Technology in CRM

TECHNOLOGY IN CRM
(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
Dr. Avinash Bhaskar Joshi Dr. Narendra Parchure
Prof. Sudeep Limaye
EDITOR
Ms. Kumkum Tripathi
Published by Symbiosis Centre for Distance Learning (SCDL), Pune

July, 2013
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
The primary purpose of any CRM strategy is to improve customer satisfaction or customer perceived
value. Over the years, it has been seen that that companies 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.
It is assumed that CRM implementation and analytics is all about technology only. In this SLM, an
attempt has been made to look at the different technological components that collectively make up
the Technology in CRM.
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 websites
are just a few examples.
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 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.
From internal implementation tools of sales force automation and planning tools of Enterprise
marketing automation to Implementation of the CRM tools, various technology-enabled tools and
strategies of CRM are discussed in different units of this SLM. The issues of customer loyalty and
B2B scenarios have also been covered in the units. The key issues of data warehousing and data
mining have been covered in the penultimate unit, cases and caselets have been included in the last
unit for each of the main points in the content. The same has been provided with an objective of
helping the readers to develop an application perspective to the content covered in the earlier units.
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.
All attempts have been made to make the text error-free. However, some omissions may still be
remaining. We would be grateful if they can be pointed out so that necessary corrections can be made
in the subsequent editions.
We sincerely hope that this book will be interesting and useful and will help students and readers to
learn this subject in a more meaningful and useful manner.
Dr. Avinash Bhaskar Joshi
Dr. Narendra Parchure
Prof. Sudeep Limaye
iii
ABOUT THE AUTHORS
Dr. Avinash Bhaskar Joshi has done his Masters in Management Studies from Pune University,
DBM from Pune University and PhD in Marketing Management. He has experience of more than
22 years in Academics and various industry sectors like Pharmaceuticals, Diagnostics, Equity, Stock
Broking Advisory and IT Training. He has also done Diploma in Marketing Management and B.Com.
from Pune University.
He has authored the book The Navratnas of 21st Century in 2011, which was the first of its kind
on Navratna Public Sector Units. It has been appreciated by the Deputy Chairman of Planning
Commission, Chairman UGC; Chairman, SCOPE etc. He has also authored a Study manual on
‘Indian Pharmaceutical Industry’ for distance learning programme. He has to his credit the experience
of being convener and chairperson for several national conferences and research workshops. He has
reviewed research papers in various reputed national and international journals and in conferences.
He is the member Board of Studies at Symbiosis Centre for Distance Learning, Pune. He has
contributed articles to newspapers and has developed a blog ‘Decoding Management Mysteries
- Management Thoughts, Concepts’. He is currently working with Sinhgad Institutes, Pune as an
Associate Professor (Management Programmes).
Dr. Narendra Parchure has done M.Phil. and Ph.D. in Business Administration from Pune
University. He has done his Masters in Personnel Management from Pune University. He has 13
years of experience in Academics and 7 years in industry. He has to his credit the experience of being
the Chairperson for a session at an International Conference organised by the Oxford College of
Engineering, Bangalore.
He has presented research papers at various reputed national and international seminars and
conferences. Currently, he is Assistant Professor for Marketing and CRM at the Symbiosis Center for
Distance Learning, Pune.
Prof. Sudeep Limaye has done his B.Com. and M.Com. (Applied Economics) from Lucknow
University and PGDBM from Institute of Management Technology (IMT), Ghaziabad. He has
also qualified the UGC NET. He is registered for PhD in Marketing Management. He has industry
experience of about 18 years in the domains of office automation, Sales management, Retail, Channel
management, B2B marketing and security. He has been a teaching faculty for more than 5 years with
Pune University MBA program institutes and AICTE approved institutes.
Prof. Sudeep Limaye has authored about 9 papers in research seminars and journals. Currently, he is
the Assistant Professor for Marketing at the Symbiosis Center for Distance Learning, Pune.
iv
CONTENTS
Unit No. TITLE Page No.

1. Introduction to CRM 1-20
1.1 Introduction
1.2 Customer − Meaning
1.3 Need for CRM
1.4 Architecture of CRM
1.5 Technology Considerations of CRM
1.6 CRM Technology
1.6.1 CRM Technology Components
1.7 Customer Life Cycle (CLC)
1.7.1 Customer Life Cycle Management
1.8 Customer Lifetime Value (CLV)
Case Study
Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading
2. Introduction to E-CRM 21-34
2.1 Introduction
2.2 Meaning and Scope of E-CRM
2.3 Need for E-CRM
2.4 Framework of E-CRM
2.5 Features and Functions of E-CRM
2.6 Six “Es” in E-CRM
2.7 Similarities between CRM and E-CRM
2.8 Differences between CRM and E-CRM
2.9 Components of E-CRM
Summary
Keywords
Suggested Reading
v
3. Sales Force Automation (SFA) 35-52
3.1 Introduction
3.2 Tools or Components of Sales Force Automation
3.3 Sales Force Automation Process
3.4 Essential Factors for Successful Implementation of SFA Program
3.5 Importance and Purpose of SFA Program
3.6 Advantages and Constraints (Challenges) with SFA Program
3.7 Success Cycle of SFA Program
3.8 Next Generation SFA Tool- M-SFA
Summary
Suggested Reading
4. Enterprise Marketing Automation 53-70
4.1 Introduction
4.2 Components of Enterprise Marketing Automation
4.2.1 Features of EMA
4.3 Opt-In and Opt-Out
4.4 Campaign Planning and Management
4.5 Personalisation
4.5.1 Personalisation and Privacy
Summary
Keywords
Suggested Reading
5. Implementing CRM 71-94
5.1 Introduction
5.2 Stake Holding Committee Formation and Kick- off Meeting
5.3 Requirement Gathering
5.4 Prototyping and Detailed Proposal Generation
5.5 Development of Customisation
5.6 Power User Beta Testing
5.7 Data Import
5.8 Training
5.9 Rollout and System Hands-off
5.10 Ongoing Support, System Optimisation and Follow-up
Summary
Keywords
Suggested Reading
vi
6. The Application Service Provider (ASP) 95-108
6.1 Introduction
6.2 M-CRM (Mobile CRM)
6.2.1 Benefits/Advantages of M-CRM
6.3 Need for CRM
6.3.1 Factors before selecting a Good M-CRM
6.4 Social Networking and CRM
6.4.1 Rules of Engagement for Social CRM
6.4.2 Integrating Social CRM into CRM Strategy
6.4.3 Transformation of Sales and Marketing by Social Media
6.4.4 Social Media and Customer Service
6.5 CRM Software Packages
6.6 Introduction to ASP
6.6.1 Need for ASP
6.6.2 Features of ASP
6.6.3 ASP Provider Types
6.7 Advantages of ASP
6.8 Disadvantages of ASP
Summary
Suggested Reading
7. Customer Loyalty, CRM in FMCG and Data Mining in CRM 109-128
7.1 Introduction to Customer Loyalty and Loyalty Programmes
7.2 Making Loyalty Programmes Successful
7.3 Building Relationships through Service Offerings
7.4 CRM in Fast Moving Consumer Goods (FMCG)
7.5 CRM Metrics
7.6 Application of CRM in B2B and B2C Scenarios
7.7 Data-mining Tools and Techniques
7.7.1 Tools for Data Mining
7.7.2 Data Mining Techniques and their Application
Summary
Suggested Reading
vii
8. IT-Enabled CRM 129-152
8.1 Introduction
8.2 Emergence of CRM
8.2.1 Database Marketing
8.2.2 Data Warehousing and Data Mining
8.3 Pitfalls of IT Focus in CRM
8.3.1 Ethical Issues − Customer Privacy
8.4 Sustaining Customer Relationship
8.4.1 Role of Service in building Relationships
8.5 Segmentation of Service
8.6 Measurement of Service
8.6.1 Monitoring of Customer Satisfaction
8.6.2 Analysing Customer Defection
Summary
Keywords
Suggested Reading
viii
9. Case Studies 153-202
1. Introduction to CRM
1.1 Dizzy Tour
1.2 The Midas Touch
1.3 Trust and Risk
1.4 The Paratha Tale
2. Introduction to E-CRM
2.1 A Case of Tesco
3. Sales Force Automation
3.1 The Force named ‘Sales Force’
3.2 Furniture Marketing
3.3 V.K. Saraf and R.B. Pai Electrical Engineers
3.4 Telebanking in Pragati Bank Ltd.
4. Enterprise Marketing Automation (EMA)
4.1 A Customer Unattended is a Customer Lost
4.2 Hotel Black Pearl (HBP)
5. Implementing a CRM Programme
5.1 A Government Run Hospital
5.2 SSM Textile Mill
5.3 Primex-O Components Ltd.
5.4 S for Structure; S for Satisfaction
6. M-CRM and Application Service Provider (ASP)
6.1 HP Utilisation of SAP CRM
7. Customer Loyalty and Loyalty Programme
7.1 Shri Ganga Electronics
7.2 Flying High
7.3 Data Management - SPDP Bank
8. IT-Enabled CRM
8.1 Relationships and Retention: Go All Bike
8.2 Travel Travails
8.3 Fun Spot
8.4 Super-SP Mall
8.5 Losing out
9. Best Practices in CRM and Future of CRM
9.1 Funfin Mutual Fund
9.2 New Food Products Marketing
ix
x
Introduction to CRM
UNIT
1
Structure:
1.1 Introduction
1.2 Customer − Meaning
1.3 Need for CRM
1.4 Architecture of CRM
1.5 Technology Considerations of CRM
1.6 CRM Technology
1.6.1 CRM Technology Components
1.7 Customer Life Cycle (CLC)
1.8 Customer Lifetime Value (CLV)
Case Study
Summary
Keywords
Suggested Reading
Introduction to CRM 1
Notes
Objectives
----------------------
After going through this unit, you will be able to:
----------------------
●● Specify the need for CRM
---------------------- ●● Explain the architecture of CRM
---------------------- ●● Describe CRM technology with its components
---------------------- ●● tate the importance of Customer Life Cycle and Customer Lifetime
S
Value
----------------------
---------------------- 1.1 INTRODUCTION

----------------------
Customer Relationship Management (CRM) has the business purpose of
---------------------- intelligently finding, marketing, selling to and servicing customers.
CRM is a broadly used term that covers concepts used by companies
----------------------
and public institutions to manage their relationships with customers and
---------------------- stakeholders. Technologies that support this business purpose include the
capture, storage and analysis of customer, vendor, partner and internal
---------------------- process information. Functions that support this business purpose include
Sales, Marketing and Customer Service, Training, Professional Development,
----------------------
Performance Management, Human Resource Development and Compensation.
---------------------- Definition of CRM
---------------------- Customer Relationship Management is a comprehensive approach for creating,
maintaining and expanding customer relationships.
----------------------
Significance of the words used in the definition is as under:
----------------------
1. Comprehensive: CRM does not belong to just sales or marketing. It is
---------------------- not the sole responsibility of customer service group or an IT team, i.e.,
CRM must be a way of doing business that touches all the areas.
----------------------
2. Approach: An approach is broadly a way of treating or dealing with
---------------------- something. CRM is a way of thinking about and dealing with the customer
relationship. We can also use the word ‘strategy’ because CRM involves
---------------------- a clear plan. In fact, CRM strategy can usually serve as a standard for
other strategies in organisation, because any strategy sets directions for
----------------------
the organisation. We can also consider this from a department or area
---------------------- level. Just as a larger organisation have strategies for shareholder, for
management, for marketing, etc. each strategy must support managing
---------------------- customer relationships. Thus, CRM is strategic.
---------------------- 3. Customer relationship: In today’s world, we do business with individuals
or groups with whom we may never meet and hence much less know in
---------------------- person- to-person sense. CRM is about creating the feel of comfort in this
high tech environment.
----------------------
2 Technology in CRM
1.2 CUSTOMER − MEANING Notes
Customer is defined as a paying client or an employee or a supplier or ----------------------
vendor or a partner too.
----------------------
Examples of customer are:
(1) If you are running a company, then you have paying clients. Against the ----------------------
payment, you provide them products and/or services.
----------------------
(2) Every establishment has employees. They are paid salary and other benefits
including bonus and in return, they give their service for productive work. ----------------------
(3) Suppliers provide raw materials and/or services required for manufacture
for which they are paid by the company. ----------------------
(4) Channel partners provide value-added services. In return, company gives ----------------------
them some services or money.
----------------------
In short, customer is an individual or group with whom you exchange
values. ----------------------
1.3 NEED FOR CRM ----------------------
Many companies experience that requirement of CRM with regards to ----------------------

reports, e.g., output and input requirements, is important before starting any
----------------------
implementation. With a proper demand specification, a lot of time and costs can
be saved based on right expectations. A well-operative CRM system can be an ----------------------
extremely powerful tool for management and customer strategies.
----------------------
CRM includes policies and processes, front-of-house customer service,
employee training, marketing, systems and information management. Hence, ----------------------
it is important that any CRM implementation considerations stretch beyond
technology, towards the broader organisational requirements. ----------------------
The objectives of a CRM strategy must consider a company’s specific ----------------------
situation and its customers’ needs and expectations.
----------------------
The data gathered as part of CRM must consider customer privacy and
data security. Customers want the assurance that their data is not accessed ----------------------
illegally by third parties. Customers also want their data used by companies to
provide a benefit to them. ----------------------
Marketing ----------------------
(Targeting Prospects
and acquiring new Sales (Business with ----------------------
customers) good knowledge
management tools) ----------------------
----------------------
Service (Handling
----------------------
post sales services) E-Commerce ----------------------
(Quick Transaction
with low cost) ----------------------
Fig. 1.3: CRM Solutions map
Notes
Check your Progress 1
----------------------
State true or False.
----------------------
1. A customer is an individual or group with whom you exchange values.
----------------------
2. The data gathered as part of CRM is irrespective of customer privacy
---------------------- and data security.
----------------------
1.4 ARCHITECTURE OF CRM
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 1.4: CRM Architecture

[Source: Xchange, Inc at 617-737-2244 or view www.xchangeinc.com by By
----------------------
Andy Frawley, CEO of Boston-based Xchange, Inc.]
---------------------- Stages of Technology Implementation:
---------------------- (a) Functional CRM
---------------------- (b) Departmental CRM

(c) Partial CRM
----------------------
(d) Full CRM
----------------------
(a) Functional CRM: This model of implementation is possible only with
---------------------- the large- scale organisations. These models will work only for particular
departments. This can be called specialised modules. Because of this
---------------------- department-wise implementation, the initial amount spent will always be
higher than the Return on Investment (ROI). This method will benefit
----------------------
only to the specific area and not to the entire organisation. For example,
---------------------- we can consider the company TATA which will be having various types
of business with variety of modules. In this kind of situation, this type of
---------------------- CRM will be helpful.
----------------------
4 Technology in CRM
(b) Departmental CRM: This model is useful for all size of organisations. Notes
There will be some departments which will be common for one or more
business modules. This intra-departmental coordination can be utilised ----------------------
and the modules can be implemented accordingly. This will provide
success to the lower as well as the middle level. That means these modules ----------------------
can help the modules like call centres. ----------------------
(c) Partial CRM: This module is possible only when the intra-departmental
----------------------
coordination is more among the departments. In this model, two to three
departments will be sharing a common master database, e.g., the sales, ----------------------
marketing departments will always share a common database of the
products and the customers. ----------------------
(d) Full CRM: This model is applicable to all levels of organisations. In this ----------------------
model, the entire organisation will be using the same database. There will
be a greater coordination among the departments with this type of model. ----------------------
As a whole the implementation is done.
----------------------
As mentioned above, each and every organisation will have its own
working method. By identifying their level with any of the above-mentioned ----------------------
models, organisations can proceed with the implementation.
----------------------
Check your Progress 2 ----------------------
Match the following. ----------------------
i. Functional CRM a. Useful for all size of organisations ----------------------

ii. Departmental CRM b. Applicable to all levels of organisations ----------------------
iii. Partial CRM c. Possible only with the large-scale
organisations ----------------------
iv. Full CRM d. Two to three departments will share a ----------------------
common master database
----------------------
1.5 TECHNOLOGY CONSIDERATIONS OF CRM ----------------------
The technology requirements of a CRM strategy include the following ----------------------

building blocks: ----------------------
●● A database for customer information.
----------------------
●● Operational CRM requires customer agent support software.
●● Collaborative CRM requires an interactive system. ----------------------
●● Analytical CRM requires statistical analysis software as well as software ----------------------
that manage any specific marketing campaigns.
----------------------
Each of these can be implemented in the following manner.
Steps before Implementing CRM ----------------------
Before implementing CRM some basic steps with analysis should be ----------------------
Notes followed. This analysis will help the users to identify various plans and the
methods for implementation.
----------------------
Step 1 − Business objectives: The main aim of designing this step is to make
---------------------- the organisation a customer-centric company. Every business will have its
own objectives, which will be achieved in a gradual manner. In this context,
---------------------- this phase in the implementation will describe the initial short-term plans. The
scope of this step will be from one to three years. The initial successful planning
----------------------
can only lead towards the long-term objectives. This includes market shares,
---------------------- revenue, margins and other initial investments.
Step 2 − Program initiatives: This is the second step towards the implementation
----------------------
of CRM. This takes one step forward to the long-term plans. This will focus on
---------------------- the customers and derive the plans to get maximum customer satisfaction. This
phase will create clear plans for the future progress to achieve the long-term
---------------------- goals. For improvement of customer satisfaction, this step is essential.
---------------------- Step 3 − Departmental plans: Here the preparation of everyday plans is
done which help the organisation in achieving the long-term goals. This
---------------------- entails organising the plans by arranging e-mail system and call centres. These
departmental plans will be prepared for each and every department and as a
----------------------
whole the integration will be made and the overall optimised implementation
---------------------- will be achieved.
---------------------- Step 4 − Technology: The technology is the main driver in this entire architecture
by which the entire planning phase will be successfully managed and the prime
---------------------- objective will be achieved. Technology implementation is done by preparing
various modules for various activities like sales, marketing, etc.
----------------------
---------------------- 1.6 CRM TECHNOLOGY

---------------------- CRM technology helps in various areas of business like:
---------------------- ●● Sales (Business with good knowledge management tools)

●● E-Commerce (Quick transaction with low cost)
----------------------
●● Marketing (Targeting prospects and acquiring new customers)
---------------------- ●● Service (Handling post-sales services)
---------------------- The types of CRM technology are:
1. Operational CRM
----------------------
●● ypical business functions involving customer service, order
T
---------------------- management, invoice or billing or sales or marketing automation
---------------------- are the parts of operational CRM.
●● It provides support to front office business processes, including
---------------------- sales, marketing and service.
---------------------- ●● ach interaction with a customer is generally added to a customer’s
E
contact history and staff can retrieve information on customers from
---------------------- the database whenever necessary.
6 Technology in CRM
●● ne of the main benefits of this contact history is that customers
O Notes
can interact with different people or different contact channels in a
company over time without having to describe the history of their ----------------------
interaction each time.
----------------------
●● I t processes customer data for a variety of purposes such as
managing campaigns, Enterprise Marketing Automation (EMA) ----------------------
and Sales Force Automation (SFA).
----------------------
●● ill now, the primary use of CRM is for operational purposes. One
T
characteristic of operational CRM is the possibility of integrating ----------------------
with the financial and human resources functions of ERP
applications. ----------------------
●● ith this integration, end-to-end functionality from lead
W ----------------------
management to order breaking can be implemented.
----------------------
2. Analytical CRM
●● nalytical CRM is the capture, storage, extraction, processing,
A ----------------------
interpretation and recording customer data to the user. ----------------------
●● ompanies such as MicroStrategy have developed applications that
C
can capture this customer data from multiple resources and then use ----------------------
hundreds of algorithms to analyse and interpret the data as needed.
----------------------
●● he value of the application is not just in algorithm and storage, but
T
also in the ability to individually personalise the response using the ----------------------
data.
----------------------
●● It generally makes heavy use of data mining.
----------------------
It analyses customer data for the following purposes:
(a) Design and execution of targeted marketing campaigns to optimise ----------------------
marketing effectiveness.
----------------------
(b) Design and execution of specific customer campaigns.
----------------------
(c) Analysis of customer behaviour to aid product and service decision-
making such as pricing, etc. ----------------------
(d) Aid in taking management decisions such as financial forecasting. ----------------------
(e) Provide a tool in predicting the probability of customer defection.
----------------------
3. Collaborative CRM
----------------------
●● I t is the communication centre, coordination network that provides
neural paths to customer and its suppliers. ----------------------
●● I t could mean a partner relationship management (PRM) application
----------------------
or a customer interaction centre.
●● I t could mean communication channels such as web or e-mail, voice ----------------------
applications and even channel strategies.
----------------------
●● I n other words, it is any CRM function that provides a point of
interaction between customer and the channel itself. ----------------------
Notes 1.6.1 CRM Technology Components
The following are the components, which are common to different CRM
----------------------
approaches.
---------------------- 1. CRM Engine: This could be the customer data repository. The data mart,
the data warehouse is the one where all the data on customer is captured
----------------------
and stored. This could include basic stuff such as your name, address,
---------------------- telephone number, birth date, etc. It could also include more sophisticated
information like how many times you have accessed a particular website
---------------------- and what you did on the web pages you accessed. It could also include the
help desk support and the purchase history.
----------------------
Ultimately, the purpose is a single gathering point for all individual
---------------------- customer information so that a unified customer view can be created
throughout the company departments that need to know the data stored in
----------------------
this CRM engine house.
---------------------- 2. Front Office Solutions: These are the unified applications that run
---------------------- on the top of the customer data warehouse. They could be sales force
automations, marketing automation or service and support customer
---------------------- interaction applications. In the client server environment (and now in the
Internet environment), they provide employees with the information on
---------------------- the basis of which the decision of “What is to be done?” or “What next
---------------------- is to be done with the customer?” is made. More specific applications
provide an element of self-service for the customer.
---------------------- 3. Enterprise Application Integration (EAI): Enterprise Application
---------------------- Integration includes pieces of codes, connectors and bridges that as a
body are called EAIs. They connect the back office and the front office.
---------------------- They also connect the newly installed CRM system with the old systems
implemented by the enterprise. They permit CRM to CRM communication.
---------------------- EAIs provide messaging services and data mapping services that allow one
---------------------- system to communicate with other systems regardless of their formatting.
---------------------- Check your Progress 3

----------------------
Multiple Choice Multiple Response.
---------------------- 1. CRM technology helps in the following business areas:
i. Marketing
---------------------- ii. Customer Service
iii. Service
----------------------
iv. E-Commerce
---------------------- v. Sales
2. Components of CRM Technology:
---------------------- i. Front office solutions
ii. Enterprise Application Integration
----------------------
iii. CRM engine
---------------------- iv. Software
8 Technology in CRM
Notes
Activity 1
----------------------
Visit a web site and order for a product to observe how technology helps ----------------------
in this process.
----------------------
----------------------
1.7 CUSTOMER LIFE CYCLE (CLC)
----------------------
In customer relationship management, customer life cycle is a term used
to describe the progression of steps a customer goes through when considering, ----------------------
purchasing, using and maintaining loyalty to a product or service. Marketing
analysts Jim Sterne and Matt Cutler have developed a matrix that breaks the ----------------------
customer life cycle into five distinct steps: Reach, Acquisition, Conversion, ----------------------
Retention and Loyalty. In layman’s terms, this means getting a potential
customer’s attention, teaching them what you have to offer, turning them into a ----------------------
paying customer and then keeping them as a loyal customer whose satisfaction
with the product or service urges other customers to join the cycle. An ellipse, ----------------------
representing the fact that customer retention truly is a cycle and the goal of
----------------------
effective CRM is to get the customer to move through the cycle again and again,
often depicts the customer life cycle. For any company, it is far cheaper to retain ----------------------
existing customers than to acquire new customers. Therefore, presuming that
this is the goal of most of the companies, the next thing is to determine the value ----------------------
of the customer to your company. A customer, who is consistently losing money
for you while he has been with you for last the 40 years is of course valuable to ----------------------
you, may be directly or indirectly. The life cycle of the customer is the process ----------------------
the customer has been undergoing to be with you for all these years. This
includes customer’s purchase history, how often he/she has taken advantage ----------------------
of special offers directed at him/her or their customer class. Depending upon
what you identify as important to your return on investment (ROI), it could ----------------------
also include your customer’s marketing value to you, how much revenue that
----------------------
marketing value could be worth indirectly.
Customer life cycle focuses on the creation of and delivery of lifetime ----------------------
value to the customer, i.e., looks at the products or services that customers
NEED throughout their lives. It is marketing orientated rather than product ----------------------
oriented and embodies the marketing concept. The problem here is that every ----------------------
organisation’s product offering is different, which makes it impossible to draw
out a single life cycle that is the same for every organisation. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Notes
1. Marketing
management
----------------------
----------------------
----------------------
---------------------- 5. Back Office Customers 2. Sales force

Analysis Automation
----------------------
----------------------
----------------------
3. Customer Support
2. E-Commerce
---------------------- and Service
---------------------- Figure 1.5: E -RM through customer life cycle

