The middle-to-long term growth plan of RACS has concentrated on future
---------------------- Chinese markets. Statistics based on actual and forecasted figures on orders and
shipments have demonstrated a growth of 110% on the expected sales revenue
---------------------- from the Chinese market in the last 6 months, reaching more than 10 million
---------------------- US dollars of revenue before tax per month. An expected 120% growth rate is
forecasted for the next 12 months. The total revenues of China’s regions are
---------------------- accountable for close to 42% of the total revenue in the Asia Pacific region.
The actual and forecasted figures are backed up with the huge opportunities in
---------------------- China, such as infrastructure investment made by the Chinese government after
---------------------- the entrance to the World Trade Organisation (WTO) and preparation projects
for the 2008 Beijing Olympics. Moreover, the Foreign Direct Investment (FDI)
---------------------- flowing in to China surpassed that to the United States in 2002, making China

the world’s leading destination for FDI. A ten percent growth rate is expected Notes
in the year 2003 for the FDI to China. Of the foreign direct investment, two
thirds come from manufacturing investments including the semiconductors, ----------------------
electronics, telecom equipment, and the chemicals sectors. The continuous
growth in investments has given RACS a great opportunity for exploiting new ----------------------
market segments in China.
----------------------
RACS believes in the notion of a Centre of Excellence (CoE) for creating
a customer value-chain. Hence, the CRM implementation is not only a program ----------------------
that articulates a company’s vision, but also a global strategy towards future
expansion in China. As the RACS business channel is mostly the distributor ----------------------
channel, the distributor companies should be identified as its customers. There ----------------------
are also direct customers but the group of distributors comprises 93-96% of
total customers with a majority of sales revenue. ----------------------
Customer Segmentation ----------------------
In order to make resource planning effectively and efficiently, the company
should perform customer segmentation so as to cater for different needs of ----------------------
different types of customers. Customer segmentation not only facilitates
----------------------
resource allocation on sales and marketing campaigns, it also allows more
in-depth analysis of customer performance to pinpoint where those 20% of ----------------------
profitable customers are located, and of product trends in each industry.
----------------------
Effective customer segmentation requires a huge amount of customer
information and sales figures for analysis. Having implemented the Enterprise ----------------------
Resource Planning (ERP) system in the Asia Pacific to collect data centrally,
RACS has developed Data Warehouse capability to enable information analysis. ----------------------
To identify profitable, high-margin customers, the Customer Pyramid Builder
(CPB) and the Customer Based Accounting (CBA) methodologies within the 3C ----------------------
Methods2 can be used. As a standardised ERP system has been implemented in
----------------------
RACS across the regions, it is not difficult for the company to extract valuable
information from the system for CPB and CBA analysis. The benefit of being ----------------------
able to identify RACS?s CPB and CBA is that the company will get a full
picture of customer performance in such a way that it can articulately pinpoint ----------------------
the profitable customers with a high margin, and those groups of high loyalty
and high value customers, as well as reallocate resources for better customer ----------------------
relationships. In a similar token, the analysis can be used to identify Prospective
----------------------
and Possible customers to exploit potential groups of customers.
3C Customer Pyramid ----------------------
To perform Customer Pyramid analysis, the company has to categorise ----------------------
the existing customers into active or inactive accounts. In addition, the
company should capture both the Prospectives whom the company’s sales ----------------------
team has information on and communications with and the Possible customers
with whom the company does not have direct communications. This kind of ----------------------
information may not be available through the ERP system. However, every ----------------------
account executive in the sales force should have daily direct contact with the
distributors through different sales channels and should therefore have a certain ----------------------
level of information. Thus, enabling Sales Force Automation (SFA) is another
key factor that can help cultivate customer relationships. ----------------------

Notes After gathering the potential customers account information, the company
can then calculate the total prospective revenue of each customer on its yearly
---------------------- base through the total sales history in the ERP system in different regions. With
the breakdown of the sales revenue of each customer, the company will be
---------------------- able to rank them on the scale of a pyramid Since RACS covers the whole of
---------------------- the Asia Pacific region with local operations, it is important that the customer
pyramid analysis include those local operations to efficiently indicate different
---------------------- opportunities in different regions. Some of the customers may have a presence
in multiple locations while some existing distributors in the current country
---------------------- may have potential business opportunities in other countries as some of the
---------------------- distributors have distributor networks across different countries. Expanding the
existing connections to those multiple-region customers means that the sales
---------------------- team will have a better chance to get Prospectives into the company’s business
network.
----------------------
Customer Based Accounting
----------------------
Besides building a customer pyramid, the company should also make use
---------------------- of the Customer Based Accounting (CBA) to calculate the cost of maintaining
customer relationships as well as the profitability of doing this in terms of Return
---------------------- On Investment. Since the company already has its customer pyramid built,
the additional information needed is the cost of doing customer relationship
----------------------
management. There are product costs, marketing costs, service costs, sales costs
---------------------- and general overheads. Again, with the ERP systems, these several different
costs can be extracted into Data Warehousing and the amounts calculated
---------------------- through data mining techniques. By using CBA, the company can identify
the profitability which is the sum of the total revenue minus the sum of total
----------------------
costs. Combining CBA with CPB, we can know each customer’s profitability.
---------------------- With the visibility of locating marginal profitable customers with those non-
profitable customers, the company can adjust sales and marketing campaigns as
---------------------- well as the financial terms of payment for different customers. CBA also acts
as a compass directing the company’s sales team on which group should be
----------------------
moving up in the pyramid and which group should be allocated with relatively
---------------------- fewer resources. CBA can also monitor the return on investment for customer
relationship management.
----------------------
Customer Loyalty and Customer Satisfaction
---------------------- One of the main purposes of implementing a customer relationship
---------------------- management program is to retain the profitable customers. Customers are only
retainable when they are loyal to the products and services provided, and are
---------------------- satisfied with the features of the products, and the prices of the products and
services offered.
----------------------
Training and Technical Support
---------------------- Being the manufacturer and service provider of all the industrial automated
---------------------- products fabricated, RACS has a division called Global Manufacturing Service
(GMS) to provide technical assistance and a project team to implement the
---------------------- automated solutions in different industries. The company realises that the

products and services are technologically advanced, and that the team of GMS Notes
must be equipped with state-of-the-art technological knowledge about the
industrial manufacturing industry. As a result, the company has been offering ----------------------
internal technical staff with on-the-job training in the Rockwell Automation
----------------------
University, which is primarily an institute for learning how to operate all the
latest products and software of the company. For the same reason, the company ----------------------
should expand part of this internal training service to the technical staff of client
customers. In this way, the customers will be more familiar with the company’s ----------------------
products and software and at the same time creating their own ownership of ----------------------
information about the solutions RACS puts together to be implemented in the
customers? This creates a better bonding, and emotional loyalty, between the ----------------------
customers and the company. By offering customers participation in part of the
----------------------
product training process this will allow them to build more trust on implementing
the company’s solutions. ----------------------
Extranet and Internet ----------------------
As far as the product complexity is concerned, customers always encounter
----------------------
difficulty using and updating latest product information. RACS has been
manufacturing more than 500,000 different products, not including the software ----------------------
that comes with those products. The huge amount of operations, product ISO
information, user manuals, and software and driver downloads can be very ----------------------
useful to the customers to choose the vendors for particular projects. When the ----------------------
company is able to offer the above product information to customers, it will
have a huge advantage over its competitors since product configuration and ----------------------
information is a valuable asset in terms of implementing the industrial automation
----------------------
solution. As a matter of fact, the company has the internal network for all the
information to assist internal staff when they are implementing the solutions for ----------------------
customers. By providing the customers with the exclusive product information
they need, the customers will be more comfortable to implement their projects ----------------------
with the company’s solutions. By the same token, customers can download ----------------------
the latest version of software, drives and patches on the products through the
extranet over the Internet. As mentioned earlier, the products and software are ----------------------
industrially sophisticated. With the extranet system, the customers can directly
----------------------
enquire through the system’s knowledge base, which can augment daily support
from the company as well as from the customers to their clients. In addition, ----------------------
most of the knowledge based systems are usually one-way information portals
in which customers can make queries and read the responses. The company can ----------------------
further differentiate services by using online bug reporting by automatically ----------------------
submitting the issues that cannot be resolved through the knowledge base. The
auto-reporting can proactively supplement the knowledge based system that the ----------------------
company has. It also facilitates bug fixing as more customers are entering into
----------------------
issues clearly related to the products when they are using the extranet. On the
customer side, they can perceive a more dynamic and responsive system which ----------------------
can actually answer their enquiries rather than a one-way query system in which
they may end up calling the support center for help. ----------------------

Notes Furthermore, the company supplies online training in various aspects
related to this industry. Those online training courses are also similar to those
---------------------- offered in the RA University except in this case there will not be any physical
demos and operation of hardware. The offering of these online training courses
---------------------- for customers through the extranet can allow them to practice online. For those
---------------------- more advanced courses, the company can also set a tuition fee with a discount
especially for the preferred customers. All these customer centered services
---------------------- can be provided through the extranet system exclusively for the selected
customers. The extranet system serves different purposes but reaches the same
---------------------- goal? Retaining customers by creating higher levels of satisfaction when the
---------------------- customers? Experience is better than they expected.
Call Centre
----------------------
The call center facility is another critical success factor that will differentiate
---------------------- the company’s service from its competitors. The Global Management Service
team has a Call Centre division located in Australia. The operators there are
----------------------
mainly Australians who speak only English. However, as Rockwell Automation
---------------------- in the Asia Pacific area covers roughly four different major official languages,
namely English, Mandarin, Korean, and Japanese, the support to other regions
---------------------- cannot be as specific and personal as it should be. RACS should diversify the
language support in the existing Call Centre. In fact, the company should create
----------------------
a network of experts around the regions and connect the technical staff via a
---------------------- centralised Call Centre in Australia. The Call Centre operates 24 /7.
Measurements
----------------------
With all these ideas on customer relationship management, the company
---------------------- must then have a measurement scale to appraise the effectiveness of the
---------------------- implementation.
There are some proactive and reactive approaches to measure the
---------------------- effectiveness in terms of customer satisfaction. The proactive approaches are
---------------------- pulling methods which the company can apply to measure the effectiveness of
the CRM model. Click-stream analysis of the extranet customers can evaluate
---------------------- whether the portal information is useful and user-friendly. On the Call Center
side, job logging per call can investigate the holding time and the dropped
---------------------- call rate for customers. Periodic internal and external audits for the company
---------------------- are necessary for promoting better services. Internal audits include periodic
team review on the performance and responsiveness to the services requested.
---------------------- External audits include a third party audit team to conduct interviews by
permission with the customers. Reactive approaches are pushing methods that
---------------------- have the customers writing feedback to the company. The company can conduct
---------------------- site-visit surveys on preferred customers to get responses. In the extranet
systems, the company can offer rating or grading indexes based on some online
---------------------- actions that the customers perform. Additional online comments along with
this function should be provided in case the customers have recommendations.
---------------------- Likewise, the rating system can be included in the training sessions provided
---------------------- so that the company knows what kinds of training are useful to the customers

and what are not. All these measurements should be conducted and analyzed Notes
periodically with corrective actions so that the customers? expectations must
never go downwards. When the company’s service level doesn’t evolve to ----------------------
become better and finer, the chance of retaining the customers is minimal.
----------------------
Conclusion
----------------------
Customer relationship management has long been mis-conceptualised as
a software implementation. CRM is actually a business process in which the ----------------------
management has to know that a company’s success lies in the recognition of the
importance of customer relationships, its market niche and the understanding ----------------------
of where those potential customers reside. It is never just an IT project in which
----------------------
the company is hoping that technology can solve whatever problems may arise.
However, implementing CRM with no particular software is not impossible ----------------------
either. The success of the CRM model for the company depends mainly on
how the company’s business process is organised to create a value-chain for ----------------------
serving the customers to gain higher values and loyalty through satisfaction.
----------------------
Senior management executives must realise that CRM may require process
reengineering. Process reengineering cannot be successful without top to ----------------------
bottom support. Lastly, the measurement of how effective the model is can
reflect the correctness of the implementation’s direction so that the whole model ----------------------
is adjustable and responsive to demanding customers.
----------------------
(Source: From the article of Mr. Joe Yau, Senior Analyst on eBusiness solutions)
----------------------
Summary ----------------------
●● Can CRM deployments be complex? Clearly, yes. They are made to ----------------------
address complex business problems. But complexity need not lead
to failure. On the contrary, organisations that select the appropriate ----------------------
technology and adhere to the ten critical success factors described above ----------------------
can expect significant returns from their CRM investments.
----------------------
Keywords ----------------------
• A product: Anything that can be offered to a market to satisfy a want ----------------------

or need. Products that are marketed include physical goods, services,
----------------------
experience, events, persons, places, properties, organisations, information,
and ideas. ----------------------
• A service: Any act or performance that one party can offer to another that ----------------------
is essentially intangible and does not result in the ownership of anything.
Its production may or may not be tied to a physical product. ----------------------
• Promotions: The means of communicating a product or service ----------------------
availability and suitability to the target market.
• Physical Evidence: A set of place, people, publicity material, symbols, ----------------------
the design, layout, the signage and all that a person can see, which ----------------------
visualises a service.

Notes • External marketing: Uses all the elements of communicating and
reaching the customers.
----------------------
• Internal marketing: Applying marketing concepts to your own
---------------------- employees.

---------------------- 1. Explain customer touch points with examples.
---------------------- 2. What are the basic five criteria against which any company assesses
e-Business solutions?
----------------------
3. What is the basic check list for a CRM Implementations?
----------------------
4. Who are all the key people involved in CRM Implementation?
---------------------- 5. What can cause a CRM initiative to fail?
---------------------- 6. How long does a CRM implementation take?
---------------------- 7. How is a CRM project implemented? Explain.
8. What indicates the need for a CRM implementation?
----------------------
---------------------- Answers to Check your Progress

1. CRM technological initiatives most commonly are implemented in
----------------------
functional areas so as to optimise profitability and revenue.
---------------------- 1. Invest in training to empower end users, use trained and experienced
consultants, get executive support up front and let business goals drive
---------------------- functionality are some of the critical success factors for successful CRM
implementation.
----------------------

---------------------- 1. Dyché, Jill. 2002. The CRM Handbook: A Business Guide to Customer
---------------------- Relationship Management. Addison-Wesley.
2. Finnegan, David and Leslie Willcocks. 2007. Implementing CRM: From
---------------------- Technology to Knowledge. West Sussex: John Wiley & Sons.
----------------------
----------------------
----------------------

Industry Specific CRM Cases
UNIT
6
Structure:
6.1 Case from the Retail Sector

6.2 Case from the Manufacturing Sector
Suggested Reading
Industry Specific CRM Cases 89

Notes
Objectives
----------------------
• Assess the commitment of organisations to CRM through cases
----------------------
• Identify and analyse the CRM activities that organisations are involved
---------------------- in
---------------------- • Analyse the difference in CRM between retail and manufacturing

sectors
----------------------
----------------------
6.1 CASE FROM THE RETAIL SECTOR
----------------------
Counting on CRM Success at Flowers.com
----------------------
Sometimes, playing the role of lead champion for a technology
---------------------- implementation is the most rewarding part of an otherwise reward-challenged
job. Sure, you might be paid well, and if you’re lucky, you might even like the
---------------------- folks you work with. But let’s face it, being responsible for the implementation
and maintenance of technology solutions in your retail operation has likely been
----------------------
the cause of more than a few gray hairs. Fortunately, every now and then it’s
---------------------- that very responsibility that elevates you above the clamor of system support
calls, troubleshooting, and management of implementation grunt work to near
---------------------- superhero status. When bottom-line savings or sales increases are attributed
to a quick-payback solution that you spearheaded, your deeds are all the more
----------------------
heroic.
---------------------- On the other hand, there are the failures, and woe to the champion of the
failed technology implementation. In a hyper-competitive market, those who
----------------------
champion a cause and fail are fortunate to have jobs in the morning, and the
---------------------- failures who keep their jobs won’t have an easy time championing their next
brilliant idea. Perhaps that’s why so many retailers put off implementing or
---------------------- altogether shy away from CRM (customer relationship management). Oh, there
have been resounding success stories, but more often than not CRM fails. In
----------------------
fact, IBM’s 2004 Global CRM Study says 85% of companies aren’t satisfied
---------------------- with the success of their CRM initiatives. If your credibility depends on the
success of the implementations you drive, you’re probably not too thrilled with
---------------------- those odds.
---------------------- Plan Your Way to CRM Buy-In
---------------------- But hold on a minute. Since when were you one to shy away from a
challenge? Nothing ventured, nothing gained, my friend. There are CRM
---------------------- success stories out there, and with the right approach, you, too, can live to
tell one. Furthermore, if your title is anything like Aaron Cano’s, you’d better
---------------------- either have -or be working on -a CRM success story of your own. Cano is VP
---------------------- of customer knowledge for multichannel specialty retailer 1-800FLOWERS.

COM, a company that serves as a compelling case study on why you should Notes
ditch your CRM reservations and tackle the odds, regardless that they’re stacked
against you. ----------------------
Cano knows that CRM isn’t an easy sell to the internal powers that be. ----------------------
While he bills his company as a customer-centric one, cost consciousness also
factors heavily in its technology buying decisions. Given the perceived black ----------------------
magic of CRM implementations, it takes careful planning and creativity to ----------------------
present a case to buy. “We’re not the first retailer to attempt to tie ROI to CRM,
but at the end of the day, I don’t think you can,” says Cano. ----------------------
“Ultimately, the decision to implement comes down to determining how ----------------------
much you’re willing to spend to enhance the customer experience and how
confident you are that such an enhancement will impact your bottom line.” Not ----------------------
exactly a sound business case for securing budget sign-off, is it? Fortunately, ----------------------
Cano knew that setting realistic expectations by clearly defining his company’s
CRM strategy would help him get the green light to spend money on CRM ----------------------
tools.
----------------------
With a hefty database of customer information in hand, it was up to the
CRM believers at 1-800-FLOWERS.COM to show the rest of the company ----------------------
what could be done with a DW (data warehouse) and some analytical tools. ----------------------
Demonstrating that a DW allows finite, segment-specific customer queries
using data already being collected is one step toward clinching the CRM ----------------------
project. It’s also important to focus on the efficiency gains anticipated by the
----------------------
ability to analyze and report on campaign success rates while the campaign is
underway. Translating this flexibility from a neat feature to specific hard-dollar ----------------------
savings or increased sales is difficult to do, but the theory isn’t hard to prove.
Nonetheless, proving that theory to corporate powers is important. The IBM ----------------------
study claims that when CRM initiatives are driven corporately, rather than by a ----------------------
specific division, success rates jump by between 25% and 60%. That said, the
study revealed that only 26% of respondents are practicing corporate-owned ----------------------
CRM initiatives. In fact, Big Blue figures that senior management at 36% of the
----------------------
companies it surveyed this year are actually impeding CRM progress because
they view CRM as useful, but not critical. That’s why securing enterprise-wide ----------------------
buy-in by illustrating the potential of the project to solve business problems is
key to its success. ----------------------
CRM can do many things, but when seeking corporate backing for a CRM ----------------------
initiative it’s often more productive to focus first on what you can’t do. For
----------------------
example, direct marketing is a staple for 1-800-FLOWERS.COM, but as little
as a year ago it couldn’t gauge the success of a direct marketing campaign ----------------------
until well after the promotion had been signed, sealed, delivered, and paid for.
Cano says it took up to two weeks to compile and analyze campaign results. ----------------------
Making matters worse, the company didn’t have the tools necessary to segment ----------------------
customers efficiently prior to developing campaigns, so most direct marketing
efforts were targeted poorly, if at all. ----------------------

Notes Putting the CRM Petal to the Metal
In the spring of 2003, 1-800-FLOWERS.COM invested in CRM solutions
---------------------- from SAS (Cary, NC) and transferred customer data it had been collecting since
---------------------- 1997 to a central Oracle DW. Because it’s integrated with the retailer’s proprietary
multichannel transaction processing engine, the DW is constantly being fed with
---------------------- new customer data. The company uses SAS CRM for data mining, analytics,
and ad hoc reporting. Shortly, 1-800FLOWERS.COM was enjoying the real-
---------------------- time data its new tools provided and using that data to serve customers more
---------------------- intelligently. Statistical models, which once took four to six weeks to build and
analyze, can now be completed in as little as two weeks. These models can help
---------------------- campaign management staff target campaigns and predict their effectiveness,
while helping the merchandise department maintain the proper stock levels to
---------------------- meet anticipated demand. The company can now segment its customer base
---------------------- by any number of parameters in preparation for a campaign, targeting specific
consumers with promotions suggested by their individual purchase histories.
---------------------- Then, it can manage those promotions as they happen.
---------------------- “Today, we can see campaign success or failure happening in real time and
gauge the success of our promotions daily. That allows us to change the focus
---------------------- of a campaign on the fly if necessary,” says Cano. “We can change a banner
on our Web site or a partner’s portal, for instance, within minutes. We monitor
---------------------- conversion rates on these sites, and if a banner, picture, or link representing a
promotion is not converting to sales, we’ll change it within minutes. E-mail
----------------------
promotions can also be followed up in short order when the company decides
---------------------- to enhance or change its efforts. The power of these tools for on-the-fly
maintenance of stock levels as they relate to promotion demand is obvious.
----------------------
Measure your way to CRM Superhero Status
---------------------- Retention rates, loyalty, and frequency are the measures most often used
to gauge retail CRM success. Cano says these measures have been improving
----------------------
steadily at 1-800FLOWERS.COM since the company signed on with SAS.
---------------------- While predicting your ROI on a potential CRM implementation may be
---------------------- difficult, measuring the outcome of your CRM efforts once underway (or even
better, during a pilot program) doesn’t have to be. Simply creating a control
---------------------- group representative of your mass market and several test groups segmented
using the target demographic, lifestyle, and purchase history information
---------------------- you’ve most likely already collected will provide a solid indicator of CRM
success to come. If new customer acquisition is your goal, find prospect lists
----------------------
that match the profile of your target groups and throw them in the mix. Then
---------------------- target relevant campaigns at your test groups, hit the control group with the
same campaigns, and compare the sales rates of your targeted tests to those
---------------------- of your mass-market approach. If you’re like 1-800-FLOWERS.COM, you’ll
see the response to targeted programming produce 30% more sales than the
----------------------
mass-market approach. “It’s all about hitting the right people with the right
---------------------- promotion,” says Cano. “When you see retention numbers and repeat buyer
numbers going up every year, you know you’re doing something right. That’s a
---------------------- direct result of the customer’s experience, which is a result of CRM.”

Building Customer Relationships Requires Commitment Notes
Back when the Internet was a fledgling B2C commerce tool, a little flower
----------------------
shop chain out of New York saw the natural fit between service-oriented
retailing and the convenience and 24/7 accessibility of the World Wide Web. ----------------------
The company was 1-800FLOWERS.COM, and it made a name for itself as a
veritable e-commerce pioneer. It survived the burst of the e-commerce bubble, ----------------------
but competition soon became its biggest challenge. Today, there’s no shortage
----------------------
of ship-to-recipient gift retailers on the Internet, so the retailer has transformed
its approach. It may no longer be the only player clamoring for market share ----------------------
in the multichannel flower delivery space, but it’s determined to be the best at
winning -and retaining - customers. The company’s 2003 investment in SAS’ ----------------------
(Cary, NC) CRM (customer relationship management) technology is evidence
----------------------
of its determination.
At 1-800-FLOWERS.COM, SAS’ CRM solutions span the entire decision- ----------------------
support process for managing customer relationships. The company collects
----------------------
data at all of its many multichannel customer contact points, then uses SAS’
Enterprise Miner data mining application to turn that data into information that ----------------------
helps it understand and anticipate customer behavior. Enterprise Miner handles
the whole data mining process -from data access to model deployment-using a ----------------------
process -flow diagram approach presented via a GUI (graphical user interface).
----------------------
This eliminates the need for manual coding and enables use of the solution by
even non-statistician types. The retailer uses this information to help meet its ----------------------
10 million customers’ merchandise and service needs, to discover the lifetime
value of individual customers, and to deliver more targeted (and therefore ----------------------
profitable) marketing campaigns to its most valuable customers.
----------------------
User Acceptance Drives CRM
----------------------
While CRM at 1-800-FLOWERS.COM is an enterprise-wide initiative,
the company’s IT staff administers it. This is a small group, with fewer than 10 IT ----------------------
employees representing production, development, and support for all segments
of the business. “We don’t have the luxury of staffing Ph.D. statistician types,” ----------------------
says Aaron Cano, the retailer’s of customer knowledge. “We were looking for ----------------------
something a business analyst could leverage without a detailed understanding
of the bits and bytes of statistical software.” Cano explains that while his ----------------------
company had been running an Oracle DW (data warehouse) for some time, it
needed an analytics tool that would create visual graphs of statistical analyses. ----------------------
“I could then sit down with our marketing executive and share understandable ----------------------
information,” he says. Now, employees at many levels are using SAS to
various degrees to develop targeting models and reports. “Now we can quickly ----------------------
understand what drives promotions, rather than sifting through information for
weeks and weeks,” he says. ----------------------
Why 85% of CRM Implementations Fail ----------------------
The 2004 Global CRM Study from IBM outlines a number of reasons ----------------------
why most CRM implementations fail, but according to the report, most of the
blame rests on the shoulders of implementation attempts that lack enterprise ----------------------

Notes buy-in. True, corporate must be willing to back the initiative, and store-level
associates must be prepared to execute. But even with the backing of your whole
---------------------- company, there are pitfalls to avoid. Jill Dyche, founding partner of Baseline
Consulting and author of The CRM Handbook: A Business Guide to Customer
---------------------- Relationship Management, offers the following don’ts:
---------------------- Don’t create measures without defining requirements. Establishing what
business problem needs to be solved, then outlining the measurements that will
----------------------
ensure the solution is effective, is the right order of things.
---------------------- Don’t measure just once. CRM success measurement should be continuous.
Each individual CRM project in the portfolio should be subject to regular and
----------------------
rigorous re-measurement.
---------------------- Don’t measure at 35,000 feet. General improvement goals such as happier
customers are too high-level and subjective to be meaningful. CRM success
----------------------
measurement should be performed at the level of the project, not the strategy.
---------------------- Don’t overemphasise cost cutting. Saving money may be a great incentive
---------------------- to start CRM
-the metric of recouping costs is a common one -but without accompanying
---------------------- business improvements it probably won’t be bona fide CRM.
---------------------- Don’t fail to drive post-measurement improvement. Companies should
acknowledge the results of their measurement efforts -for instance, customer
---------------------- satisfaction scores increased, but only by 3% - and refine accordingly.
---------------------- The IBM study claims that, when clear guidelines were applied during
implementation, CRM success rates were bolstered from less than 15% to
----------------------
greater than 70%. If the implementation of a CRM plan garnered the same
---------------------- respect and sense of urgency given POS and back office systems, perhaps that
figure would be even higher.
----------------------

----------------------
Fill in the blanks.
---------------------- 1. Given the perceived black magic of CRM implementations, it takes
_________ and creativity to present a case to buy.
----------------------
----------------------
6.2 CASE FROM THE MANUFACTURING SECTOR
----------------------
Perstorp Specialty Chemicals AB
----------------------
Founded in 1882, Perstorp Specialty Chemicals AB is a global leader in its
---------------------- segments for the market of coating intermediates and performance chemicals,
with production sites in Sweden, Italy, Germany, the US and India. Perstorp
---------------------- and Neste Oxo are currently merging their operations in order to form an
---------------------- international specialty chemicals group based in the Nordic region. The group

has annual sales of approximately $700 Million (U.S.) with 3,000 employees. Notes
Manufacturing activities are conducted in 11 countries.
----------------------
Perstorp’s Challenges
●● Increasing global competition causing severe margin pressure ----------------------
●● Sales staff “stretched” and needs additional support to capture incremental ----------------------
revenue opportunities
----------------------
●● ERP system pre-dated Web technology
●● Customers located around the globe, resulting in language issues and ----------------------
calls from all time zones.
----------------------
●● Information needed by both by Perstorp personnel and by customers was
“trapped” inside of the company’s ERP system ----------------------
●● Inconsistent business processes across the various world locations ----------------------
●● Significant portion of workload being handled manually.
----------------------
Perstorp’s Objectives in Implementing E-business
●● “Make it easier for customers to do business with us.” Because of current ----------------------
business processes, customers must rely on Customer Service to answer ----------------------
any question related to their account, and must transact with Perstorp
using traditional methods such as paper purchase orders and invoices. ----------------------
●● Maintain its position as leader of customer service, among its competitive ----------------------
set. Though Perstorp has enjoyed an excellent reputation in the area
of customer service, the competition isn’t sitting still. Perstorp must ----------------------
continually innovate to stay ahead.
----------------------
●● Increase competitive advantage by enhancing the quality of customer
service. Global competition continues to increase, requiring Perstorp to ----------------------
differentiate itself in a meaningful way.
----------------------
●● Streamline business processes to enable staff to be more efficient.
Like many industrial companies, Perstorp still largely relies on manual ----------------------
processes. As a result, staff members spend much of their time performing
administrative tasks. ----------------------
●● Expand revenue opportunities by broadening selling reach. Perstorp’s ----------------------
sales force spends most of its resources on servicing current client
accounts, leaving little time for prospecting. ----------------------
●● Keep the current ERP system by retrofitting it with e-Business capabilities. ----------------------
●● Perstorp’s ERP system, PRISM, pre-dates Web technology, limiting
Perstorp’s ability to transact electronically with its customers. Replacing ----------------------
the ERP system cannot be justified given the recent and costly ----------------------
implementation.
●● Standardise business processes across various world locations. Because ----------------------
Perstorp operates in several countries, there exist inconsistencies in ----------------------
procedures, reporting, etc.
----------------------

Notes ●● Achieve operational cost savings. Increasing competition and margin
pressure necessitate efficient operations and cost containment.
---------------------- A Quest for Superlative Customer Service
---------------------- Customer service reigns supreme at Perstorp. For them, excellent customer
service is defined as highly trained and informative Customer Service Reps
---------------------- (CSR’s), on-time delivery, and short lead times for product. In addition to being
---------------------- a corporate mantra and a core focus, it has been the driving force behind most
of the company’s recent technology initiatives.
---------------------- In 1995, Perstorp implemented PRISM, an ERP system popular in the
---------------------- Chemical industry, in order to improve efficiencies, achieve better inventory
management, and cut turnaround time. The implementation has been a success.
---------------------- According to Lena Hagsten, Manager of Customer Service, “PRISM can give
us lots of good information very quickly.” In fact, as a service to key customers,
---------------------- Perstorp’s sales team frequently provides monthly sales reports to help them in
their tracking and sales analysis. Says Hagsten, “PRISM enables us to have far
----------------------
more information than our competition. In most cases, our customers tell us that
---------------------- we provide them with better information about their account than they can get
out of their own system.” Hagsten acknowledges that the sales history reports
---------------------- take a lot of time, but that it’s another example of Perstorp going the “extra
mile” to serve the customer and makes Perstorp look “buttoned up.”
----------------------
As a testament to Perstorp’s commitment to customer service, they
---------------------- consistently rank ahead of their competitors in 7 out of 9 key metrics. In the 2000
customer survey, their strongest areas were Technical Support, Documentation,
---------------------- Commitment, and Effectiveness though they also surpassed the competition
---------------------- in Product Quality, Availability and Delivery Time. Says Mats Olofsson,
Perstorp’s Key Customer Manager, “Many of our customers have been with
---------------------- us for decades. That loyalty is engendered by our consistently going the extra
mile.” Despite their impressive marks, Perstorp was aware that PRISM offered
---------------------- little in the way of e-Business capabilities -something they felt was critical in
---------------------- taking their customer service to a higher level. Convinced that eBusiness would
enable them to further accentuate their strengths, Perstorp moved forward with
---------------------- an e-Business project, beginning June 2001.
Objectives and Solutions Related to Customer Service
----------------------
1. Provide Customers greater access to Information
----------------------
Perstorp’s Order Delivery Process Manager, Dörte Lüthje-Fristedt,
---------------------- estimates that only one-third of calls received by the Call Center are order
calls, with the majority being inquiries and requests for information related to
---------------------- products or order status.
---------------------- In the area of technical service, “There is a tremendous opportunity for
us to provide the same information we do today -and more -by putting it at
---------------------- the customer’s fingertips, online,” says Mikael Hallhagen, Product Manager.
In addition to a site that offers a veritable library of information, he also would
----------------------
like to be able to automatically email the customer when new information is
---------------------- available on the site pertinent to products they have bought from Perstorp.