---------------------- Example of Customer Life Cycle
---------------------- Live Cash Pension, Retirement Plans Life Insurance, Savings, Student Loan
Graduate, A/c Car Loan Mortgage etc.
---------------------- Explanation:
---------------------- Let us consider an example from the banking sector. SBI has a number of
products that aims at its customers throughout their lifetime relationship with
----------------------
the company. Here, we apply a Customer Life Cycle (CLC). When you begin
---------------------- with, there are many types of current and savings account and you may wish to
buy property and so take out a mortgage.
----------------------
You could take out a car loan to buy a vehicle to get you to work. It would
---------------------- also be advisable to take out a pension. As you progress through your career
you begin with your family and save for your children’s education. You embark
---------------------- upon a number of savings plans and schemes and ultimately SBI offers you
pension planning.
----------------------
This is how an organisation such as SBI, which is marketing oriented, can
---------------------- recruit and retain customers and then extend additional products and services to
---------------------- them throughout the individual’s life. This is an example of Customer Life Cycle.
----------------------
The methods of customer life cycle management are as follows:
----------------------
●● Personalisation: This is a special form of the product which will be prepared
---------------------- according to the personnel requirements. Because of this personalised
attention, the customer retention process will become very easy.
---------------------- ●● Customisation: This improves the product quality according to the
---------------------- expectations of the customer. This will change the standard product into
a specialised solution for an individual to improve customer satisfaction.
---------------------- ●● Cross-selling: This is the process of changing the product design to
10 Technology in CRM
satisfy individual requirements. This will cross the product design and Notes
the target to satisfy the customer’s expectations.
●● Up selling: Increase the production range to manage the market ----------------------
requirement and the current demand without wasting the current approvals. ----------------------
When we follow the above-mentioned methods, the retention of customers will
become an easy process and the customer life cycle management will be flexible. ----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. __________ is a special form of the product which will be prepared
according to the personnel requirements. ----------------------
2. Customer life cycle focuses on the ___________ and _________ of ----------------------
lifetime value to the customer.
----------------------
1.8 CUSTOMER LIFETIME VALUE (CLV) ----------------------
There are two kinds of Lifetime Value measurement − absolute and ----------------------
relative. The first is very difficult to calculate; the second, very easy to calculate ----------------------
and in many ways more powerful than the first.
The most difficult part of calculating Lifetime Value (LTV) is deciding ----------------------
what a “lifetime” is. LTV is the value of the customer over the Life Cycle. ----------------------
LTV does not exist without a Life Cycle. The Lifetime Value concept has been
horribly abused and misunderstood over the last several years. It is not necessary ----------------------
to figure out an absolute Lifetime Value for a customer or wait for “a lifetime”
to find out the value to use the concept in managing customer value. If you ----------------------
are new to this Life-time Value concept and have not tracked the appropriate ----------------------
parameters or your company is new and lacks meaningful operating history, you
can look for “relative Lifetime Value”, link it to customer behaviour and still ----------------------
get leverage from using LTV/LCV in your business model to manage customer
value. ----------------------
Here’s a very simple example. Say you run the same ad in two different ----------------------
newsletters and get response from both. When you look at these responders,
maybe a week later for a content visit or 30 days later for a purchase, you find ----------------------
a high percentage of repeat visitors or buyers from one newsletter and a low ----------------------
percentage from the other.
----------------------
Repeat behaviour indicates higher Lifetime Value and predicts future repeat
behaviour, regardless of what the actual monetary Lifetime Value is. You can switch ----------------------
money out of the low repeat newsletter into the high repeat newsletter and get higher
ROI without having to measure anything but repeat behaviour. ----------------------
Using customer behaviour to predict the relative Lifetime Value and ----------------------
loyalty of customers is a 40- year-old technique still used by mail order and TV
shopping companies today. ----------------------
Notes Large sites with CRM analytics are using this technique known as RFM
(Regency, Frequency and Monetary value model), to predict customer value
---------------------- and response to promotions.
---------------------- Let’s say you’re not satisfied with using relative Lifetime Value as a proxy
for absolute Lifetime Value. No problem. Here are a few issues we need to put
---------------------- on the table when discussing the calculation of LTV:
---------------------- a) If you haven’t been in business long enough to know the lifetime of a
customer, just put a stake in the ground by looking for defected best
---------------------- customers. Look at customers who have spent or visited the most with you
and then of these, look at the ones who haven’t made a purchase or visit in
----------------------
some time (6−9 months, for example). In all likelihood, the last purchase
---------------------- or visit was the end of the life cycle when considering best customers
who have stopped buying or visiting. Then look at first purchase or visit
---------------------- date for these customers, calculate your lifetime and use this length of
time as the “standard” customer lifetime, realising the average lifetime is
----------------------
probably much shorter.
---------------------- b) Frequently, a customer will defect for a few years and then come back.
This is normal. Their life changed somehow and they left and now they
----------------------
need you again. Most offline marketers would call a customer who has
---------------------- had zero activity for over 2 years a defected customer.
---------------------- Online, it’s more like 6 months for the average customer, unless you are
in a classic seasonal business. If the customer starts up again, they would
---------------------- be a “new customer” for marketing and modeling purposes. They will
more likely behave like a new customer than a current customer. The
---------------------- behaviour will ramp and fall off all over again, just like it did in their
---------------------- previous life cycle with your business.
That doesn’t mean you can’t use the same customer number or combine
---------------------- the old behaviour record with the new behaviour record in the customer
---------------------- service shop. In fact, knowing how long on an average a customer defects
before they come back can be a useful promotional tool.
---------------------- But there has been a significant break in behaviour and this customer is
---------------------- more likely to behave as a new customer than a customer who has been
with you the whole time. That’s just the way it works. They are likely to
---------------------- be interested in different products, for example.
---------------------- You should decide if it’s a new lifetime or not based on your business. In
most cases, from a marketing perspective and for the purposes of lifetime
---------------------- value, they should be treated as new customers. Otherwise, all your
customers will have “infinite” lifetimes and you lose the relevance of the
----------------------
metric.
---------------------- c) Another challenge to calculating Lifetime Value is usually much of the
data you need to complete the simple calculation are not available or
----------------------
can’t be agreed upon by all the players, especially if you are in a big
---------------------- company. If you don’t know what the average unit returned costs you in
terms of overhead, you can’t do the calculation. If you don’t know what Notes
the average number of customer service calls per unit shipped is and what
the calls cost, you can’t do the calculation. This is a particularly difficult ----------------------
problem for offline retailers, who don’t have a database that captures
nearly enough relevant data. ----------------------
Here’s one way approach it if the operational data you need is unclear. ----------------------
Try to focus on the average unit sold and break up all the revenue and
----------------------
cost components that comprise the unit. Once you get to a profit/unit, just
multiply by units sold to a customer over the “lifetime” minus overhead ----------------------
and promotional costs and you get LTV.
----------------------
Average price, cost of goods sold, gross margin should be easy to find. To
get customer service costs, look at how many units you move annually ----------------------
and divide by annual customer service cost. Do the same thing for returns
and so on, until you know the costs/unit sold of all the elements going into ----------------------
a sale. Don’t forget credit processing, after sale support, etc.
----------------------
LTV Calculation and Customer Acquisition Cost Calculations
----------------------
Say the average customer buys for 2 years and then stops for at least 1
year. ----------------------
Therefore, we define the Lifetime of a customer as 2 years. Over 2 years, ----------------------
the average customer makes 16 purchases.
16 × 1.20 Profit per Unit = 19.20 LTV of the average customer. The ----------------------
average customer recruits 3 other customers. The maximum acquisition cost of ----------------------
a new customer should be 4 × 19.20 = 76.80 to breakeven.
----------------------
The sum of your entire customer lifetime values should equal your future
profits; if you include the value of pass-along customers in Lifetime Value, you ----------------------
will over estimate profits. Some customer groups also have negative LTVs. This
is the part of LTV analysis that is usually forgotten, because it literally means ----------------------
you would be more profitable if you had fewer customers.
----------------------
After measuring customer value, the next step is to manage customer
value, i.e., to make money by creating very high ROI customer marketing ----------------------
campaigns and site designs.
----------------------
“Cost of retaining old customer is always less than generating new
customers.” ----------------------
Companies lose 10% to 30% of their customers annually and even more in the ----------------------
online world. Customers leave for many reasons.
----------------------
Some move, some die and some are wooed away by the competitor. But
an overwhelming 68% of the customers leave because they simply feel you ----------------------
don’t care enough about them. It takes several interactions with the customers
before you even make back the cost of acquiring them. ----------------------
Companies that lose a lot of customers spend a lot of money on sales ----------------------
and marketing to replace the ones they lose. That diverts budgets from service
----------------------
Notes and the growing needs of employees. When we have to worry about replacing
customers, we can’t spend money on other things which will lead to further
---------------------- customers moving out.
---------------------- Customers were being acquired from the target segment using tools and
techniques developed for mass marketing. But in the present era of liberalisation,
---------------------- privatisation and globalisation, the existing mass marketing tools have proved
to be ineffective. So it is all the more difficult to get a new customer. Most
----------------------
companies use a variety of methods to acquire customers all at different expense.
---------------------- The cost of an e-mail interaction, direct mail, a piece of advertisement, a phone
call and a visit from a salesperson all need to be understood to determine exactly
---------------------- how much the customer costs you to acquire. We must also include the hard
cost of things like mailing and expense accounts and the related soft cost like
----------------------
sales trainings and meetings.
---------------------- Now use the knowledge of cost of acquisition to determine how much
money you simply waste if customers leave before they pay you back for
----------------------
your investments. In most companies, it is a big number. Let us take a look
---------------------- at how one financial institution used its cost of acquisition number to set into
action changes that helped it to retain more of its customers. It was found that
---------------------- nearly $500 was spent in getting a new customer. It was also discovered that
on an average a new customer did not become profitable till the 2nd year. The
----------------------
research made the shocking discovery that 22% didn’t even make it through the
---------------------- first year.
Not only was the firm’s $500 investment lost, but each and every time the
----------------------
customer was serviced the cost of that activity was lost as well.
---------------------- The next part of the customer retention project was to find a way to retain
---------------------- more customers. In a highly customised workshop, 10 to 12 branch managers
were asked to think about relationship management and not risk management.
---------------------- They were helped to focus their attention and that of their staff on individual
movements of truth and opportunities that occurred 1000s of times a day. A
---------------------- movement of truth is anytime a customer has the opportunity to make a judgment
---------------------- about the quality of service you are delivering. Common wisdom these days
estimate that a cost of getting a customer is between 6 and 30 times more than it
---------------------- is to keep one. It’s well publicised that an increase of only 5% in your customer
retention could mean a boost of 25% to 100% on your bottom line.
----------------------
---------------------- Case Study

----------------------
Case Study 1
---------------------- FIVE STEPS TO DESIGNING CRM-SUPPORTING ONLINE SURVEYS
---------------------- In today’s competitive economy, marketers are trying their best for
effective customer acquisition programmes in order to decrease customer
---------------------- defection. Companies have started paying attention to customer relationship
---------------------- management systems so that customers remain loyal to them. Companies are
adopting online surveys, which is cost-effective and is an immediate method to Notes
gather customer feedback.
Best Practices for Online Surveys ----------------------
Survey is an important task to get quality and accurate information for ----------------------
decision- making. The typical questions that an organisation needs to understand
before conducting a survey fall into five categories: ----------------------
1. Determine the business process: Before designing a survey, the researcher ----------------------
must understand the business objective, purpose of the survey, what is to
be measured, number of questions to be framed in the questionnaire and ----------------------
type of rating to be used. These factors are important for development of ----------------------
any kind of survey. Another important aspect in determining the business
purpose of a survey is all the departments of an organisation. This will ----------------------
help one to figure out if the questions asked are relevant or not.
----------------------
2. Design the survey: Survey design is the most important process to get
results for an organisation’s needs. To get better response rate, a survey ----------------------
must begin with a title, preamble and should explain the overall aim of the
survey. Instructions associated with different questions should be at the ----------------------
beginning of each section. Filter questions should be used to differentiate
----------------------
respondents relevant for a survey. If a respondent is not sure about the
answer for a question, he should be provided a “let-out” selection, such ----------------------
as “Don’t Know” or “Not Applicable”. Questions should be short and
simple. A good rating scale of 4−8 scale should be used in survey. ----------------------
3. Select the sample: An optimum sample size is important to get the right ----------------------
conclusions. A sample should be selected randomly for true representation
of population. Through the process of random sampling, researcher is able ----------------------
to draw right statistical inference from a small group of representative
of the whole population. A sample size should be in between 30−50 to ----------------------
overcome sampling error. ----------------------
4. Implement the survey: Response rate is an important factor to ensure the
correct survey results. Low response rate leads to low reliability of study. ----------------------
Also, difficult questions are mostly skipped by respondents.
----------------------
Follow-ups or reminders by researcher are required to reduce the low
response rate. The factors like incentives, technical and telephone support, ----------------------
analysis and the distribution of the final report should be considered
----------------------
during survey implementation. Online surveys overcome costly elements
like consulting fees and data entry. ----------------------
5. Analyse and report the results: A survey report must address two issues
----------------------
– validity of survey questions and substantive business issues that were
the purpose of the survey. Validity of questions is assessed by measuring ----------------------
the number of responses for each option of questions. No single option
should have more than 85% of the responses and not less than 5%. ----------------------
The business issues are assessed by measuring responses to individual ----------------------
question or a group of questions of same topic.
----------------------
Source: www.thewisemarketer.com
Notes Case Study 2
TWO WAYS TO ENSURE CRM SUCCESS
----------------------
A marketer must consider different factors like business strategies and
---------------------- theories, technology, budgets, etc., for the success of Customer Relationship
Management (CRM) practice in his organisation. Experts and consultants in the
----------------------
area of CRM have listed out 11 ways to ensure CRM success.
---------------------- 1. Get executive buy-in: When the management doesn’t believe in a new
CRM practice, then the employees also follow suit. If the top management
----------------------
of a company shows interest towards this new practice, then it will
---------------------- motivate other stakeholders towards them.
---------------------- 2. Align departmental strategies: All the departments like marketing team,
sales force, etc., should be aligned to communicate a consistent message
---------------------- about their brand, across all customer touch points.
---------------------- 3. Strategy first, technology second: Software is not the only key to CRM
success. Software facilitates the implementation process.
---------------------- Technology is only one pillar of success for CRM; there are other
---------------------- important factors responsible for it.
4. Minimise financial risks: Companies must calculate the costs of CRM
----------------------
implementation and financial risks involved. By analysing the cost-benefit
---------------------- of CRM practice, companies may decide the type of CRM and investment
for CRM.
----------------------
5. Look for quick wins: The CRM projects should be small, so that they
---------------------- can be easily managed. The small and manageable projects lead to quick
win, more momentum and higher end-user adaptation.
----------------------
6. Consider migration paths: One should know where his company
---------------------- is heading. Vendors should be selected on the basis of their ability to
facilitate a company’s product to grow, along with company’s growth.
----------------------
Organisation should plan CRM system from the beginning in order to
---------------------- avoid wastage of time and money on additional add-ons and modules.
---------------------- 7. Scrub the data: Information about customers is more important as

compared to technology in case of CRM practice. Customer data should
---------------------- be accurate. Before implementation of CRM, the database should be
standardised. Data warehousing is another important factor. Data cleansing
---------------------- software is provided by vendors like Dataflux, firstLogic and Trilium. As
---------------------- a thumb rule, companies should have their server space to maintain 13
months’ worth of customer data and at least three years’ worth of contract
---------------------- data information.
---------------------- 8. Plan for disruptions: The executives and management in charge of any
CRM implementation should consider the possibility of changes in their
---------------------- company like acquisitions or sell-offs. Management should be ready to
accept these changes during CRM implementation.
----------------------
9. Do not leave training till the end: In most cases, training is not considered Notes
as an important component of CRM implementation. The end-users are
informed about the CRM process at the eleventh hour. Early training ----------------------
programme makes the end-user realise the benefits of CRM application.
----------------------
10. Choose a champion of change: The CRM process should be started
with a single department. The organisation should choose that department ----------------------
whose manager is inclined to CRM implementation. Such a department
----------------------
will reap benefits from CRM system. Other departments will start to think
to implement CRM after seeing the success of the department, where ----------------------
CRM was implemented.
----------------------
11. Ask the expert: Companies immediately look for a new product or
another module, whenever they face problems related to customisation, ----------------------
functionality or deployment strategy with their existing application
system. Instead, they should try to leverage current applications to gain ----------------------
new services and functionalities. A lot of times, people lose sight of what
----------------------
they have and why they have purchased, even though there is a lot of
functionality with what they already have. ----------------------
Source: www.destinationcrm.com
----------------------
Case Study 3
----------------------
THE 10 BIGGEST CRM MISTAKES
A good CRM system is the key to identify top customers and increase ----------------------
sales and visibility across the organisation. But due to certain mistakes in the ----------------------
CRM system, companies get fewer returns when compared to their investments
on CRM practices. These mistakes are: ----------------------
1. Don’t think, just buy: Companies buy a CRM solution because their ----------------------
competitors have one and think it would differentiate their product.
----------------------
But they don’t consider whether this solution aligns with their business
goals and customer process. When companies purchase a CRM solution ----------------------
for wrong reason, then it is not only of any use, but also puts the business
in trouble. ----------------------
2. Don’t involve the sales team: Companies should make their employees ----------------------
aware about the benefit of a CRM system, if they want their employees
to use a new CRM system. Employees of different departments perceive ----------------------
the CRM system differently. Companies should encourage employees
----------------------
from each department to participate in the decision-making process for
implementation of a new CRM system. ----------------------
3. Pay no attention to process: According to Bob Furniss, President of ----------------------
Touchpoint Associates Inc., “CRM is not just a technology but also a
process.” Technology should adapt to company’s process, but not vice ----------------------
versa. A company must analyse the procedures being adopted by it and
find out which one is to be changed. A pilot process may be experimented ----------------------
before its mass application. ----------------------
Notes 4. Go it alone: A CRM project may not be successful without support from
the top management. When there is a lack of support from those in the
---------------------- top management, the others feel defunct, which automatically leads to the
breakdown of any CRM initiative.
----------------------
5. See the forest, not the trees: Many times, CRM system collects a lot of
---------------------- data about a customer, but forgets to record some important information
about that customer, for instance, his birthday. If a company’s sales
----------------------
representative wishes a customer on his birthday before asking “How can
---------------------- I help you today”, it will create a positive impact on the sales deal.
6. Customers, what customers?: The prime objective of a CRM system
----------------------
is to serve customers in a better way. But in many cases, customers are
---------------------- neglected by companies. Companies mostly focus on software and forget
to ask what their customers want from the CRM system. Companies
---------------------- must identify their CRM goals and build strong relationships with their
customers.
----------------------
7. Disdain training: Many companies allocate little or no budget for training
---------------------- their employees. Training is required for employees to know about the
CRM systems and be comfortable using the new system.
----------------------
8. Hold the staffing: Sales organisations usually forget to think how a new
---------------------- CRM system will impact their staffing needs. Sales organisation should
---------------------- ask some basic questions like - CRM system’s impact on call volumes,
intensity of manual work during CRM implementation, will the company
---------------------- run two systems simultaneously till one billing system has all the complete
information, etc., before implementing a new CRM system.
----------------------
9. Testing: Companies should start with a small CRM system and test it
---------------------- extensively in market. If there is any error found in that CRM system,
then the organisation should redirect the project, without further wastage
---------------------- of investment.
---------------------- 10. Don’t define success: Many times companies fail to identify what they
expect from a CRM system. A company must clearly define its expectations
---------------------- in terms of customer information across the organisation, more real-time
---------------------- sales information, better forecasting or enhanced cross-selling. It should
also develop a process to evaluate its progress from time to time.
----------------------
Source: www.successmtgs.com
----------------------
Summary
----------------------
●● ustomer Relationship Management (CRM) has the business purpose of
C
---------------------- intelligently finding marketing, selling to and servicing customers.
---------------------- ●● well-operative CRM system can be an extremely powerful tool for
A
management and customer strategies.
----------------------
●● RM is not just a technology, but rather a comprehensive approach to an
C
---------------------- organisation’s philosophy in dealing with its customers.
●● he technology requirement of CRM includes the following building
T Notes
blocks like database for customer information.
●● perational CRM requires customer agent support software, collaborative
O ----------------------
CRM requires an interactive system and analytical CRM requires ----------------------
statistical analysis software as well as software that manage any specific
marketing campaigns. ----------------------
●● I n customer relationship management, customer life cycle is a term ----------------------
used to describe the progression of steps a customer goes through when
considering, purchasing, using and maintaining loyalty to a product or ----------------------
service.
----------------------
●● ost of retaining old customer is always less than generating new
C
customers. ----------------------
●● he retention of customers will become an easy process and the customer
T
----------------------
life cycle management will become flexible.
----------------------
Keywords
----------------------
●● Enterprise Application integration: The use of software and computer ----------------------
systems architectural principles to integrate a set of enterprise computer
applications ----------------------
●● Lifetime Value: A prediction of the net profit (or gross profit for
----------------------
startups) attributed to the entire future relationship with a customer.
----------------------
Self-Assessment Questions ----------------------
1. Define the concept of CRM & its scope. ----------------------
2. Discuss the types of CRM.
----------------------
3. What do you mean by customer life cycle? How we can analyse Customer
Lifetime Value (CLV)? ----------------------
4. Cost of retaining old customer is always less than generating new one. ----------------------
Justify the statement with proper example.
----------------------
5. Discuss the different types of CRM technology components.
----------------------
----------------------
----------------------
State True or False.
----------------------
1. True
2. False ----------------------
----------------------
----------------------
Notes Check your Progress 2
Match the following.
----------------------
i. –c
----------------------
ii. –a
---------------------- iii. – d
---------------------- iv. – b

----------------------
1. CRM technology helps in the following business areas:
----------------------
i. Marketing iii. Service
---------------------- iv. E-Commerce v. Sales
---------------------- 2. Components of CRM Technology:
---------------------- i. Front office solutions
ii. Enterprise Application Integration
----------------------
iii. CRM engine
----------------------
---------------------- Fill in the blanks.
---------------------- 1. Personalisation is a special form of the product which will be prepared
according to the personnel requirements.
----------------------
2. Customer life cycle focuses on the creation and delivery of lifetime value
---------------------- to the customer.
----------------------
Suggested Reading
----------------------
1. Agnihotri, Raj and Adam Rapp. 2010. Effective Sales Force Automation
---------------------- and Customer Relationship Management. Businessexpert Press.
---------------------- 2. Colombo, George W. 1994. Sales Force Automation: Using the Latest
Technology to Make Your Sales Force More Competitive. McGraw-Hill.
----------------------
3. http://searchcrm.techtarget.com/tutorial/Sales-Force-Automation-
---------------------- Learning-Guide.
----------------------
----------------------
----------------------
----------------------
----------------------
Introduction to E-CRM
UNIT
2
Structure:
2.1 Introduction
2.2 Meaning and Scope of E-CRM
2.3 Need for E-CRM
2.4 Framework of E-CRM
2.5 Features and Functions of E-CRM
2.6 Six “Es” in e CRM
2.7 Similarities between CRM and E-CRM
2.8 Differences between CRM and E-CRM
2.9 Components of E-CRM
Summary
Keywords
Suggested Reading
Introduction to E-CRM 21
Notes
Objectives
----------------------
----------------------
●● State the role of technology in customer relationship marketing
---------------------- ●● pecify the applications of technology in customer relationship
S
---------------------- management
●● Identify the components of technology driven CRM
----------------------
●● Enumerate the applications of electronic CRM practices
----------------------
---------------------- 2.1 INTRODUCTION

----------------------
In today’s world, a company can survive only if it can manage to keep its
---------------------- customers happy.
Building a customer environment and using other means to maintain
----------------------
customer attention have now become the top priorities for any company, which
---------------------- wants to make it big in the market.
---------------------- As technology changes, more people all over the world have started
engaging in buying and selling activities over the Internet. As a consequence,
---------------------- companies also have to give customers a good and easy online environment.
---------------------- The result, evidently, is e-CRM.
---------------------- 2.2 MEANING AND SCOPE OF E-CRM

---------------------- Interactive, personalised and relevant communication with customers can
---------------------- be conducted across both electronic and traditional channels. It utilises complete
information of the customer to make decisions about messaging, promotional
---------------------- offers and channel delivery.
---------------------- With the help of e-CRM, unconnected customers can be communicated

with synchronised systems. It asks for the permission of the potential customer
---------------------- before talking to him about product or services. It focuses on understanding
customer relationships, which affect the business. The crux of e-CRM is not
---------------------- what an organisation is doing on the web but how successfully an organisation
---------------------- ties its online channel back to its traditional channel or customer touch points.
The E-CRM or electronic customer relationship management
---------------------- encompasses all the CRM functions with the use of the net environment, i.e.,
---------------------- intranet, extranet and Internet. Electronic CRM concerns all forms of managing
relationships with customers making use of information technology (IT).
---------------------- E-CRM is enterprises use IT to integrate internal organisational resources
and external “marketing” strategies to understand and fulfill their customer’s
---------------------- needs. Compared to traditional CRM, the integrated information for e-CRM
---------------------- intra-organisational collaboration proves more efficient to communicate with
customers.
Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 2.1 Evolution of CRM ----------------------
----------------------
2.3 NEED FOR E-CRM
----------------------
A system based on technology and designed to provide better and superior
service levels to any customer is the need of the hour. The introduction of ----------------------
technology into consumer’s homes and office has created a need for CRM to
----------------------
keep pace and incorporate technology. Also with more and more competition
and evolution of consumers in terms of expectation levels, the marketers have ----------------------
to customise their offering up to individual level. The need for an e-CRM can
be explained with the following factors. ----------------------
(1) The crm offerings remain channel centric rather than customer ----------------------
centric.
----------------------
With the help of individual channel and their support systems, the host
CRM can improve with necessary steps, like consideration of customers, ----------------------
customers’ wants and their fulfillment, etc. Otherwise, as in case of a
bank, the majority of customers are unprofitable, irrespective of how ----------------------
efficiently customer communication through any channel happens; these ----------------------
customers will remain unprofitable. Hence, we need to have e-CRM.
(2) Customer centric metrics do not exist. The data needed for e-CRM ----------------------
is generally related to customer profitability, return on investment of ----------------------
customer interaction and customer lifetime value (CLV), because data
needed for this falls outside the reach of channel centric system. ----------------------
(3) Contemporary customers facing traditional systems. Contemporary ----------------------
(modern, recent, fresh) customers face traditional systems such as sales
force automation. Customer care often has its own data models and data ----------------------
stores, which manage only the information that their application requires
----------------------
and generates. These systems rarely interact with others, as they remain
isolated. ----------------------
Example: A customer has ordered a product and has a question about
----------------------
the status of that order. Rather than calling a customer service number,
Notes the customer is able to return to the web site and inquire about the order
through self service, which queries the company’s order processing
---------------------- system automatically to return the status of the order. The customer can
do this whenever it is convenient and the company saves thousands of
---------------------- dollars in customer service costs.
----------------------
2.4 FRAMEWORK OF E-CRM
----------------------
Companies need to take firm initiatives on the e-CRM frontier to optimise
---------------------- the value of interactive relationship. There are three dimensions of e-CRM,
---------------------- which must explain clearly the customer optimisation. They are:
(a) Acquisition: The number of customers is increasing.
----------------------
(b) Expansion: Growing probability by inspiring customer to buy more
---------------------- products and services.
---------------------- (c) Retention: Increasing number of times that customer stays or visits.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig.2.2: The System of e-crm

As explained in Fig. 2.2, the enterprise CRM system operates at both back
----------------------
end and front end in terms of the data maintained in the data warehouse being
---------------------- mined for designing a customised CRM techniques, which is specific to the
prospect or the existing customer. The whole system involves the integration
---------------------- of the back end processes and the front end execution functions of marketing
or sales or order management or the aftermarket service to the customer. The
----------------------
system is run and executed through the extensive use of technology; in fact,
---------------------- modern technology is the backbone of an e-CRM system.
The components of the e-CRM system are listed below:
----------------------
1. Back office system
---------------------- 2. Database
3. The front office functions
----------------------
4. The contact channels
---------------------- 5. The consumer
Notes
----------------------
Multiple Choice Single Response.
----------------------
1. What occurs when a web site can know so much about a person’s
likes and dislikes that it can fashion offers that are more likely to ----------------------
appeal to that person?
----------------------
i. Operational CRM
ii. Analytical CRM ----------------------
iii. Personalisation
----------------------
iv. None of the above
State True or False. ----------------------
1. E-CRM works on both front end and the back end of the organisation ----------------------
for designing a good CRM strategy.
2. In modern marketing, there is a need to design a personalised ----------------------
marketing strategy. ----------------------
----------------------
Activity 1
----------------------
1. Check the website of any commercial bank and study the customer
----------------------
relationship tools deployed on the site by the bank.
2. Check the website for an online trading portal and make a list of the ----------------------
personal information that is filled in and is useful to the company for
----------------------
designing a good CRM strategy.
----------------------
2.5 FEATURES AND FUNCTIONS OF E-CRM ----------------------
Features of e-CRM are detailed out below. ----------------------
1. Driven by a data warehouse. ----------------------
2. Focused on reliable metrics to assess customer actions across the channels.
3. Built to accommodate the new market dynamics that place the customer ----------------------
in control. ----------------------
4. Determines effective investment allocation decisions so that profitable
customer could be identified and retained. ----------------------
5. Enables the business to extend its personalised reach. ----------------------
6. Coordinates marketing initiatives across the customer channels.
----------------------
7. Leverages customer information for more effective e-marketing and
e-business. ----------------------
8. E-CRM implies capabilities like self service knowledge bases, automated
email response, personalisation of web content, online product bundling ----------------------
and pricing. ----------------------
Notes 9. E-CRM gives Internet users the ability to interact with the business
through their preferred communication channel.
----------------------
10. It also allows businesses to offset expensive customer service agents with
---------------------- technology.
11. E-CRM puts much emphasis on the customer satisfaction and reduced
----------------------
cost through improved efficiency.
---------------------- 12. E-CRM uses customer data for personalisation, cross-selling and up-
selling.
----------------------
13. Sales Force Automation (SFA) and Enterprise Marketing Automation
---------------------- (EMA) is integrated in the e-CRM.
---------------------- The key functions of e-crm are summarised below:
---------------------- 1. Web service: The combination of all web services available to users.
Allows companies to provide self-service CRM to customers, suppliers
---------------------- and partners.
---------------------- 2. E-sales: E-sales applications are web-based applications that support
unassisted B2B and B2C selling via the Internet. These applications
---------------------- enable orginisations to rapidly establish an online selling channel.
---------------------- 3. E-service: E-service applications deliver valuable customer information
that empowers customer service organisations to proactively track,
---------------------- organise and analyse all interactions with new and existing customers on
an ongoing basis. Companies will be able to identify additional products
----------------------
and services that may be a good cross-sell or up-sell opportunity, assign
---------------------- status and escalations based on the customer’s needs and most importantly
determine which customers are most profitable.
----------------------
4. E-marketing: E-marketing modules allow organisations to deliver
---------------------- highly personalised web offers and dynamic web surveys that are fully
synchronised with marketing efforts in traditional channels.
----------------------
5. E-catalogues: E-catalogues enable companies to create hierarchical
---------------------- product catalogues and publish them to the web.
---------------------- 6. E-collaboration: E-collaboration modules reduce call volume and

improve service profitability by offering users the assistance they need at
---------------------- precisely the moment they need it- while on the Web site.
---------------------- 7. E-personlisation: E-personalisation provides customers with access to
relevant information based on their profiles.
----------------------
8. E-recommendation: Customers are guided through a questionnaire to
---------------------- the most suitable choice of products or services.
9. Content management: Content management applications are considered
----------------------
to be part of personalisation service tools. In fact, any customisation or
---------------------- recommendation to the user is based on suggestive content with regards
to products and services best matching a customer’s expectations.
----------------------
10. E-profiling: Profiling or tracking is the collection and the processing of Notes
users’ raw data, in order to build a user profile.
----------------------
2.6 SIX E’S IN E-CRM ----------------------
There are six E’s in E-CRM for optimising the value of relationship between ----------------------
companies and customers. Value optimisation and value for the customer have
a direct implication on the service level requirements. The service levels and ----------------------
the purchase levels have a direct correlation with each other. For example,
low purchase value customers who require high levels of service must either ----------------------
purchase the high level of service or move away to competitors. Similarly, high ----------------------
value customers who require a high level of service are maintained without
expanding the costly offering to the entire customer population. The six E’s are ----------------------
explained below:
----------------------
1. Electronic: New electronic channels such as the web and custom-
made e-messaging have become the medium for interactive, speedy and ----------------------
economic communication, which challenges companies to keep pace
with improved speed. ----------------------
2. Enterprise: Through e-CRM, a company gains the means to touch and ----------------------
shape a customer’s experience. This will depend on the construction
----------------------
and maintenance of a data warehouse, which will provide consolidated,
detailed views of individual customers, cross-channel customer behaviour ----------------------
and communications history.
----------------------
3. Empowerment: E-CRM strategies must be structured to accommodate
consumers, who now have the power to decide when and how to ----------------------
communicate with the company and through which channel. With this,
consumers decide which firms earn the opportunity. For consumer ----------------------
empowerment, e-CRM solution must be structured to deliver timely,
----------------------
relevant and valuable information.
4. Economics: Many companies execute customer communication ----------------------
strategies to understand the economics of customer relationships so as to
----------------------
get the benefits of smart asset allocation and channel delivery, which will
in return provide customer communication initiatives. ----------------------
5. Evaluation: Evaluation of results allows companies to continuously ----------------------
refine and improve efforts to optimise relationships between companies
and their customers. Understanding customer economics depends on ----------------------
customer behavior towards marketing programs, evaluation of customer
interactions with the help of customer touch point channels and comparison ----------------------
of anticipated rate of investment against actual returns through customer ----------------------
investigative reporting.
----------------------
----------------------
----------------------
Notes 6. Eternal information: The use of consumer information can be employed
to understand their needs. This information can be gained from sources,
---------------------- networks or web page profiler applications, under the condition that
companies follow strict rules and privacy concerns for consumer.
----------------------
---------------------- 2.7 SIMILARITIES BETWEEN CRM AND E-CRM