The Solution: Notes
●● Using Stratyc’s eStoreFront which features full integration to their ERP,
----------------------
Perstorp is now able to share the information formerly “trapped” inside
with their customers -and in real time. ----------------------
●● For customers, this means being able to access detailed and updated
----------------------
product information, get order status, and get answers to many routine
questions, anytime. ----------------------
●● Technical information, including sell sheets, MSDS/TDS, troubleshooting
----------------------
guides, and FAQs is all available to view or download, whenever the
customer needs it. ----------------------
2. Provide Hassle-free Ordering ----------------------
Perstorp’s overriding objective in embarking on eBusiness was to be “the
easiest company to do business with.” Today, though it varies by business unit ----------------------
and market, the majority of customers place their orders via the fax machine ----------------------
and to a lesser degree by phone. For customers, this process requires cutting a
purchase order in their system, printing it out, faxing it and confirming receipt. ----------------------
There also tends to be back-and-forth communication in cases of a discrepancy,
----------------------
the form being hard to read, or a delivery date problem, etc.
In addition, because Perstorp’s customers are located all over the globe, ----------------------
customers may not be able to get an answer to a question quickly, or be unable ----------------------
to place an order during their business hours. During peak times, the phone
lines can become busy creating inconvenience for customers as well. ----------------------
The fact that most customer orders are faxed to Perstorp also presents ----------------------
difficulties. Many countries tend to have older machines that frequently
malfunction leaving the customer little option order than to place the order in ----------------------
the mail which is unacceptably slow.
----------------------
The Solution:
----------------------
The eStoreFront enables customers to easily find product, get product
information, and place orders online. ----------------------
●● Eliminates the need to produce a purchase order. ----------------------
●● Results in higher order accuracy and less manual labor
----------------------
●● Is open 24x7 for whenever a customer wants to place an order or check
order status. ----------------------
●● Many of the countries relying on old Fax technology may, in fact, have ----------------------
Web access providing them a faster, cheaper, and more reliable order
placement method ----------------------
3. Provide quick issue Resolution ----------------------
In cases where an issue requires research, Perstorp personnel will call a ----------------------
customer back. This practice can be costly and time-consuming, and usually
means a delay for a customer to get resolution. ----------------------

Notes Other times, calls are re-routed in an effort to find the right person to
answer the customer’s question. According to Lüthje-Fristedt, an estimated 30%
---------------------- of customer calls need to be re-routed multiple times to resolve a customer’s
question.
----------------------
The Solution:
----------------------
A large portion of customer calls relate to either order status or technical product
---------------------- information.
●● Perstorp’s e-StoreFront provides customers the ability to access product
----------------------
and order information, easily and whenever they need it.
---------------------- ●● Technical information, troubleshooting and FAQ’s are also furnished on
the site.
----------------------
4. Address Time Zone Issues
----------------------
Because Perstorp’s customers are located around the globe and across
---------------------- all time zones, covering the customer service requirements is a challenge.
Frequently, customers need same-day issue resolution but the customer service
---------------------- agent most qualified to answer the question is in a different time zone and not
available.
----------------------
Customer service centers in other countries are heavily dependent on the
---------------------- Service Center at the Swedish headquarters. For example, customers in Australia
---------------------- rely on the Customer Service department located in Singapore. However, the
Singapore staff often needs information directly from Sweden or Toledo. Due
---------------------- to the time difference, resolving the issue within hours is difficult and at times
impossible.
----------------------
The Solution:
---------------------- The e-StoreFront is open 24x7, allowing it to be available to take orders and
---------------------- answer questions whenever the customer needs it.
●● A large number of questions can easily be addressed with Website content,
----------------------
decreasing the strain on Customer Service reps.
---------------------- ●● The questions that do require a rep’s attention can then be more efficiently
routed for fast turnaround.
----------------------
5. Address Language Barriers
----------------------
Language issues also present difficulties, particularly in cases where the
---------------------- order or question is complex and technical. Resolving a problem or answering a
complicated question over the phone can be extremely challenging, particularly
---------------------- when there are language issues.
---------------------- The Solution:
Perstorp’s e-StoreFront provides clear technical information that can be
----------------------
printed or downloaded. Customers can also easily send questions via e-mail. Says
---------------------- Mikael Hallhagen, former manager of the Technical Services department, this
will ease anxiety associated with language. “Sometimes, it can be intimidating
---------------------- to ask technical questions in a second or third language. The Web addresses this

anxiety, in addition to providing a written response for later reference by the Notes
customer.”
----------------------
6. A need for streamlined Internal Processes:
a. Reduce the amount of manual work. ----------------------
Despite having a sophisticated ERP system in place, there are ----------------------

efficiencies that exist because either the ERP lacks connectivity to
----------------------
another system, or the people who need the information contained
within PRISM have no access to it. The result is the Customer ----------------------
Service Reps spend inordinate amounts of time and effort relaying
information back and forth. In fact, it is estimated that for every ----------------------
order that Perstorp processes, there are on average four contact ----------------------
points required by Customer Service such as processing a fax,
phone call or email and this doesn’t take into account the research ----------------------
time required to get the required information.
----------------------
For example, Perstorp relies on forwarders and transporters to
deliver its product to its customers. However, because these ----------------------
transport companies have no access to PRISM, Perstorp’s customer ----------------------
service reps manually input information such as vessel name,
estimated time of arrival, country-specific tax, etc. in order to ----------------------
provide customers with updated status. Frequently this information
----------------------
changes, which requires continual updates to the system.
The Solution: ----------------------
Whenever possible, Perstorp is using Web technology to eliminate ----------------------
redundant work throughout the supply chain. With the integration
built between PRISM and the Web tools, information can flow ----------------------
seamlessly back and forth between Perstorp and their customers, ----------------------
eliminating the need for much of the data entry and many of the
routine phone calls being handled today. ----------------------
l In the case of transport information, Perstorp is exploring ----------------------
with Stratyc the possibility of mapping this information into
PRISM from the forwarders system. For smaller transporters, ----------------------
an extranet could provide a good solution. ----------------------
b. Automate the order placement process
----------------------
Worldwide, Perstorp has a team of seven highly trained individuals
handling order placement and customer service from customers and ----------------------
agents around the globe. Historically, their duties have included ----------------------
much data entry into PRISM such as order entry of faxed customer
orders, reservation of product, booking of transport, confirmation ----------------------
of quotes and requirements, and broker delivery updates, as well as
----------------------
printing and faxing of COA, MSDS and TDS, and general customer
service and issue resolution. ----------------------

Notes When examined, the current order flow process is complex and
typically includes 20 steps taking place at either the “Order taking site”
---------------------- or the “Order fulfilling site.” Steps in the process include validating
of quotes inside of PRISM, order entry, checking inventory levels,
---------------------- changing status codes inside of PRISM, printing acknowledgement,
---------------------- sending acknowledgements and filing of documentation.
Order placement has been a manual and inefficient process, with
----------------------
a large number of Perstorp’s orders come in via the fax, though it
---------------------- does largely depend on region. When orders are placed over the
phone, calls tend to be quite lengthy, averaging 5-10 minutes but at
---------------------- times an hour or longer.
---------------------- The high level of manual handling of orders results in a high-cost
operation. It is estimated that Perstorp spends $55 to process each
---------------------- order. (This figure is arrived at by taking CSR labor costs divided
by the number of orders, and does not include any selling costs, or
----------------------
shipping costs.)
---------------------- The Solution:
---------------------- ●● By integrating with Perstorp’s ERP system, the e-StoreFront
automates the majority of the tasks associated with order
---------------------- placement and results in greater efficiency, faster turnaround
---------------------- time, higher customer convenience, and improved accuracy.
●● By going online, customers can quickly and easily identify the
---------------------- product(s) they need, review product information, calculate
needed quantities, check availability, and place the order.
----------------------
Later, they can also check order status.
---------------------- ●● By providing them the ability to do it online, Perstorp has
increased convenience for the customer and eliminated
----------------------
redundant work for the Customer Service reps.
---------------------- c. Give the Sales Team more time
---------------------- The “sales team is stretched,” says Per Westberg, Perstorp’s
Marketing Manager. Perstorp has 15 sales people covering six
---------------------- continents around the globe, with each rep responsible for $15MM-
$20MM in annual sales revenues-a figure which is significantly
----------------------
higher than what is typical in this industry.
---------------------- Sales personnel and Customer Service are currently handling many
---------------------- calls related to delivery details, document details, change of orders,
etc. Westberg estimates that sales reps spend 5-10% and sales
---------------------- assistants 15% of their time on such inquires.
---------------------- The Solution:

Because of their large territories, the sales team finds it difficult to
---------------------- support the smaller accounts. Says Westberg, “By providing them
---------------------- with online access to product information, ordering and order status

information, these accounts can receive better service, and with Notes
fewer resources required by Perstorp.”
----------------------
●● With less time required by them to address customer inquiries,
the sales force gains valuable time to spend on account ----------------------
maintenance and prospecting for new business.
●● The Websites support Perstorp’s goal to provide accessibility, ----------------------
competence, sales assistance, speed -words that Westberg ----------------------
describes as excellent customer service.
d. Focus on activities that add value ----------------------
Historically, customer service reps have spent approximately 80% ----------------------

of their time providing information from PRISM to internal staff
----------------------
and answering customer questions. It is estimated that only 20% of
their time was spent processing customer orders. ----------------------
The Solution:
----------------------
Perstorp’s eStoreFront provides a user-friendly way for customers
and employees to access information that has previously been ----------------------
“trapped” inside of PRISM.
----------------------
●● By doing so, it alleviates the strain on the Customer Service
reps to provide this information and allows them to focus on ----------------------
value-add activities. ----------------------
●● For example, by following up with the customer after an order
is received, the rep has the opportunity to ensure the order was ----------------------
accurate, on-time, to specification, etc, and to immediately
----------------------
resolve any issues without the customer needing to initiate
the process. What is learned during such calls would also ----------------------
help to improve future service.
----------------------
e. Give Agents better tools
Perstorp relies heavily on 60 Agents around the world to handle ----------------------
local sales and marketing efforts, customer maintenance, order ----------------------
taking, and administrative work.
Because Agents have had no access to PRISM, they have relied ----------------------
on Perstorp’s Customer Service Center to enter orders into the ----------------------
system, and get product and customer information out. Many have
expressed a need/desire to place orders in orders without needing to ----------------------
call Perstorp’s Customer Service center.
----------------------
According to Ekstrom, Agents typically fall into one of two camps.
“The first recognises that they are important to the customer, and ----------------------
views eBusiness as a way to interact better, and gain access to data
such as COA, MSDS, so that they can provide better service. They ----------------------
see eBusiness as a tool to serve current customers better, and gain ----------------------
new ones.” The second camp views eBusiness as a threat their
customer relationships. ----------------------

Notes The Solution:
Says John Ekström, “Our agents are critical to our success so we
----------------------
need to support them, and give them better tools. Our Web tools
---------------------- will definitely do that.”
By providing them real-time access to PRISM, Perstorp’s agents
----------------------
gain visibility into information on the customer, the products, and
---------------------- specific order details that will allow them to sell smarter. And, by
enabling them to place their customer orders directly into PRISM,
---------------------- they can do it at their convenience. Accuracy and efficiencies are
also improved.
----------------------
f. Reduce the number of queries going to Technical Service
----------------------
Perstorp’s technical expertise plays a key role in its brand and
---------------------- reputation. The Technical Service department assists customers
with application technology, troubleshooting and technical issues,
---------------------- in order to optimise how the customer uses the product and ensure
---------------------- they are using it safely.
Technical data, like much of Perstorp’s information, is “trapped”
---------------------- inside of PRISM. When customers need technical information, their
---------------------- calls have traditionally been sent to this department for resolution.
Today, there are 5 Full Time Equivalents dedicated to handling
---------------------- technical service issues. In addition to the time, Perstorp also spends
money to print leaflets of technical information to fax or mail as
---------------------- follow-up. In addition to being costly and time consuming for the
---------------------- Technical Services staff, it has also been a distraction from the main
duties.
---------------------- The Solution:
---------------------- Though this is a work-in-progress, it is Perstorp’s intention to
publish all of its current technical information -and possibly more
----------------------
-online, as a service to their customers.
---------------------- ●● Provides 24x7 access to critical product information to
customers around the world
----------------------
●● Mikael Hallhagen, former Manager of the Tech Services
---------------------- department, estimates that 90% of questions could be answered
with 40-50 FAQs. By posting them online, customers could
----------------------
find the information they need and “Perstorp could save a ton
---------------------- of time and money.”
●● Frees the Technical Service department from processing the
----------------------
information requests
---------------------- Conclusion
---------------------- John Ekström, Perstorp’s Sales Director, has been involved with the
Web initiative from the beginning. In his words, “Our overarching
---------------------- goal is to increase customer satisfaction.

e also recognise the opportunities for new business processes to raise
W Notes
our own internal efficiencies, enable us to make better decisions, and do
less firefighting.” “Superb service is our mantra,” says Mikael Hallhagen. ----------------------
Perstorp often finds that the high quality of their product and their excellent
service make up for pricing which is at times slightly higher than the ----------------------
competition -at times by as little as a penny. ----------------------
erstorp routinely benchmarks itself against operational leaders around the
P
----------------------
world, in various industries. Though the Perstorp name is quite well known,
there is a strong believe that the awareness level and reputation for quality ----------------------
must be continually and actively cultivated. Says Ekström, “Our objective
in moving now is to do something new, to be among the first. We have ----------------------
always been known for being innovative and creative, but we cannot stand
----------------------
still. We must prove our innovation, or the gloss fades” Stratyc’s solutions,
by fully integrating with Perstorp’s PRISM ERP system, enable Perstorp ----------------------
to share with its trading partners and employees information which has
previously been “trapped” inside of PRISM. Though these early phases of ----------------------
their project will certainly improve customer convenience and streamline
----------------------
internal operations, Perstorp’s future vision reaches farther. Perstorp plans
to explore with Stratyc ways to facilitate electronic invoicing, payment, ----------------------
shipment tracking, as well as creative ways to proactively service the
customer (i.e. programming the system to automatically send out product ----------------------
updates to customers as they are issued).
----------------------
----------------------
Fill in the blanks.
----------------------
1. The e-Store Front enables customers to easily find product, ________,
and place orders online. ----------------------
----------------------
Answers to Check your Progress ----------------------