---------------------- As the customer relationship revolution moves on, companies are willing
to find better ways in dealing with customers. CRM and e-CRM offer these
---------------------- opportunities to provide value-added relationships. The tables below identify
---------------------- some of the CRM and e-CRM similarities. It is important for a company to
review their business model and then choose the direction of traditional CRM
---------------------- or e-CRM.
---------------------- Similarities between CRM and e-CRM are based on the following parameters.
●● Objective: They bring the companies closer to the customers.
----------------------
●● evel of interaction: They provide the best interaction between
L
---------------------- marketing, sales, service and support.
---------------------- ●● Usage: They eliminate and reduce the disconnections between customer
and company relationships.
---------------------- ●● Focus: They both improve upon reality and perception of personalisation.
---------------------- ●● edia: They use mail, telephone or in person or the common customer
M
touch points as media of communication.
----------------------
---------------------- 2.8 DIFFERENCES BETWEEN CRM AND E-CRM
---------------------- Differences between CRM and e-CRM are best understood in a tabular
format, as shown below.
----------------------
Characteristics CRM E-CRM
---------------------- Strategy It is a business strategy for It is an extension, which
acquiring and maintaining includes the electronic
---------------------- the right customer. channel also along with the
---------------------- traditional channel of CRM.
Customer touch Customer touch points or Includes web-enabled touch
---------------------- points contacts are through mail, points and fully integrates
telephone or in person. with the other traditional
---------------------- touch points.
---------------------- Process This is the manual process This is the menu based
where the human beings interaction where the
---------------------- will handle the customers customers will interact
---------------------- and the interaction will be through the applications. This
direct. communication is indirect.
----------------------
----------------------
Characteristics CRM E-CRM Notes
Priority of goals This is company-centric This is customer-centric
mechanism where the mechanism where the ----------------------
company objectives and customers and their ----------------------
growth will have highest satisfaction will have the
priority. highest priority. ----------------------
Emotional Emotional dealings will Emotional dealings will be
dealings be more because the less because the machines ----------------------
human beings handle and the applications cannot ----------------------
the customers. Human express their emotions.
frustrations or simultaneous Consequently, the relationship ----------------------
multiple dealings can affect will be stable.
the customer relationship. ----------------------
Nature of Single transaction at a time Multiple transactions at the ----------------------
transaction because the human being same time. Many customers
can interact with only one can log in at the same time ----------------------
customer at a time. Due to and can enter into the dealings
this reason, the company with the organisation without ----------------------
may lose customers any confusion. ----------------------
because of the time delay or
frustrations or may create ----------------------
errors in the dealings.
Mode of Single mode communication Multi mode communication. ----------------------
communication All the touch points are ----------------------
accessed and the information
will go to the same data ----------------------
repository.
Data repository Multiple data repository Single data repository ----------------------
Man Power Manpower requirement Manpower requirement is
----------------------
is more and the technical very less and the technical
requirement is less. browsers, applications, ----------------------
DBMS requirements will be
more. ----------------------
Data pooling Customer data is maintained Customer data is used for
----------------------
only as a history, which is review purpose. The data will
not utilised as a customer be analysed and the further ----------------------
intelligence base. sales pattern will be based
on the existing data. The ----------------------
algorithms will analyse the
----------------------
data and the sales models will
be prepared automatically. ----------------------
Constraints The transaction is limited by The transaction can happen
time, geographical factors at any time from anywhere in ----------------------
any way.
----------------------
Emphasis Emphasis on customer care Emphasis on integration and
and customer satisfaction. better customer integration. ----------------------
Notes Characteristics CRM E-CRM
Return on Return on Investment Helps in calculating Return
---------------------- investment is generally difficult to on Investment using customer
---------------------- calculate. lifetime value.
Number of Less number of campaigns More number of campaigns
---------------------- campaigns possible. possible.
----------------------
----------------------
----------------------
1. E-CRM is an extension of the CRM strategy of an organisation.
----------------------
2. E-CRM creates a multichannel communication with the customer.
---------------------- 3. Customer value addition is a key component of e-CRM strategy.
----------------------
---------------------- 2.9 COMPONENTS OF E-CRM
---------------------- Let us now take a look at various components of e-CRM.
---------------------- (1) E-CRM assessment: It is very important to devise numerical measures

of how a company measures up in the eyes of the customers with respect
---------------------- to its competitors. An e-CRM capability index is devised, which provides
a benchmark for cross company comparison. Based on these results, a
---------------------- company identifies quick hits, which can be immediately implemented to
---------------------- improve business processes, impact the bottom line and in future enhance
its understanding of its customers’ view of the company.
---------------------- (2) E-CRM strategy alignment: Each company must identify, measures
---------------------- and align to the gaps that exist between customer expectation already
measured in the e CRM assessment stage and the internal capabilities that
---------------------- serve these customer expectations.
---------------------- (3) E-CRM architecture: During this stage, the company will try and
develop a CEA (Connected Enterprise Architecture) within the context
---------------------- of the company’s own customer relationship management strategy. The
following is a set of technical e-CRM capabilities and applications that
----------------------
collectively and ideally comprise a full e-CRM solution.
---------------------- ●● Customer Analytic Software: This will help companies to
transform customer findings into return on investment by producing
----------------------
initiatives in communications software.
---------------------- ●● Data mining Software: The analytical demonstration can be done
with the help of campaign management software with multiple
----------------------
campaigns running on daily or weekly basis.
---------------------- ●● Campaign management Software: This software tests various
offers against control groups, captures promotion history for each
----------------------
customer and prospect and produces output for virtually any online Notes
or offline customer touch point channel.
●● Business Simulation: It is used in conjunction with Campaign ----------------------
Management Software. Business simulation optimises customer ----------------------
offers, messaging and channel delivery prior to the execution of
campaign and compares planned costs and ROI projections with ----------------------
actual result.
----------------------
●● Real time Decision engine: It coordinates and synchronises
communications across duplicate customer touch points system. ----------------------
Real time decision engines contain business intelligence to
determine and communicate the most appropriate message offer ----------------------
and channel delivery in real time and support two- way dialogue ----------------------
with the customer.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 2.3: E-CRM Process
----------------------
[Source - Xchange, Inc at 617-737-2244 or view www.xchangeinc.com by By
Andy Frawley, CEO of Boston-based Xchange, Inc.] ----------------------
Steps to e-CRM Success ----------------------
Many factors play a part in ensuring that the implementation any level of
----------------------
e-CRM is successful. One obvious way it could be measured is by the ability
for the system to add value to the existing business. There are four suggested ----------------------
implementation steps that affect the viability of a project like this:
----------------------
1. Developing customer-centric strategies
2. Redesigning workflow management systems ----------------------
3. Re-engineering work processes ----------------------
4. Supporting with the right technologies ----------------------
----------------------
----------------------
Notes Summary
---------------------- ●● I n today’s world, a company can survive only if they can manage to keep
its customers happy.
----------------------
●● -CRM provides companies with a means to conduct interactive,
E
---------------------- personalised and relevant communications with customers across both
electronic and traditional channels.
----------------------
●● he Business types must address the six Es in e-CRM to optimise the
T
---------------------- value of relationship between companies and their customers. They are
Electronic, Enterprise, Empowerment, Economics, Evaluation, External
----------------------
Information.
---------------------- ●● ven though they both share some traits as similarities, CRM and e-CRM
E
have their own different characteristics such as Strategy, Customer
---------------------- Touch Points, Process, Priority of Goals, Emotional Dealings, Nature
---------------------- of Transaction, Mode of Communication, Data Repository, Man Power,
Data Pooling, Constraints, Emphasis, ROI and Number of Campaigns.
---------------------- ●● I nternet architectures are very difficult to realise in practice. Perhaps,
---------------------- the company that is purchasing CRM system has a long history of using
SAP or has built its own internal system or has both client server and
---------------------- mainframe systems at multiple sites.
---------------------- ●● his sort of problems can create a disaster unless there is some way of
T
dealing with the problem; e-CRM provides that solution..
----------------------
---------------------- Keywords
---------------------- ●● E-CRM: Electronic CRM concerns all forms of managing relationships

with customers making use of information technology.
----------------------
---------------------- Self-Assessment Questions
---------------------- 1. What is E-CRM? Explain its features.

2. State the similarities and differences between CRM and e-CRM.
----------------------
3. Explain the architecture of e-CRM with examples.
----------------------
4. What are the six Es in e-CRM? Explain.
---------------------- 5. Explain the components of e-CRM.
----------------------
----------------------
----------------------
----------------------
----------------------
Answers to Check your Progress Notes
Multiple Choice Single Response. ----------------------
1. What occurs when a web site can know so much about a person’s likes
and dislikes that it can fashion offers that are more likely to appeal to that ----------------------
person? ----------------------
iii. Personalisation
----------------------
----------------------
1. True
2. True ----------------------

1. True
----------------------
2. True
----------------------
3. True
----------------------
Suggested Reading ----------------------
1. Batterley, Richard. Leading Through Relationship Marketing. ----------------------
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.
----------------------
7. Sheth, Parvatiyar, Shainesh. Customer Relationship Management.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Sales Force Automation (SFA)
UNIT
3
Structure:
3.1 Introduction
3.2 Tools or Components of Sales Force Automation
3.3 Sales Force Automation Process
3.4 Essential Factors for Successful Implementation of SFA Program
3.5 Importance and Purpose of SFA Program
3.6 Advantages and Constraints (Challenges) with SFA Program
3.7 Success Cycle of SFA Program
3.8 Next Generation SFA Tool- M-SFA
Summary
Suggested Reading
Sales Force Automation (SFA) 35

Notes
Objectives
----------------------
----------------------
●● Identify the components of the SFA process
---------------------- ●● Explain the factors involved in the implementation of the SFA
---------------------- program
●● Describe the advantages and disadvantages of the SFA program
----------------------
●● Discuss M-SFA
----------------------
---------------------- 3.1 INTRODUCTION

----------------------
Marketing and selling are two important functions for any organisation.
---------------------- In fact, both these functions are to be carried out by all the profit making
organisations. In this unit, we will study one of the technological developments
---------------------- with respect to Sales function. Before we understand Sales Force Automation,
let us revisit the concept of marketing and selling in brief. As we know, both of
----------------------
them have different sets of activities to be done by any organisation.
---------------------- According to the famous definition of Marketing by William J Stanton,
“It is a total system of business activities designed to plan, price, promote and
----------------------
distribute want satisfying products to target markets to achieve organisational
---------------------- objectives”. Selling may be defined as follows: “When a company makes a
product and then tries to persuade customers to buy it, it can be said as Selling”.
---------------------- The major difference between selling and marketing can be understood as
follows.
----------------------
In Selling In Marketing
---------------------- Emphasis is given on product Emphasis is given on customer
---------------------- Management is sales-volume oriented Management is profit-oriented
Planning is short-term; it restricts to Planning is long-term; it deals with
---------------------- today’s products and markets new products, future growth, newer
markets
----------------------
The sales function is very dynamic in nature and is evolved with continuous
---------------------- innovations in it. After the introduction of computers, the IT technology has
been a great help to various functions in the business. One such development
----------------------
in technology has helped the sales function in last few years in Sales Force
---------------------- Automation.
What is Sales Force Automation?
----------------------
It is basically a software tool for the automation of various activities
---------------------- related to sales function of an organisation. For any organisation, the sales
force plays an important role of selling the product range or services to their
----------------------
customers. They are the people who are in direct contact with customers.
---------------------- They acquire important information about customers, competitors, markets
and other information related to sales activities. This information earlier was Notes
remaining with them unless it was totally shared with the organisation. After the
introduction of computer technology, this problem is solved to a great extent. ----------------------
The Information technology service providers realised the importance of this
and developed software to transfer all the relevant information from a sales ----------------------
person to his organisation. The software developed in such a manner helped ----------------------
sales people, their sales department and overall organisation to accumulate the
information in the form of sales and customer related data. Over last few years, ----------------------
such software developed, which is basically useful for sales department and sales
force, is named as ‘Sales Force Automation’. Basically Sales Force Automation ----------------------
provides a mechanism for collecting, storing, analysing and distributing sales ----------------------
and customer related data to the sales people in an organisation.
----------------------
In last one decade, many software development companies have designed
the Sales Force Automation software and it is widely used in almost all the ----------------------
industries and sectors where sales is an important function. Earlier SFA
Programme was aimed at improving sales force productivity and helping them ----------------------
to document their daily sales records, report calls, sending necessary information
----------------------
to their headquarters or regional offices. Later on, the usage of this software
was expanded to larger interest of an organisation such as developing customer ----------------------
relationship and ultimately improving customer satisfaction.
----------------------
Sales Force Automation definitions
i. It is the automation of sales activities within an organisation. (Tech web ----------------------
2003, Amen hours 2002, Gilbert 2002)
----------------------
ii. It is the use of computer hardware, software and telecommunication
devices by sales people in their selling and /or administrative activities. ----------------------
(Morjan et al 2001) ----------------------
iii. SFA systems utilise computerised hardware and software to provide
automated collection, assimilation, analysis and distribution of information ----------------------
to improve sales force activity. (Morgan and Inka 2001) ----------------------
iv. SFA system consists of centralised database system that can be assessed
----------------------
through a modem by remote laptop computers using special SFA software,
so that a sales person can send constantly refreshed information regarding ----------------------
various aspects of the job (Parthasarathy and Soni 1997).
----------------------
v. SFA supports the sales process by improving the speed and quality of
information flow among the sales persons, customers and organisations. ----------------------
(Spier and Venkatesh 2002)
----------------------
Therefore we can say that SFA is the application of information technology
to sales function for better productivity and increased customer satisfaction. ----------------------
----------------------
----------------------
----------------------

Notes 3.2 TOOLS OR COMPONENTS OF SALES FORCE
AUTOMATION
----------------------
The Sales Force Automation programme offers a lot of support to an
---------------------- organisation related to various sales activities. The software programs through
---------------------- their various components or tools maintain the entire sales process for a
company. An individual sales representative can maintain his assigned sales
---------------------- tasks, his achievement, performance and client related information. This entire
information is available at the back office of organisation and it keeps such type
---------------------- of information of all sales representatives of the organisation.
---------------------- Thus, the back office maintains all the important documents related to
the entire sales cycle. It may include organisation’s overall sales policy, sales
----------------------
presentations slides / templates, various reports such as expense report, daily
---------------------- field report and various documents related to contract with distributors and
wholesalers, data related to industry and competitors and historical data related
---------------------- to each product, customers etc.
---------------------- For an organisation, to be effective with respect to sales function, a lot of
activities need to be conducted in a methodical manner at various levels in a sales
---------------------- department. The major key players in this department are sales representatives,
sales mangers, back office staff, sales and support staff and front-end staff.
----------------------
All of them have to play an equally important role in successful sales activity.
---------------------- Therefore, to achieve the sales objectives, the Sales Force Automation program
is equipped with various functions. The features of them are briefed as follows.
----------------------
i. Lead Management: This tool is also known as ‘opportunity management’.
---------------------- This tool helps sales representative to manage the prospective enquiries
(leads) in an efficient manner to develop them into future customers. This
---------------------- tool guides various sales strategies to a sales person. It offers support
---------------------- in performing various tasks, maintaining documents related to the lead
generated. Also it keeps the details of the communication with the lead.
---------------------- An organisation, based on earlier analysis also, can send the right enquiry
to right sales person so that the further course of action can be taken
---------------------- instantaneously and the received enquiry is fulfilled at the earliest.
---------------------- ii. Sales and Territory Management: For any sales manager to manage his
sales territory is always very challenging. He has to take a review of sales
---------------------- activities conducted by sales representatives in his team and lot of data
---------------------- related to various activities is being sent to him. SFA tool helps him to
analyse large data related to sales. Based on the assessment of the same,
---------------------- he can take corrective measures and take a decision and guide his sales
team accordingly.
----------------------
iii. Management of Sales Activities: For effective implementation, proper
---------------------- planning of all activities is very essential in an important function like
sales. This tool offers calendars in assisting the planning related to
---------------------- various important events in sales department related to customers. It also
---------------------- maintains the updates and automates the ‘To Do’ list for an individual
sales person as well as organisation as a whole. The software also helps in Notes
post facto analysis. The tool also offers reminders and alarms for proposal
presentations to the prospective clients, product demonstrations etc. ----------------------
iv. Forecasting: The tool offers a distinct visibility to the organisation in ----------------------
to sales process, which consists of all sales steps to sell the product to
a customer. Accurate forecasting made well in advance helps sales ----------------------
department to gain more customers, revenues and higher profits. It also
----------------------
guides the organisation towards designing future products and future
trends in customer services based on forecasting methods. ----------------------
v. Customer Accounts Management: The program offers a 3600 view of
----------------------
each customer acquired by the firm. Moreover, it helps sales managers
to gain a detailed idea about each and every customer. This facilitates a ----------------------
better understanding between management and employees and boost for
maintaining long-term customer relationship. As soon as the customer ----------------------
is acquired, the tool seamlessly integrates the back-office, regarding
----------------------
all details including payments made by the customer. Thus, it helps to
maintain the entire life cycle in an effective manner. ----------------------
vi. Sales Collaterals (promotional material support) management: The
----------------------
tool offers very important aspect of sales function, i.e. product catalogues,
which are the basic promotional material incorporating all the relevant ----------------------
information of products. Sales representatives can use these customised,
updated product catalogues to demonstrate the product range and convert ----------------------
a prospective into a customer. The modified sales collaterals can be
----------------------
instantly transferred to laptop of a sales representative and he can use
the same instantly as an effective tool to convince his customer. Thus, a ----------------------
sales representative can access sales collaterals any time to get the latest
information about products, prices, descriptions, specifications etc. ----------------------
Communication through e-mail with a customer is also an important task ----------------------
and a standardised format of the same is a part of sales collaterals. It
is time consuming for a representative to prepare communication letters ----------------------
and other contents to be used in official communication with prospective ----------------------
customers. With SFA tools, a sales representative can create an HTML
email template for individualised communication with prospective ----------------------
customers.
----------------------
vii. Sales Analytics Tools: This tool offers an instant access to real time
data for effective and timely decision to sales managers. These easy to ----------------------
use sales analytics tools help managers to analyze sales pipelines (i.e. a
systematic approach to selling a product or service) and historical trends ----------------------
or sales patterns. ----------------------
Sales pipeline is a systematic approach to selling a product or service.
There are four key metrics to keep in mind: ----------------------
●● Number of deals in your pipeline (#) ----------------------

●● Average size of a deal in your pipeline ($) ----------------------

Notes ●● verage percentage of deals that successfully make it through the
A
pipeline or lead to customer conversion ratio (%)
---------------------- ●● verage time deals stay in the pipeline before they are won or sales
A
---------------------- velocity (days)
viii. After Sales Management: This tool is mainly useful for after sales
---------------------- department in an organisation. In many industries like computer hardware,
---------------------- consumer durables, electronics, after sales service is a very important
factor for customer satisfaction and to get referrals from existing satisfied
---------------------- customers. This tool maintains all data related to customer purchases,
date of purchase, purchased product, customer address, warranty details
---------------------- etc. Sales representatives and staff of after sales department can track the
---------------------- record of all customers within the shortest time and can take necessary
actions for better customer services.
---------------------- ix. Channel Management: This tool gives an idea about the functioning of
---------------------- various channel (distribution) and helps to manage their various activities
towards sales, distribution and various issues related to distribution
---------------------- management.
---------------------- x. Integration of Various Applications: The SFA tool, in most of cases is
integrated with applications such as Microsoft Excel, which is a spreadsheet
---------------------- application and MS Word, which is a word processor developed by
Microsoft company. Such type of integration help sales persons, managers
----------------------
and office staff to increase their efficiency and productivity.
----------------------
----------------------
----------------------
1. The software programs through their various components or tools
---------------------- maintain the entire sales process for a salesperson.
---------------------- 2. SFA tool helps the sales manager to analyse large data related to sales.
---------------------- 1. The major key players in the sales department are:
---------------------- i. Sales representatives
ii. Customers
----------------------
iii. Back office staff
---------------------- iv. Sales and support staff
---------------------- v. Front-end staff
----------------------
----------------------
----------------------
----------------------
3.3 SALES FORCE AUTOMATION PROCESS Notes
Major objectives for any organisation to implement Sales Force ----------------------
Automation process include following:
----------------------
i. To increase the accuracy of sales forecast to help sales department for
managing various activities. ----------------------
ii. To increase the focus of organisation on core areas of business or markets. ----------------------
iii. To reduce the length of sales cycle.
----------------------
iv. To ensure quicker response to enquiry.
v. To offer customer friendly after sales service. ----------------------
Basic sales process ----------------------
Before understanding Sales Force Automation process, it is essential to ----------------------
know the basic sales process. The normal business process can be studied as
follows. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 3.1: Basic Sales Process
SFA Process ----------------------
The implementation of SFA process involves many steps and phases, which are ----------------------
discussed after this diagram.
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 3.2: Phase-wise Process of SFA
---------------------- i. Phase 0- conceptualisation and initial screening of project SFA:

This phase is the beginning of the project. In this phase, the software
---------------------- program Sales Force Automation is conceptualised and initial activities
like vendor approach, vendor initial presentations (briefing about the
---------------------- projects) are carried out. In this phase, briefing to senior management
---------------------- on all details about SFA is carried out. Also, for better implementation
of SFA, facts and figures are studied regarding company’s products,
---------------------- customers, channel partners and other stakeholders including marketing
and sales departments. Software installation and other costs are put forth
---------------------- in front of senior management. Finally the proposal is ready.
---------------------- ii. Approval from top management: In this step, the top management of
organisation takes a review and study entire project to be implemented in
---------------------- detailed manner. They also study the impact of project implementation
---------------------- from long-term strategic perspective. They also conduct cost benefit
analysis from entire organisation’s point of view. After a final decision,
---------------------- they give a nod to the software implementation.
---------------------- iii. Phase 1- Analysis and planning of implementing SFA: In this phase,
the approved program for SFA implementation is taken forward in
---------------------- consultation with all the departments. Also the requirement of sales
and other interfacing departments from SFA program is assessed,
---------------------- various processes are standardised and further planning is done for the
---------------------- implementation of software. Various objectives are also set during the
planning process.
----------------------
iv. Phase 2- Pilot implementation: In this phase, all key elements of the Notes
plan are defined, as also the entire software program outlines roles, duties
and activities carried out by everyone in the organisation. Here the major ----------------------
course of activity involves building all technical aspects of making SFA
system and process operational. The software is customised as per specific ----------------------
requirement of the sales department. If the organisation is very large, then ----------------------
pilot SFA may be tested at one specific branch or unit and once satisfactory
results are obtained, then entire pilot project can be rolled out at the larger ----------------------
level in the organisation. The pilot implementation helps in identification
of problems and gaps developed, if any, during development of software. ----------------------
v. Phase 3- SFA training: The installed software program is tested and a ----------------------
successful pilot program is carried out. After removing gaps, the final
----------------------
software is ready to launch at all levels. In this step, the most important task
of staff training towards how to use the software is conducted at various ----------------------
levels. The training program aims at effective usage of software. Initially
top management understands the new system regarding usage, generation ----------------------
of data, reports and other technical aspects of SFA. Then training is usually
----------------------
given to middle management and most importantly to sales department,
as they use the software to a great extent. Therefore, workshops can be ----------------------
arranged to prepare all the staff related to sales management. The front-end
people (those who are in continuous communication with customers) are ----------------------
also to be trained in detailed manner about various aspects of the software.
----------------------
Front-end staff gets frequent opportunity to interact with customers, so
they play a crucial role in the implementation of SFA program. A special ----------------------
briefing has to be done to the staff of other departments such as finance,
marketing, manufacturing, logistics etc. The training phase ensures that ----------------------
it creates a sound platform to give full benefit from the installed system
----------------------
to sales and other departments. Also the main aims of training are to
eradicate the fear of using new system from the minds of the staff and ----------------------
make them aware and convinced of the benefits derived from using the
software. ----------------------
vi. Phase 4- Full implementation of software: In this phase, the entire sales ----------------------
department including field sales staff and other departments start using
SFA program. In this phase, the software is exposed to real situations. ----------------------
The software starts generating data and reports as per data generation and
----------------------
data feeding in the system. After specific period, a review is taken by the
team who is involved in the software implementation program and the top ----------------------
management is informed about the observations regarding functioning of
software program. ----------------------
vii. Success audit: This phase is the final stage of SFA implementation ----------------------
program. In this phase, an opinion of all stakeholders is taken regarding
usefulness and functioning of SFA system. The users are asked towards ----------------------
their opinion of satisfying the objectives set with respect to SFA program.
----------------------
At the end, wherever found necessary, modifications and rectifications are
made in the software program. ----------------------

Notes
----------------------
----------------------
i. Phase 1- Analysis and planning a. Staff training towards how to
---------------------- of implementing SFA use the software is conducted
at various levels.
----------------------
ii. Phase 2- Pilot implementation b. The entire sales department
---------------------- including field sales staff and
other departments start using
---------------------- SFA program.
iii. Phase 3- SFA training c. All technical aspects of
----------------------
making SFA system and
---------------------- process operational are built.
iv. Phase 4- Full implementation of d. The approved program for
---------------------- software SFA implementation is taken
forward in consultation with
----------------------
all the departments.
----------------------
---------------------- 3.4 ESSENTIAL FACTORS FOR SUCCESSFUL

IMPLEMENTATION OF SFA PROGRAM
----------------------
Any new addition in process or technology is always challenging to
----------------------
implement and more importantly, it is challenging to get successful results out
---------------------- of it. In any organisation, it is the combination of technology and human efforts
that makes for the successful launch of any new software technology. There are
---------------------- some basic aspects, which should be considered as for successful SFA process.
They are briefed as follows.
----------------------
i. Well defined objectives: Any business activity should be aimed at
---------------------- accomplishing some basic objectives and should end in measurable
results. In SFA implementation, results represent actual accomplishment
----------------------
generated by the SFA process once it is fully operationalised. It is very
---------------------- necessary that expected results are well defined while setting the SFA
process. Those results could be measured in qualitative and quantitative
---------------------- manner. For example, an organisation can have following objectives
while implementing SFA program.
----------------------
a. To reduce overall sales cycle from three weeks to two week.
----------------------
b. To increase average sales productivity of sales representative by
---------------------- 10% for next two years.
---------------------- c. To increase customer satisfaction and thereby retention of customer.
d. To increase sales forecast accuracy by 10 %.
----------------------
ii. Attitude of staff: Usually, it has been observed that when new technology
---------------------- is introduced, initially people resist accepting and using it. Once they
understand the benefits and importance such as ease of use, convenience, Notes
user friendliness, time saving capacity and, more important, performance
improving ability, they adopt it and start using the technology. Similarly, ----------------------
sales force of an organisation may initially find it difficult to adopt and
use SFA program, but once they are convinced that they are going to ----------------------
benefit most from the implementation of the program, they start using ----------------------
the program with great enthusiasm. Following example exhibits a typical
attitude of staff towards SFA program before and after its implementation. ----------------------
Before SFA Implementation After SFA Implementation ----------------------
I don’t require it. I am a very I think this tool will help me to
successful Sales Representative inbecome a more successful Sales ----------------------
my organisation. Representative in my organisation. ----------------------
Now I will justify my less call Now SFA helps me to plan my day
average in field as I have to be in
and daily calls in a more systematic ----------------------
the office for more administrativemanner, which should give me
----------------------
work. better sales results in the field.
The data that I am sending to The data and information that I am ----------------------
my office is not at all useful andsending should be useful to our after
nobody in the office is going to use
sales department, which should be ----------------------
it. helpful to give better customer ----------------------
service. A happy customer will
give me more referrals. ----------------------
I know this new system will I am sure that this new technology
----------------------
also vanish like the earlier ones will increase my performance and
introduced in our company. help me to grow faster. ----------------------
iii. Support of top management: It is very much essential that the senior
----------------------
executives and management organise training workshops for all relevant
staff in the organisation. Also the support of top management for ----------------------
implementation of new technology is very much required and it should
be percolated from their communication. The senior managers from sales ----------------------
department should express their commitment and effective guidelines
----------------------
towards SFA program. In the initial days, continuous monitoring is very
essential for smooth functioning of the program. ----------------------
3.5 IMPORTANCE AND PURPOSE OF SFA PROGRAM ----------------------
----------------------
In today’s competitive world, an ambitious business organisation strives
hard to perform better continuously to stay ahead of other competitors. It always ----------------------
seeks to increase its sales performance in the market and hence to increase its
profits. The SFA technology has been playing an important role in helping sales ----------------------
department to increase its efficiency thereby improving sales of an organisation.
----------------------
Following points exhibit the importance and purpose of implementing SFA
program in an organisation. ----------------------
----------------------