1. Given the perceived black magic of CRM implementations, it takes
----------------------
careful planning and creativity to present a case to buy.
1. The e-Store Front enables customers to easily find product, get product ----------------------
information, and place orders online.
----------------------
----------------------

Notes
Suggested Reading
----------------------
---------------------- 2. Jaiswal, M.P. & Anjali Kaushik. e-CRM: Business & System Frontiers.
---------------------- 3. Rust, Roland T. and P.K. Kannan. e-Service-New Directions in Theory &
Practice.
----------------------
4. Sheth, Jagdish, Atul Parvatiyar. Handbook of Relationship Marketing.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Operational CRM
UNIT
7
Structure:
7.1 Introduction
7.2 Operational CRM
7.3 Holistic Customer View
7.4 Sales Force Automation
7.5 Goals of Operational CRM
Case Study
Summary
Key Words
Suggested Reading
Operational CRM 105

Notes
Objectives
----------------------
• Discuss the importance of customer interface
----------------------
• Differentiate between operational and analytical CRM
---------------------- • Describe sales force automation (SFA) as the most visible facet of
---------------------- operational CRM
----------------------
---------------------- 7.1 INTRODUCTION

---------------------- Customer Relationship Management has continued to thrive and is
reaching increased levels of maturity. The reasons behind this are many, but
---------------------- my favourite is quite simple: if your competitors have a better understanding
---------------------- of your customers and how they interact with you, they will attempt and likely
succeed in driving your customers away from you and toward their products or
---------------------- services.
---------------------- The commonly accepted subsets of CRM are:

●● Sales Force Automation
----------------------
●● Call Centre and other Types of Customer Interface Operations
----------------------
●● Purchase Recommendation Engines and Real-Time Content Customisation
---------------------- Engines
●● Marketing Segmentation, Campaign Operations, and Campaign
---------------------- Management
---------------------- The first two items above, sales force automation and customer interface
centers, are operational functions of a company. From a technology point of
---------------------- view, the system development and support of CRM applications should be
---------------------- closely coordinated, regardless of whether they are strictly operational or
strictly analytical. This is because in order to achieve a full view and control
---------------------- of all customer touch-points, all of these systems will need to be seamlessly
integrated, and perhaps even from the same vendor, using the same underlying
---------------------- technologies.
---------------------- Every customer-facing system is a CRM system, and it may be difficult
to draw a line while classifying applications as CRM or otherwise. While it
----------------------
may be simple to call a reservations application an operational CRM system,
---------------------- the line gets blurred for, say, an accounts receivables system. If the collection
department uses this system to contact customers, and conduct its customer-
---------------------- facing operations with it, then it is also an operational CRM system. On the
other hand, an account receivables system that feeds a billing system and a
----------------------
collection agency would not be. The first example is a direct customer touch-
---------------------- point, while the second example does not appear to be.

7.2 OPERATIONAL CRM Notes
CRM is a holistic approach to identify and increase the lifetime value of your ----------------------
existing and future customers. CRM is not a set of technologies, but a business
----------------------
philosophy recognising the importance of building your business around the
needs of your most valuable and high growth customers. This is achieved by ----------------------
aligning your people, processes and technology with the requirements of your
internal and external customers. ----------------------
Implementing Operational and Analytical CRM is achieved through the ----------------------
CRM delivery model encompassing business strategy, process and systems
analysis, design, build, delivery and support. ----------------------
Operational CRM applications are quite the opposite of analytical tools. ----------------------
Having originated for use by business users, CRM applications are designed to
be intuitive and user-friendly. ----------------------
The current market for CRM software represents a consolidation in this ----------------------
space; originally CRM applications existed as separate products for marketing,
sales force automation, customer call centres, and customer service. Since ----------------------
each of these applications shares the common trait of helping companies more ----------------------
effectively manage their customer facing processes, the first CRM suites to
consolidate these functions found great market success. By utilising customer ----------------------
information across marketing, sales and service, companies were able to
improve front-office operational effectiveness tremendously. ----------------------
An integrated data model was one of the primary benefits of this ----------------------
consolidation. This model not only allowed users to more effectively manage
----------------------
customer relationships across all phases of the customer life cycle, but also
provided users with the ability to get aggregate reporting on customers across ----------------------
an organisation.
----------------------
Reporting capabilities in CRM products continue to improve and have
recently started to incorporate some basic analysis and modeling functionality. ----------------------
However, analytical capabilities encompassed in CRM suites are largely
in the form of aggregate reporting (such as pipeline performance, channel ----------------------
effectiveness, customer satisfaction, and top selling products.)
----------------------
Operational CRM applications provide business users with comprehensive
aggregate reporting and analysis capabilities; however these capabilities should ----------------------
not be mistaken for predictive analytics. Organisations with operational CRM
----------------------
products still require sizeable analytic departments to support modelling needs.
----------------------

1. Operational CRM applications are quite the opposite of analytical tools. ----------------------
----------------------
Operational CRM 107

Notes
Activity 1
----------------------
---------------------- Prepare a list of areas where customer interfaces are possible in any
organisation. Visit a shopping mall / centre and prepare a report on each
---------------------- shop on the different customer interfaces you have come across.
----------------------
---------------------- 7.3 HOLISTIC CUSTOMER VIEW

---------------------- One problem that most companies have - especially with the proliferation
of customer channel touch points in the past decade - is that different parts of
----------------------
the organisation have different views of the same customer. For example, one
---------------------- customer may have a car lease, money market and checking accounts and CDs
with the same bank. However, because data on each of those customers and
---------------------- products is often stored on multiple, disintegrated systems, there is no single
view of the customer, and business users may not know just how valuable
----------------------
certain customers are to the organisation.
---------------------- On the customer side, users often don’t have a way to access information
about all of their interactions with a company via a single vehicle. They must
----------------------
call a toll-free number for order inquiries, e-mail customer service for detailed
---------------------- information or consult paper statements or invoices regarding account statuses.
Portals change this rag-tag picture into a smoothly interactive window that
---------------------- allows for direct, efficient interaction between users - including customers,
employees and supply-chain partners.
----------------------
Fig 7.1 represents a CRM technical architecture that features a Web portal as
---------------------- the gateway between customers, partners, employees and suppliers.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 7.1 : CRM Technical Architecture ----------------------
Some features that are essential in a first-class portal product include: ----------------------
●● Personalisation Services - Develop a user profile based on cached
clickstream information and filter content for each portal user based on ----------------------
rules stored in the profile (meta data). ----------------------
●● Secure Services - Enforces security rules of organisation for external and
internal users. ----------------------
●● Publishing Services - An interactive mechanism for users to document the ----------------------

location and meaning of business content.
----------------------
●● Access Services - Help users find and access portal content.
●● Subscription Services - Deliver business content on a regularly scheduled ----------------------
basis via e-mail, fax or other means. ----------------------
●● Download Center - Manages the transmission of business content and
messages for active subscribers. ----------------------
●● Workflow Services - Provide interaction with workflow products such as ----------------------
e-mail, voice mail, PDA, etc.
----------------------
●● Collaboration Services - Allow portal users to communicate with each
other - this includes features such as Web chats, instant messaging, etc. ----------------------
●● Registration Wizard - Facilitates the collection of user profile information.
----------------------
Operational CRM 109

Notes ●● Bulk Import Services - Allow subscribers to add bulk content such as
newsletters, software for distribution, etc.
---------------------- ●● Digital Dashboard - Allows users to consolidate personal team, corporate
---------------------- and external information. According to the Stanford, Connecticut-based
research and consulting firm, Gartner Inc., advanced portal products also
---------------------- have the following features.
---------------------- ●● Repository and Legacy Application Integration - to integrate enterprise
repositories and legacy applications.
---------------------- ●● Extended Search Capability - to search other repositories or even other
---------------------- search engines and return combined results set.
●● Extensive Offline Support - to allow PDA users to work offline and cache
---------------------- information for future connections.
---------------------- What can these dynamic portals contribute to the bottom line? Satisfied
customers. If customers have a pleasant experience using your Web site - if they
---------------------- can progress through the entire transaction life cycle without a hitch, they are
more likely to visit your site again. They are more likely to become “sticky”
----------------------
customers. These sticky customers can be of immense value to your business.
---------------------- According to a recent report in the Harvard Business Review, a five percent
increase in customer retention can increase profits by as much as an incredible
---------------------- 100 percent. It’s a simple equation. Satisfied customers equal loyal customers.
Loyal customers equal retained customers, and increased customer retention
----------------------
equals increased profits.
---------------------- However, portals are only one side of the CRM equation. For really robust
analysis capabilities, you need powerful analytical technologies. Perhaps the
----------------------
most powerful analytical technology in the market right now is data mining.
----------------------

---------------------- 1. Satisfied customers equal loyal customers.
----------------------
---------------------- Activity 2
----------------------
Prepare a wish list of your requirements as a student / customer using a
---------------------- web portal of any educational or training organisation.
----------------------
7.4 SALES FORCE AUTOMATION
----------------------
Sales Force Automation (SFA) is one of the most visible facets of CRM.
----------------------
SFA has been around for quite some time, and is typically the first foray a
---------------------- company makes into CRM on a formal (i.e. conscious) basis. It includes

software used by the sales force, which provides for relationship management Notes
during and after the sales cycle.
----------------------
At its very minimal, SFA is glorified contact management software. It is
unfortunate that traditionally it has served a purpose just as limited in scope ----------------------
to the average sales person using it. Where it has been able to provide value,
it is in its reporting capabilities to sales management. In other words, sales ----------------------
management has been able to track metrics related to their sales force, such as
----------------------
quotas, business development pipeline reports, utilisation of time, etc. It has
also served as a central repository for contacts, leads, and companies. If the ----------------------
above does not intrigue one too much, it shouldn’t surprise anyone. In fact, the
sales force has traditionally shared the same apathy towards SFA software. Why ----------------------
bother connecting to the company’s contact management software, or spending
----------------------
time synchronising your handheld PDA with the corporate system, when you
don’t get any value out of it. Thus, user acceptance - and continuous use-have ----------------------
been major defeating factors in SFA implementations.
----------------------
To succeed, SFA solutions should first and foremost strive to provide
maximum value to the end user - the sales person, not just management. In other ----------------------
words, the system should provide the sales person with maximum intelligence to
facilitate the sales cycle. In the following example, while viewing a traditional ----------------------
SFA object, the sales person is presented with a number of options: The sales
----------------------
person receives a reminder that he has an appointment with John Doe, CIO of
Acme Enterprises, in 2 hours. He opens the appointment, and is presented with ----------------------
the following options:
----------------------
●● Learn more about John Doe
●● Learn more about Acme Enterprises ----------------------
●● View past marketing campaigns that included Acme Enterprises ----------------------

●● View other leads for Acme Enterprises ----------------------
●● Recommend a Product
----------------------
●● View the latest headlines on Acme Enterprises.
----------------------
These are just some examples that illustrate the power of an SFA system
equipped with robust sales intelligence. Couple this with the convenience of ----------------------
today's technology which enables us to put all this power into a handheld, and
you will likely have an overwhelming user acceptance rate. An SFA system of ----------------------
this calibre will have the potential to make the difference whether a sales cycle ----------------------
will end with a success or not.
Call Centres and other Customer Interface Operations using technology ----------------------
to address the needs of Customer Interface Operations is important, especially ----------------------
for businesses receiving a high volume of customer calls, e-mails, and other
customer-facing interactions. The volume of these interactions (or, in IT ----------------------
terms, transactions) is especially pronounced with credit card companies, hotel
reservations centers, insurance claim centers, telemarketing operations, order ----------------------
entry centers, etc. These types of systems are very operational in nature. ----------------------
Operational CRM 111

Notes Here are some common characteristics of these applications:
●● All transactions happen in real-time
----------------------
●● Due to its high volume and underlying patterns, the data is highly normalised
---------------------- ●● Uptime must be close to 100% to sustain critical operations (i.e. reservations)
---------------------- ●● Backup and recovery must be robust with minimal loss of data
---------------------- ●● Reporting is often done in batch processes and as such is static and not
in real time. The above characteristics seem proper, given the objectives
---------------------- of such systems. What many companies are beginning to realise, though,
is that they can leverage this system to support other corporate functions.
---------------------- While it is true that this system has an operational task, as a customer
---------------------- touch-point, it can be used to:
●● Up-sell by recommending a relevant product or service the customer may
---------------------- benefit from
---------------------- ●● Identify customers at risk for defecting and offer them a "special deal"
●● Learn whether the customer disputing the bill is a top-tier spender or
----------------------
one that often asks for refunds before deciding whether to issue a billing
---------------------- credit.
Business Intelligence enables us to extend operational systems in
----------------------
such ways. To help accomplish the above three points, there are intelligent
---------------------- recommendation engines on the market today. There is a wealth of opportunity
to better manage customer contact operations, including predictive analytics
---------------------- for powerful, interactive, speed-of-thought analysis that would replace the one-
size-fits-all static books of reports.
----------------------
---------------------- 7.5 GOALS OF OPERATIONAL CRM

---------------------- The goal of operational CRM should be to "integrate people, processes
and technology using the customer's perspective and expectations as the key
---------------------- driver." In other words, it should deliver customer-centric business processes
---------------------- and operations.
The operational aspect of CRM is typically high profile because it cuts
----------------------
across so many organisational boundaries. It is also where most CRM initiatives
---------------------- fail.
Common reasons for failure include:
----------------------
●● Implementation costs, time frames and organisational commitment are
---------------------- underestimated
---------------------- ●● Political friction within the organisation stifles the sharing of customer
information
----------------------
●● Initiatives are driven by technology rather than by customer strategy and
---------------------- service process design
●● Tendency to push “work” to the customer
----------------------

●● No success measures and no accountability Notes
The bottom line is that state-of-the-art technology and solid analysis will
not solve the challenge of executing effectively across a range of customer ----------------------
contact points and organisational domains. ----------------------
How do you avoid these pitfalls? Here are a few suggestions:
----------------------
●● Don’t allow your CRM effort to fall victim to the impediments mentioned
in the preceding bullets. Most organisations know their own limits, so ----------------------
trust your judgment. If you don’t think your organisation is up to the
----------------------
challenge, then either bring in outside assistance or don’t start down the
CRM path. ----------------------
●● Establish visible top-down support from the most senior levels of the
----------------------
organisation.
●● Communicate your strategy copiously to foster buy-in among your people. ----------------------
Make them owners of the initiative and reward them when it succeeds.
----------------------
Another major trap that financial services organisations fall into in with
operational CRM is failing to recognise the difference between customer ----------------------
relationships and customer encounters. Most, if not all, financial services
organisations would argue they have relationships with their customers, when ----------------------
in fact many have only encounters. What’s the difference? A relationship is ----------------------
built on the principle that the customer will have interaction with the same
service provider each time and that both parties expect to continue to do ----------------------
business together. An encounter, by contrast, is based on the principle that
service providers and customers are interchangeable and that the customer has ----------------------
contact with whichever service provider is available. ----------------------
Stockbrokers, optometrists, insurance agents, bankers and even health-care
providers in managed care organisations are classic service relationship-based ----------------------
positions that are in some ways evolving toward encounter-based positions. ----------------------
As you invest time and resources into CRM initiatives, you must consider
this fundamental issue and realistically evolve your customer service strategy ----------------------
accordingly. A strategy focused on relationships with processes geared to
encounters is doomed to end in poor results and customer dissatisfaction. ----------------------
----------------------
1. The goals of operational CRM are it should deliver __________ and ----------------------
operations.
----------------------
----------------------
----------------------
----------------------
Operational CRM 113

Notes
Case Study
----------------------
Active data warehousing sweetens the pot for Harrah’s
----------------------
The woman standing at the slot machine is explaining to her husband why
---------------------- she wanted to come to her regular casino on her birthday, even though a new
---------------------- one has opened up in the vicinity. “You have to understand,” she tells him.
“They always take great care of me here. I really feel like they know me.”
---------------------- As if on cue, a smiling floor manager taps her on the shoulder and presents
---------------------- her with a birthday cake, candles already lit. She hasn’t informed the casino
that it’s her birthday and isn’t expecting any gifts or special treatment to help
---------------------- her celebrate. Even so, she’s delighted with this affectionate display from the
casino floor staff. Her husband grins at her after the rousing chorus of “Happy
---------------------- Birthday” finishes and the singers disperse. “Free cake?” he says. “Heck, I want
---------------------- to come here for my birthday.”
This isn’t a glimpse into the future or the dream of a business owner
---------------------- wondering how to increase the lifetime value of customers. This is reality,
---------------------- the result of the partnership between Harrah’s Entertainment and Teradata. It
provides a demonstration of the power of active data warehousing and its ability
---------------------- to redefine how businesses interact with their customers.
---------------------- Upping the ante
Harrah’s is, by anyone’s reckoning, an extremely successful business.
----------------------
Founded in 1937, the Las Vegas-based company is a top provider of casino
---------------------- entertainment. With more than 40 casinos worldwide and revenue in the billions,
Harrah’s knows how to make good business decisions. But that doesn’t mean
---------------------- the company doesn’t have room to grow.
---------------------- Sandeep Khera is Harrah’s director of operational customer relationship
management (CRM). “We’ve been doing analytical CRM for many years, and
---------------------- we use that to drive our closed-loop marketing cycle,” he says. “This principally
results in decision-science-based marketing interventions through direct mail,
----------------------
e-mail and outbound telemarketing channels. But these efforts tend to reach
---------------------- customers days or even weeks after their visit. Operational CRM allows us to
provide the same value and service but we can deliver it before the customer
---------------------- has even left the floor.”
---------------------- According to Khera, an operational CRM system could profoundly improve
Harrah’s business in three primary ways. “To begin with,” he says, “over the
---------------------- last several years, we’ve implemented technologies that have automated and
---------------------- reduced transaction times on the floor, but that means we’ve reduced the number
of customer-employee touch points, too.” Reducing touch points potentially
---------------------- creates a problem. “Fundamentally, casinos are about experiences and customer
service, so one challenge is finding ways to maintain and maximise the value of
---------------------- these interactions.”
----------------------

Beyond this, Khera explains, an operational CRM solution helps to satisfy Notes
marketing needs. As more and more gambling channels open to the public,
standing out from the competition becomes an increasingly onerous challenge. ----------------------
“An additional capability we wanted was to be able to pass on personal, timely
and customised marketing offers to our clientele, right on the floor,” he says. ----------------------
Finally, Khera points out that operational CRM can profoundly affect a ----------------------
customer’s experience: “We want to perpetually create the feeling that luck is
----------------------
pervasive across the floor. We want our guests to feel like they’re in a lucky
environment.” Luck, of course, is outside the human ability to control, but the ----------------------
perception of luck is not. Hitting the right person at the right time with the right
message, particularly when the message is delivered via transparent triggers, ----------------------
creates an environment conducive to fun-the kind of place where people like to
----------------------
gamble.
Seeing and raising ----------------------
The relevance of active data warehousing to a company like Harrah’s ----------------------
is self-evident. “We’ve actually been using Teradata Database technology
in conjunction with custom development for some time,” says Sam Dillard, ----------------------
corporate director for enterprise application support at Harrah’s. “We’ve
----------------------
used it to extend our own customer relationship management aspects into the
environment of the casino.” ----------------------
In other words, Harrah’s was already well ahead of the curve in terms ----------------------
of collecting and acting on valuable client data points, but the marketing
and technology team at Harrah’s took it one step further by asking the right ----------------------
questions: How could they better use the data? Could they turn the slot floor
into a communications channel to their customers, approaching them with a ----------------------
message that would possibly improve their experience? ----------------------
Without an active data warehousing solution, Harrah’s approach to floor
service was limited to an ad hoc basis, and wasn’t always as timely as required. ----------------------
“We had programs and systems, and customer service points were certainly ----------------------
being taken advantage of,” Dillard says. “Specific preferences for a given
customer were being used to create great customer service moments, but it ----------------------
really depended upon the initiative of any given employee to use the tools they
had. Also, once a customer left the casino, there was an undesired lag before the ----------------------
customer was reached with our message or offer.” Typically, the offers had to ----------------------
be passed through marketing and sent out via surface mail, a process that could
take weeks. The Harrah’s team knew they could improve on that. ----------------------
Harrah’s leveraged their relationship with Teradata to help make their ----------------------
vision a reality. “Harrah’s has a strong culture,” says Dillard. “We’ve developed
good partnerships between marketing and the information technology group ----------------------
over the years. And we had experience with Teradata and knew they could help
us deliver some of the programs we wanted. ----------------------
“It’s been our practice with the enterprise data warehouse to try something ----------------------
in a small way, allow the business the opportunity to examine the data and see if
----------------------
Operational CRM 115

Notes there is a business case for extending that technology and implementing it more
robustly,” Dillard notes. “That’s exactly what we did with this project.”
----------------------
House advantage
---------------------- The team at Harrah’s asked themselves how they could meaningfully
---------------------- intervene with a customer while he or she was in-house, and what data they
would need. They realised the scenario required real-time information flowing
---------------------- off of the casino floor, including things like the machine at which the customer
was sitting, the length of time they’d been playing and even their historical
----------------------
relationship with the casino.
---------------------- “We can use active data warehousing to answer these questions,” Dillard
---------------------- explains. “We already use Teradata for similar things. We use an adaptor they
provide to reach into our database to look up relevant customer history so we
---------------------- can act on it immediately. We want to understand how long someone’s been a
guest; we want to know whether or not they’re currently staying in our hotel,
----------------------
what their preferences are, et cetera. Then we pull this information back into
---------------------- our system to make a determination as to whether or not that customer should
be eligible for an offer and, if so, which one.”
----------------------
With Teradata’s help, Harrah’s has been able to provide much more
---------------------- personalised, yet systematic, floor service for its patrons. Examples of what
the casino has been able to accomplish include the ability to recognise first-
----------------------
time customers and to provide them with services and experiences designed
---------------------- specifically for new visitors. Another interesting capability is recognising
customers who have been away from the casino for an extended period of time.
---------------------- When the active data warehouse alerts staff of such a return visitor, Harrah’s
---------------------- provides a special “welcome back” interaction designed to make the customers
frequent the casino more regularly in the future.
----------------------
Read ‘em and weep: full house
---------------------- Another important program made possible through active data warehousing
is Harrah’s Player Contact System (PCS). This program is central to managing
----------------------
the relationship with those customers likely to be the most profitable for the
---------------------- casino.
---------------------- Explains Dillard, “For some time, we’ve had employees who are VIP
hosts. It’s their responsibility to cultivate an ongoing personal relationship with
---------------------- our best customers and work with them to maintain their interest in coming to
our properties.”
----------------------
Historically, those hosts were left to their own devices to drive VIP
---------------------- revenue, and they used everything from little black books to sales databases as
---------------------- their tools. Harrah’s had no way of centrally managing how and when a VIP
was contacted or by whom, or documenting the interaction. They also had a
---------------------- data/relationship loss risk. The relationship between the host and VIP is, by its
very nature, extremely personal. If a host left the organisation, a lot of these
----------------------
relationships-and information about these relationships-would go with them.
Harrah’s clearly needed a capability that would allow them, as an enterprise, to Notes
maintain this trove of guest data.
----------------------
As if that weren’t enough, just organising contacts can be very challenging.
“Historically, there was no great way to quantify which VIPs to spend the most ----------------------
time on,” Dillard continues. “What we’re doing now is using the analytical data
we collect to prioritise the contacts for our VIP hosts. This helps ensure they ----------------------
are interacting with the customers who have the greatest revenue potential. We ----------------------
need to make sure we’re focusing on the right people, our best relationships,
instead of those who just call most frequently.” ----------------------
Taking it to the bank ----------------------
Dillard and Khera agree that Harrah’s active data warehousing program ----------------------
is a success. In just the fourth quarter of last year, Harrah’s initiated more than
14,000 proactive customer interactions, and has seen better service scores in ----------------------
customer loyalty. Using the PCS, VIP growth over each of the last three years
----------------------
has been upward of 20%. Harrah’s is also in the middle of designing and piloting
an off-site disaster-recovery system, using Teradata’s dual-active technology to ----------------------
ensure that these critical systems don’t go down, even temporarily. As Dillard
notes, “We’re using the Player Contact System as the launch project. We’ve ----------------------
already completed several milestones, and assuming this project is successful, ----------------------
we’ll no doubt continue to protect other operational CRM systems the same
way.” ----------------------
By using active data warehousing to manage relationships with customers- ----------------------
whether new patrons or long-time VIPs-, Harrah’s has been able to maximise
revenues while enhancing the casino experience. The lessons they’ve learned ----------------------
from their launch programs will allow them to branch out to achieve even better ----------------------
results in the future and maintain their market leadership.
----------------------
Ultimately, the success of these projects rests on good logic and partnerships.
As Dillard says, “We got smarter faster and we knew that what we wanted ----------------------
to tackle next was designing the operational CRM application on the IT side.
Working with strong teams internally, and with the help of Teradata, we’ve been ----------------------
able to really make this work on a large scale. We have been able to stay at the ----------------------
top of the curve.”
As you might guess, Harrah’s loves gambling-just not when it comes to ----------------------
managing their relationships with their customers. ----------------------
(Source: Harrah’s Entertainment)
----------------------
Exercise:
----------------------
What are the important lessons an Indian organisation can learn from this
case? ----------------------
----------------------
----------------------
Operational CRM 117

Notes Summary
---------------------- ●● Many organisations have invested huge sums of money in operational
---------------------- CRM systems for sales, marketing, and call centers that present great
opportunities for efficiency. However, they only go so far in delivering
---------------------- ROI. For example, operational CRM for a call center can empower
agents with ready access to basic customer information (name, address,
---------------------- recent purchases), improve call-handling times, and help track call center
---------------------- productivity. Yet, such an operational system is basically helpless to
provide the agent with real-time intelligence to improve and customise an
---------------------- interaction. Adding a layer of analytics to these operational, transaction-
focused systems can provide relevant information on what to cross-sell,
---------------------- whom to retain, and how to service customers. It is this type of intelligence
---------------------- that powers the increased ROI of operational systems. While operational
CRM may facilitate faster and more efficient customer interactions, it
---------------------- does not provide the insights that would enhance the quality of those
interactions.
----------------------
●● And in today's economy simply improving transaction processing is
---------------------- not enough. Customers are constantly evaluating the organisations
they do business with, and weighing the alternatives. They expect
---------------------- individualised attention and to be treated with consistency, regardless of
---------------------- the communication channel. Until recently the business strategy of many
organisations was product-centric, focusing mainly on how to sell more
---------------------- products and how to make the product line more profitable. Today, some
of the most successful organisations are moving away from this paradigm
---------------------- to be customer-centric and look to leverage data across all product lines
---------------------- and channels to increase the profitability of the total customer relationship.
●● Transforming to a true customer-centric organisation requires a channel-
---------------------- agnostic approach, compelling the company to think about how to
---------------------- interact more effectively and consistently with the customer across all
relevant channels. Organisations must access, consolidate, and analyse
---------------------- data about individual transactions from all touch points in order to create
effective intelligence about service, retention, or cross-sell opportunities.
---------------------- Subsequent analysis provides knowledge about who is valuable or
---------------------- potentially valuable, how individual customers should be serviced and
who should be targeted for what cross sell or retention opportunity.
---------------------- Creating this intelligence is not the final step. It also requires total channel
alignment for delivery of consistent intelligence, at the right time to
---------------------- enhance all customer interactions regardless of touch point.
---------------------- ●● Implemented effectively, analytical CRM can help organisations achieve
maximum ROI by increasing revenue and decreasing costs. With more
---------------------- accurate insights into customer behaviours and preferences, marketers
---------------------- can more effectively attract and retain customers, increase the lifetime
value of those customers, and use marketing dollars where they are most
---------------------- likely to produce optimal results. Leveraging this business intelligence

through a company's operational CRM systems will ultimately facilitate Notes
better business decisions.
----------------------
Keywords
----------------------
• Data: It is just a bundle of facts and figures. ----------------------
• Information: Is created using data, by giving it a meaning by relational
connections. ----------------------
• Knowledge: The learning created out of the meaningful information, ----------------------

which may be put to some use or application.
----------------------
• Primary data: The data gathered for a specific purpose or for a specific
research project. ----------------------
• Secondary data: The data collected for some other purpose, which ----------------------
already exists.
----------------------
• Internal data: Data that is available within the organisation.
• External data: The data available outside your organisation mostly in ----------------------
published and printed form. ----------------------
• Data mining: Derives its name from the similarities between searching
for valuable information in a large database and mining a mountain for a ----------------------
vein of valuable ore. ----------------------
• Data warehouse (DW): Comprises a computing system used to store
----------------------
information regarding an organisation’s activities in database.
----------------------
----------------------
1. Explain the difference between operational and analytical CRM.
----------------------
2. Discuss the features that are essential in a first-class portal product.
----------------------
3. What are the common reasons for a CRM failure?
4. Discuss how sales force automation can act as a customer touch-point. ----------------------
5. Discuss and explain goals of Operational CRM. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Operational CRM 119

1. True
----------------------
Check your progress 2
----------------------
---------------------- 1. True
1. The goals of operational CRM are it should deliver customer-centric
----------------------
business processes and operations.
----------------------
---------------------- 1. Dyché, Jill. 2002. The CRM Handbook: A Business Guide to Customer
Relationship Management. Addison-Wesley.
----------------------
2. Finnegan, David and Leslie Willcocks. 2007. Implementing CRM: From
---------------------- Technology to Knowledge. West Sussex: John Wiley & Sons.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Analytical CRM
UNIT
8
Structure:
8.1 Introduction
8.2 Understanding Analytical CRM
8.3 Architecture of Analytical CRM
8.4 Value of Analytical CRM
8.5 Scope of Analytical CRM
8.6 Customer-Centric Enterprise Management
Case Study
Summary
Key Words
Suggested Reading
Analytical CRM 121

Notes
Objectives
----------------------
• Explain the concept of analytical CRM
----------------------
• Describe the purpose and role of analytical CRM in organisations
---------------------- • Convince decision makers to try and understand customer behaviour
----------------------
---------------------- 8.1 INTRODUCTION

---------------------- Analytical CRM is both a technology and a concept. As part of the wider business
intelligence market, it is a complex area to understand. This unit simplifies the
---------------------- technologies, uses and user groups found in the analytical CRM market.
---------------------- Reading this unit will help you to:
---------------------- ●● Understand the indicators displayed by organisations likely to adopt
advanced analytical CRM solutions.
----------------------
●● Learn about the market opportunities by geography, vertical and
---------------------- technology.
●● Develop new strategies to encompass the changes seen and expected in
----------------------
the analytical CRM space.
----------------------
8.2 UNDERSTANDING ANALYTICAL CRM
----------------------
The goal of analytical CRM should be to “develop insight into your
---------------------- customers’ needs.” Unfortunately, analytical CRM is often implemented under
---------------------- the premise of “helping you determine what other products and services you can
sell to your customers.” The problem with the latter interpretation is that it is
---------------------- based on building revenue instead of driving customer satisfaction. One of the
ROI promises of CRM is that it will deliver measurable revenue enhancements.
---------------------- Very few CRM initiatives have delivered on this promise.
---------------------- If you want to build revenue by being astute with the findings of analytical
CRM, approach it as opportunity management. This will separate the notion
---------------------- that you are somehow “taking care of your customer” by selling them additional
---------------------- products and services.
On the other hand, if you follow the basic premise of CRM, which is to
----------------------
take good care of your customers, the capabilities of analytical CRM will enable
---------------------- you to find out what makes your customers happy. Then you can enhance or
change your service delivery model accordingly. You can also influence product
---------------------- development, pricing, agent support and even such things as geographical
presence. Soon “cross selling” becomes “cross buying” and in the end both
----------------------
parties benefit from a long-term relationship.
----------------------