Notes i. To increase accuracy of sales forecasting, which helps the manufacturing
department for better planning of production schedule.
----------------------
ii. To ensure faster follow- up, once the lead is generated.
---------------------- iii. To increase presence of field force in the field for actual business (sales)
generation by reducing their administrative work load.
----------------------
iv. To collect process and disseminate information related to market and
---------------------- competitors.
---------------------- v. To build data related to sales, customers, competitors over the period of
years to reduce the dependency on sales representatives’ information.
----------------------
vi. To ease the transfer of territories and accounts from one team to another
---------------------- sales team.
---------------------- vii. To offer better sales service, thereby improved customer satisfaction and
increased customer loyalty.
----------------------
An SFA program offers different importance to different levels as follows.
---------------------- Sales Representatives Shorter sales cycles, more business opportunities,
---------------------- higher success rate, more sales leads etc.
Sales Manager Improved productivity of sales people, better
---------------------- customer relations, accurate and in time sales reports
and records, reduced cost of sales.
----------------------
Senior Management Better cash flow management, increased market
---------------------- share of product, higher sales revenue, improved
profitability.
----------------------
A research was conducted by Erifmeyer and Johnson in 2001 with 40
---------------------- manufacturing and service companies in United States on their motivation for
implementing SFA. Following were the observations.
----------------------
Particulars % of sample reports
---------------------- Improved efficiency 72
---------------------- Improved customer contact 42
Increased sales 33
----------------------
Reduced cost 26
---------------------- Improved accuracy 21
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
3.6 ADVANTAGES AND CONSTRAINTS (CHALLENGES) Notes
WITH SFA PROGRAM
----------------------
When an organisation implements SFA program, it offers both advantages
and some challenges. They are briefed as follows. ----------------------
Strategic advantages Strategic challenges ----------------------

Increased operational support, better May develop unrest in organisation
----------------------
customer services, useful in building due to inclusion of new technology.
long- term customer relationship, If not successful, it may create a bad ----------------------
increased overall customer base impression amongst stakeholders.
through retention of customers. ----------------------
----------------------
Operational Advantages Operational Disadvantages
Overall may prove as a cost saving Software technology procurement ----------------------
technology and frees sales people and development cost could be higher
from their administrative jobs, useful and may not be suitable for small ----------------------
when sales team is large and spread organisations.
in large geographical area, increased ----------------------
Maintenance, upgradation and training
relationship with channel partners like are required on continuous basis. ----------------------
suppliers, distributors, retailers.
----------------------
Other Advantages Other Disadvantages
----------------------
Helps to improve overall sales Investment is a constraint for small
function and increased productivity, organisations. IT support is critical for ----------------------
efficiency and profitability of sales sustained use of software. Attitude of
department, gives access to overall staff and sales people is most crucial ----------------------
sales related information in short span in successful implantation of software ----------------------
of time for faster decision- making program.
process ----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. An SFA program helps to build data related to _______, _______,
________ over the period of years to reduce the dependency on sales ----------------------
representatives’ information.
----------------------
2. For an SFA program, maintenance, upgradation and training are
required on __________ basis. ----------------------
1. When new technology is introduced, people accept and use it willingly.
----------------------
2. With the help of the SFA technology, a sales department can increase
its efficiency and ultimately improve the organisational sales. ----------------------
----------------------

Notes 3.7 SUCCESS CYCLE OF SFA PROGRAM
---------------------- Effective sales can be achieved with CRM solution and integrated tools
for sales. Different enterprises and companies using a direct sales channel will
---------------------- have numerous options for Consumable Sales Force Automation Tools for
specific sales force and sales cycle automation needs.
----------------------
Companies with direct sales forces using a consultative sales structure
---------------------- will appreciate the integrated tools built into trade point for opportunities
---------------------- tracking activity. Opportunities include a number of integrated tools to create
an event-driven opportunities for sales forces by a Consultative Sales structure.
---------------------- It includes:
---------------------- 1. Integrated event management tools

2. Support for generating tasks for existing opportunities
----------------------
3. View history of an opportunity
----------------------
4. Upload, create or scan in documents for each opportunity
---------------------- 5. Assign multiple personnel to an opportunity
---------------------- 6. Estimated and actual closing dates can be entered to tracking time lines
---------------------- 7. One click create quotes from opportunities
8. Manage your sales cycle quickly and easily
----------------------
Why SFA software
----------------------
Sales Force Automation (SFA) software increases sales win rates, enhances
---------------------- a sales representatives’ productivity, improves revenue and reduces the sales
cycle duration.
----------------------
Irrespective of the organisational size and scope, SFA software is designed
---------------------- to eliminate many time-consuming tasks associated with selling. Today, many
small and midsize enterprise sales organisations struggle because of several
---------------------- reasons like split customer data, expanding customer base, more complex
---------------------- products, increased competition, higher customer expectations, longer sales
cycles and an expanding sales force. What can help them is a centralised,
---------------------- automated business software solution, which shall be designed specifically for
sales professionals and which can eliminate much of the mundane and repetitive
---------------------- work, leaving the salespeople free for selling.
---------------------- In order to have following benefits, select the best SFA that can assure
you success. The benefits are:
----------------------
1. Save time: Sales automation applications allow salespeople to speed up
---------------------- generation of estimates and their conversion into proposals, quotes and
then orders after a deal is signed. Furthermore, the sales team can have
----------------------
immediate access to order information and can alert customers to an order
---------------------- arrival or delay. It improves the entire customer experience and increases
the value of the sales professional in the eyes of the customer.
----------------------
2. Improve customer service: SFA systems are an integral component of Notes
CRM software. These systems create a central database of every client’s
information, reducing the chances of customer dissatisfaction. CRM ----------------------
systems integrate marketing, sales and customer support activities for a
holistic view of the customer relationship. ----------------------
3. Increase revenue: Since salespeople are freed of routine jobs, they can ----------------------
make more sales calls. Enabling sales representatives to reach more
----------------------
prospects generates more income for the company, leading to enhanced
employee satisfaction as well as profits. Equipped with information, a ----------------------
sales department can create a targeted effort based on matching the most
relevant products or services based on a customer’s accurate purchasing ----------------------
history. With the help of sales automation software, the executives are
----------------------
able to create more accurate sales forecasts based on real-time figures.
4. Opportunity management: SFA systems routinely include competitive ----------------------
intelligence functions which let companies monitor their competitors’
----------------------
activities and take proactive measures accordingly. Information from
online queries or web site visits are funneled into the SFA solution for ----------------------
speedy follow-up and an increased chance of conversion. SFA software
eliminates the need for duplicated data entry, out-of-date files and ----------------------
time-consuming file-sharing. The application also lets salespeople and
----------------------
managers analyze the productivity of each phone call or visit. Sales
managers can integrate marketing materials, research reports or data ----------------------
from various sources into the SFA technology to better-equip salespeople.
The software also includes information on upcoming products or new ----------------------
services.
----------------------
5. Manage sales teams: Sales managers can access each salesperson’s
activities, opportunities, sales figures, customer complaints and other ----------------------
metrics used for measuring success and sales revenue instantly; there is
----------------------
no need to tally the sales-call sheets daily or weekly. This also facilitates
timely intervention by the management. ----------------------
These business software solutions also help managers to select the optimal ----------------------
individual to follow-up on a particular lead, based on geography, expertise or
availability. Once the lead results in an immediate connection between a prospect ----------------------
and a salesperson, its transformation into a sale is more likely. Similar lead-
allocation method is followed for in-bound calls or emails. SFA software also ----------------------
helps managers stay abreast of problematic areas, such as an under-performing ----------------------
representative and make proactive adjustments early in the process – while such
adjustments can still be influential in fixing the problem. ----------------------
----------------------
3.8 NEXT GENERATION SFA TOOL - M-SFA
----------------------
The software developer companies always seek to have improvement in
the earlier developed software. In recent times, the SFA technology has also ----------------------
seen many developments. One such development is introduction of mobile SFA
technology. Laptops are one of the important gadgets for any sales representative ----------------------

Notes of today, who is always on field. M-SFA is a solution offered to sales persons,
which are hand held devices that offer better convenience and ease of use than
---------------------- laptops. M-SFA helps a sales person to perform order entry, inventory checking
at warehouse and immediate access to order enquiry as his smart device on
---------------------- hand held terminal when he is on the field.
---------------------- An m-SFA solution offers various benefits to sales persons:
---------------------- i. Instant submission and process of customer order
ii. Understanding inventory levels of products instantly
----------------------
iii. To access the vital information related to customers with respect to credit
---------------------- limits, payment terms, demographics and sales history
---------------------- iv. Voice recording facility
---------------------- With invasion of technology and newer gadgets such as iPods, m-SFA
solution is an important tool for a moving sales person for faster communication
---------------------- through voice or data to his sales office and help to improve his performance.
----------------------
Activity 1
----------------------
Visit a software company and find out which SFA tools they are using.
----------------------
----------------------
Summary
----------------------
●● sales function is very important function in every organisation, as
A
---------------------- it generates revenue. Moreover, it is very challenging due its dynamic
nature. In last few years, new technologies such as SFA program are
----------------------
helping sales personnel to increase their efficiencies in their domain.
---------------------- ●● FA products were originally meant to improve sales force productivity
S
and motivate sales people to reduce their administrative activities and
---------------------- increase field presence.
---------------------- ●● owadays, organisations believe that SFA programs not only improve
N
sales productivity but also help to improve customer satisfaction and
---------------------- customer retention.
---------------------- ●● ll over the world, SFA programs have helped sales function to improvise
A
for efficiency and productivity.
----------------------
---------------------- Self-Assessment Questions

---------------------- 1. What are the components involved in the SFA process? Describe any two
of them.
----------------------
2. Based on the unit, make a list of some points for successful implementation
---------------------- of an SFA program.
----------------------
Answers to Check your Progress Notes
1. False
----------------------
2. True
----------------------
1. The major key players in the sales department are: ----------------------
i. Sales representatives ----------------------
iii. Back office staff ----------------------
iv. Sales and support staff
----------------------
v. Front-end staff
----------------------
i. –d ----------------------
ii. –c ----------------------
iii. – a
----------------------
iv. – b
----------------------
Fill in the blanks. ----------------------
1. An SFA program helps to build data related to sales, customers, ----------------------
competitors over the period of years to reduce the dependency on sales
representatives’ information. ----------------------
2. For an SFA program, maintenance, upgradation and training are required ----------------------
on continuous basis.
----------------------
----------------------
1. False
2. True ----------------------
----------------------
Suggested Reading
----------------------
1. Agnihotri, Raj and Adam Rapp. 2010. Effective Sales Force Automation
----------------------
and Customer Relationship Management. Businessexpert Press.
2. Colombo, George W. 1994. Sales Force Automation: Using the Latest ----------------------
Technology to Make Your Sales Force More Competitive. McGraw-Hill.
----------------------
3. http://searchcrm.techtarget.com/tutorial/Sales-Force-Automation-
Learning-Guide. ----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
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Enterprise Marketing Automation
UNIT
4
Structure:
4.1 Introduction
4.2 Components of Enterprise Marketing Automation
4.2.1 Features of EMA
4.3 Opt-In and Opt-Out
4.4 Campaign Planning and Management
4.5 Personalisation
4.5.1 Personalisation and Privacy
Summary
Keywords
Suggested Reading
Enterprise Marketing Automation 53

Notes
Objectives
----------------------
----------------------
●● List the components of Enterprise Marketing Automation
---------------------- ●● Describe the concepts opt-in and opt-out
---------------------- ●● Explain personalisation and its features
----------------------
4.1 INTRODUCTION
----------------------
Companies market themselves. In small companies, the level of marketing
---------------------- that goes on can be as simple as a printed brochure and a website. Even the
smallest companies are creating static websites that operate as online brochures
----------------------
for their wares.
---------------------- As companies grow in size, companies use direct mail, email, promotions,
interactive voice response, newsletter, contests, events and other customer
----------------------
“touch points” (point of interaction of a customer with a company) to market
---------------------- their products.
---------------------- Companies also run marketing campaigns to increase their sales in a

defined time period. Can you people remember the advertisement from a
---------------------- popular retailer which says that “between 20th of December to 31st of December
when you buy one shirt you get another free with it”? This is called marketing
---------------------- campaign which offers an incentive to the customer for shopping within a time
---------------------- period for certain items. The company hopes to drastically increase its sale in
this time period.
---------------------- If there is a method to track all marketing campaign efforts then the
---------------------- company will be able to make a more focused attempt in convincing customers.
This is possible through Enterprise Marketing Automation (EMA). It uses Web-
---------------------- based applications and the Internet to improve the effectiveness of traditional
marketing. It creates new methods of marketing and campaign management
---------------------- using the web and information technology to craft finely tuned successful
---------------------- efforts.
The next few sections take you through the basics of modern-day marketing
----------------------
efforts. Enterprise marketing automation is part of customer relationship
---------------------- management module. It can also be independent software installed by the
company. The main function of the enterprise marketing automation module
---------------------- is to run different marketing programmes in the organisation. The enterprise
marketing automation module also helps the given organisation develop a
----------------------
business plan.
---------------------- An enterprise feeds from the customer data which is maintained by the
company. Therefore, the module helps the company to maintain, manage and
----------------------
filter customer- related information.
----------------------
When a company decides to start a marketing campaign for a particular Notes
product then the enterprise marketing automation tool provides the company a
shortlist of customer who could be interested in the product. This filtration of ----------------------
customer is done based on customer segmentation.
----------------------
Customer Segmentation
----------------------
Segmentation is a dynamic ongoing process which is:
●● Measurable ----------------------
●● Approachable ----------------------
●● Significant
----------------------
●● Differentiable
----------------------
●● Affordable
Customer segmentation is an important parameter to consider when ----------------------
designing marketing campaigns. Customer segmentation technique splits the
customer on various parameters. If the marketing campaign satisfies those ----------------------
customer parameters, then, enterprise marketing automation tool will provide ----------------------
their list.
----------------------
Parameters considered for customer segmentation are as follows:
●● Homogeneity within a particular customer segment. ----------------------
●● Heterogeneity across different industry and customer segment. ----------------------
●● ustomer should respond in an identical manner to a particular marketing
C
----------------------
campaign.
●● Customer should be reachable through the marketing campaign. ----------------------
●● Organisation should be able to create a marketing strategy for the group. ----------------------
Segmentation Strategy
----------------------
An organisation looks to target a particular segment for the following reason:
----------------------
●● Organisations are better able to understand and satisfy needs of the
customer. ----------------------
●● Organisations are able to generate higher profits through segmentation.
----------------------
●● Segmentation provides a great opportunity of growth.
●● Segmentation can create a long and fruitful customer relationship. ----------------------
●● Segmentation can lead to higher market share. ----------------------
However, to devise a successful segmentation strategy is difficult.
----------------------
Organisations typically run into challenges around selection of variables to
define segment. There is also a difficulty in identifying correct algorithms for ----------------------
segmentation.
----------------------
----------------------
----------------------

Notes 4.2 COMPONENTS OF ENTERPRISE MARKETING
AUTOMATION
----------------------
There are five components of enterprise marketing automation. They are
---------------------- as follows:
---------------------- 1. Promotions: These are the activities undertaken by organisations to
increase their sales. Promotions can be categorised as cross-selling or up-
----------------------
selling. In cross-selling, customers are offered similar products to the one
---------------------- they have already bought. The aim of cross-selling is to satisfy all the
customer requirements. In up-selling, customers are offered expensive
---------------------- product as well as an upgrade to the existing products. Up-selling is more
profitable and it is in top up of existing sale.
----------------------
2. Event-based marketing: This involves registering customers for
---------------------- seminar and in case of web cast, via the Internet. Companies look forward
to sponsoring events and include their products as part of the marketing
----------------------
event.
---------------------- 3. Loyalty and loyalty Programmes: Loyalty is defined as continued
---------------------- commitment of a customer to a particular product, brand or an organisation.
Customers tend to maintain their loyalty if companies provide value to
---------------------- them and/or it is much expensive to change product brand or organisation.
---------------------- 4. Partner management: It is a marketing campaign organisation joins

hands to promote their and partner’s products. This could also be referred
---------------------- to as joint promotion.
---------------------- 5. Response management: This gives flexibility in marketing campaigns

based upon the initial reaction from the customer. It is a response
---------------------- management in real time.
---------------------- EMA is the technology of end-to-end marketing. Its core component is
campaign management. The “e” component of campaign management is the
---------------------- provision of a single view of the customer to the entire enterprise and those with
responsibility for that customer, which are all available with a browser. Most
----------------------
e-marketing toolsets, like those of Siebel are focused on products that provide
---------------------- customer intelligence, which includes information about customer, such as
his preferred choice of communication - e-mail or phone, etc. which will be
---------------------- useful for planning and executing a campaign. For planning and executing the
campaign, following points should be considered:
----------------------
(a) Extraction and analysis of the intelligence: From a heap of data, useful
---------------------- information has to be mined out.
---------------------- (b) Campaign definition and planning: It has to be based on the data
analysis.
----------------------
(c) Campaign launch: Starting the campaign
---------------------- (d) Campaign monitoring tools that handle lead generation: As the
---------------------- marketing campaign progresses, the system will get contact information
about potential customers. These potential customers are called leads. The Notes
monitoring tools should be capable of handling this process of managing
information collected about leads. ----------------------
(e) Response management – This point has been discussed later in the unit. ----------------------
(f) Workflow for a uniform customer view across the enterprise: The
----------------------
whole process should be centrally streamlined so that at a given point of
time there is only one set of information about a customer. ----------------------
Embedded in most e-marketing software from many of the major players
----------------------
such as Siebel, Unica is the process identified as the permission marketing
mantra, “opt-in, opt-out”. Permission marketing is an approach to selling ----------------------
goods and services in which a prospect explicitly agrees in advance to receive
marketing information. ----------------------
4.2.1 Features of EMA ----------------------
(1) EMA enhances the courtship through an intoxicating mixture of e-mail, ----------------------
e-fax, the Web, the telephone and other technology tools.
(2) It intensifies the experience for the prospective customer when personalised ----------------------
or segmented customer preferences are determined by use of analytical ----------------------
tools. These tools define customer segments that are appropriate to your
business and can help evaluate the successes and failures of e-marketing ----------------------
campaigns in near real time so that significant adjustments to the incentives
and direction to be taken can be made quickly. ----------------------
(3) All trial and tribulations are monitored and adjusted continuously. (4) ----------------------
EMA philosophically propagates permission marketing.
----------------------
(5) EMA software packages come from companies Epiphany & Unica.
Unica, a leading provider of innovative marketing solutions, is now part ----------------------
of Enterprise Marketing Management at IBM. The typical cost of a full
----------------------
blown EMA implementation is near about $60000 to $1 million.
(6) EMA has the analytic engines that are necessary to identify and personalise ----------------------
campaigns with millions of stored customer data records to slice and dice. ----------------------
Components of EMA
The components of EMA Engine are: ----------------------
1. Promotions: Activities carried out by business to boost the sales of their ----------------------
products or services are called promotions.
----------------------
Web-integrated marketing provides the same marketing goodies that
consumers have always been interested in − promotions, sweepstakes, ----------------------
contests, giveaways, cross-selling of products, up-selling of products and
----------------------
discount coupons.
i. Cross-selling: ----------------------
a. The strategy of pushing new products to current customers based on ----------------------
their past purchases.
----------------------

Notes b. Cross-selling is designed to widen the customer’s reliance on the
company and decrease the likelihood of the customer switching to a
---------------------- competitor.
---------------------- c. Cross-selling is often a natural process - if you are selling a skirt,
for example, you might offer a belt that matches it. If you run a
---------------------- motorbike hire shop, you might try to sell waterproof clothing to
customers renting bikes in the monsoon.
----------------------
d. Cross-selling involves five fundamentals:
----------------------
●● Knowing your products
---------------------- ●● knowing your customers
---------------------- ●● Asking questions and listening for clues
●● Assessing customers’ needs and proposing only appropriate
----------------------
products
---------------------- ●● Treating the sale as a suggestion, that way a client will feel
comfortable about volunteering the information and it will be
---------------------- easy for the customer to accept the offer
---------------------- ii. Up-selling: Fortunately, most businesses have the potential to increase
sales simply by selling more to their existing customers.
----------------------
When you attempt to sell additional products and services to members
---------------------- of your business’s current customer base, you are applying a growth
technique known as the up-sell. The rationale behind implementing the
----------------------
up-sell is based on both cost savings and marketing efficiency factors. It
---------------------- is absolutely essential that your business develop appropriate backend up-
sell products and services.
----------------------
Not only is up-sell marketing less costly, but each rupee spent to remarket
---------------------- to existing customers tends to generate far more additional sales rupees
from this up-sell marketing than corresponding marketing rupees spent in
---------------------- the initial sales and marketing efforts.
---------------------- If your business can effectively reach its existing customer base, it will
have the advantage of marketing to those who already know and like your
---------------------- business and its products and services, your business’s existing customers
are aware that your business can meet their needs and wants and within a
----------------------
cost structure they accept.
---------------------- The following are the four major ways to up-sell your existing customers:
---------------------- a. Sell more of what your customers are already buying: For example,
sell other music CDs featuring your customers’ favourite recording artists
---------------------- or send your customers a newsletter announcing new releases.
---------------------- b. Sell complementary products and services: For example, when a
customer buys a music CD, you could offer them a CD carrying case or a
---------------------- storage tower.
----------------------
c. Introduce non-complementary products and services: For example, a Notes
customer who typically buys music CDs can be introduced to videotapes
and DVDs that provide access to the latest in recorded movies. ----------------------
d. Offer new products and services that your business has added: For ----------------------
example, if your media business adds media equipment, such as CD, video
and/or DVD players, these can also be offered to existing customers. ----------------------
Some other promotions used by companies are selling at lower cost. Loss ----------------------
leaders are still a lure. They are those business companies who are leaders in
their respective fields by selling their products at under costs (loss). Buy.com ----------------------
has a model that calls for selling products for 5% under cost to lure a customer
----------------------
base. Their calculations is that they will gain long-term customer value through
repeat customers over time and that the loyal customer base due to the other ----------------------
things (excellent service and promotions) will stay loyal despite price increase
later on. They are also advocates of permission marketing and marketing e-tools ----------------------
to monitor their sales deals.
----------------------
2. Events: Various vendors have developed robust EMA event management
tools for capturing customer information through event registration and ----------------------
online interaction. Web is the preferred e-marketing delivery mechanism.
----------------------
More interesting is “webinars” - seminars conducted over Web. It works
as follows: ----------------------
a. The newsletter is sent in plain text format each week to your email ----------------------
address after you have given permission for it by signing on http://
www.crm guru.com. ----------------------
b. Within the letter are embedded URLs for locations on the Web ----------------------
where you can register for a webcast on some future date.
c. A web-based registration form is filled, an email reminder is sent ----------------------
some time before the webcast. ----------------------
d. Make sure that you have proper tools – streaming video plug – in
----------------------
such as Real Player or Windows Media Player or a proprietary
player that you download and install at the webcast site and you can ----------------------
watch either recorded or live webinars.
----------------------
e. In the meantime, the sponsoring company has captured a qualified
prospect - you! ----------------------
f. The site and newsletter also provides opt-in service. ----------------------
Other registration and lead management features provided by most EMA
vendors include: ----------------------
a. Registration page with opt-in. ----------------------

b. Unsubscribe (opt-out) capabilities. ----------------------
c. User controlled profile management.
----------------------
d. Lead follow up from tradeshows and similar venues.
----------------------

Notes e. Campaigns on tradeshow floor.
f. User group registration and follow up.
----------------------
3. Loyalty and retention programmes: When a customer keeps buying
---------------------- products or services from a particular company over a period of time,
he is said to be loyal to the company. Customer loyalty is much more
----------------------
difficult to maintain when all it takes is a different URL and a click or
---------------------- two to switch brands. Customers are constantly bombarded by the next
great deal and access to that deal no longer involves even a phone call or
---------------------- protracted arguments. Historically, we can trace the advent of customer
loyalty as follows:
----------------------
i. Baby Boomers (people born in America between 1940−1960)
---------------------- and their children are used to easy acquisition of cheap thrills and
expensive goods, with sensate gratification easily obtained in a
----------------------
booming economy.
---------------------- ii. The 1980s were the era of free-spending Yuppies and while they may
---------------------- not spend so freely and more, they have little sense of commitment
to anything that’s on the market. Even if the product is good, there
---------------------- is going to be a better new generation, something less expensive of
the same caliber or simply something cooler very soon.
----------------------
EMA applications build in those small, personalised touches that engender
---------------------- loyalty in customers.
---------------------- Campaign Management has the following example:
●● Birthday Greetings
----------------------
●● Holiday and special occasion reminders
---------------------- ●● Delivery of gift ideas
---------------------- ●● Welcome programmes
---------------------- ●● Points-based programmes
●● Win-back programmes for inactive customers
----------------------
Some other techniques to increase loyalty of customers are:
---------------------- ●● Create a psychological bond with the customer
---------------------- ●● Create service-oriented, customer-centric culture
●● Empower employees to serve
----------------------
●● Reward customer loyalty
----------------------
●● Beg for customer feedback
---------------------- ●● Deliver on your promises
---------------------- ●● Anticipate change in customer needs
4. Partner and channel management: Simplified versions of Partner
---------------------- Relationship Management (PRM) are embedded into many EMA
---------------------- applications. It involves the effective management of all the responses
that are collected as a part of a company. These include features that Notes
incorporate targeted, joint marketing programmes to promote both your
business and your partners. Some features are: ----------------------
●● Cross-sell of a company’s complementary products ----------------------
●● Promotion of new versions or upgrades of a company’s products
----------------------
●● Joint promotions with partners or affiliates
5. Response management: During campaigns, you have many responses; ----------------------
many leads have been handed off to sales. You also have series of online ----------------------
surveys. So you have a lot of data to handle. How does your e-marketing
suite handle response management so you can analyse data? ----------------------
Traditional response management is tedious, even with the use of computers. ----------------------
Marketing Campaign ----------------------
----------------------
----------------------
Telephone
Other E-mail
Registration ----------------------
Response Information
----------------------
----------------------
----------------------
Campaign
Refinement ----------------------
----------------------
Campaign Refinement
----------------------
----------------------
----------------------
Other E-mail
Telephone Registration
Response Information ----------------------
----------------------
----------------------
Campaign ----------------------
Refinement
----------------------
Time
----------------------
Fig. 4.1: Traditional Response Management
----------------------
You have to gather the responses from multiple sources manually and
enter into the database. You must store the information somewhere and do the ----------------------

Notes analysis. After the analysis, you need to work through plans to revamp the next
campaign, since the response gathering was often completed after the campaign
---------------------- was completed.
---------------------- This is where EMA shines. Using the Internet as a tool that works in real
time, “closed-loop feedback” has been integrated into the e-marketing toolbox.
----------------------
i. Closed-loop feedback is the nucleus of Internet-based response
---------------------- management. It is response management in real time.
ii. It is the use of Internet and the tools to compile, extract and analyse
----------------------
information while the campaigns are in progress.
---------------------- iii. It is the augmentation of those campaigns in midstream and the continuous
---------------------- repetition of that development. Value addition happens to the campaign
midway through its implementation and this keeps happening.
---------------------- iv. In other words, information is generating new activity that is generating
---------------------- new information. For example, as a part of an incentive offered in an
e-campaign you are asking the respondents to choose a weekend getaway
---------------------- from a choice of five places and you have given “others” as the sixth
option and if you get maximum number of people opting for the sixth
---------------------- option then it means you have to give better choices to get more customers,
---------------------- which can be done midway through the campaign.
v. The time to gather and analyse information and respond to campaigns is
---------------------- reduced.
---------------------- The Return on Investment is obvious because:
---------------------- i. Information gathering, extraction and analysis time is reduced.
---------------------- ii. Refinements to campaigns can be done in midstream, improving the

possibility of return within the existing campaign. It is no longer a lesson
---------------------- learnt for next time, but instead a chance for success while the original
campaign is in progress.
----------------------
iii. Automated tasks free up labour time for marketing tasks that are not
---------------------- tedious or laborious.
---------------------- Hence, response management is more effective in e-marketing and closed

loop- based system.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
E-Marketing Campaign Notes
----------------------
EMA Tools
Campaign
Refinement
----------------------
----------------------
Refinement Refinement
----------------------
Direct Mail Direct Mail
----------------------
Feedback ----------------------
Telephone
E-mail Response ----------------------
Feedback Feedback
----------------------
Time
----------------------
Fig. 4.2: Close Loop
----------------------
E - Marketing & Closed - Loop Feedback
By comparing the time scale in the two diagrams, it is clear that the second ----------------------
one is definitely less time-consuming.
----------------------
1. Enterprise marketing automation is part of __________________ ----------------------

management module.
----------------------
2. Segmentation is a dynamic ongoing process which is __________,
Approachable and . ----------------------
1. Promotions, Partner Management and Response Management are the
types of EMA. ----------------------
2. EMA philosophically propagates permission marketing. ----------------------

i. Cross-selling a. Up-selling ----------------------
ii. It involves assessing customers’ b. Strategy of pushing new
needs and proposing only products to current customers ----------------------
appropriate products
----------------------
iii. Increasing sales simply by selling c. Cross-selling
more ----------------------
iv. Up-selling d. Based on both cost savings
----------------------
and marketing efficiency
factors ----------------------