“Deep customer relationships represent a continuing stream of income Notes
and a critical platform for new growth. They also represent a powerful and
defensible barrier to entry.” ----------------------
(Jay Curry, The Customer Marketing Method, The Free Press, 2000) ----------------------
A customer become savvier shopper, they will constitute to blend their
----------------------
purchasing and service habits. The efficient and automated management of
customer interactions is only part of the story. Companies also need to analyse ----------------------
the performance of those relationships, uncover trends in customer behavior,
and understand the true value of their customers to the company. ----------------------
Analysing customer relationships from a lifetime perspective is critical for ----------------------
success. Fig. 8.1 shows the development of your customer base from this point
of view. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.1 ----------------------
The crux of the business problem resides in achieving the following: ----------------------
●● Widening the relationship with customers by acquiring new and profitable ----------------------
customers
●● Lengthening the relationship with your top customers by targeting existing ----------------------
resources and strengthening the foundation of those relationships ----------------------
●● Deepening the relationship with customers by transforming minor
customers into highly profitable ones. An additional step is increasing your ----------------------
share of sales revenue (and hence your share of wallet), or recognising ----------------------
cross-selling or up-selling opportunities with current customers and
making the right offers. ----------------------
Achieving these tasks involves extensively analysing your customer data. ----------------------
This type of analysis is one of the major purposes of Analytical CRM.
----------------------
Analytical CRM 123

Notes To widen your customer relationships, you need to be able to answer
some questions:
----------------------
●● What kind of customers would you like to acquire?
---------------------- ●● What kind of customers will drive your growth in future?
---------------------- ●● Which new customers are likely to be interested in your products?
●● To lengthen your customer relationships, you need to answer these
---------------------- questions:
---------------------- ●● Which customers in particular do you want to keep?
●● Which customers will drive most of your profits?
----------------------
●● Which customers might switch to your competitors and why?
----------------------
●● Which customers are dissatisfied with your services and products?
---------------------- Intensifying and deepening your customer relationships also require you
to answer essential questions, such as:
----------------------
●● With which customers can you increase the share of wallet?
---------------------- ●● Which products and services interest a particular customer?
---------------------- ●● Which products are typically bought together? Which cross selling
opportunities should you consider?
---------------------- The changed market situation therefore means that knowledge about
---------------------- the value of a customer or a customer segment is decisive for your company’s
success. Once you have this knowledge, you can use it to allocate resources more
---------------------- efficiently to the most desirable customers and to reengineer the unprofitable
ones. Your customer information must be kept consistent throughout, and it
---------------------- must be available across all the touch points where your company interacts with
---------------------- your customers. Decisions about how to develop a relationship with a particular
customer should be reflected in all interactions and planning with customers.
---------------------- In short
---------------------- Analytical CRM provides executives and managers the ability to measure
the performance of marketing, sales and service departments and gives business
----------------------
analysts tools to enhance their department’s operational effectiveness.
---------------------- Analytical CRM helps an organisation perform better by enabling:
---------------------- ●● Executives to make decisions based on more accurate and relevant
information about their company
----------------------
●● Department heads to deliver better results using up-to-date comparative
---------------------- metrics of their department
---------------------- ●● Managers to manage more effectively through detailed reporting of

ongoing initiatives
---------------------- Implementing an Analytical CRM solution empowers the entire customer
facing organisation to manage their customer relationships more effectively.
----------------------
Analytical CRM evolved from the convergence of two disparate solutions,
---------------------- analytics (also known as decision support) and CRM (also known as front office

applications). These two solutions produce a significant return on investment Notes
for those who implement them correctly.
----------------------

1. The goal of analytical CRM should be to develop insight into your ----------------------
customers’ needs.
----------------------
8.3 ARCHITECTURE OF ANALYTICAL CRM ----------------------
To manage your interactions and processes with your customers most ----------------------
efficiently, you need to apply a consistent metric that helps you improve the
value of your customer relationships. Capturing your learning on a continuous ----------------------
basis, you gain a deeper understanding of your customers and empower your ----------------------
employees to optimise customer relationships across all channels and points of
interaction with your customers. ----------------------
Analytical CRM is a consistent suite of analytical applications that help ----------------------
you measure, predict, and optimise customer relationships.
----------------------
To address these business issues, analytical CRM includes a sound analytical
infrastructure that allows you to gather all the relevant information about your ----------------------
customers and organise it consistently. You can thereby achieve a 360-degree
view of your customers, which then forms the basis for wide-ranging analytical ----------------------
methods that help you measure and build truly interactive, mutually beneficial,
----------------------
and profitable relationships.
Fig 8.2 illustrates the analytical applications that constitute the suite of ----------------------
analytical CRM. They all play an essential role in gaining greater insights
----------------------
about customers and customer relationships and in applying this knowledge
consistently during all customer interactions. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.2: The Business Architecture of Analytical CRM ----------------------
Analytical CRM 125

Notes A distinction needs to be made between the different types of analytical
applications. Some applications focus on customers and yield a deeper
---------------------- understanding of customers’ needs, behaviour, and value. Applications for
marketing, sales, and service analytics provide the information you need to
---------------------- better understand, plan, and valuate the effectiveness of your life cycle patterns
---------------------- (engage, transact, fulfill, service). Channel analytics provides you with answers
for channel-specific business questions, such as Web analytics, analytics for
---------------------- customer interaction center, or sales funnel analysis.
---------------------- Mastering the following is the key for a successful analytical CRM solution:
●● Capturing all relevant customer information from different sources,
----------------------
channels, and touch points and then integrating it into a customer
---------------------- knowledge base with a 360° view
●● Applying a comprehensive set of analytical methods to measure and
----------------------
optimise customer relationships and answering all relevant business
---------------------- questions
●● Deploying analytical results to improve the CRM processes, your
----------------------
interactions with customers, and your business planning with customers
---------------------- ●● Integrating customer value with shareholder value and your strategic
enterprise management.
----------------------
The following sections discuss how analytical CRM helps you solve these
---------------------- business issues.
----------------------
8.4 VALUE OF ANALYTICAL CRM
----------------------
What does your company stand to gain by implementing analytical CRM?
---------------------- First, analytical CRM can make a considerable contribution toward providing
the answers to numerous business management questions and thereby support
---------------------- a whole range of business decisions. The analytical capabilities allow you to
---------------------- identify new trends in the markets most important to your company and then to
channel your investments in these markets.
---------------------- They also help you gain further insights into customer needs and preferences by
---------------------- identifying patterns to:
●● Acquire new profitable customers by cloning your best customers
----------------------
●● Improve your relationships with existing customers by addressing their
---------------------- individual needs
---------------------- ●● Optimise cross-selling and up-selling opportunities
●● Improve customer loyalty and reduce customers’ propensity to churn.
---------------------- Analytical CRM also enables you to gear all the processes of your
---------------------- company toward customer-centricity and thereby:
●● Aim your resources at high-value customers and build more profitable
---------------------- customer relationships by:
---------------------- ●● Targeting your investments in marketing, sales, and service

●● Directing your attention and services more effectively toward such Notes
customers
●● Forcing internal efficiencies and process improvements ----------------------
●● Automate and personalise customer interactions based on sound customer ----------------------
knowledge
----------------------
●● Integrate your enterprise strategy with your strategies in marketing, sales
and service. ----------------------
As analysts, such as the Gartner Group, have pointed out, some companies
----------------------
can increase profits by as much as 100% by retaining an additional 5% of their
customers. By some estimates, it costs four to seven times more to replace a ----------------------
customer than it does to keep one.
----------------------
8.5 SCOPE OF ANALYTICAL CRM ----------------------
Capturing all relevant customer information: ----------------------
Building an integrated customer knowledge base represents a formidable
----------------------
challenge. In the past, information was distributed across the entire company
and its different departments in silos. This information had to be harmonised ----------------------
from both the business and the technical point of view.
----------------------
Customers can interact with your company in a number of new ways, and
this generates a whole new range of data sources for you. Therefore, analytical ----------------------
solutions must do more than provide a reliable platform for constructing your
customer knowledge base. It is equally decisive that these solutions flexibly ----------------------
and consistently integrate all data from the broad variety of interactions with ----------------------
your customers across all touch points, rather than basing your assessment of
customers on individual channels. ----------------------
Consequently, you benefit from a consolidated view, which should ----------------------
include, for example:
●● Your customers’ response to your marketing campaigns ----------------------
●● Your customers’ priorities in your Web shop ----------------------

●● The requests for information addressed to your customer interaction ----------------------
center. You should also incorporate external sources of information, such
as: ----------------------
●● Market data on your customers ----------------------
●● Enterprise data on competitors dealing with your customers
----------------------
●● Web surveys to supplement your customer information with details about
customer satisfaction and customer preferences ----------------------
●● Data from communities or clubs with a common interest.
----------------------
Finally, don’t forget integration with your back office, where billing and
shipment data together with your customer-related activities are valuated from ----------------------
a financial perspective and consolidated into a coherent picture of financial
----------------------
success and customer profitability.
Analytical CRM 127

Notes Successful analytical CRM solutions integrate customer data and,
ultimately, deliver this data smoothly in a broad range of heterogeneous analytical
---------------------- applications. Such a customer knowledge base generates new insights for a
company with every new customer interaction, offering invaluable competitive
---------------------- advantages.
---------------------- Measuring and optimising customer relationships:
---------------------- Performing a sound analysis of your existing customers is often the best
way to develop a customer-oriented strategy for marketing, sales, and service.
---------------------- The reason for this is found in a fundamental marketing maxim: the more you
know about your customers, the more easily you can provide the goods and
----------------------
services they’re looking for. Successful companies anticipate customer needs
---------------------- and, ideally, shape those needs.
Informed investments in your portfolio of customer relationships cannot
----------------------
be made without knowledge about:
---------------------- ●● Your customers’ behaviour (such as preferences, priorities, and activities)
---------------------- ●● Your customers’ value in terms of customer profitability, customer lifetime
value, and potential
----------------------
●● A clear understanding of the composition of your customer portfolio and
---------------------- how you can optimise it.
Deploying analytical results to improve planning and customer interactions:
----------------------
Many CRM initiatives automate marketing, sales, and service through
---------------------- front-office suites. Operational CRM is indispensable because it empowers your
sales staff to efficiently serve your customers and synchronises your customer
----------------------
interactions across all channels. To ensure that these efforts attain the desired
---------------------- result, you must integrate operational and analytical CRM.
---------------------- The purpose of analytical CRM extends well beyond obtaining analytical
results. The knowledge gained about customers and customer relationships must
---------------------- be made seamlessly available to the relevant employees and systems as well as
accessible during all appropriate processes. To empower your employees to
---------------------- improve and optimise the processes in marketing, sales, and service, a process
---------------------- flow like that shown in Fig 8.3 must be in place. A deep understanding of your
customers will only be of value to your company if you are in a position to
---------------------- apply these insights effectively in your day-to-day business. This requires you
to deploy your analytical results with two main aims: to optimise planning and
---------------------- forecasting and to optimise the performance of customer interactions.
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.3 ----------------------
Only those companies that effectively implement their customer
----------------------
knowledge and constantly build upon this knowledge using a feedback loop
will be the leading enterprises of tomorrow. ----------------------
----------------------
----------------------
1. Successful analytical CRM solutions _____________ and ultimately,
----------------------
_______ this data smoothly in a broad range of heterogeneous
analytical applications. ----------------------
----------------------
8.6 CUSTOMER-CENTRIC ENTERPRISE MANAGEMENT
----------------------
“Companies do not win in a highly competitive market just by focusing
on market share and revenue growth. A great business design combines superb ----------------------
knowledge about customers and profit together with great imagination.” (A.J. ----------------------
Slywotzky and D.J. Morrison, The Profit Zone, Random House 1998)
----------------------
The intrinsic link between customer value and shareholder value is borne
out by the fact that a company’s market value depends largely on the value ----------------------
of its customer base. Companies must develop a new vision of how they will
acquire and retain customers in hyper-competitive markets. Every organisation ----------------------
must learn to successfully implement customer-centric strategies and translate
----------------------
its visions into actions without delay. The Balanced Scorecard, developed
by Robert Kaplan and David Norton, is a methodology for translating an ----------------------
organisation’s strategy into terms that can be understood, communicated, and
acted upon. Once a Balanced Scorecard has been set up to describe strategy, ----------------------
it serves as the organising framework for the management system. Because
----------------------
customer-related measures like customer satisfaction and customer lifetime
Analytical CRM 129

Notes value are important drivers of future performance, this kind of measure plays a
significant role in today’s strategy implementation.
----------------------
To implement a coordinated and consistent approach toward translating
---------------------- company targets into concrete marketing, sales, and service strategies and,
ultimately, operational objectives, the following steps are supported by modern
---------------------- software solutions:
---------------------- ●● Gap Analysis and Scenario Planning
●● Formulating transparent strategies
----------------------
●● Communicating the strategy within the entire enterprise
---------------------- ●● Coordinating the enterprise strategy with the goals of the employees
---------------------- ●● Linking objectives with the annual budget
---------------------- ●● Identifying and coordinating strategic initiatives
●● Conducting regular performance reviews with feedback and adjusting
---------------------- strategies where necessary.
---------------------- The implementation of a strategic management system combined with
analytical functions and key figures from analytical CRM is a formidable
---------------------- approach to synchronise your business management with your strategies.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 8.4: Integrating Analytical CRM with Business Performance

Management
----------------------
To withstand the high pressure in your markets, your analytical CRM
---------------------- solution has to be closely integrated with business performance management.
This applies to the numerous key performance indicators from analytical CRM,
---------------------- which support a global assessment of the business and customer situation and
---------------------- of the achievement of your strategic goals. Different plans in marketing, sales,
and service are also consolidated into a common planning platform of business
---------------------- planning, the main pre-requisite for enterprise management in dynamic markets.
---------------------- The Holistic Approach: Seven Steps to Profitable Relationships

By now it should be clear that analytical CRM is not merely a collection
----------------------
of CRM-related analyses. It is a systematic approach to help you measure
---------------------- and assess customer relationships and develop them into mutually profitable

and beneficial relationships in day-to-day business. This is best illustrated by Notes
considering the dependencies in following figure.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.5: From Customer-Centricity to Profitable Growth
The cause-and-effect chain in Fig 8.5 shows that customer relationship ----------------------
management is about to embark into a new era of analytical applications
----------------------
whose purpose extends far beyond that of reporting. These applications help
you understand the depicted relationships between cause and effect and - more ----------------------
important - shape them.
----------------------
For example, customer satisfaction influences share of wallet and the
cross-selling opportunities, and, therefore, on the revenue growth that can be ----------------------
achieved from a particular customer segment. Analytical CRM is not restricted
to simply making these correlations transparent by producing key figures or ----------------------
data mining results. It provides employees with the right insights and supplies ----------------------
business processes with the necessary information so that the knowledge your
company has gained generates sustainable profits clearly affecting your bottom ----------------------
line.
----------------------
Assessing these insights lays the foundations for CRM that includes the
following aspects: ----------------------
●● Taking the analyses into account during customer-oriented planning ----------------------
●● Empowering your employees with consistent and accurate customer
information ----------------------
●● Formulating the analytical results so that they can be applied to optimise ----------------------
the relevant marketing, sales, and service processes and to drive intelligent
interactions with your customers ----------------------
●● Balancing customer value and shareholder value by integrating your ----------------------
plans in marketing, sales, and service with strategic plans
----------------------
----------------------
----------------------
----------------------
Analytical CRM 131

Notes Fig. 8.6 summarises the fundamental steps in analytical CRM.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig 8.6: Seven Steps to Profitable Customer Relationships
----------------------
----------------------

1. Once a Balanced Scorecard has been set up to describe strategy, it
----------------------
serves as the ___________ for the management system.
----------------------
----------------------
Case Study
----------------------
Union Bank of Norway…
----------------------
In the early 1990s, Union Bank of Norway, Norway’s largest savings
---------------------- bank, with over a million residential and commercial customers, realised it was
---------------------- losing touch with its customers. It needed to act fast - and this meant more than
just implementing customer relationship management. It meant changing the
---------------------- way 3000 bank employees did their jobs.
---------------------- It’s a scary thing when you realise you don’t know what your customer
want any more. Especially when your business is growing and you have managed
---------------------- to avoid the substantial losses of your European competitors in a market that, in
the early 1990’s, was anything but stable.
----------------------
The Union Bank of Norway had managed to escape the debilitating losses
---------------------- sustained by some of its competitors was great news. The bank had succeeded
in providing more automated ways for its customers to perform their banking.
---------------------- This automation in turn to lower costs and help the bank limit sum of the losses
---------------------- other banks incurred.