Notes
Activity 1
----------------------
---------------------- Visit a market to observe the up-selling and cross-selling activity.
----------------------
4.3 OPT-IN AND OPT-OUT
----------------------
Opt-In
----------------------
You might have visited a website and entered a contest, downloaded a
---------------------- free book or whitepaper or played a game. When you fill an online form on
a website with your vital statistics, often at the bottom of the form there are
---------------------- checkboxes that ask you whether you would like to receive further information
or an e-mail update on the product. This is “opting -in”.
----------------------
Opt-in e-marketing has two functions: intelligence and engagement. The
---------------------- first stage, even prior to clicking your mouse on the checkbox, is the forms you
fill with information about yourself. This information is stored along with your
---------------------- website activity, which is monitored as you meander your way through the site.
After the form is filled, at the point that you’ve clicked or unclicked on the
---------------------- checkboxes, you are engaged.
---------------------- Opt-Out
---------------------- There is also an opt-out variation – the checkbox is already checked and
you have to uncheck it to opt out of the newsletter update or further information.
---------------------- This is “opt- out”. Opt-in principle is more favourable than the Opt-out principle.
Example
----------------------
Which one are you more responsive to? An unsolicited email that says “If
---------------------- you do not want to receive any more mails from us, please type remove in the
subject line and reply to this email” (opt-out) or a registration form on a site that
---------------------- asks you to accept emails in return for entry into a contest for $15000 (opt-in).
---------------------- Results are clearly in favour of opt-in as shown below:
i. Traditional banner ad click through rates is 0.5%
---------------------- ii. Traditional interruption mail is 1% and at most 2%
---------------------- iii. Click through rates for opt-in email is 7%–10% (Click through means
how many percentage of people who actually see a banner, interruption
---------------------- mail or opt-in e-mail, click in and see or read further).
Using available EMA technologies, opt-in campaigns or all marketing
----------------------
campaigns are honed, sharpened and thrust into a segmented marketplace so
---------------------- that the level of success is potentially much greater. EMA provides the templates
and tools for planning, executing and analysing these campaigns in real-time
---------------------- behaviour or milestones such as the opening of a new account.
----------------------
----------------------
----------------------
4.4 CAMPAIGN PLANNING AND MANAGEMENT Notes
E-marketing’s biggest strength is campaign management – the creation of ----------------------
personalised marketing efforts that not only engage the customer or prospect,
but also engage the entire enterprise in the effort to provide a single view of the ----------------------
activity to any department or segment of the company.
----------------------
The campaign management features of the technology are end to end.
They plan and monitor all activities including: ----------------------
●● Identification of the prospect ----------------------

●● Generation of the lead
----------------------
●● Prospect and customer information capture
●● Lead qualification ----------------------
●● Distribution of leads to appropriate segments
----------------------
●● Campaign planning
●● Campaign execution (promotions, events planning) ----------------------
●● Response management
----------------------
●● Refinement − changes in campaign
●● Channel management (joint marketing campaigns) ----------------------
The difference between EMA campaign methods and traditional marketing
----------------------
methods lies in the use of Internet. EMA uses the Internet to capture, extract and
analyse information about each customer and each market segment. It gives you ----------------------
the design tools to plan, execute, monitor and refine your marketing campaigns
to the level of the individual within the market segment. ----------------------
EMA tools also provide a consistent, continuous representation of a value ----------------------
proposition across multiple channels. The fields, call centre, the Web, the internal
departments all see a single view of the customer due to the tight integration between ----------------------
the front office – the customer-facing part of the enterprise – and the back office ----------------------
which controls functions such as human resources and finances.
EMA workflow allows all parties to see exactly what they are permitted ----------------------
to see in all marketing campaigns as they evolve. No one is left out of the loop ----------------------
and no department is slighted in the process. So mistakes are minimised.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes Campaign
Management
---------------------- 2. Revenue &

1. Campaign Team
Budget goals
----------------------
3. Revenue & Cost Indirect
tracking
---------------------- Offering
Analytics
---------------------- Advertising
---------------------- Offering to
selected customer
segment
----------------------
----------------------
---------------------- Other E-mail Web

Direct
Mail
---------------------- Phone E-newsletter

Fax
Analytics Responses
---------------------- Phone
Handoff follow-up
----------------------
E-Sales
----------------------
Fig. 4.3: A Campaign created with EMA Tools
----------------------
---------------------- 4.5 PERSONALISATION

---------------------- Personalisation is the art and science of creating a unique experience for
every individual customer. As an administrator, entirely different categories
----------------------
relating to appropriate functions would appear. The features of personalisation
---------------------- are explained below:
1. It takes an intricate set of highly complex algorithms to create the personal
----------------------
experience. These algorithms slice and dice the customers; customers are
---------------------- being segmented, compared and qualified.
---------------------- 2. Personalisation identifies the needs and requirements of individual

customers.
---------------------- It also means that the engagement of named, faced customers has to be
---------------------- ongoing and intimate to the point that the customer hardly realises that he
is not dealing with a person or that he is not actually getting a peer-to-peer
---------------------- response.
---------------------- 3. Personalisation is the process of customising interaction with a customer

based on his or her explicit interest and preferences or interest and
---------------------- preferences that are derived from other data about customer.
---------------------- 4. Personalisation of the interaction can take on any or all of the following:
●● Personalised offer
----------------------
●● Personalised messages Notes
●● Personalised preference for communication channel
----------------------
5. The benefits of personalisation are:
●● Long standing, happy customers ----------------------
●● Reduced customer service, marketing and sales cost ----------------------
6. The technology that sits behind personalisation of information is ----------------------
extraordinary.
7. The amount of data analysed and the number of ways it is analysed is ----------------------
extensive, often in multiple terabytes. ----------------------
8. Models used for personalisation:
----------------------
●● Offer-based personalisation models
----------------------
●● Real-time interactive personalisation product, for example, the
ability to make qualified decisions right then when the customer is ----------------------
searching for a good book to read this weekend.
4.5.1 Personalisation and Privacy ----------------------
With all the individual data captured and stored, privacy remains an ----------------------
issue. The issue is how much information captured and what information stored
----------------------
constitutes a violation of privacy. Net Perceptions, a real-time personalisation
specialist has developed an exceptional privacy standard for customers. They ----------------------
actively support or are founding members of several privacy standards like
Online Privacy Alliance (OPA). As an institute, OPA is creating a privacy ----------------------
standard for its hundred plus global corporate members to adhere to, which
----------------------
provides powerful protections for privacy.
There are 5 rules for an organisation: ----------------------
1. Publicly adopt and implement a privacy policy. ----------------------
2. Give notice and disclosure of the privacy policy. ----------------------
3. Give individuals the choice on how their personal information is going to
be used online, especially if the use is unrelated to the purpose for which ----------------------
it was collected (opt-in). Minimally allow the individuals the ability to ----------------------
have it and not to opt-out.
----------------------
4. If the information is to be transferred to third parties, it should be in
adherence to this data security standard or procedure. The third party ----------------------
should protect the integrity of the data transfer.
----------------------
5. Take steps to ensure the data is accurate, complete and timely. Mechanisms
for correction of problems and for protection against unauthorised ----------------------
alterations should be established.
----------------------
Example CRM strategy at Walt Disney Resorts
Under Destination Disney, the name for Disney’s new customer experience ----------------------
strategy, the company intends to leverage technology, both front and behind the ----------------------

Notes scenes, in hope of personalising the park experience. Disney will be able to slice
and dice data to influence a customer’s total vacation experience, from hotel to
---------------------- park ride. It can also make assumptions about visitors’ buying behaviour and
personal preferences in real time and refine those assumptions as it collects
---------------------- more data about customers.
---------------------- Once in the park, the idea is to be able to give park goers up-to-the minute
information specific to their preset preferences via their cell phones, e.g., if
---------------------- you have a restaurant reservation in half an hour, Disney will remind you to
keep it by sending a text message to your cell phone. Similarly your cell phone
----------------------
will beep to remind you about the fireworks. Disney wants to make that data
---------------------- accessible across all lines of business, so that any employee at any given time
can access or add information to visitor’s profile, e.g., the same information that
---------------------- a visitor might give to a reservations agent when booking a vacation could be
viewed later by the visitor’s hotel concierge, who could then make personalised
---------------------- recommendations without asking the guest for additional information.
---------------------- Another initiative that ties in with Destination Disney is a website called
magical gatherings, specifically intended to boost new revenues and group
---------------------- business bookings by encouraging far-flung family members to collaborate
---------------------- online to plan their next reunion or group event at Disney World.

----------------------
Fill in the blanks.
---------------------- 1. Personalisation is the process of _________ interaction with a
customer based on his or her explicit interest and preferences.
----------------------
2. Models used for personalisation are Offer-based personalisation
---------------------- models and _____________.
---------------------- 3. EMA tools also provide a consistent, continuous representation of a
_____________ across multiple channels.
----------------------
----------------------
1. Opt-in e-marketing has two functions: intelligence, engagement and
---------------------- management.
2. The difference between EMA campaign methods and traditional
----------------------
marketing methods lies in the use of Internet.
----------------------
---------------------- Summary
---------------------- ●● nterprise Marketing Automation (EMA) is a method to track all marketing
E
campaign efforts for making an attempt in convincing customers. It is
---------------------- also known as e-marketing.
---------------------- ●● ore Components of EMA are campaign management and response
C
management. Promotion, events, loyalty and retention programmes,
---------------------- partner and channel management, etc. are the other components of EMA.
●● egmentation means identifying attributes and patterns which enable a
S Notes
company to group its customers.
●● ersonalisation is the art and science of creating a unique experience for
P ----------------------
each individual customer. ----------------------
Keywords ----------------------
●● Touch point: Point of interaction of a customer with a company. ----------------------
●● Partner management: A marketing campaign in which an organisation ----------------------

joins hands to promote its and its partner’s products.
----------------------
●● Enterprise marketing automation: The technology of end-to-end
marketing. ----------------------
●● Cross-selling: The strategy of pushing new products to current customers ----------------------
based on their past purchases.
----------------------
1. Write short notes on loyalty and retention programmes. ----------------------
2. Write a short note on response management.
----------------------
3. Response management is more effective in e- marketing and closed loop-
based system. Justify this statement with proper examples. ----------------------
4. What do you mean by personalisation and segmentation? ----------------------
Answers to Check your Progress ----------------------
----------------------
1. Enterprise marketing automation is part of customer relationship ----------------------
management module.
----------------------
2. Segmentation is a dynamic ongoing process which is Measurable,
Approachable and Significant. ----------------------
1. False
----------------------
2. True
----------------------
i. – b. ----------------------
ii. – c. ----------------------
iii. – a. ----------------------
iv. – d.
----------------------

Notes Check your Progress 2
Fill in the blanks.
----------------------
1. Personalisation is the process of customising interaction with a customer
---------------------- based on his or her explicit interest and preferences.
---------------------- 2. Models used for personalisation are Offer-based personalisation models
and Real-time interactive personalisation product.
----------------------
3. EMA tools also provide a consistent, continuous representation of a value
---------------------- proposition across multiple channels.
---------------------- State True or False.

1. False
----------------------
2. True
----------------------
---------------------- Suggested Reading

---------------------- 1. Albee, Ardath. 2009. eMarketing Strategies for the Complex Sale.
McGraw- Hill.
----------------------
2. Goldenberg, Barton J. 2003. CRM Automation. New Jersey: Prentice
---------------------- Hall.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Implementing CRM
UNIT
5
Structure:
5.1 Introduction
5.2 Stake Holding Committee Formation and Kick-off Meeting
5.3 Requirement Gathering
5.4 Prototyping and Detailed Proposal Generation
5.5 Development of Customisation
5.6 Power User Beta Testing
5.7 Data Import
5.8 Training
5.9 Rollout and System Hands-off
5.10 Ongoing Support, System Optimisation and Follow-up
Summary
Key Words
Suggested Reading
Implementing CRM 71
Notes
Objectives
----------------------
----------------------
●● Describe the concept of kick-off meeting
---------------------- ●● List the steps in training
---------------------- ●● Explain the importance of the testing phase (Power User Beta Testing)
----------------------
5.1 INTRODUCTION
----------------------
This unit describes the various phases to be followed before implementing
---------------------- the CRM in an organisation. Each and every project starts with planning and
ends with installation and proceeds with maintenance.
----------------------
This entire process contains various phases like planning, analysis,
---------------------- prototyping, error handling, information gathering and final statement of work.
The Statement of Work (SOW) is the important part in the project preparation,
----------------------
which will describe the entire process in detail including cost involved, time
---------------------- duration and the requirement with final date of manufacturing.
---------------------- The SOW can be changed only by the project manager with the concern
of the organisation from both customer and vendor side. Let us take the
---------------------- example of building construction project, which starts with the blueprint. This
blueprint will be prepared by taking various factors into consideration like cost-
---------------------- effectiveness, project effectiveness and the technical feasibility.
---------------------- Then the sample flat will be prepared which will help the architect to
calculate the actual cost and the time required to complete the entire project.
---------------------- Then the construction will start according to the plan and it will be modified in
---------------------- between according to the customer requirements. This kind of changes can be
termed as customisation. The final phase will get over by giving possession to
---------------------- the customers. In this way the various phases involved with this development
will be discussed in this unit in detail.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 5.1: Implementing CRM ----------------------
In a simple way, the following steps can explain the pre-implementation ----------------------
process in brief:
----------------------
1. Needs Analysis
----------------------
●● Define the CRM project by identifying system goals, project scope,
constraints and assumptions. ----------------------
●● Detail requirements that describe what the system must do.
----------------------
●● Develop a conceptual design specification for the CRM system.
----------------------
2. Prototype Development
●● Develop a prototype of the final CRM system that serves as a proof- ----------------------
ofconcept to test features, functionality and system integration.
----------------------
●● Conduct pilot testing to one or more subsets of system users.
3. Customisation ----------------------
●● ny CRM system that we choose to implement should allow us to

A ----------------------
perform customisations to make it fit for the business requirements.
----------------------
Implementing CRM 73
Notes These customisations can be simple, such as adding fields and
tables to the database or more complex, such as incorporating your
---------------------- specific business processes.
---------------------- 4. Data Conversion
●● As like most companies, the valuable customer data in numerous
---------------------- systems and databases throughout the organisation.
---------------------- ●● Getting that data into the new CRM system will be critical to the
success of the overall project.
----------------------
●● Use of the most efficient tools and technologies to make data
---------------------- conversion as painless as possible.
---------------------- 5. Systems Integration

●● Developing a complete view of the customer with any CRM system
---------------------- often requires integrating data that resides in other back-office
---------------------- systems, such as Accounting, Finance, Production, etc.
6. Custom Reports
----------------------
●● Most CRM systems will come with a set number of “canned”
---------------------- reports. While these may fit some of your needs, inevitably you will
require certain custom reports to better monitor your business.
----------------------
Pre-implementation Analysis
---------------------- This is the first phase before starting the actual implementation of CRM.
---------------------- This should clearly specify the necessary thing to be done before starting the
implementation phase. It should specify the parameters, such as:
----------------------
1. Time: Time required to do the preliminary activity will vary from several
---------------------- weeks to several months depending upon the depth of the preliminary
work. Some complicated system may need more time for the understanding
---------------------- of the architecture. This work may lead to several months. Otherwise, this
phase can be completed within short time duration.
----------------------
2. User Requirements: The requirements specified by various levels of
---------------------- people are to be identified and analysed. The requirement can be identified
at two levels:
----------------------
●● Executive level
----------------------
●● User level
---------------------- Executive level will be from the technical level of requirements and the
users will specify the functional level requirements. Both the functional
----------------------
and technical requirements should go hand in hand to get better output.
---------------------- 3. Software Identification: The identification of proper software for the
process is an important part of the implementation, which will decide the
----------------------
real success or failure of a system. Every day new applications are coming
---------------------- up in the market with various specifications. It can be decided only by the
organisation based on their requirement criteria. The requirement criteria
----------------------
specified by one organisation will vary from another organisation. The Notes
selection criteria should be clear enough to get the proper reference. The
following criteria are an example: ----------------------
●● Scalability of software ----------------------
●● Toolset flexibility
----------------------
●● Stability of existing code
●● Compatibility of CRM with legacy system ----------------------
●● Level of technical support ----------------------
●● Availability of additional modules (Like EMA, SFA)
----------------------
The above-mentioned criteria are an example for the selection of software.
Likewise, individual organisations should specify their own criteria for ----------------------
the selection of software. Most of the project failures are due to the poor
----------------------
selection of criteria.
4. Software Specifications: The strength and the weakness of the ----------------------
organisation process should be clearly specified with the software ----------------------
efficiency. The current software problems are to be analysed thoroughly
to bring out the best software selection criteria for the future. This phase ----------------------
helps the organisation to specify the proper selection criteria.
----------------------
5.2 STAKE HOLDING COMMITTEE FORMATION AND ----------------------
KICK-OFF MEETING
----------------------
This committee contains people from the organisation with various
designations who are involved in one or other way with the operations of ----------------------
the organisation. This committee can only give the clear view about the ----------------------
organisational functionality. The discussions and the coordination among these
stake-holding committee members will help the implementation team to do the ----------------------
process smoothly and successfully. The members can be basically classified
into three categories: ----------------------
1. Users: Users are the backbone for any system. The failure or the success ----------------------
of a system is mostly dependent on the users. The users can make or
----------------------
break the system, because they are the consumers of the project. If we
involve the users in the pre-implementation process, the anomalies that ----------------------
will happen at the end of the process can be minimised.
----------------------
2. Natural leaders: These people may not have a high designation in an
organisation, but they are involved only because of their deeds and not ----------------------
because of their titles. For example, we can consider the peons of an
organisation. Even though they are at the bottom level of organisational ----------------------
hierarchical structure, they interact with the people of the entire
----------------------
organisation. So they can give real input to the development team about
the acceptance and the rejection of any new system developed in the ----------------------
organisation.
----------------------
Implementing CRM 75
Notes 3. Senior Management: These people are the actual top-level people
who are responsible for the capital investment of any plans within the
---------------------- organisation. They are not directly related to the success or failure of a
system developed in an organisation. Their roles are as follows: defining
---------------------- various parameters like clear ROI (Return on Investment), quality metrics
---------------------- and to fulfil the corporate mission.
Before the kick-off meeting, evaluation of risk and identification of required
----------------------
technology is taken into consideration.
---------------------- Evaluating Risks
---------------------- Various risk factors are to be considered and analysed before starting the
implementation process. The risk factors can belong to any of the categories
---------------------- like culture, process, goal, technology, etc. Some risk factors can be analysed at
the beginning of the implementation and some can be analysed at a later stage
----------------------
of development. This is the responsibility of the senior management because
---------------------- they are the capital investors and the effect of any risk factors will directly
influence the ROI.
----------------------
Technology Implementation
---------------------- The required technology should be identified and its capability with
---------------------- the integration of existing system should be tested at the beginning of the
implementation. Every organisation will have its own working style and the
---------------------- technology. The proposed new system should be accommodative with the
existing system and it should be able to understand and accept the legacy system
---------------------- and data.
---------------------- Kick-off Meeting
---------------------- The Kick-off meeting is the first meeting with the project team and the
client of the project. This meeting would follow definition of the base elements
---------------------- for the project and other project planning activities. This meeting introduces
the members of the project team and the client and provides the opportunity
----------------------
to discuss the role of each team member. Other base elements in the project
---------------------- that involve the client may also be discussed at this meeting (Schedule, Status
Reporting, etc.).
----------------------
The basic format of a kick-off meeting includes the roles of and
---------------------- contributions from the stakeholders. It also mentions the risks and issues
involved, particularly those that may affect project schedules and lead to
---------------------- decreased customer satisfaction. This is the point at which help needed from
stakeholders is explicitly mentioned.
----------------------
If there are any new team members, the process to be followed is explained
---------------------- so as to maintain quality standards of the organisation. Clarity is given by the
---------------------- project lead if there is any ambiguity in the process implementation.
There is a special discussion on the legalities involved in the project.
---------------------- For example, the design team interacting with the testing team may want a car
----------------------
to be tested on city roads. If the legal permissions are not mentioned by the Notes
concerned stakeholder during kickoff, the test may get modified later to comply
with local traffic laws (this causes unplanned delay in project implementation). ----------------------
So, it was best to have a discussion about it in the kickoff meeting and follow it
up separately, than to assume stuff and later be forced to re-plan test procedures. ----------------------
The kick-off meeting is an enthusiasm generator for the customer ----------------------

and displays a full summary of the project so far. By displaying a thorough
----------------------
knowledge of the goal and steps on how to reach it, confidence is put in the
customer. ----------------------
The purpose of kick-off meeting is to ensure that all project participants
----------------------
begin the project with a clear and shared understanding of the project and
project expectations. ----------------------
Once the selection criteria is prepared and the best method is identified
----------------------
then the meeting phase will begin. This phase of the implementation will
include the people from both the vendor and the customer team. The main ----------------------
reason behind the combination of the two teams is to bring out a better system
with expected performance and best ROI to the organisation. The coordination ----------------------
between these two teams will improve the implementation phase and make it
----------------------
smooth and flexible. This meeting between both the teams should continue till
the end of the implementation. This meeting includes: ----------------------
1. Vendor team (Project manager, implementation leader, System ----------------------
engineers, Programmer): This team consists of people from the
implementing organisation. These people work for the organisation, ----------------------
which is preparing the project for the customers. They belong to technical
as well as functional teams. Their roles and responsibilities are as follows: ----------------------
i. Project manager: The project manager will prepare the complete ----------------------
plan for the project development and assign duties to various people
involved in the process and monitor the progress of the work. ----------------------
The project manager is responsible for all aspects of the project ----------------------
development like cost control, quality and testing, etc. He has to
manage several projects at a time. It is not necessary for a project ----------------------
manager to be on the site all the time. It is sufficient for a project
manager to be on the site at least for 40hrs/week. His responsibilities ----------------------
are to divide the work among the people and supervise the work in ----------------------
progress so that he can take up many projects at the same time. If
any problem arises with the project development then the people ----------------------
can contact the PM to get the solution. The final Statement of
Work (SOW) will be prepared only by the project manager and the ----------------------
changes to the same will be made only with the permission of the ----------------------
project manager. So a project manager acts like a bridge between
the customer headquarters and the vendor headquarters. ----------------------
ii. implementation leader: This person is the technical leader. He is ----------------------
responsible for the technical aspects of the project.
----------------------
Implementing CRM 77
Notes He implements the plans prepared by the project manager. He/she
is purely responsible for the technical aspects of a project. He/she
---------------------- takes the plan from the project manager and segregates the work
into various modules and assigns the modules to various system
---------------------- engineers for development. An implementation leader can handle
---------------------- only one project at a time. He she helps the project manager to
prepare the Statement of Work. But any modifications to it or
---------------------- any problems related to the project plan cannot be handled by the
Implementation leader. It will be forwarded to the Project Manager.
----------------------
iii. System engineers: They are identified only by the project they have
---------------------- undertaken. For example, if they work in java platform then they will
be called Java developers and if they work with functional aspects
----------------------
of CRM then they will be called functional sales specialist. They
---------------------- should be onsite all the time because they are the actual developers
of the project. They are responsible only for the particular module
---------------------- assigned to them rather than the entire project. So any changes in
the plans will be intimated to them by the implementation leaders.
----------------------
They are not directly responsible for the SOW. They are not required
---------------------- to understand the functionality of the organisation.
iv. Programmers: Programmers are responsible for the development
----------------------
of the applications. They will be having the knowledge on the
---------------------- concerned area rather than the overall applications. They will be
responsible for only one application at a time.
----------------------
2. Customer’s Team (Project Manager, Systems or Business Analyst, IT
---------------------- Staff, Integration Experts, Heads of Non-Technical Departments):
After the formation of partner’s team the customer team should be formed.
---------------------- The customer team will work along with the vendor team to avoid the
cost overruns. The customer team can monitor the work in progress as
----------------------
well as the diversification of capital investment.
---------------------- The users should participate in this meeting to bring out the best
---------------------- technology. The customer team will have a clear knowledge about the project
that is going to be implemented in the organisation, so that this knowledge can
---------------------- be imparted to the vendor’s team to bring out a best project with all expected
parameters. These people should know how the implementation works as well
---------------------- as when it will be implemented. Let us look at the team members:
---------------------- i. Project manager: The project manager will reflect the project from the
customer’s viewpoint. The project manager will connect the customer’s
---------------------- team with the vendor’s team and will discuss with the partner’s team
---------------------- project manager to bring out the changes in the Statement of Work. The
entire financial control will be in the hands of PM. The management allots
---------------------- the capital and handover the control to the PM. Any changes in the SOW
should be sanctioned by the PM and he has to fulfill the expectations of
---------------------- the company. The PM is responsible for the failure or the success of the
---------------------- System.
ii. Systems or business analyst: They are called the functional experts. Notes
They can give input on the business processes and provide the enterprise
specific knowledge to the development team. It is not necessary for them ----------------------
to be onsite all the time. They can have an interaction with the vendor’s
team whenever clarifications are required but he should attend the project ----------------------
development team regularly. They are equivalent to the functional experts ----------------------
with the vendor’s team. These analysts will have the background knowledge
about the company, which can be imparted with the vendor’s team. ----------------------
iii. IT staff: They are the administrators of the system and they are ----------------------
responsible for the maintenance of the system. These people can set up
the network and install the software. They are like lab administrators who ----------------------
are responsible for the entire lab set up and software installations. They
----------------------
should be available throughout the implementation problem to dig out
the bugs and remove them from the system. Even though they don’t have ----------------------
major responsibilities like development, they are solely responsible for
solving the whole installation problems. ----------------------
iv. Integration experts: These people will guide the integration of CRM ----------------------
with the information system. They are specialised people and entirely
dedicated to the specific areas. For example, we can consider the library ----------------------
staff, administrative staff, who will be having the knowledge only about
----------------------
that particular area. Integration experts are required throughout the
processing of implementation to impart the knowledge and the hands- on ----------------------
experience that they have in the related area.
----------------------
v. Heads of non-technical departments: These people provide the input
and the approvals of the modules development. They can share the ----------------------
feelings of the employees about the modules as soon as it is developed
by the experts. But these people do not have the technical knowledge to ----------------------
understand the system completely or may take time to understand the
----------------------
system.
----------------------
----------------------
1. Prototype development, customisation, data conversion are steps
----------------------
involved in the _____________.
2. Members in the stake-holding committee comprise _________, ----------------------
________ and senior management.
----------------------
----------------------
----------------------
----------------------
----------------------
Implementing CRM 79
Notes
----------------------
i. Needs analysis a. For better monitoring of business
---------------------- ii. Data conversion b. Detail requirements that describe what
the system must do.
---------------------- iii. System integration c. Getting customer data into the new CRM
---------------------- system
iv. Custom reports d. Integrating data that resides in other
---------------------- back-office systems
----------------------
---------------------- 5.3 REQUIREMENT GATHERING

---------------------- The requirement gathering phase is the second phase, which commences
after the meeting. The bigger the scope of the project, the larger will be the
----------------------
length of the requirement gathering phase.
---------------------- The reasons for the length of the requirement gathering phase could be:
---------------------- ●● uantitative: This factor considers the number of people to be interviewed
Q
for the collection of details.
----------------------
●● ualitative: The complexity of the project implies that the requirement
Q
---------------------- phase is more complicated.
In this phase, all those who are going to use the system must be involved.
----------------------
CRM implementation affects the interaction of every appropriate department in
---------------------- the company. Therefore, it is very important that all the departments co-ordinate
and co-operate with each other.
----------------------
Marketing, sales, finance and so on need to be involved in the teams
---------------------- during this phase and involves a number of actions to be executed. Analysis of
legacy system, which involves technical and functional issues, helps to develop
---------------------- enterprises sales methodology and business rules that define the company.
---------------------- A good requirement analysis will evolve with some issues like “how
successful the sales methodology has been and what can be changed?” and will
---------------------- also provide us with some of the solutions, though certainly not all of them.
---------------------- Requirement gathering can bring even more business issues to the public
eye. Ultimately, whatever the customer wants to carry forward will be added
---------------------- into the CRM system. Most CRM packages are fairly flexible in these tool sets
---------------------- because they allow for small or wholesale changes in the business rules which
in turn govern the customer’s corporate life.
---------------------- The problem with ERP packages is that it is inflexible in terms of
---------------------- embedded business rules, i.e., we are supposed to do business in our own way.
Later, when object-oriented methodologies and languages (SAP R/3 4.0, for
---------------------- example) were used to build ERP packages, the ability to alter the best practices
and business rules which have been implanted in the application became easy.
----------------------
Once the front office requirement gathering is over, the next step is the Notes
identification of the input and output.
----------------------
Input and output Phase
In this input and output phase, we will be dealing with the following questions: ----------------------
i. Which screens will be needed to input data? ----------------------
ii. In what way will the information be retrieved from the system? ----------------------
iii. How will the customer want to work with the system?
----------------------
iv. How many users must the system accommodate and how will they connect
to it (either by LAN, individual remote users, remote offices or web)? ----------------------
Apart from these questions, we need to consider what would be the ----------------------
system’s optimal functionality if all the customer wishes get fulfilled. The
difficulty of this part is that the users often ask for the functionality that is ----------------------
impossible, unaware of the technical knowledge with respect to the system.
----------------------
It is always a good practice to brief the basics of CRM before requirement
gathering in order to narrow the expectations of the users. ----------------------
As the project proceeds, the functionality list narrows significantly. Our ----------------------
concern is to meet the customer’s needs as much as possible, but at the same
time there are a lot of restrictions and technical boundaries, which limit the ----------------------
implementation. ----------------------
Data identification
----------------------
The third phase in this requirement gathering is to identify what data
has to be imported to the system and what has to be exported. Both the one- ----------------------
time effort that must occur and the ones that will be recurring throughout the
life of the system, such as financial data gathered from invoice sales must be ----------------------
considered. In order to make the requirements gathering smooth, it is important ----------------------
to obtain all possible information about the existing system, which will provide
a foundation to see how the legacy system and CRM implementation will fit. ----------------------
Check whether the CRM functionality matches with legacy system ----------------------
functionality. To get this information, non-disclosure agreements and all other
necessary paperwork need to be signed during this phase. According to the non- ----------------------
disclosure agreement, neither the implementation partner nor the customer is
----------------------
allowed to disclose each other’s information given during the course of the
project. ----------------------
This agreement is valid for the life of the project and usually a term of one
----------------------
year after that and longer, if specified. Once the agreement is signed, both the
partner and the customer can get the data and confidential information necessary ----------------------
to start the project work, including the system detail from the customer and other
information from the partner. The detailed plan can be prepared after this phase, ----------------------
which will clearly specify the Statement of Work. If this phase is properly done
----------------------
then the further steps involved in the implementation phase will become easy
and simple. ----------------------
Implementing CRM 81
Notes 5.4 PROTOTYPING AND DETAILED PROPOSAL
GENERATION
----------------------
Prototyping is the process of quickly putting together a working model (a
---------------------- prototype) in order to test various aspects of a design, illustrate ideas or features
---------------------- and gather early user feedback. Prototyping is often treated as an integral part of
the system design process, where it is believed to reduce project risk and cost.
---------------------- Often one or more prototypes are made in a process of iterative and incremental
development where each prototype is influenced by the performance of previous
---------------------- designs. In this way, problems or deficiencies in design can be corrected. When
---------------------- the prototype is sufficiently refined and meets the functionality, robustness,
manufacturability and other design goals, the product is ready for production.
----------------------
The actual work begins in this phase where we deal with the prototype.
---------------------- Generally, prototype is a model of the actual system. This is the main step
involved in the project development life cycle. For example, we can consider
---------------------- the construction of sample flat before the initiation of the entire building
construction. The purpose of the prototype is to develop some of the key
----------------------
functionality for the customer to examine before the rollout (i.e., the time when
---------------------- the production environment has to be installed at the site).
By following the prototyping approach, the amount of difficulty involved
----------------------
in achieving the functionality and various issues are brought out before the
---------------------- actual implementation takes place. It informs the user about the difficulty of full
achievement and confirms whether it can be done or not.
----------------------
After preparing the prototype, the project manager can come to a
---------------------- conclusion of actual time requirement, manpower requirement and the final
completion schedule can be finalised.
----------------------
The same goes for the creation of mock screens where the workflow can
---------------------- be demonstrated. For example, “click this button and this happens, taking you
to…” allows the user to participate at each step of the workflow and prototype
---------------------- development. The methodology that allows the users to give maximum
---------------------- participation and provides input on deliverables as they are delivered is called
the iterative method. The idea is that all the users are allowed to participate at
---------------------- each step of workflow and are involved in all iterations of the application.
---------------------- The result is happy customers because the prototyping approach provides
a platform wherein the customers can not only verify the workflow and give
---------------------- input to the team at all times but also experience the look and feel of the screens
thereby giving a clear understanding of the scope of the statement of work.
----------------------
The prototype can clarify the customer needs by visualisation. When the
---------------------- customer sees the process work or the workflow and agrees to what he or she
sees, a mutual understanding and a good rapport is established amongst the
----------------------
development team and the customer teams thereby making the project work go
---------------------- much more smoothly.
----------------------
The prototype can be demonstrated to various departments in order to Notes
bring out their views and agendas which can then be analysed and worked
out by the development team even if the data presentation from department to ----------------------
department is conflicting. This process generally takes about two weeks.
----------------------
Once the prototype is done and demonstrated and the proposed changes
made in the workflow and functions are acceptable to both the customer and ----------------------
development team, a formal project proposal is written for the client that states
the deliverables, timelines and final costs. The length of this document could be ----------------------
10 to100 pages or more depending upon the type of the project involved.
----------------------
The CRM projects are often divided into four phases:
----------------------
Phase I: Sales Module Customisations
This phase includes the development of product catalogues, the sales ----------------------
process embedding, the account and contact databases and the sale pipeline ----------------------
management criteria.
Phase II: Marketing Module Customisations ----------------------
Technically speaking, this phase is the same as the sales module ----------------------
customisation. They are merely different in what needs to be customised.
----------------------
Phase III: Integration with External Applications
It includes the analysis of the existing information technology infrastructure ----------------------
and the network functionality. It identifies the integration points between the ----------------------
legacy systems, CRM application, etc.
Phase IV: Reporting Integration ----------------------
This is a vital function, especially for those businesses that are scattered ----------------------
beyond one office. Problems arise when the information is not appropriately
structured or appropriately routed. In order to avoid such problems it is necessary ----------------------
that the appropriate templates be created and the right reports are auto-routed to ----------------------
the right recipients.
----------------------
5.5 DEVELOPMENT OF CUSTOMISATION
----------------------
After the detailed proposal generation step of pre-implementation, the ----------------------
next stage is the development of customisation.
Customisation is a process of converting the product according to the ----------------------
customer’s requirement. For example, a shopkeeper can have the readymade ----------------------
furniture in his shop. But when a valuable customer asks for changes in the
design, then the shopkeeper can modify the design according to the customer ----------------------
requirements to retain the valuable customer with him. This kind of process can
be termed as customisation. This step is followed after signing an appropriate ----------------------
proposal as per the customer’s requirement. ----------------------
The time duration for different customisation process differs widely
depending on the requirements. If the simple requirements are specified by ----------------------
the users then the customisation process becomes easy. The normal duration ----------------------
usually lasts for 5 to 7 weeks.
Implementing CRM 83
Notes This time limit may also exceed due to the following factors:
1. Size of the project: It depends on the number of modules involved in the
----------------------
project.
---------------------- 2. Complexity: The complexity of the project may also increase based on
the interfaces, workflow and other functional requirements.
----------------------
3. Technical problems: It may occur due to system failures, etc. (unrelated
---------------------- to implementation).
---------------------- 4. Other factors: Depending on the workflow and the techniques involved,
the estimated time and cost may increase.
----------------------
The elasticity of application is highly required during the creation of
---------------------- customised application since the project must be adaptable to the development
environment and the changes implied on it, e.g., if EMA, CRM toolsets are not
---------------------- flexible then it becomes very difficult to develop customisation application.
---------------------- The responsibilities of different tasks are assigned to people based on
their programming skills, i.e., Java developers, database administrators, etc. The
---------------------- elasticity of application is highly required during the creation of customisation
---------------------- application since the project must be adaptable to the development environment
and the changes implied on it.
----------------------
The effective implementation partners require the following:
---------------------- 1. The implementation team should set up their environment similar to that
of the customer’s site.
----------------------
2. This set up is required since the development team may develop an
---------------------- environment different from that at the customer’s end, which, may in turn,
---------------------- create problems and thus affect the user-friendly nature of the project.
3. Thus, it is very essential that the development team work on the same
---------------------- database and system as that of the customer.
---------------------- 4. All these when implied successfully would also lead to a successful
environment.
----------------------
The Project Manager who is responsible for the entire project development
---------------------- and customisation has to perform the following activities:
---------------------- i. He is responsible to check whether the work is progressing as per the
plan.
----------------------
ii. He is responsible for motivating all his team members and mainly looks
---------------------- out for the performance of the developers.
---------------------- iii. He also has the responsibility of maintaining the project customisation
reports and time frames.
---------------------- Customisation also involves Change Management. Proper report has to
---------------------- be maintained based on the functional changes implied at different stages of
implementation. It has to mainly specify the SOW functional changes.
----------------------
Notes
----------------------
Fill in the blanks.
----------------------
1. The ____________ factor considers the number of people to be
interviewed for the collection of details. ----------------------
2. Prototyping is believed to reduce ___________ and cost. ----------------------
3. ____________ involves creating appropriate templates and auto-
----------------------
routing the right reports to the right recipients.
1. The problem with ERP packages is that it is inflexible in terms of ----------------------

embedded business rules.
----------------------
2. The non-disclosure agreement is valid for a term of five years.
----------------------
5.6 POWER USER BETA TESTING ----------------------
This is the testing phase that comes after the development stage. This Beta ----------------------
Testing involves the active user’s participation. In this phase, the user-specified
----------------------
customisation process will be completed and the system will be prepared for
data migration. This testing phase ensures acceptance of the system by the ----------------------
power users. The term power user indicates that the success or the failure of
any system depends on the users. Because of this, the users are termed as power ----------------------
users. The complete verification of the developed system is also done based on
----------------------
the requirements specified by the users initially.
The first step involves creation of the testing environment at the site. ----------------------
The testing environment will be separate from the actual working environment ----------------------
setup. The risk involved with developing this testing environment is that it may
crash the entire system. In order to avoid such a risk it is better that the customer ----------------------
purchases a server machine that can be isolated easily and can work with the
legacy system side by side. ----------------------
A few problems may also arise by implementing such a server machine ----------------------
especially in case of extensive customisation wherein extensive checks are
performed during development. To overcome these problems, we need to develop ----------------------
a close relationship between the development team and the implementation ----------------------
team.
----------------------
The success or failure of this phase depends upon the backup resources
available. This would mainly determine the factors like: ----------------------
i. What types of backup resources are needed?
----------------------
ii. What procedural automation is followed?
----------------------
iii. What type of training is given to the Power Users?
----------------------
Implementing CRM 85
Notes 5.7 DATA IMPORT
---------------------- This phase identifies the usability and the accuracy of the data.
---------------------- Once the data is properly created, it will be ready for updating the system.
This phase requires full customer participation to prove the accuracy and to
---------------------- understand the meaning of the data. The customer must verify the integrity of
the data to be transferred to avoid the installation anomalies. This phase gives
---------------------- an option for the last minute usability requirement gathering.
----------------------
5.8 TRAINING
----------------------
This phase is the main phase in the implementation process, which
---------------------- improves the usability of the finished project. As we discussed earlier, the success
or the failure of a system is always in the hands of the user. The user should get
----------------------
the proper training of the finished software so that optimal functionality based
---------------------- on the developed system can be obtained.
---------------------- This training will also be done in various stages. Different people require a
different level of training depending upon his or her roles with that organisation.
---------------------- The following steps will explain the different types of training methods:
---------------------- 1. Basic Training: The basic training can be done in two ways. Either
the external people who have developed the system can come to the
---------------------- organisation to train the people or the internal staff can be sent to the
development team to get the training. The main factor involved in
---------------------- selecting any one method is cost. The company will calculate the total
---------------------- expenditure that they will incur by arranging this training programme by
calling the development team to the organisation.
----------------------
This expenditure will include: (a) Travelling expenses, (b) Training
---------------------- charges, (c) Equipment cost and (d) Other expenditures.
2. Customisation Training: There is no hard and fast rule, but this training
----------------------
is done by the now-trained employees who have been engaged in the
---------------------- project. The reason it is best done by the internal project team is their
familiarity with the system to begin with. In terms of cost, it speeds up
---------------------- the basic CRM training and their ordinary labour cost. Another advantage
is that the internal staff had the benefit of ongoing knowledge transfer
----------------------
throughout the implementation process. In this way, a transfer of
---------------------- knowledge/information takes place between the vendor or the integrator
and the users who will, in turn, use the derived knowledge in an on-going
---------------------- fashion. It is very important that the knowledge transfer is an intentional
written part of the statement of work.
----------------------
3. Documentation: The documentation is an important section of the
---------------------- process. It is the responsibility of the vendor or the consulting company
to provide the documentation on the customised system and to see that
----------------------
the future use is ensured. The job of providing the documentation is
---------------------- generally given to documentation experts who know how to structure a
useful document. It is very essential to have a look at some disc losable Notes
past documentation written by the expert and have the documentation
deliverables sketched out in details in the statement of work. A good ----------------------
documentation will improve the usability of the system developed. In
the same way, a poor documentation may increase the complexity of the ----------------------
system for the user. The proper documentation will improve the system’s ----------------------
future usability features.
----------------------
4. Additional Training: Some companies recommend additional training.
Two highly recommended courses are Train the Trainer and an Integrator ----------------------
Course.
----------------------
i. Train the trainer: This will be the one who will train the users
among your staff. This is a major time and money saver. The ----------------------
trained people will give the module-wise training to the employees
individually. This will be the easiest method of training and reaching ----------------------
the bottom level of hierarchy easily.
----------------------
ii. Integrator course: This course teaches the IT staff how to make
their own customisations of sales logic or to the other vendors who ----------------------
have such a course.
----------------------
Activity 1 ----------------------
----------------------
Take a part in training activity in your organisation to observe different
training methods been used. ----------------------
----------------------
5.9 ROLLOUT AND SYSTEM HANDS-OFF ----------------------
This is the final phase wherein it is the time to install the production ----------------------
environment at the site. The production environment is the one your company
is going to use. Being a delicate and huge task, the probabilities are more that ----------------------
things might go wrong and could lead to disaster. The consequences would ----------------------
force the organisation to shut down the legacy system. For this reason, data
migration has to convert all data in the format of Sales Logic or PeopleSoft ----------------------
or Siebel databases (which can be either in Oracle, MS SQL server 7.0, DB2,
Interbase or any other format). When it is done and accepted, the new system is ----------------------
powered up. ----------------------
This work is usually performed on a weekend so that the actual workweek
is not disrupted. Even if the work is not accomplished in the specified duration, ----------------------
alternate arrangements can be planned and executed in such a way that the ----------------------
disruption remains minimal during the workweek.
----------------------
Irrespective of the estimated expenditure, the companies are ready to
shell out even hundreds of thousands of dollars to build tools that are used for ----------------------
data mapping and migration in a large environment. Once the data migration
gets completed, the tools are not used. ----------------------
Implementing CRM 87
Notes The second significant phase of the rollout is remote user and satellite office
preparation. This differs according to different software and methodologies.
---------------------- The variances in methodology and preparation are related to the individual
company and to the scale of the project.
----------------------
Each remote user is usually given a copy of the general database, which
---------------------- is installed on the desktop or laptop and they are provided with the freedom to
customise it as and when they want. Initially, trained implementation personnel
----------------------
guide all the users. Since this is a production environment, the developer stays
---------------------- onsite to deal with unexpected problems.
The interaction between the system and the network can pose a problem
----------------------
such as data synchronisation with remote users. The initial stage of the
---------------------- production environment comprises ups and downs because the sync-up does
not always run smoothly, but things get sorted out when the product has good
---------------------- data synchronisation engines.
----------------------
----------------------
Fill in the blanks.
----------------------
1. In the testing phase, system will be prepared for ______________.
----------------------
2. _____________ teaches the IT staff how to make their own
---------------------- customisations of sales logic.
----------------------
1. The testing environment is the same as that of the actual working
---------------------- environment setup.
---------------------- 2. Rollout and system hands-off is usually performed on weekdays.
----------------------
5.10 ONGOING SUPPORT, SYSTEM OPTIMISATION AND
----------------------
FOLLOW-UP
----------------------
This is optional because not all companies opt to follow through on-
---------------------- support after the rollout. This implementation is one of the disadvantages for
small companies because of their limited ability to provide post-implementation
----------------------
maintenance and support. In either case, the level of service provided is very
---------------------- important and it is therefore wise to arrange for post-implementation support.
Investing finance on maintenance would be a safer option rather than incurring
---------------------- systemic failure cost.
---------------------- It is the legal responsibility of the implementation partner to include the
post- implementation in the contract before the implementation ever starts. The
---------------------- implementation partner must be ready to provide the customer with rapidly
turned around support till the user is able to manage. It is a good practice to
----------------------
contact the customer and make sure that they are happy with the functioning
---------------------- of the system. Occasional onsite assessments are needed which help the
implementation partner to assess whether the customer is getting maximum Notes
benefit from the system.
----------------------
Checklist to be prepared before the implementation of CRM
The checklist below offers a series of considerations to be aware of before ----------------------
moving forward with CRM development. Make sure each of these items has
----------------------
been at least considered at your company and the more complex your intended
CRM programme, the more mandatory it is that you resolve the issue prior to ----------------------
beginning development.
----------------------
Evaluation Question/explanation
1. Have you prepared a CRM business plan? ----------------------
Regardless of whether management requires a CRM business plan, it is ----------------------

a very good idea to have one that represents a CRM baseline for your
company or department. ----------------------
2. Do you know who your executive sponsor is and what he expects? ----------------------
By the time you are ready to launch development, who the CRM executive ----------------------
sponsor is should be crystal clear. Moreover, his role in defining and
validating requirements, managing executive expectations and helping ----------------------
define success metrics should be well understood by all stakeholders.
----------------------
3. Have high-level business requirements been defined?
----------------------
In CRM, this activity should be separate from the formal development
project for two reasons: business requirements will dictate whether the ----------------------
CRM programme moves forward and whether they require involvement
from stakeholders who might not be available during implementation. ----------------------
4. Have success metrics been established? ----------------------
How will you know if your CRM programme has been a success? Although ----------------------
many companies do not require success metrics to be implemented, they
act as an effective safety net after the system is deployed. ----------------------
5. Has the project been funded? ----------------------
No use of planning an entire CRM programme if only a mere proof-of-
----------------------
concept has been approved.
6. Is there an agreement on desired customer? ----------------------
Depending on the scope of your CRM programme, you might include ----------------------
a description of desired behaviours. Are the business functions slated
to support these desired behaviours apparent? Either way, building ----------------------
consensus on how you want customers to behave differently is important. ----------------------
For instance, if the sales staff will be using CRM to manage the sales
pipeline, it should establish the ideal response to an information mailing. ----------------------
7. Does each organisation agree on a common definition of “customer”? ----------------------
The marketing department of an automobile company might consider
a “customer” to be a dealer, but the call centre might consider it to be ----------------------
Implementing CRM 89
Notes a driver. Have consensus on this and other key definitions or plan on
developing them as you define data requirements.
----------------------
8. Can you map the desired functionality to data requirements?
---------------------- Customer data is complex, more often than it is straightforward.
This usually means defining data requirements along with business
----------------------
requirements.
---------------------- At some point you will need to know whether customer data is necessary
and from what system it will originate. A firm understanding of the level
----------------------
of customer data − account, household – is also critical.
---------------------- 9. Do you suspect that external data will be necessary?
---------------------- Purchasing data from an external source (such as Dun & Bradstreet,
Axciom, Data Quick or Experian) might not initially be a high priority,
---------------------- but it can supplement customer profiles with such indicators as number
---------------------- of family members, estimated income, household level psychographics,
ZIP code breakdowns, real estate information and other attributes that can
---------------------- reveal customer behaviours and preferences.
---------------------- 10. For customisation, does the current workstation development environment
support the CRM product?
----------------------
What type of workstation configurations does your CRM tools
---------------------- development environment require? Additional development tools (e.g.,
Microsoft’s Visual Studio) or hardware (e.g., database servers) might be
---------------------- necessary to correctly customise the CRM environment.
---------------------- 11. Have you identified the other applications or systems with which the
CRM product must integrate?
----------------------
There should be an up-front understanding of the impact of CRM on
---------------------- other corporate systems and of how the data will move between systems
effectively. In addition, staff members whose systems will be touched by
---------------------- CRM should be notified of the pending integration requirements.
---------------------- 12. Have the organisational or political barriers to rolling out CRM been
identified? Have they been resolved?
----------------------
Yes, it is a loaded question. No, it is not meant to point fingers, but to
---------------------- establish up-front what the tactics will be when questions of ownership or
disagreements about functional priorities rear their heads. An influential
---------------------- executive sponsor might be able to resolve such issues before they arise.
---------------------- 13. Have you truly defined your privacy policy?
---------------------- Regardless of whether your CRM programme will be Web-based,
understand your company’s boundaries for using data about your
---------------------- customers.
---------------------- CRM must not only adhere to a corporate privacy policy, it should also be
the flagship example of the company’s behaviour around customer data.
----------------------
Summary Notes
●● The pre-implementation phase involves different people in various stages. ----------------------

●● he requirement gathering brings out the entire organisation’s requirements
T ----------------------
by which the entire development process will become easy and simple. If
the requirement is gathered in detail, the development phase will become ----------------------
simple. This phase brings out more business problems to the public eyes.
----------------------
This phase includes various steps like data identification, input-output
screens development, etc. ----------------------
●● ustomisation is a process of making active user participation and
C
----------------------
corresponding changes proposed by the customers will be incorporated
with the model. ----------------------
●● he kick-off meeting will be conducted between the vendor team and
T
the customer teams. Both the teams will comprise people with different ----------------------
designations by keeping the project manager as a head. ----------------------
●● he project manager is the integrator between the vendor’s team and
T
the customer’s team. The customisation process includes various factors ----------------------
like size, complexity, technical problems, etc. The project manager is ----------------------
responsible for the customisation process and the changes proposed by
the customers will be approved only by the PM. ----------------------
●● fter the customisation process gets over, the project manager will prepare
A ----------------------
the detailed proposal. Prototyping is a process of model preparation
or single module preparation before starting the process of entire ----------------------
development that will bring out the idea of the entire system development.
The prototyping will bring out the proper idea about the cost, time and ----------------------
manpower requirement to complete the entire project. The prototyping ----------------------
process will help the project manager to prepare the Statement of Work
successfully. ----------------------
●● he last phase in the pre-implementation process will be training. The
T ----------------------
training phase can be done in four different stages. The four different
training modules are basic training, customised training, documentation ----------------------
and integrated training. The basic training can be given by the vendor’s
team at the customer site or by sending the customers to the vendor site. ----------------------
----------------------
Keywords
----------------------
●● ick-off meeting: The first meeting with the project team and the client
K
of the project. ----------------------
●● rototyping: The process of quickly putting together a working model (a
P ----------------------
prototype) in order to test various aspects of a design, illustrate ideas or
features and gather early user feedback. ----------------------
●● Customisation: A process of converting the product according to the ----------------------
customer’s requirement.
----------------------
Implementing CRM 91
Notes
----------------------
1. Explain in detail the various steps involved in pre-implementation phase.
---------------------- 2. Which are the two teams involved in the process of kick-off meeting?
---------------------- 3. What are the advantages of requirement gathering in CRM implementation?
---------------------- 4. Explain the various responsibilities of senior management personalities

in the pre-implementation phase.
---------------------- 5. Discuss the four phases involved in CRM projects.
---------------------- 6. What are the different types of training?
---------------------- 7. Explain the process of prototyping and its usage in the detailed proposal
generation.
----------------------
8. Write a short note on rollout and system hands-off phase.
----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. Prototype development, customisation, data conversion are steps involved
---------------------- in the pre-implementation process.
---------------------- 2. Members in the stake-holding committee comprise users, natural leaders

and senior management.
----------------------
---------------------- i. – b.
---------------------- ii. – c.
---------------------- iii. – d.
iii. – a.
----------------------
----------------------
Fill in the blanks.
---------------------- 1. The quantitative factor considers the number of people to be interviewed
for the collection of details.
----------------------
2. Prototyping is believed to reduce project risk and cost.
----------------------
3. Reporting integration involves creating appropriate templates and auto-
---------------------- routing the right reports to the right recipients.

1. True
----------------------
2. False
----------------------
Check your Progress 3 Notes
Fill in the blanks.
----------------------
1. In the testing phase, system will be prepared for data migration.
----------------------
2. Integrator course teaches the IT staff how to make their own customisations
of sales logic. ----------------------
1. False
----------------------
2. False
----------------------
Suggested Reading ----------------------
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. ----------------------
----------------------
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Implementing CRM 93
Notes
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The Application Service Provider (ASP)
UNIT
6
Structure:
6.1 Introduction
6.2 M-CRM (Mobile CRM)
6.2.1 Benefits/Advantages of M-CRM
6.3 Need for CRM
6.4 Social Networking and CRM
6.4.1 Rules of Engagement for Social CRM
6.4.2 Integrating Social CRM into CRM Strategy
6.4.3 Transformation of Sales and Marketing by Social Media
6.4.4 Social Media and Customer Service
6.5 CRM Software Packages
6.6 Introduction to ASP
6.6.1 Need for ASP
6.6.2 Features of ASP
6.6.3 ASP Provider Types
6.7 Advantages of ASP
6.8 Disadvantages of ASP
Summary
Suggested Reading
The Application Service Provider (ASP) 95

Notes
Objectives
----------------------
----------------------
●● Specify the need for CRM
---------------------- ●● Define m-CRM
---------------------- ●● Describe the role of social networking in CRM
---------------------- ●● Explain the concept of ASP
●● Enlist the benefits and limitations of ASP
----------------------
---------------------- 6.1 INTRODUCTION

---------------------- In today’s ever changing environment, there should be effective
application of SFA and CRM with various devices like mobile, personal PC’s
---------------------- etc. These devices will be helpful in several business activities such as budget,
---------------------- scheduling, planning, preparation of bills, invoices etc. by giving proper
authority and responsibility to those who will interact with the customer and
---------------------- then the information will be added in database.
---------------------- The concept started with the idea of supporting the customer relations by
solving their complaints and maintaining relations with them and so on.
---------------------- To have accurate data, business processes ensure and streamline the
---------------------- processing of information collection, by improving the efficiency. With the
help of up-to-date information about the customer, a company can provide and
---------------------- deliver timely service to various touch points.
----------------------
6.2 M-CRM (MOBILE CRM)
----------------------
Mobile Customer Relationship Management, i.e. mobile CRM is designed
---------------------- to be executed, operated and accessed through mobile platforms. Mobile CRM
helps organisations to add, edit and manage their interaction and relationships
---------------------- with current or prospective customers through mobile applications on handheld
---------------------- mobile devices, Personal Digital Assistance (PDAs, now called as smart phones)
and Personal Computers.
---------------------- Mobile CRM is designed for users like sales and marketing personnel who
---------------------- regularly need distant access to the organisation’s essential CRM application.
Mobile CRM can function as an extension of the in-house (installed) CRM
---------------------- or a cloud CRM accessed through a mobile Web browser. Depending on the
vendor/seller/ merchant/ retailer/ developer, mobile CRM provides the same
---------------------- functionality and services as a desktop or the organisation’s primary CRM
---------------------- server.
Mobile CRM (m-CRM) is a component of e-CRM. The services under
----------------------
m-CRM aim at developing customer relationships, acquiring or maintaining
---------------------- customers, support marketing, sales or services processes and use wireless
networks as the medium of delivery to the customers. Communication being Notes
the central aspect of customer relations activities, m-CRM is also understood as
communication (one-way or two- way), which is related to sales, marketing and ----------------------
customer service activities, conducted through the medium used, e.g. mobile,
for the purpose of building and maintaining customer relationships. ----------------------
E-CRM permits customers to contact company services from more and ----------------------
more places. Since the Internet access points are increasing by the day, m-CRM
----------------------
goes one step ahead and ensures that customers or managers access the systems,
for instance from a mobile phone or PDA with internet access, resulting in less ----------------------
rigidity but more flexibility.
----------------------
Businesses now-a-days are using handheld devices to streamline
information collection, improve the efficiency of business processes and ensure ----------------------
accurate corporate data. With up-to-date access to customer information, a
company can deliver timely customer service across multiple touch points, ----------------------
including sales and customer service. Effective use of mobile applications can
----------------------
help a company slash sales cycles, speed problem resolution and deliver better
customer service. ----------------------
Since m-CRM has a limitation of not being able to provide a comprehensive
----------------------
range of customer relationship activities, it should be integrated in the complete
CRM system. ----------------------
The popularity of mobile crm generates from three main reasons: ----------------------
1. The devices that consumers are using today have improved in multiple
ways, allowing for advancement such as larger and clearer displays, ----------------------
improved access times on networks, etc. ----------------------
2. The users are also becoming more sophisticated and cultured. M-CRM,
----------------------
therefore, is easy to adapt.
3. The software being developed for these applications has become valuable, ----------------------
meaningful and useful to customers.
----------------------
There are four basic steps that a company should follow to implement
m-CRM system. By following these and also making sure that the IT department, ----------------------
end users and management comply with the agreement terms, the outcome will
----------------------
certainly be positive.
Step 1 - Need analysis phase: Means understanding of all the technical needs ----------------------
and desires of the users and stakeholders. At this step, it is important to consider ----------------------
that m-CRM system must be able to grow and change with the business.
Step 2 – Mobile design phase: A critical phase, which will show all the ----------------------
technical concerns that need to be addressed. A few main things to consider are ----------------------
screen size, device storage or security.
Step 3 – Mobile application testing phase: This step will take care to ensure ----------------------
that the users and stakeholders / participants all approve the new system. ----------------------
----------------------

Notes Step 4 – Roll-out phase: The final and last step when the new system is
implemented and training on the final product is done with and for all users.
----------------------
Having a particular m-CRM system that is really efficient is always
---------------------- dependent on the basis of the needs of the organisation and of the ultimate
users. After the detailed identification of the needs, the best systems can be
---------------------- implemented to meet these needs in the competitive environment.
---------------------- 6.2.1 Benefits/Advantages of M-CRM
Advantages of m-CRM are listed as follows:
----------------------
1. The mobile channel creates a more personal and direct connection with
---------------------- customers.
---------------------- 2. It is continuously active and allows individuals concerned to take action
quickly using the information.
----------------------
3. It is the only channel which allows for high and quality responsiveness.
----------------------
4. It supports loyalty of the customer towards the company, which improves
---------------------- and strengthens relationships.