As customers adopted this automation, starting with automated teller Notes
machines, but gradually encompassing the telephone and then web based
technologies, they grew less dependent on their local Union Bank of Norway ----------------------
branches for executing their transactions. This was good news: The bank had
begun driving its customers to use lower-cost channels. And yet, as customers ----------------------
refrained from in-branch banking, the in-branch staff was also loosing the ----------------------
opportunity for customer dialog. No one knew what was on customer’s minds
and what customers wanted. ----------------------
What they did … ----------------------
One of the big problems was all different systems that contained customer
----------------------
data. Most of this information was dispersed across multiple production
systems. To obtain basic information on a customer, the bank needed to find, ----------------------
gather, and consolidate information from all these systems - a process that could
take days. One bank executive described the network of disconnected data as ----------------------
“an information labyrinth”.
----------------------
Official at the bank reasoned that to obtain - and more important, use-
pertinent customer information, the bank would need a complete view of its ----------------------
customers across the various systems that contained the data. Indeed, the bank
----------------------
realised this view extended across sales channels, customer demographics, and
the bank’s various products as well. ----------------------
If the bank could track customer behaviours, executives realised they’d ----------------------
have a better shot at understanding and predicting future behaviours and
customer preferences. This new information could drive cross selling and targets ----------------------
- marketing initiatives that promised to boost revenues and further mitigate
costs. Union Bank of Norway embark on the acquisition of a data ware house ----------------------
to consolidate it disparate customer data and to provide the bank’s business ----------------------
people with a centralised analysis platform on which to determine who their
customers were, what they were interested in, and what they were likely to buy. ----------------------
In addition to eliminating the costly, time-consuming, and pervasive practice of
data gathering, date warehouse would provide the so-called 360 - degree view ----------------------
of the customer base that would allow the bank to get to know its customers. ----------------------
Kari Opdal, Head of CRM for Union Bank of Norway, says the banks data
warehouse has become “the heart of our organisation”. In addition to aiding ----------------------
marketing functions, the data warehouse as made date available to cross-section ----------------------
of the banks organisation, from finance to accounting to auditing. “At first, only
a few people were interested in using the data warehouse” Opdal admits, “but ----------------------
now nearly 3000 people have access”. Most of the business users use the data
to perform sales and financial reporting as well as customer portfolio analysis. ----------------------
But beyond the daily analysis, Union Bank of Norway can directly relate its ----------------------
ability to react more quickly to market opportunities with customer information
to an increase in market share. For instance, Opdal and their CRM team launched ----------------------
a customer loyalty program focusing on the banks most profitable customers. ----------------------
Customers provide personal information through a permission- based marketing
campaign. The bank then uses this information to determine the optimal type ----------------------
Analytical CRM 133

Notes of communication it should subsequently have with the customer. Overall, this
program alone has resulted in a mind-boggling 70- percent response rate from
---------------------- customers whom the bank has obviously engaged in a dialog.
---------------------- “Our customers were saying they were happy with our offering,” Opdal
explains,” but they didn’t feel that we had been interacting with them on a one to
---------------------- one basis.” Union Bank of Norway added CRM functionality to data warehouse
infrastructure, enabling it to supplement it classical marketing programs with
----------------------
event-based marketing and optimise it customer communications based on
---------------------- relevant and timely occurrences through all its distribution channels. Customer
response rates have reached 60 percent.
----------------------
The bank has also used its newly robust customer data to aid in channel
---------------------- optimisation. For instance, customer who weren’t using the bill paying service
best suited to them would be told via customised promotion, how much money
---------------------- they could save by switching to the best payment service. Not only does this
help the bank cut down on more costly services; it also instills the perception
----------------------
that the bank is acting as the customers advocate.
---------------------- The challenges…
---------------------- Having begun the process of building a data warehouse back in 1995, Union
Bank of Norway has witnessed it evolution, in terms of both the data and the
---------------------- applications that provide business users with critical information. Because the
---------------------- bank took a requirements-driven approach to CRM, development has proved to
be relatively problem-free
---------------------- The challenge was in building the organisation around the data ware
---------------------- house. Not having had a centralised location for key corporate data in the
past, many of the skills required to develop and support the data subject areas,
---------------------- data base, and applications were new to the bank. Job roles such as database
administrator, application designer, data modular, and other unique to a data-
---------------------- centric organisation had to become institutionalised to support the banks new
---------------------- found business intelligence environment.
As the data and applications that helped the bank manage its customer
---------------------- relationship continue to grow and evolve, the other areas of the bank have
---------------------- taken notice. More users have requested access, and more systems have been
integrated to ensure the “single version of the truth” about customers. This has
---------------------- meant continuing growth of the development and support staff for customer
data and its usage.
----------------------
Good advice…
----------------------
Kari Opdal is unequivocal in her brief that the CRM is more of a serious
---------------------- of behaviours than it is an actual project. “We don’t actually use the term
internally a lot because there’s so much hype these days”, she admits. “CRM
---------------------- can be so easily misunderstood to be something that it’s not”. Opdal and her
team symbolically point to the 1995 - 1996 period in which the data warehouse
----------------------
was adopted as the hub of CRM.
----------------------

Opdal advice to others beginning large-scale CRM projects focuses on the Notes
clarity of the CRM mission. “Have clear goal of where you want to go,” she
counsels,” and then take it one step at a time.” Almost as an afterthought, she ----------------------
adds what might be the best advice of all: “Think big; act small.”
----------------------
Conclusion…
----------------------
Notwithstanding Union Bank of Norway’s sophisticated customer-focused
marketing strategies, Opdal insists that a two-way dialog between a company ----------------------
and its customers in an unending process. The bank continues to survey its
customers about their products, their investments preferences the financial ----------------------
goals and planning activities, and their overall satisfaction with the bank. The
----------------------
bank then stores the feed back in the data warehouse, maintaining ever-evolving
profiles on each individual’s customer. For a company who admits it was losing ----------------------
touch with its customer, Union Bank of Norway has become very high-touch
indeed. ----------------------
Exercise: ----------------------
What important lessons can you learn from this case? ----------------------
Summary ----------------------
●● Analytical customer relationship management may be defined as a decision ----------------------

support system that is targeted to helping senior executives, marketing, ----------------------
sales and customer support personnel to better understand and capitalise
upon their customer needs, the company's interactions with the customer, ----------------------
and the customer buying cycle. Like the term Business Intelligence, this
is a fairly new term with a myriad of definitions and a variety of products ----------------------
that support some of those defining aspects. ----------------------
●● The main thing is "What do your end users need to do?” You really
need to build your own definition of Analytical CRM based upon the ----------------------
PRIORITISED needs of the users or user groups that should most benefit ----------------------
from this process and the supporting technical systems. From this, you
may begin evaluating systems, architectures, and tools that will answer ----------------------
those needs in a timely and cost effective fashion.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Analytical CRM 135

Notes Keywords
----------------------
• Customer Acquisition: This type of application involves finding
---------------------- customers who previously were not aware of the product, who were not
candidates for purchasing the products (for example, baby diapers for
---------------------- new parents), or who in the past have bought from a competitor.
---------------------- • Telemarketing: Marketing done using the telephone for selling, marketing
and service aspects.
----------------------
• Teleselling: Selling done over the telephone.
----------------------
• Cross-selling: Offering your customer a basket-full of related products/
---------------------- services along with the main product/service that is being sold.
• Up-selling: Looking for opportunities of selling more to the same
----------------------
customer.
---------------------- • De-selling: No-selling or negative selling.
----------------------

---------------------- 1. Prepare a list of outcomes from analytical CRM.
---------------------- 2. What are the fundamental steps in analytical CRM?
---------------------- 3. How can one improve planning and customer interaction through
analytical results?
---------------------- 4. What are the challenges one would be facing in implementing Analytical
---------------------- CRM?
5. What are the key elements for a successful analytical CRM solution?
----------------------
6. What is the goal of analytical CRM?
----------------------
7. Discuss the indicators displayed by organisations likely to adopt advanced
---------------------- analytical CRM solutions.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Answers to Check your Progress Notes

1. True ----------------------
Fill in the blanks.
----------------------
1. Successful analytical CRM solutions integrate customer data and,
ultimately, deliver this data smoothly in a broad range of heterogeneous ----------------------
analytical applications.
----------------------
----------------------
Fill in the blanks.
----------------------
1. Once a Balanced Scorecard has been set up to describe strategy, it serves
as the organising framework for the management system. ----------------------
----------------------
Suggested Reading
----------------------
----------------------
2. Jaiswal, M.P. & Anjali Kaushik. e-CRM: Business & System Frontiers.
3. Rust, Roland T. and P.K. Kannan. e-Service-New Directions in Theory & ----------------------
Practice. ----------------------
4. Sheth, Jagdish, Atul Parvatiyar. Handbook of Relationship Marketing.
----------------------
5. Sheth, Parvatiyar, Shainesh. Customer Relationship Management.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Analytical CRM 137

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Customer Experience Management (CEM)
UNIT
9
Structure:
9.1 Introduction
9.2 Customer Experience Management
9.3 Commitment Top Management and the Team
9.4 Keeping Customer’s Emotional needs at the Core
9.5 Customer Defined Product / Service Standard
9.6 The People Factor
Case Study
Summary
Key Words
Suggested Reading
Customer Experience Management (CEM) 139

Notes
Objectives
----------------------
• Discuss the concepts of customer experience management
----------------------
• Describe the importance of emotions in CEM
---------------------- • Stress the importance of top management commitment for CEM
---------------------- • Elaborate on the customer defined standards of product and service
---------------------- • Evaluate why the people factor is the most important in CEM
----------------------
---------------------- 9.1 INTRODUCTION

---------------------- Marketing becomes CRM and CRM is now turning into Customer
---------------------- Experience Management (CEM).
While CRM considers customer at the core it is still talking about product/
---------------------- service i.e. the supplier side CEM takes this across to 180 degrees and speaks
---------------------- about customer experience. In CEM customer doesn’t remain an outsider who
is at the receiving end; instead he becomes inherent part of the experience of a
---------------------- product or service.
---------------------- Marketing says – people do not buy products, they purchase benefits.
A carpenter does not need sandpaper, he needs a smooth surface. CEM
---------------------- exactly starts at this ‘Smooth Surface’ or the benefit-the experience and works
backwards to re-engineer the offering. The company and whole set of things
----------------------
that create and deliver the experience. It is interesting to note that CEM has got
---------------------- quite a prominence in the management literature recently and rightly so.
---------------------- 9.2 CUSTOMER EXPERIENCE MANAGEMENT

---------------------- A good definition of CEM comes from Colin Shaw & John Ivens in their
---------------------- book “Building great customer experiences”
“The customer experience is a blend of a company’s physical performance
----------------------
and the emotions evoked, intuitively measured against customer expectations
---------------------- across all moments of contacts”.
In order to understand this definition, let us look at the words underlined.
----------------------
It is a blend, not one thing or another but blended together. It is about
---------------------- the physical and very importantly the emotional. It is measured intuitively by
customers against their expectations. Finally it is not just when you are in a
----------------------
shop; it is whenever you come into contact with that organisation or its brand
---------------------- across all of their moments of contact. It goes into the vital details that tell you
the truth about an organisation.
----------------------

Customer today is an evolved person – better informed, well connected and Notes
empowered than before. Also, today there are many new competitors in the
same category and different categories at times compete with each other. ----------------------
Let us look at an example: A person having Rs. 500/-and time to spare, ----------------------
may spend it on buying a book & read it, go to a multiplex, purchase a CD &
enjoy it at home or go to a restaurant with his friends. Thus all these offering ----------------------
from different categories are competing with each other.
----------------------
As you see in this example each of the product or service the person
finalises on ‘experience’ he gets out of reading a book or visiting a multiplex is ----------------------
what we are talking about.
----------------------
CEM definition above tells us how physical and emotional gets blended
to create this experience. ----------------------
In case of a book, for example, it can be the look and the feel of the book, ----------------------
type of the paper, binding, the cover page, the layout, reader friendly approach,
the sections and many more could be included in the physical presentation of ----------------------
the book. And of course, the main part – the content of the book makes for the ----------------------
physical - intellectual- emotional aspect of the book.
Mainly the Content (emotional) and also the Presentation (physical) ----------------------
makes the complete appeal and creates an experience for a customer (reader in ----------------------
the case).
----------------------
9.3 COMMITMENT TOP MANAGEMENT AND THE TEAM
----------------------
CEM appreciates the fact that with every interaction regardless of channel ----------------------
or nature of interaction, the customer learns something about the company.
A customer will only repurchase product or service from you because ----------------------
of good previous experience. Customers generally like to revisit the store or ----------------------
website those treat them as individuals; not as a number or a code.
Decision to implement CEM in your organisation will depend mainly on two ----------------------
factors: ----------------------
●● Is your top management committed to it?
----------------------
●● Is your organisation ‘people-ready’ to take up CEM challenges?
A good Trekker will tell you how life gets difficult as you climb higher on ----------------------
the mountain. Same applies to organisation- life gets tougher as you go up the ----------------------
ladder. But then like a trekker-in business also, you have a wider (and perhaps
better) view when you are at the top. ----------------------
This better vision should also get you a better picture of changing customer ----------------------
need and expectations. An experience, we have already said revolves around
customer expectation. ----------------------
Top management has to be convinced and then commit to CEM. ----------------------
----------------------

Notes Only top management’s commitment will not be sufficient but you need
to check if your organisation is ‘people ready’ to take up CEM as a culture.
----------------------
Example:
---------------------- You are an industrial product company and wish to implement CEM. Simple
questions to ask yourself are:
----------------------
●● How close is my R&D team to the customer?
----------------------
●● How many times does my R&D person go for trials / installation of the
---------------------- new product developed?
●● What will be the score of an ‘Application Knowledge’ test for my R& D
----------------------
engineers?
---------------------- ●● Was the recent set of products developed and conceived in a lab or on the
field? Who conceived them?
----------------------
Answers to all the questions above will give you better pictures of your
---------------------- ‘people readiness’. This people aspect is discussed further in greater details.
---------------------- CEM is not an individual’s or an individual department’s job. It is a group
activity, a continued responsibility.
----------------------
Imagine you have had a great evening by a pool side restaurant with your
---------------------- close friends. You have been served select drinks and food. It is now time for
the bill. You request for the bill. It takes lot of time to get you the bill. You
---------------------- get impatient and follow up with the captain. He explains that there is some
technical snag in the computer. You finally walk down to the counter and realise
----------------------
that their computer always has a problem.
---------------------- Your sweet experience of a pretty evening has just got sour ending.
---------------------- Reason: Technical flaw.
It is important that the total customer view is given to your Back-office
---------------------- staff. Unless you do that and create a sense of importance to customers in every
---------------------- department of company, it is difficult to create real CEM.