----------------------
Match the following steps of m-CRM implementation with their
---------------------- meaning.
---------------------- i. Need analysis phase a. The new system is implemented

and training on the final product is
---------------------- done.
ii. Mobile design phase b. Understanding of all the technical
---------------------- needs and desires of the users and
---------------------- stakeholders.
iii. Mobile application testing c. Shows all the technical concerns
---------------------- phase that need to be addressed.
iv. Roll-out phase d. Ensures that the users and
---------------------- stakeholders /participants all
---------------------- approve the new system.
----------------------
6.3 NEED FOR CRM
----------------------
In a society we have to expect and demand information available to us
----------------------
wherever we need it. For an organisation, it is difficult to be competitive if they
---------------------- do not have real time access to m-CRM. Considering the growth in this era,
every organisation must be well equipped with the upgraded applications.
----------------------
If we have an association with today’s environment of mobile and
---------------------- remote workers with demands from customers and prospects for near real-time
response, it is clear that companies need a solution that offers flexibility in how
----------------------
staff access customer information. This is especially true when it comes to sales Notes
and service organisations, which are increasingly looking to mobile customer
relationship management applications in an effort to enhance sales productivity ----------------------
and streamline business operations.
----------------------
Considering high efficiency, less paper work, minimum time usage for
all the work completion, the m-CRM, i.e. mobilising the technology is all the ----------------------
way beneficial. Organisations equipped with m-CRM stand out from other
----------------------
organisations in that they have more satisfaction as an outcome from the internet
processing and from other technological factors. ----------------------
To have best business solutions using m-CRM:
----------------------
●● Make sure that the user (either an individual user or an enterprise group
user) experience and application works with business scenario. ----------------------
●● The software must have the ability to be easily organised without a lot of ----------------------
IT effort and involvement.
----------------------
●● usinesses must be able to manage their own matters while leveraging
B
their mobile business investment to manage their customers. ----------------------
----------------------
There are many m-CRM solutions available, so an organisation needs to
select a proper solution, which is best for the organisation. Following are few ----------------------
factors that an organisation should consider:
----------------------
●● uy-in: Whatever the size of the organisation, buy-in is critical. Success
B
comes to an organisation when the use and impact is considered positively. ----------------------
To have the success, good customer relationship must be developed.
----------------------
●● eployment process: To see that by minimum usage of time the system
D
should be installed with all ongoing support and all associated costs. A ----------------------
sign of an effective CRM is its efficiency when it comes to deployment.
----------------------
●● ase of use: Organisations must look at how easily the mobile CRM
E
solution integrates into their functions like smart phones and how friendly ----------------------
the product will be for employees. If the solution is too complicated, it is
----------------------
of no use because the users simply do not know how to use it.
●● ecurity: No matter which mobile CRM solution you opt for, it should
S ----------------------
satisfy any security concerns, especially since the device may be storing
----------------------
sensitive customer information such as credit card and social security
numbers. ----------------------
----------------------
1. A sign of an effective CRM is its efficiency when it comes to ----------------------
deployment.
----------------------
2. Mobile CRM solution has no security concerns.
----------------------

Notes 6.4 SOCIAL NETWORKING AND CRM
---------------------- CRM often makes use of social media to build customer relationships.
Some CRM systems integrate social media sites like Twitter, LinkedIn and
---------------------- Facebook to track and communicate with customers sharing their opinions
and experiences regarding a company, products and services. Trends identified
----------------------
through social media allow businesses to make more accurate decisions on
---------------------- which products to supply.
---------------------- 6.4.1 Rules of Engagement for Social CRM

Social CRM platforms and tools continue to evolve and improve. More
---------------------- attention needs to be given to process, ideology and roles in social media
---------------------- engagement. Just as important is establishing responsibilities and guidelines
for engagement. When does a complaint get routed to the CEO or a product
---------------------- idea goes to your R&D group, for example? Following rules can be applied for
engagement of social CRM:
----------------------
●● ompanies are beginning to figure out how to use social CRM more
C
---------------------- efficiently by adapting their applications and workflow and adding more
“community managers.”
----------------------
●● here should be a transformation as well as promise for providing stronger
T
---------------------- social CRM capabilities.
---------------------- ●● omponents for generating ideas, collecting large-scale public comment
C
and creating a white-label social network should be more.
---------------------- ●● ales and support teams can cross-reference social media content with
S
---------------------- customer and prospect information, streamline workflow and manage
real-time responses across the enterprise.
---------------------- Still, it appears that social CRM technology is well ahead of the day-to-
---------------------- day reality of actually managing online conversations; we need more thought
given to strategy, process and roles for engaging with customers.
---------------------- 6.4.2 Integrating Social CRM into CRM Strategy
---------------------- In the world of social media and Web 2.0, you need to create a company-
wide community policy based on a social strategy supporting your business
---------------------- goals. There are three customer facing tenets of CRM software that you need to
---------------------- consider: Marketing, Sales force automation, Customer service. They must tap
into the social web as it is useful to their interest area with a complete view of
---------------------- the customer relationship.
---------------------- 6.4.3 Transformation of Sales and Marketing by Social Media
It is said that social media is partly responsible for blurring of the line
----------------------
between sales and marketing. The push model of forcing messages on customers
---------------------- has collapsed. Research has shown that in the area of marketing, sale and
service, social media is increasingly referred as an engagement channel, which
---------------------- incorporates additional elements of marketing and sales.
----------------------

What seems to be the declining (and worrying) influence of sales and Notes
marketing is in fact a reorientation in the relationship with the customer. It is
essential to understand the importance of acceptance of the idea that customers ----------------------
and sales persons also wish to have media monitoring and get influenced by
campaigns through social web. The whole community will benefit from it. ----------------------
For the best marketing, creation and modification of the content that ----------------------
buyers find educational and helpful is vital. The social and demand generation
----------------------
method is creeping in, e.g. start a blog, open a twitter account or create a
Facebook page, link to other communities and encourage them to link to you ----------------------
─ in short, be a part of the communication. However, overt selling should be
avoided because it breaks down trust in the community. ----------------------
6.4.4 Social Media and Customer Service ----------------------
When there is better customer service present in an organisation, there is
----------------------
no need to change the way of handling the traditional one-to-one channels. The
call center will continue to use CRM software solutions to automate interactions ----------------------
through phone, email, chat and so on. The new social channels must be covered
into business processes and analytics. With an application and its effective use, ----------------------
you will find that social conversations will result into a considerable traffic
----------------------
through your call center.
Social media offers opportunities for increased efficiency in customer ----------------------
service. Social communities are full of experts, whose knowledge of products ----------------------
can be put to work serving other customers, reducing the cost of service
and creating a more desirable customer experience. The agents will develop ----------------------
relationships with these experts, giving them recognition and rewards for their
participation. With a social service strategy, by empowering the community, ----------------------
the ratio may be improved to hundreds of customers per agent with customer ----------------------
satisfaction rating.
A software niche has emerged, which supports the social customer ----------------------
care experience with some features such as matching community experts to ----------------------
customers, community- driven knowledge bases, sentiment reporting and
discussion management. Software solutions, which support these features, ----------------------
include Crowd Engineering, Fuze Digital Solutions, Help stream, Jive, Lithium,
Parachute and Get Satisfaction. ----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. Trends identified through ___________ allow businesses to make
more accurate decisions on which products to supply. ----------------------
2. The new social channels must be covered into ____________ and ----------------------
____________.
----------------------
----------------------

Notes
---------------------- 1. Three customer facing tenets of CRM software:
---------------------- i. Marketing
ii. Sales force automation
----------------------
iii. IT
---------------------- iv. Customer service
2. New social and demand generation methods include:
----------------------
i. Starting a blog
---------------------- ii. Opening a twitter account
---------------------- iii. Creating a Facebook page
iv. Operating multiple e-mail IDs
----------------------
----------------------
6.5 CRM SOFTWARE PACKAGES
----------------------
Many CRM vendors offer subscription-based web tools like cloud
---------------------- computing and software as a service. Some CRM systems are equipped with
mobile capabilities, making information accessible to remote sales staff.
---------------------- Salesforce.com was the first company to provide enterprise applications through
---------------------- a web browser and has maintained its leadership position till date. Traditional
providers have recently moved into the cloud-based market via acquisitions of
---------------------- smaller providers.
---------------------- Sales force also plays an important role in CRM as a driving force behind
the adoption of CRM for maximising sales effectiveness and increasing sales
---------------------- productivity. Vendor relationship management (VRM) provides tools and
services that allow customers to manage their individual relationship with
---------------------- vendors. VRM development has come out of efforts by Project VRM under
---------------------- Berkman Center for Internet and Society at Harvard Law, as well as by a
growing number of startups and established companies.
----------------------
Effectively managing the dialogue with the market in terms of sharing
---------------------- information is a must. It helps in fast-tracking problems and responding to
questions both internally and externally, with customers, prospects, employees,
---------------------- other stakeholders and the public.
----------------------
6.6 INTRODUCTION TO ASP
----------------------
An application service provider (ASP) is a business that provides
---------------------- computer-based services to customers over a network. Software offered using
an ASP model is also sometimes called On-demand software. The most limited
---------------------- sense of this business is that of providing access to a particular application
---------------------- program (such as medical billing, telephone billing etc.) using a standard
protocol such as HTTP (Hyper Text Transfer Protocol).
----------------------

In simple terms, an ASP is a company that hosts a software application Notes
and rents it out for a monthly fee. The basic value proposition of an ASP is
twofold: ----------------------
1. Freeing up the customer resources for more strategic initiatives by
----------------------
outsourcing certain aspects such as the expenses associated with managing
a business application. ----------------------
2. Conservation of the customer’s capital by paying a monthly service
fee. This minimisation of cost can be achieved by avoiding the large ----------------------
expenditures, which are required to bring enterprise business application ----------------------
on line.
The ASP Model ----------------------
The application software resides on the vendor’s system and is accessed by ----------------------
users through a web browser using HTML or by special purpose client software
provided by the vendor. Custom client software can also interface to these ----------------------
systems through XML APIs. These APIs can also be used where integration
with in-house systems is required. ----------------------
6.6.1 Need for ASP ----------------------

The need for ASPs has evolved from the increasing costs of specialised ----------------------
software that have far exceeded the price range of small to medium sized
businesses. The growing complexities of software have also led to huge costs ----------------------
in distributing the software to end-users. Through ASPs, the complexities and
costs of such software can be cut down. In addition, the issues of upgrading ----------------------
have been eliminated from the end-firm by placing the responsibility on the
----------------------
ASP to maintain up-to-date services, 24 x 7 technical support, physical and
electronic security and in-built support for business continuity and flexible ----------------------
working. Considering this need, the clients for ASP are businesses, government
organisations, non-profits and membership organisations. ----------------------
6.6.2 Features of ASP ----------------------
Common features associated with ASPs include:
----------------------
(a) ASP fully owns and operates the software application(s).
(b) ASP owns, operates and maintains the servers that support the software. ----------------------
(c) ASP makes information available to customers via the Internet or a “thin ----------------------
client”.
(d) ASP bills on a “per-use” basis or on a monthly/ annual fee. ----------------------
6.6.3 ASP Provider Types ----------------------
There are several forms of ASP business: ----------------------
●● specialist or functional ASP, which delivers a single application, such
A
as credit card payment processing etc. ----------------------
●● vertical market ASP, which delivers a solution package for a specific
A ----------------------
customer type, such as a dental practice etc.
●● An enterprise ASP, which delivers broad spectrum solutions. ----------------------
●● A local ASP, which delivers small business services within a limited area. ----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. ___________ provides tools and services that allow customers to
---------------------- manage their individual relationship with vendors.
2. Software offered using an ASP model is also sometimes called
----------------------
_____________.
---------------------- Multiple Choice Multiple Response.
1. Common features of ASPs include:
----------------------
i. ASP fully owns and operates the software application(s)
---------------------- ii. ASP owns, operates and maintains the servers that support the
software
----------------------
iii. ASP makes information available to customers via the Internet
---------------------- or a “thin client”
---------------------- iv. ASP bills on a daily fee
2. Clients for ASP include:
---------------------- i. Businesses
---------------------- ii. Government organisations
iii. Non-profits
----------------------
iv. Individuals
---------------------- v. Membership organisations
----------------------
---------------------- Activity 1
----------------------
Visit a service provider website to avail different computer based services
---------------------- for customer.
----------------------
---------------------- 6.7 ADVANTAGES OF ASP
---------------------- 1. Rapid implementation: ASPs implement the same products on the same
platform over and over again, thus enabling them to become extremely
---------------------- proficient at this task and at times even to automate the most repetitive
parts of the process. Because the implementations all happen within the
----------------------
ASPs data center, certain application components can be redeployed
---------------------- and/or shared among multiple applications. Eventually, this reduces the
human effort and the total time required for the implementation.
----------------------
2. Lower cost of entry and ownership: ASPs rent applications for a
---------------------- monthly fee, which enables the customers to bring down the large capital
expenditures, which were traditionally required. ASPs centralise and share
---------------------- resources such as network connectivity, hardware, software, facilities and

human resources. This provides a way to pass additional savings to the Notes
customers while at the same time maintaining substantial profit margins.
----------------------
3. Reduced people headaches: It is a known fact that it is very difficult to
find good people, recruit them and to retain them (which is even more ----------------------
difficult). ASPs reduce their load by directly addressing and outsourcing
their customer’s IT department or in some case only a part of the IT ----------------------
department, which is required to manage each respective application.
----------------------
4. Availability: Most ASPs advertise 24/7/365 uptime for their customer’s
applications. In simple terms, it is “online all the time.” This is typically ----------------------
backed up by a service level agreement (SLA), which guarantees that your
----------------------
systems are up and running all the time; else, you start getting portions of
your money back. This is useful for mission-critical applications, which ----------------------
make it good for future aspects.
----------------------
5. Scalability: ASP businesses require that they use high-performance,
scalable technologies. ASPs invest millions of dollars in order to develop ----------------------
a scalable infrastructure so as to accommodate the needs of the new
economy’s companies. Because it is already in place, all customers, ----------------------
whether small or large, get to enjoy the same world class infrastructure.
----------------------
6.8 DISADVANTAGES OF ASP ----------------------
1. Limited choices: ASPs typically provide a very limited number of brands ----------------------
when it comes to applications. They are forced to do this if they are going
----------------------
to be able to produce repeatable, scalable results.
2. Limited hosting of products: Because most ASPs are completely reliant ----------------------
on the marketing efforts of the actual software vendors and drive brand
----------------------
loyalty, they are likely to host only the products with greatest market
share. These products are not always the best solution for a customer’s ----------------------
business problem.
----------------------
3. Integration with other applications: Because ASP applications are
hosted outside the enterprise, integration with other enterprise apps ----------------------
becomes challenging. Even though actual data connectivity between
the enterprise and the ASP can be reasonably robust, the fact that the ----------------------
applications (and the experts who manage them) are not part of the ----------------------
enterprise’s core IT function makes integration efforts more complex.
4. Security: For all practical purposes, data held at an ASP is very safe. ----------------------
However, discomfort still exists with many IT managers because not only ----------------------
their jobs, but also the viability of their company depend upon the safety
of the enterprise data. ----------------------
5. Connectivity: If an application were operating within the enterprise, it ----------------------
would take a LAN failure to break connectivity to the application.
----------------------
6. Difficulty in problem fixing: LAN technology is very stable and in the
event a problem does occur, it can be fixed directly by the enterprise. ----------------------

Notes When using an ASP, there are several more variables introduced in the
communication loop, including telecom companies. So the problem
---------------------- fixing, if the problem takes place, becomes even more difficult.
----------------------
Summary
----------------------
●● obile Customer Relationship Management, i.e. mobile CRM is designed
M
---------------------- to be executed, operated and accessed through mobile platforms. Mobile
CRM (m-CRM) is a component of e-CRM.
----------------------
●● he services under m-CRM aim at developing customer relationships,
T
---------------------- acquiring or maintaining customers, support marketing, sales or services
processes and use wireless networks as the medium of delivery to the
---------------------- customers.
---------------------- ●● ffective use of mobile applications can help a company slash sales
E
cycles, speed problem resolution and deliver better customer service.
----------------------
●● here are four basic steps that a company should follow to implement
T
---------------------- m-CRM system: Need analysis phase, Mobile design phase, Mobile
application testing phase, Roll-out phase.
----------------------
●● dvantages of m-CRM: mobile channel creates a more personal and direct
A
---------------------- connection with customers; continuously active and allows individuals
concerned to take action quickly using the information, the only channel
---------------------- which allows for high and quality responsiveness, supports loyalty of
the customer towards the company, which improves and strengthens
----------------------
relationships.
---------------------- ●● here are many m-CRM solutions available, so an organisation needs to
T
select a proper solution, which is best for the organisation based on buy-
----------------------
in, deployment process, ease of use and security.
---------------------- ●● CRM often makes use of social media to build customer relationships.
---------------------- ●● ome CRM systems are equipped with mobile capabilities, making
S
information accessible to remote sales staff.
---------------------- ●● ost companies cannot afford to implement the levels of redundancy,
M
---------------------- reliability and security. The solution to this lies with ASP. By using an ASP,
even the smallest business can gain access to leading business applications
---------------------- often becoming world-class information system infrastructure. The
deciding factor, whether to use ASP lies on a high-level overview
---------------------- considering their advantages as well as their disadvantages.
---------------------- ●● n Application Service Provider (ASP) is a business that provides
A
computer based services to customers over a network.
----------------------
●● SP is a company that hosts a software application and rents it out for a
A
---------------------- monthly fee.
●● he need for ASPs has evolved from the increasing costs of specialised
T
----------------------
software that have far exceeded the price range of small to medium sized
---------------------- businesses.

●● lients for ASP services include businesses, government organisations,
C Notes
non- profits and membership organisations.
●● he application software resides on the vendor’s system and is accessed
T ----------------------
by users through a web browser using HTML. ----------------------
----------------------
1. Justify the need of m-CRM in modern organisations.
2. What is the role of social networking in CRM? Give two examples. ----------------------
3. Who are ASPs? Discuss their role in brief. ----------------------
4. Why do most of ASPs advertise 24/7/365 uptime for their customer’s
----------------------
application?
5. What are the advantages and disadvantages of ASPs? Explain. ----------------------
6. Explain the concept of ASP with its model and types. ----------------------
Answers to Check your Progress ----------------------
----------------------
Match the following steps of m-crm implementation with their meaning. ----------------------
i. –b ----------------------
ii. –c
----------------------
iii. –d
----------------------
iv. –a
1. True ----------------------
2. False
----------------------
3. Trends identified through social media allow businesses to make more ----------------------
accurate decisions on which products to supply.
----------------------
4. The new social channels must be covered into business processes and
analytics. ----------------------
Multiple Choice Multiple Response. ----------------------
1. Three customer facing tenets of CRM software:
----------------------
i. Marketing
----------------------
ii. Sales force automation
iii. Customer service ----------------------

Notes 2. New social and demand generation methods include:
i. Starting a blog
----------------------
ii. Opening a twitter account
----------------------
iii. Creating a Facebook page
---------------------- 1. Vendor relationship management (VRM) provides tools and services that
allow customers to manage their individual relationship with vendors.
----------------------
2. Software offered using an ASP model is also sometimes called on-demand
---------------------- software.
----------------------
1. Common features of ASPs include:
----------------------
i. ASP fully owns and operates the software application(s)
---------------------- ii. ASP owns, operates and maintains the servers that support the
---------------------- software
iii. ASP makes information available to customers via the Internet or a
----------------------
“thin client.”
---------------------- 2. Clients for ASP include:
---------------------- i. Businesses
---------------------- ii. Government organisations

iii. Non-profits
----------------------
v. Membership organisations
----------------------
---------------------- 1. False
---------------------- 2. False
3. True
----------------------

---------------------- 1. Factor, Alexander. 2001. Analyzing Application Service Providers.
---------------------- Prentice Hall.
2. Goldberg, Barton J. 2002. CRM Automation. Prentice Hall.
----------------------
3. Poole Johnny. 2013. Application Service Provider 28 Success Secrets - 28
---------------------- Most Asked Questions On Application Service Provider - What You Need
To Know. Ingram.
----------------------

Customer Loyalty, CRM in FMCG and Data Mining in
CRM UNIT
Structure: 7
7.1 Introduction to Customer Loyalty and Loyalty Programmes
7.2 Making Loyalty Programmes Successful
7.3 Building Relationships through Service Offerings
7.4 CRM in Fast Moving Consumer Goods (FMCG)
7.5 CRM Metrics
7.6 Application of CRM in B2B and B2C Scenarios
7.7 Data-mining Tools and Techniques
Summary
Suggested Reading
Customer Loyalty, CRM in FMCG and Data Mining in CRM 109

Notes
Objectives
----------------------
----------------------
●● Define customer loyalty and specify how to make a loyalty
---------------------- programme successful
---------------------- ●● Describe CRM metrics
●● Explain various data mining tools and techniques
----------------------
●● Elaborate on the importance of CRM in FMCG
----------------------
---------------------- 7.1 INTRODUCTION TO CUSTOMER LOYALTY AND

LOYALTY PROGRAMMES
----------------------
Customer loyalty is all about attracting the right customer to buy or
----------------------
attracting them to buy higher quantities to get more number of customers.
---------------------- However, that does not constitute how you build customer loyalty.
You build loyalty by the following means:
----------------------
●● Keeping touch with customers using email marketing or with thank you
---------------------- cards etc.
---------------------- ●● Treating your team well so that they treat your customers well.
●● howing that you care by remembering them and knowing what they like
S
----------------------
or dislike.
---------------------- ●● Rewarding them for selecting you other than competitors.
---------------------- In short, customer loyalty is treating people in the way they want to be treated.
Definition of customer loyalty
----------------------
●● “ Likelihood of previous customers to continue to buy from a specific
---------------------- organisation. Great attention is given to marketing and customer
service to retain current customers by increasing their customer loyalty.
----------------------
Organisations employ loyalty programmes which reward customers for
---------------------- repeat business.”
Loyalty programmes
----------------------
●● oyalty programmes may offer prizes, reward points, future discounts
L
---------------------- and other incentives designed to keep customers coming back and doing
repeat business with you. It is an electronic commerce and channel partner
----------------------
term that is used to describe a programme that rewards customers for
---------------------- making purchases from the same vendor or company.
●● oyalty programmes are structured marketing efforts that reward and
L
----------------------
therefore encourage loyal buying behavior – behavior which is potentially
---------------------- beneficial to the firm.
----------------------

7.2 MAKING LOYALTY PROGRAMMES SUCCESSFUL Notes
A good loyalty programme has the power to transform a business into a ----------------------
customer- centric profit machine. Let us take a look at the major factors that
directly impact the success and profitability of a customer loyalty programme. ----------------------
It is important for the marketing department to contribute to the business. ----------------------
It also measures and demonstrates its contribution to profits, though the
misconception is that marketing is a cost centre, not a profit centre. At the same ----------------------
time, the marketplace is changing; customers are becoming more demanding ----------------------
and competition is becoming more intense. Technology is providing some
answers, but each answer brings more choices and more decisions to be made. ----------------------
However, it is sensible to: (1) Focus on the best customers that you already
have (2) Optimise the profit that can be made from them (3) Increase the period ----------------------
in which they remain customers (4) Be able to produce measurable results of ----------------------
success. A well designed loyalty programme can do all these things. In a loyalty
programme, customer and transactional data can be collected. The intelligent ----------------------
use of the data will provide a much clearer picture of the customer base – which
will lead to more profits from the beginning. ----------------------
Some factors that make loyalty programmes successful are discussed below. ----------------------
1. Focus on acquiring data, not just repeat visits: A so-called “loyalty ----------------------
programme” cannot guarantee true loyalty or even repeat visits in any
lasting way, as the popular misconception goes. Early operators thought ----------------------
that the reward would be enough to bring customers back time after time.
----------------------
The smarter operators used loyalty programmes not to buy repeat visits
but to gather information from their customers in order to learn more ----------------------
about them: what they wanted and what changes or offerings would be
most likely to make them truly loyal. ----------------------
2. Target customer acquisition more accurately: A loyalty programme ----------------------
should attract new customers to the business. Acquiring customers is
essential to any business, but it can be expensive if compared to nurturing ----------------------
existing good customers. The quality of new customers acquired can be
----------------------
raised by careful use of the existing data from a loyalty programme. It can
be used to establish the demographic profiles of existing ‘best customers’ ----------------------
and then to target prospective customers with similar demographic
profiles in acquisition campaigns. ----------------------
3. Intelligent de-selection of the least profitable customers: It can be more ----------------------
profitable to lose bad customers than to gain new ones. Design a loyalty
programme that rewards better customers to stay. In fact, the Syracuse, ----------------------
NY-based Green Hills Supermarket has observed that only around 30%
----------------------
of customers actually generate enough profit to cover the cost of servicing
them. ----------------------
4. Win-back profitable customers that have defected: Jill Griffin and ----------------------
Michael Lowenstein, in their book Customer Win-back, report that there
----------------------

Notes are several reasons customer win-back has a greater chance of success
than acquisition. In case of lost customers, you can have information
---------------------- about their past purchase history, where and how to reach them, their
preferred communication channels etc. This advantage is not available
---------------------- with prospects.
---------------------- 5. Increase customer lifetime Value (ClV): Customer Lifetime Value (CLV)
is increasingly being recognised as one of the most important measures
----------------------
of the worth of a customer. It takes into account not only the customer’s
---------------------- value but the expected value over their projected lifetime as a customer.
By identifying customers through a loyalty programme, you may be able
---------------------- to monitor long- term CLV and identify the demographic, sociographic
and purchase profiles, which define the most profitable customers. With
----------------------
this knowledge, you will be able to target and develop more customers.
---------------------- 6. Build real customer relationships based on relevance: Relationship
marketing may be powerful in theory but it is problematic in practice.
----------------------
Building a relationship with customers improves behavioural loyalty,
---------------------- leading to increased bottom-line profits. On examining the human elements
of a long-lasting relationship, you will come across several factors such
---------------------- as trust, consistent provision of good products and services suitable to
the customer’s unique needs. Surprise and delight can be achieved by
----------------------
delivering personal offers such as birthday discount shopping, easy on the
---------------------- pocket day etc. for the most profitable loyalty programme.
7. Set fairer tiered pricing policies: The data from a loyalty programme
----------------------
can help formulate pricing structures. For example, suppose a sufficient
---------------------- number of best customers are happy to buy a product at a particular price,
the company would not be interested in reducing that price merely for
---------------------- cherry-pickers. To help with differentiation, some retailers reduce the
prices of key products to attract new customers. Other retailers try to “buy
----------------------
loyalty” to low pricing (EDLP or Every Day Low Prices). Access Pricing
---------------------- has emerged recently, allowing customers to use loyalty points to ‘buy’
extra discounts on selected items in store.
----------------------
8. Better merchandising and store layout planning: Basket analysis
---------------------- can identify what lines are bought at the same time, particularly by best
customers and cross-purchasing can be encouraged by using suitably
---------------------- planned planograms. The dimensions of knowing who the customer is,
---------------------- how much they spend, where they live help a retailer decide what and
when to display.
---------------------- 9. Reduce promotional and advertising costs: There is no need to send
---------------------- out thousands of flyers or pamphlets or resort to huge newspaper ads for
all readers. It is better that the audience is known to you and each offer
---------------------- can carry a unique identifier that ties the offer to both the customer and
the moment of redemption.
----------------------
10. Geographical targeting for new store locations: The loyalty card
---------------------- enables you to profile the demographics of best customers. In addition,

if the addresses of existing customers are known, they can be plotted Notes
geographically and sites can be chosen.
----------------------
11. Developing a core offer that cannot be refused: The loyalty is
developed by understanding what customers want and then empowering ----------------------
employees to deliver those needs consistently. The data from a good
loyalty programme will help improve this core offering by tailoring and ----------------------
moulding it more closely to the customers’ needs and desires.
----------------------
12. Judging the marketplace’s influence on customer loyalty: The
marketplace is a key factor in the development of loyalty. The elements ----------------------
most closely involved are ease of switching and inertia. The level and
----------------------
quality of competition has a significant effect on how easy it is for a
customer to switch from any one particular supplier. When competitors ----------------------
are offering very similar products at similar prices, with similar levels of
service, some means of useful differentiation has to be found in order to ----------------------
give customers a reason to be loyal.
----------------------
13. Using demographic data to predict loyalty: According to Jan Hofmeyr
and Butch Rice, developers of ‘The Conversion Model’, which enables ----------------------
users to segment customers not only by their commitment to staying with
----------------------
a brand but also to segment non-users by their openness to switching to
the brand. They also suggest that younger consumers are less committed ----------------------
to brands than older consumers. Interestingly, these differences carry over
into cultural groups as well; they find that French-speaking Canadians are ----------------------
more likely to be committed to a brand than English-speaking Canadians
----------------------
and Afrikaans- speaking South Africans are more likely to be committed
than English- speaking South Africans. ----------------------
14. Promoting the brand to build customer loyalty: Every business must ----------------------
develop and deliver a consistently branded experience for its customers.
The essence of the brand should be apparent in every interaction a ----------------------
customer has with the company, enabling customers to form an emotional
attachment with the brand. The loyalty programme provides a truly multi- ----------------------
channel vehicle through which to communicate this brand experience and ----------------------
through which the consumer can become more attached to the company
and its brand. ----------------------
15. Rapid market penetration with a coalition programme: Partnership ----------------------
in a coalition loyalty programme is often thought of as a quick method of
entry into the field of customer loyalty. Successful coalition programmes ----------------------
have a major partnership in several of the key consumer sectors in order to
quickly capture a significant proportion of consumers’ spend. This means ----------------------
the data collected is more representative of the target market but that the ----------------------
share of each consumer’s wallet is also maximised. Most importantly, new
partners joining the programme after it is established will automatically ----------------------
gain the same degree of market penetration as the existing partners.
----------------------
16. Using gift cards and store value cards for loyalty: What is done with
the card determines how useful it is as a vehicle for building loyalty to ----------------------

Notes the retailer. Gift card merchants can use different types of promotions
to increase the level of excitement. All these are gift card-based ways of
---------------------- generating renewed consumer engagement.
---------------------- 17. Use the six Ps of customer loyalty marketing: Loyalty programmes
have become necessary due to vast customer bases and market sizes.
---------------------- Adding two new ‘Ps’ to the well-known 4 Ps, you get Product, Price, Place,
Promotion, People and Promotion. The two additions stand to benefit the
----------------------
customer loyalty. Other factors in the development and management of
---------------------- successful loyalty initiatives include strategy and economics, the features
and benefits offered by the programme, the methodology of the reward
---------------------- component and the metrics and measurements used to track the effect of
the programme.
----------------------
18. Avoiding technological problems with loyalty platforms: If you are
---------------------- setting out to find a ready-made or partly-customised loyalty platform,
the Loyalty Guide will provide you data gathered, analysed and presented
----------------------
in an easy-to- access format with specialist expertise, to ensure that the
---------------------- generated report provides you with the very latest and most up-to-date
market intelligence.
----------------------
Loyalty programmes in e-CRM
---------------------- Loyalty programmes have been present in the market for numerous
---------------------- decades now. However, after the advent of e-commerce, these programmes
have taken a new dimension, namely the reward card app.
---------------------- Using a mobile phone for loyalty programmes is ideal because everyone
---------------------- has their phone with them at all times, especially savvy professionals. This
means that their capacity to engage with your brand and browse their rewards
---------------------- is literally at their fingertips.
---------------------- Most customers need more than the occasional freebie to feel involved in
your rewards programme. In order to be an effective tool for your business, a
---------------------- reward card app has to offer tangible value to customers.
---------------------- Using metrics gathered by loyalty card apps allows businesses to better
tailor their rewards programme and gain insight into customer behavior that
---------------------- can be utilised outside the rewards programme. Providing a tailored rewards
programme makes the customer feel special and reinforces the customer’s
----------------------
relationship with your brand. Turning customers into ambassadors for your
---------------------- brand is essential to growing your revenue.
Loyalty card apps for smartphones are a great way to drive business and
----------------------
track customer metrics. However, to get the most out of a loyalty card app, your
---------------------- business has to choose the right platform. Here are a few key factors to keep in
mind when deciding on a loyalty card app that’s right for your business and how
---------------------- to get the most out of the programme when implementing it.
---------------------- 1. Make it easy
---------------------- 2. Make it meaningful

3. Make it intelligent Notes
4. Make it engaging
----------------------

1. A good loyalty programme has the power to transform a business into ----------------------
a customer-centric profit machine.
----------------------
2. With the help of better merchandising and store layout planning, a
loyalty programme can run successfully. ----------------------
1. In order to be an effective tool for your business, ________ has to
----------------------
offer tangible value to customers.
2. Turning customers into ___________ for your brand is essential to ----------------------
growth in your revenue.
----------------------
----------------------
Activity 1
----------------------
Observe a company’s marketing activity as to how they are making loyalty ----------------------
program successful.
----------------------
----------------------
7.3 BUILDING RELATIONSHIPS THROUGH SERVICE
OFFERINGS ----------------------
The success of a company depends largely on strong client relationships, ----------------------

especially for a small or newly started company. Exceptional client service ----------------------
constitutes a core value for the business and the organisation has to always
aim to become a trusted partner of its clients, rather than a vendor. Companies ----------------------
must be able to differentiate themselves from the competition through strong
relationships. Best practices for building client relationships are outlined ----------------------
below: ----------------------
1. Be patient in building new relationships. Relationships take time.
----------------------
Resist indulging in disingenuous schmoozing, as it can be a severe put-
off. Instead, take the time to get to know your client and share a little bit ----------------------
of yourself. Most importantly, remember that your work for your client is
paramount in building a relationship. At the end of the day, no amount of ----------------------
personal connection can substitute for great work.
----------------------
2. Get to know their industry and company. Keep up with your client’s
company as well as their industry. You do not have to be an expert, but ----------------------
this will help you speak the same language as the client, understand
----------------------

Notes what keeps them up at night and cater your interaction and offerings
accordingly.
----------------------
3. Go the extra mile. As you grow your business and your client relationships,
---------------------- there will be times that you will have to make a decision on when to adjust
or expand your core offerings to cater to the needs of a client. The benefits
---------------------- of offering customised solutions are two-fold: 1) clients remember the
times you came through for them and 2) it may open up additional revenue
----------------------
streams and new product offerings you had not previously considered. A
---------------------- word of caution, though: if you are making a significant departure from
your core offerings, ensure that you are adequately compensated.
----------------------
4. Treat every client as your most important one. Simply put, happy
---------------------- clients are more likely to make referrals. Provide all clients with your
best service, regardless of whether they are a Fortune 500 company or a
---------------------- small business. You never know who your clients may know or to whom
they will refer you. Just as importantly, when they switch jobs, either
----------------------
within their company or to a new one, you want to be the partner they
---------------------- recommend to their new team. Lastly, it is important to remember that
today’s small companies could be the big companies of tomorrow and it
---------------------- is incredibly fulfilling to be a trusted partner fueling that growth.
---------------------- 5. Respond promptly. When a client emails you, acknowledge the receipt
of the email as quickly as possible, even if you do not have the answer they
---------------------- are looking for. You will give them comfort by simply acknowledging the
receipt of their request and by communicating that you are on it. This may
----------------------
seem like a no-brainer, but relationship managers are often seen worrying
---------------------- about having the right answer and as a result, they forget to acknowledge
that they are on the case.
----------------------
6. Be more than an e-mail address. Despite its prevalence in business
---------------------- today, email communication can often be misconstrued, especially during
stressful situations, if senders and recipients do not know each other well.
---------------------- Use other channels to help shed light on who you are. Consider a phone
---------------------- call, Skype or an in-person meeting to put a face (or voice) to a name.
Even a phone call is a great way to build a better relationship with your
---------------------- client, if it is used for a good purpose.
---------------------- 7. Always summarise next steps. No matter how quick or trivial a client
meeting seems, always recap the conversation with next steps. Many
---------------------- vendors skip this basic step. You think you will remember all of the details
and maybe you will, but your client may not. Aligning on the same page
---------------------- with next steps prevents a lot of confusion down the road.
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. Best practices for building client relationships is patience in building
new relationships. ----------------------
2. The success of a company depends largely on strong client ----------------------
relationships, especially for a small or newly started company.
----------------------
7.4 CRM IN FAST MOVING CONSUMER GOODS (FMCG) ----------------------
----------------------
Customer relationship is a requisite for large products and services, but
that does not eradicate its need for the Fast Moving Consumer Goods section. ----------------------
Even our daily needs provider (or grocer) can practice CRM in his business. Let
us take a look at the background and challenges for the same. ----------------------
Background ----------------------
●● MCGs collate product holdings, channel usages, service requests and
F
----------------------
history on a per supply channel partner basis.
●● Products are sold quickly and at relatively low prices. ----------------------
●● rofit made on FMCG products is relatively small and since they generally
P ----------------------
sell in large quantities, the cumulative profit can be large.
----------------------
●● MCGs have a short shelf life, either as a result of high consumer demand
F
or because the product expires quickly. ----------------------
●● Keeping track of demand and supply for large quantities can be challenging.
----------------------
●● here are always multiple competitors for products who vary from region
T
to region. challenges ----------------------
●● How to create an intelligent, unified view of supply channel holders and ----------------------
their needs
●● ow to assist workforce in achieving higher targets, reduce non-
H ----------------------
core workloads, minimise coordination efforts and provide actionable ----------------------
intelligence
●● How to create a single window to view end-to-end processes that span ----------------------
across systems and geographies and enforce TAT/SLA adherence ----------------------
●● How to converge multiple, disjoint, independent campaigns across
products ----------------------
●● ow to reliably coordinate, collaborate and action supply channel
H ----------------------
complaints to ensure fast and accurate resolutions
----------------------
●● ow to reduce process cost and wastage while conforming to compliance
H
and market standards ----------------------
●● ow to provide real-time insights into processes with intelligent reports
H
----------------------
and dashboards for pro-active actions

Notes Use of CRM and benefits
CRM for FMCGs has evolved from a customer facing application to
----------------------
a customer- centric strategy that manages the complete cycle from customer
---------------------- needs to product delivery.
CRM solution for FMCGs helps increase wallet-share by brand building
----------------------
and trade promotion to maximise product sales using performance details,
---------------------- profiling information plus transaction and feedback data. It enables servicing
customer needs and complaints across channels using a single system to prevent
---------------------- information leaks.
---------------------- CRM has many usages in FMCG Businesses. Contrary to the general opinion
that CRM works best for B2B kind of sales cycle or for services involving
---------------------- repeated customer visits, CRM can also be useful for FMCG business.
Especially, with changing lifestyles and increasing importance of social media,
----------------------
it is essential for an FMCG brand to leverage the power of a social CRM.
---------------------- In addition to the usage in Chain Management, following are the other unique
---------------------- uses of a CRM in the FMCG business:
1. Analysing sales across regions and products: Just as it does in other
---------------------- industries, a CRM can give a bird’s eye view on the Sales across
---------------------- Categories, Region and Product Variants, even in the FMCG industry.
An FMCG business consists of a range of products and dimensions. It is
---------------------- important that a track is maintained across product varieties and regions.
Usually, those at the helm of FMCG are more prone to analyzing graphs
---------------------- than others. In such scenarios, if a CRM system can automate some of the
---------------------- tasks and provide some built-in graphs at regular intervals, it would be a
great help to the management in making decisions.
---------------------- 2. Collaboration within team: Most of the work on existing products, new
---------------------- products, branding strategies, selling etc. happens in teams. Thus, fine
tuning and execution of new branding strategies or promotions can be
---------------------- improved through better team co-ordinations on tasks at hand. Also, most
of these initiatives are handled as team projects. Thus, CRM can be a
---------------------- useful tool in keeping track of projects and keeping everyone in the team
---------------------- updated to ensure collaboration.
3. Managing distribution: In most cases, FMCG business critically
----------------------
depends on distribution and the sales people walk from retailer to retailer
---------------------- pushing stocks. For growing companies, Management would prefer that
the salesperson on the street not only meet up to their daily or weekly
---------------------- stocks numbers in terms of push, but also cover designated number of
stores. However, typical targets are in terms of quantities sold. Thus, if a
----------------------
salesperson is targeted to sell 100 quantities over 10 stores and is able to
---------------------- sell-off 100 in 5 stores, he would typically skip the rest and make wrong
entries about his visit. Ultimately, this affects the FMCG company in
---------------------- terms of its reach and penetration. To ensure that the salesperson covers
all 10, a CRM can be a really useful tool. Using his mobile phone, he can
----------------------
update into the CRM about his meetings with a retailer after he has visited

the store location. Based on the phone location, the CRM can note the Notes
location, time of message, content of message etc. The Manager of the
salesperson can at end of the day be sent a list of visits for the day with the ----------------------
above details. This would ensure that the discipline in terms of reaching
maximum number of stores is maintained. ----------------------
4. Managing brand in online space: Social Media has the power to make ----------------------
or break a brand on account of its multiplier effect. Especially, for an
----------------------
FMCG business, involving larger target audience, probability of any
feedback (good or bad) going viral in no time is huge. A social CRM can ----------------------
be useful in increasing the brand image. It can regularly give feedback to
the brand team on the tweets and shares by consumers. The brand team is ----------------------
thus in a position to spread the good word around or contain the impact of
----------------------
bad feedbacks at the level of the originator.
5. Managing online/SMS contests: Most FMCG businesses, as part of ----------------------
the brand initiatives, organise SMS or email contests to engage more
----------------------
meaningfully with the target audience. With a CRM at hand, rules can be
built in to update the database automatically, based on incoming SMSs ----------------------
and sending auto-replies based on response. Further, such events are time-
driven formats and thus rules around initiating automated next rounds ----------------------
of engagements can be incorporated to ensure a smoother execution
----------------------
with lesser slip-ups. Also, the entire database of leads generated from a
campaign can be analysed to figure out which target segments respond ----------------------
well to what kind of initiatives. In the long run, this can be helpful in
meaningfully allocating the branding budgets. ----------------------
----------------------
----------------------
----------------------
1. Most FMCG businesses, as part of the brand initiatives, organise
SMS or email contests to engage more meaningfully with the target ----------------------
audience.
----------------------
2. CRM can be a useful tool in keeping track of projects and keeping
everyone in the team updated to ensure collaboration. ----------------------
----------------------
7.5 CRM METRICS ----------------------
A metric is simply something you can measure. In CRM, we use metrics ----------------------
to track performance and ultimately success.
----------------------
Metrics give you better control over your sales and marketing effort.
Metrics allow you to track performance more closely than an improvised, ----------------------
offhand approach. By following what is happening more closely, we can react
more effectively to what is going on and how it affects our overall performance. ----------------------
Metrics give precision to our sales and marketing, allowing us to respond
----------------------
correctly to changes or to initiate changes.

Notes There are different metrics for CRM success. Which ones you choose to
adopt depends mainly on your sales and marketing goals.
----------------------
It is critical to set clear CRM objectives and establish the right metrics
---------------------- by following a four-step approach to establish the correct measures for your
organisation:
----------------------
1) Define and quantify business goals
---------------------- 2) Formulate CRM strategies and tactics
---------------------- 3) Establish appropriate CRM measures
---------------------- 4) Link CRM goals, strategies and metrics

Firms also need to adopt CRM metrics best practices, including
---------------------- establishing metrics early in the CRM deployment initiative, measuring what is
---------------------- important to customers and using metrics to guide employees.
Note once again that CRM is not about technology. CRM can help you
----------------------
track success, but by itself it cannot create success. By monitoring what is going
---------------------- on in your organisation closely, CRM can help steer you along the appropriate
path, but ultimately your success depends on the efforts of your marketing team.
----------------------
Here are some useful metrics for measuring sales and marketing
---------------------- performance. Note that all these can be tracked by any good CRM system and
displayed on dashboards for managers and executives to follow. Note also
---------------------- that you are probably not going to want to use all available metrics, but rather
concentrate on those which are most important to your organisation at this time.
----------------------
The most common way to calculate customer satisfaction is with surveys
---------------------- or questionnaires. These are generally created and handled by the marketing
---------------------- department and can be anything from a couple of simple check boxes to
elaborate multi-question surveys that are analyzed statistically in great detail.
---------------------- Keeping track of customer satisfaction is one of the most important jobs
---------------------- in an organisation. It is the best predictor of future success of your organisation.
A CRM value system: Five metrics of success
----------------------
A common question asked is what metrics define the success of our CRM
---------------------- initiative. As we reflect on the best definition of CRM success, five key metrics
become apparent - five key values that define the critical path to success in any
----------------------
implementation. They are
---------------------- 1. Strategic alignment: A company must implement a CRM solution that
is strategic and aligned with its goals. When you do not define your
----------------------
company’s goals and strategies in terms of CRM requirements, you have
---------------------- no basis for making decisions on applications, training protocols, success
metrics or reporting. You have no measure to define success. What is
---------------------- more, you cannot gain user buy-in because employees do not have a
clear understanding of what’s in it for them. Without a clearly defined
----------------------
set of goals and requirements that directly support strategies and related
---------------------- business processes, a CRM project is sure to fail.

2. User involvement and acceptance: Solutions should be implemented so Notes
that they are accepted and embraced by all system users. This is a change
management initiative and is very important in achieving other objectives. ----------------------
User acceptance is the bottom line. If you do not gain user acceptance,
then it will not matter that you pick the king of CRM applications or ----------------------
that you effectively identify business process improvements. A human ----------------------
change management initiative is required in order to make the technology
initiative work. ----------------------
3. Improved process effectiveness: Deliver a solution that improves sales, ----------------------
marketing and customer support effectiveness. CRM must automate
business processes and formalise best practices that will improve the ----------------------
overall effectiveness of the company’s sales, marketing and customer
----------------------
support efforts in a way that aligns with the business goals. It is not enough
to just capture data; companies need to focus on the impact their CRM ----------------------
implementation has on their customer, since improvements in customer
relationships drive the ROI to justify the investment made in CRM. ----------------------
4. Information sharing: When a solution is put into place, you must facilitate ----------------------
information sharing between departments. Complex interdependencies
require that multiple departments share information seamlessly. Walls ----------------------
that exist between departments must be broken down. An effective flow
----------------------
of information between departments will improve relationships and a
company’s ability to execute its strategies and achieve corporate goals. ----------------------
5. Visibility: Finally, provide visibility into key performance metrics through
----------------------
reports and dashboards. The sole purpose of a CRM solution cannot be
report generation. It is critical to understand that the business processes ----------------------
supported by CRM provide data that can be used to garner knowledge
of customer and employee activity. Without understanding these key ----------------------
performance indicators, management cannot see if progress is being made
----------------------
or when deviations to performance benchmarks are occurring.
Sticking closely to this critical path can help assure a successful journey. ----------------------
CRM cannot be approached as a tactical exercise if it is going to generate ----------------------
positive effects and returns. In order to succeed, it needs to be driven by strategy
and a high level of attention to the key performance metrics and human factors ----------------------
that drive a business.
----------------------
The Purpose for CRM measurement
The reasons companies measure customers is obvious. Businesses ----------------------
have long since measured financial performance with traditional financial ----------------------
measurement tools: profit and loss statements, balance sheets and cash flow
statements. These measurement frameworks suffer from limitations; they ----------------------
measure past activities and are “lag” versus “leading” indicators (Kaplan &
Norton, 001). Kaplan and Norton created the balanced scorecard to address ----------------------
some of these deficiencies and have expanded the tool to measure strategy. ----------------------
In this example, the balanced scorecard intends to predict future financial
performance and track how effectively the corporate strategy is executed. ----------------------

Notes What companies need from measurement systems can vary from the mundane
to the profound. The social sciences have established rigorous theories of
---------------------- measurement and research design to ensure that the experiments themselves
and the conclusions researchers reach are valid (Trochim, 2001). While these
---------------------- principles have influenced some CRM practices today, many businesses look
---------------------- at measurement in less theoretical terms. With that in mind, three main uses or
CRM measurement systems are:
----------------------
1. To influence or validate decision-making
---------------------- 2. To guide ongoing activities or tactics
---------------------- 3. To predict future states
---------------------- Companies implement CRM measurement very differently based on their

internal decision-making styles. As companies make decisions about customer
---------------------- strategies, they look to customer measurement to help influence specific
decision makers or the decision-making process or validate initial ideas about
---------------------- how to manage customer relationships. These decision-making styles are listed
---------------------- below:
1. Firm (stable) ROI approach: In this approach, companies develop a
---------------------- return- on-investment model that seeks to deliver actual cash benefits to
---------------------- the company. This approach identifies cost savings, provable productivity
improvements or well-tested revenue generation opportunities.
---------------------- 2. Intangible benefits/assets: In this approach, so-called softer benefits or
---------------------- intangible assets are identified and quantified. For example, brand equity
or knowledge capital are two forms of intangible assets that companies
---------------------- try to measure and quantify and correlate to future company performance.
---------------------- 3. Competitive assessments: This approach measures how competitors
interact with customers and decisions are made to either seek parity or
---------------------- exceed a competitor’s capabilities.
---------------------- 4. Value-driven: This approach measures economic value delivered to
and/or derived from a customer. This style involves building a model of
---------------------- customer value exchange.
---------------------- 5. Instinct and experience: This approach uses manager’s individual
experiences and intuitions about what CRM solutions to execute that may
---------------------- or may not be supported by additional facts.
---------------------- Many companies frequently adopt more than one style. The styles adopted,
consciously or otherwise, shape how the company will measure customer
---------------------- activity. The company’s business model, approach to the market and history of
---------------------- measuring customers also influence the finalisation of the measurement styles
that are more appropriate or expedient for the company.
----------------------
----------------------
----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. Companies implement CRM measurement very differently based on
their ________________ . ----------------------
2. Keeping track of customer satisfaction is one of the most important ----------------------
jobs in an organisation. It is the best _________ of future success of
your organisation. ----------------------
----------------------
7.6 APPLICATION OF CRM IN B2B AND B2C SCENARIOS ----------------------
With the help of CRM solutions, B2B marketers achieve greater return ----------------------
on investments. A quick Google search for CRM helps to find plenty of B2B
products, but surfing through the results to find solutions designed specifically ----------------------
for the B2C sale is like finding a needle in a haystack.
----------------------
Why does this happen? To find a solution for this, first it is necessary
to understand the unique differences between B2B and B2C sales. There are ----------------------
many formulas for sales and marketing success. Following six aspects that
are common to both B2B and B2C sales effectively illustrate the differences ----------------------
between them:
----------------------
1. Speed and simplicity of sales process: B2C sale is relatively faster and
simpler than B2B sale. ----------------------
2. Number of decision makers: There are usually one or two decision ----------------------
makers in a B2C sale; there may be a dozen or more involved in a B2B
sale. ----------------------
3. Quantity of indications: B2C sale starts with more indications; B2B sale ----------------------
will have fewer indications to manage.
----------------------
4. Role of emotion: B2C sales frequently involve emotion on the customer’s
side unlike B2B sale, which is typically driven by business decisions and ----------------------
not by emotions.
----------------------
5. Value of sale: The total value of a B2C sale is relatively smaller than B2B.
6. Uniformity of offer: B2C sales are typically a uniform product offering ----------------------
whereas B2B sales tend to be a more customised product offering.
----------------------
Referencing the six sales and marketing rules above, three consistent
subjects appear and can be used as a baseline for selecting tools to help B2C ----------------------
marketers:
----------------------
1. Speed: At every stage, speed is essential when dealing with a B2C sale.
----------------------
Leads must be received in real-time and distributed to sales people quickly;
initial contact must be made within time. Research has been done about ----------------------
the importance of speed in the sales process and speed-to-contact. When
evaluating tools to support it, the solutions are, ----------------------

Notes a. Automatic rule-based lead distribution
b. Lead management and ongoing reports
----------------------
c. Screen pop-up notices
----------------------
2. Process: Having a consistent and repeatable process, everyone works the
---------------------- same way, so sales managers and marketing executives can track their
results. Sales process also plays an important role in converting leads.
---------------------- Long-term consistent follow-up can have an impact on overall conversion
rates. B2C companies should look for solutions that offer the following
----------------------
capabilities to enhance the sales process:
---------------------- a. Easy configurable sales workflow
---------------------- b. Automatic lead nurturing
---------------------- c. Scheduled reports and email delivery
3. Persistence (Determination): Selling to consumers is very competitive.
----------------------
To be successful, B2C companies will need to have persistent long-term
---------------------- follow- up strategies in place. It is very important to be persistent. It can
be a key for success. It is important and easy to B2C companies to have
---------------------- tools that support to maximise return on their marketing efforts. The most
successful B2C organisations incorporate these features:
----------------------
a. Automatic call prioritisation
----------------------
b. Follow-up drip emails and reminders
---------------------- c. Lead recycling and routing
---------------------- d. Follow-up reminders and emails
---------------------- In particular, specialised B2C solutions are available in some areas like
mortgage, insurance and education. For better products availability,
---------------------- specifically designed solutions will be demanded by B2C companies.
----------------------
7.7 DATA MINING TOOLS AND TECHNIQUES
----------------------
Understanding the advantages of using different data mining tools and
---------------------- techniques and knowing what data mining does can help beginner auditors to
provide recommendations that improve business processes and discover fraud.
----------------------
Most internal auditors, especially those working in customer-focused
---------------------- industries, are aware of data mining and what it can do for an organisation
that reduces the cost of acquiring new customers and improve the sales rate
---------------------- of new products and services. If the beginner internal auditor gains a clear
---------------------- understanding of what data mining does and which different data mining tools
and techniques are available for use, it can improve audit activities and business
---------------------- operations across the board.
---------------------- What is data mining?

Data mining automates the findings of relevant patterns in a database.
---------------------- This can be done with the help of defined approaches to see to it that current

and historical data can be analyzed to predict future trends. For hidden patterns, Notes
it allows organisations to make proactive and knowledgeable decisions.
----------------------
Changes in data mining techniques enabled organisations to collect,
analyze and access data in new ways. The first change occurred in the area ----------------------
of basic data collection. Companies made the changes from ledgers and
other paper-based records to computer-based systems. As companies started ----------------------
collecting and saving basic data in computers, companies were able to start
----------------------
answering questions with pace and ease.
With the introduction of microcomputers and networks and the evolution ----------------------
of middleware, protocols and other methodologies that enable data to be moved
----------------------
seamlessly among programmes and other machines, the companies were able to
link certain data questions together. The development of data warehousing and ----------------------
decision support systems has enabled companies to extend queries from what
was the total number of sales in a particular month to what will happen to sales ----------------------
in next month and why. This will provide additional value to business planning
----------------------
and developments. Auditors will observe that sensible and rational decisions
are made on the basis of data mining exercises, especially where the results of ----------------------
such exercises are used as input for other processes or systems.
----------------------
The danger in this process is that with the help of data mining exercise,
important customer information could be exploited by an outsider. A hacker can ----------------------
be used by an organisation to hack the rival organisation’s computer system and
use a data mining tool to capture the important information, which can be used ----------------------
negatively.
----------------------
----------------------
Organisations that wish to use data mining tools can purchase these
programmes, which can be integrated into new products and systems as they ----------------------
are brought online or they can build their own custom mining solution.
----------------------
Internal auditors need to aware of the different kinds of data mining
tools, so that after purchasing, these tools will match the organisation’s current ----------------------
detective needs. Most data mining tools can be classified into three categories:
traditional data mining tools, dashboards and text-mining tools. ----------------------
1. Traditional Data Mining Tool: Traditional data mining programmes ----------------------

help companies establish data patterns by using a number of complex
----------------------
algorithms and techniques. Some of these tools are installed on the
desktop to monitor the data and highlight trends and others capture ----------------------
information. In addition, while one person or department concentrates
on one database type, most will be able to handle any data using online ----------------------