----------------------
Fill in the blanks.
---------------------- 1. Customers generally like to revisit the store or website those treat
---------------------- them as ______; not as a number or a code.
----------------------
Activity 1
----------------------
---------------------- “Products satisfy physiological needs and services satisfy psychological

needs”- Do you agree or disagree with this statement? Why?
----------------------
----------------------

9.4 KEEPING CUSTOMER’S EMOTIONAL NEEDS AT THE Notes
CORE
----------------------
You must have concluded, and rightly so, that the above statement is not ----------------------
correct. Products do satisfy physiological and emotional needs and services
take care of both too. ----------------------
Remember that the typical smell of a new car, feel of the driving wheel ----------------------
leather jacket, thud of the door and even the logo on the front - all are part of
the product and all have great emotional value. You can feel the entire newness ----------------------
of a car through various senses. And a simple service of cleaning of the wash
room area creates a good physiological feel in a restaurant. We can thus say that ----------------------
products and services both satisfy the physiological and psychological needs ----------------------
of a customer. Buck Rogers, ex VP-Marketing at IBM once said “People buy
emotionally and justify it with logic.” Since emotions play a very important role ----------------------
in creating an experience, it has to be handled and tackled with great care.
----------------------
Here is an interesting example by John Ivens:
----------------------
One of our clients, Neil, related a story to me of a problem within one
of his accounts. One of his company’s customer, for the purpose of this story, ----------------------
Nigel, was constantly contacting the call centre and reporting minor faults,
exaggerating their impact and importance, causing Neil a great deal of work ----------------------
investigating the problem. This had gone on for some nine months, and was
----------------------
eventually spotted by one of the customer service agents. Neil and the agent
decided to broach the subject at the next service review meeting. Nigel was ----------------------
very defensive, and in fact took exception to the suggestion that these reports
were inappropriate. He was visibly upset that the subject had been raised. ----------------------
Over the next two months this became a contentious issue between the two ----------------------
companies. Neil started to count the cost of these inappropriate fault reports.
The account team was trying to sell a new system into another part of the ----------------------
account, and this dispute had started to impinge on the sale. They decided to try
----------------------
the softly, softly approach, and the account manager invited Nigel for a drink
one evening. During the evening Nigel revealed that a year ago, in another ----------------------
company, he had nearly been fired as he had failed to act on a fault fast enough.
The whole system crashed, causing a great deal of important data to be lost, as ----------------------
it turned out the backup system had not worked properly as well. Nigel had not
----------------------
been a popular man. This event had caused him to leave his previous company.
Clearly, this had scarred his memory. He obviously never wanted this situation to ----------------------
repeat itself, and therefore had become very nervous with the slightest problem
that occurred, and escalated it way before it was necessary. This had resulted ----------------------
in the many calls to the service centre, engineers being despatched when they
----------------------
were not needed, and managers even being called out over weekends.
The account manager managed to convince Nigel that he understood his ----------------------
problems, and an action plan was put in place to reassure Nigel that the problems ----------------------
were being dealt with quickly: a win / win all round.
----------------------

Notes So what was the problem here? Quite simply, the service centre had not
understood the real motivator, the underlying problem. They had only dealt with
---------------------- the call at face value, at a physical level, not an emotional level. As it turns out,
there are a number of things that Neil could have done to reassure Nigel of the
---------------------- robust nature of the system. He could have offered shared monitoring systems
---------------------- to build his confidence, and therefore reduce the level of call outs. But he hadn’t
understood the underlying issue. Nigel was therefore driven or motivated to
---------------------- over-compensate to ensure he did not make the same mistake twice.
----------------------
----------------------

1. Products do satisfy physiological and emotional needs and services
---------------------- take care of both.
----------------------
---------------------- 9.5 CUSTOMER DEFINED PRODUCT / SERVICE
STANDARD
----------------------
It is clearly established by now that knowing customer requirements,
---------------------- priorities and expectation levels can be both effective and efficient.
---------------------- The precise measurement of customer needs and expectations is a must. It
is important to thus look at customer priorities and customer defined standards.
----------------------
Example
----------------------
Sr. Company Customer Customer Defined
---------------------- No. Priorities Standards
---------------------- 1. Bob-Card (Credit • R
esolution - Resolve problems at first
Card by bank of problem contact & first attempt
---------------------- Baroda) • Treatment - Listen - Do everything
---------------------- possible - Be open & honest
• C
ourtesy by - Put member at ease
---------------------- representative - Be patient while explaining
---------------------- - Listen attentively
- Thank the member at the
----------------------
end of the call
---------------------- 2. Air Deccan (A low • Reliability - On time take offs &
cost airline) • Responsiveness arrivals
----------------------
- Within 3 days reply to an
---------------------- e-mail complaint
---------------------- As we can see from the example, every business must determine the
standards set by customers and try to achieve them.
----------------------

Notes
Activity 2
----------------------
Determine the customer priorities and customer defined standards for ----------------------
your business.
----------------------
9.6 THE PEOPLE FACTOR ----------------------
For all services and most of the products people play a very vital role. ----------------------
‘People’ means the employees involved in the entire process of an offering.
----------------------
The experience normally happens between the companies offering and
the customers’ and to a great extent people form a major part of this offering. ----------------------
Example: ----------------------
A pure service like consultancy or teaching will totally depend on the ----------------------
people who are providing the service.
----------------------
A hybrid offering (which offers the product food and allied service) like
a restaurant will also have substantial dependence on its employees to create a ----------------------
right kind of experience.
----------------------
A product like a car or a machine will also have Sales people who play
crucial role in helping you to take decision of product A versus Product B. ----------------------
Thus the importance of people involved in the companies offering is ----------------------
immense. Selecting the right people then becomes extremely important;
whichever industry you belong to. ----------------------
Let us look at factors to be considered while selecting the right people in ----------------------
order to create the right experience.
●● Select the right candidates. ----------------------
●● Train them on technical and functional. ----------------------

●● Empower them. ----------------------
●● Support them with the right technology tools.
----------------------
●● Let them understand the importance of ‘Emotional Intelligence’.
Out of the factors mentioned above selecting the right candidates, giving ----------------------
them the right tools and training and motivating them is easily understandable
----------------------
and can be managed.
In order to create a right kind of CEM it is important to understand the ----------------------
difference between the technical and functional aspects of Customer care. ----------------------
Technical is the ‘What’ and Functional is the ‘How’ of an offering. Technical is
the core product or the service being delivered and functional is the method or ----------------------
the mode in which it is delivered.
----------------------
Example: A Dentist offering a root canal. Technical is her expertise in
performing it while functional is how she puts the client at comfort while she ----------------------

Notes is at the job. It could be through soothing music, proper lights, the quality of
equipments, pre-job briefing and explanation, a smile and many other things.
---------------------- Thus combination of entire gamut of technical and functional aspect of a service
makes for a great experience.
----------------------
Emotional Intelligence is defined by Daniel Goleman as:
----------------------
“Emotional Intelligence refers to the capacity for recognising our
---------------------- own feelings and those of others, for motivating ourselves, and for managing
emotions well in ourselves and in our relationships.”
----------------------
Emotional Intelligence falls into five categories:
---------------------- 1. Self awareness - Knowing one’s emotions.
---------------------- 2. Self regulation – Managing emotions.
3. Empathy – Recognising emotions in others.
---------------------- 4. Motivation – Motivating oneself.
---------------------- 5. Social skills – Handling relationships.
---------------------- It is very important to have your team members with excellent technical
and functional skills and also good score on emotional intelligence.
---------------------- CEM is thus a happening which helps customer cherish those moments
---------------------- of maybe a dinner in a restaurant, a kitchen appliance, a family trip made
memorable or the dentist as explained above. Every business / profession has
---------------------- this unique advantage of ensuring that the people factor just works towards
creating the right experience. As explained above it is important to note here
---------------------- that customer is a participant in this process of experience delivery and not a
---------------------- mere recipient. Also, the experience created has to be driven back from the
farther end. This means a happy trip is designed backwards from the end results
---------------------- and all the necessary ingredients put in at the right juncture. People form a vital
element in this process.
----------------------

----------------------
Fill in the blanks.
---------------------- 1. In order to create a right kind of CEM it is important to understand the
---------------------- difference between the _____ and functional aspects of Customer care.
----------------------
Case Study
----------------------
---------------------- Club Med

---------------------- A good recovery can turn angry, frustrated customer into loyal ones. It
can, in fact, create more goodwill than if things had gone smoothly in the first
---------------------- place. Consider how Club Med-Cancun, part of the Paris-based Club Mediter-
ranee, recovered from a service nightmare and won the loyalty of one group of
----------------------
vacationers.
The vacationers had nothing but trouble getting from New York to their Notes
Mexican destination. The flight took off six hours late, made two unexpected
stops, and circled 30 minutes before it could land. Because of all the delays and ----------------------
mishap, the plane was en route for 10 hours more than planned and ran out of
food and drinks. It finally arrived at two o’clock in the morning, with a landing ----------------------
so rough that oxygen masks and luggage dropped from overhead. By the time
the plane pulled up to the gate, the soured passengers were faint with hunger ----------------------
and convinced them that their vacation was ruined before it had even started. ----------------------
One lawyer on board was already collecting names and addresses for a class-
action lawsuit. ----------------------
Silvio de Bortoli, the general manager of the Cancun resort and a legend
----------------------
throughout the organisation for his ability to satisfy customers, got word of
horrendous flight and immediately created an antidote. He took half of the staff ----------------------
to the airport, where they laid out a table of snacks and drinks and set up a stereo
system to play lively music. As the guests filed through the gate, they received ----------------------
personal greetings, help with their bags, a sympathetic ear, and a chauffeured
ride to the resort. Waiting for them at Club Med was a lavish banquet, complete ----------------------
with mariachi band and champagne. Moreover, the staff had rallied other guests
to wake up and greet the newcomers, and the partying continued until sunrise. ----------------------
Many guests said it was the most fun they’d had since college. ----------------------
In the end, the vacationers had a better experience than if their flight from
New York had gone like clockwork. Although the company probably couldn’t ----------------------
measure it, club Mediterranee won market share that night. After all, the battle
for market share is won not by analysing demographic trends, ratings points, ----------------------
and other global measures, but rather by pleasing customers one at a time. ----------------------
(An excerpt from C.W.L. Hart, J.L. Heskett, and W.E. Sasser)
----------------------
Exercise:
Imagine that you are one of the customers to experience this wonderful ----------------------
event at Club Med. You want to recommend this resort to one of your friends ----------------------
who is getting married shortly. Write a detailed letter explaining in your words
what happened. Emphasise on the emotional aspect of this experience. Visit the ----------------------
Club Med website and collect more references to include in your letter.
----------------------
Summary
----------------------
●● The unit lays out a clear differentiation between CRM and CEM. This ----------------------
is not to say that these are two different concepts; rather they are related
with each other and help each other grow in terms of relevance to theory ----------------------
and practice.
----------------------
●● It is understood well in this unit that although the physiological part
is important to customer satisfaction the psychological part dominates ----------------------
business equations. This is true with not only consumer goods and
----------------------
service businesses but also the industrial businesses. Thus in whichever
industry you are you will have to seek for opportunities to create CEM ----------------------
– real Customer Experience. The People Factor then becomes extremely
important as discussed in this and in other units in this book. ----------------------

Notes Keywords
----------------------
• Sales Management: A sequence of activities that guides managers
---------------------- in creating, implementing and evaluating the sales program for an
organisation.
----------------------
• Sales Force Automation (SFA): A technological tool to help salespeople
---------------------- acquire and retain customers, which helps in reducing administrative cost
and provides good basis for account management. It increases better
---------------------- selling chances for the Salesperson and more business for the company.
---------------------- • Contact Management: An area of CRM that can track the where, who
and why of a particular client.
----------------------
----------------------
---------------------- 1. Write a note on Emotional Intelligence.

2. Analyse the difference between CRM and CEM.
----------------------
3. Why is organisation’s integration necessary in CEM?
----------------------
4. Why customer’s emotional needs are at the core of CEM?
----------------------
----------------------

Fill in the blanks.
----------------------
1. Customers generally like to revisit the store or website those treat them as
---------------------- individuals; not as a number or a code.
---------------------- 1. True
----------------------
Fill in the blanks.
----------------------
1. In order to create a right kind of CEM it is important to understand the
---------------------- difference between the technical and functional aspects of Customer care.
----------------------
Suggested Reading
----------------------
----------------------
2. Shajahan, S. 2006. Relationship Marketing. TMGH.
---------------------- 3. Batterley, Richard. Leading Through Relationship Marketing.

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ADVANCED CUSTOMER

(FOR PRIVATE CIRCULATION ONLY)

COURSE DESIGN AND REVIEW COMMITTEE

Published by Symbiosis Centre for Distance Learning (SCDL), Pune

Copyright © 2016 Symbiosis Open Education Society

Mr. Abhay Kardeguddi

An experienced trainer, he conducts workshops in Sales, Marketing, Customer Service, Relationship

2 Advanced Customer Relationship Management

In order to understand CRM, it is important to understand key or core ----------------------

---------------------- 8. Mutually beneficial long-term relationship: Friends, this concept is

4 Advanced Customer Relationship Management

●● Commercial environment. ----------------------

●● Procedures restrict responsiveness. ----------------------

6 Advanced Customer Relationship Management

●● It gets you good word-of mouth publicity. ----------------------

Service is an act, a process, an experience. It happens (mostly) between ----------------------

---------------------- It is about applying marketing concept to your own employees. (Remember

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1.7 DATA INFORMATION AND KNOWLEDGE ----------------------

---------------------- Information is Plan and

---------------------- S INTERNAL DATA SECONDARY DATA

---------------------- S INTERNAL DATA SECONDARY DATA

---------------------- Product Customer / Other data /

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Integrated Database ----------------------

Call center feedback / ----------------------

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---------------------- Opportunity Sales information sent.

---------------------- Prospect Lead tracking process initiated.

---------------------- Preliminary Prospect - Plan for enquiry

---------------------- Fig 1.5: SFA in Action

---------------------- Fill in the blanks.

---------------------- 1.9 EFFECTIVE CRM IMPLEMENTATION

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1.10 CAUSES OF CRM FAILURE ----------------------

---------------------- Lack of CRM skills 6%

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---------------------- Check your Progress 3

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---------------------- Self-Assessment Questions

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Check your Progress 2 ----------------------

State True or False. ----------------------

3. Sheth, Jagdish, Atul Parvatiyar. Handbook of Relationship Marketing. ----------------------

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CRM through Effective Customer Complaints Handling 29

---------------------- 2.1 INTRODUCTION

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CRM through Effective Customer Complaints Handling 31

---------------------- 2.3 WHY COMPLAINTS MATTER

2.4 DESIGNING AND MANAGING A COMPLAINT ----------------------

●● Consult your staff: ----------------------

CRM through Effective Customer Complaints Handling 33

---------------------- 2.5 COMPLAINTS AND THE ART OF CUSTOMER CARE

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●● Hire the right people. ----------------------

CRM through Effective Customer Complaints Handling 35

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CRM through Effective Customer Complaints Handling 37

---------------------- 2. Details of goods or services supplied to the customer

---------------------- Date of purchase or service: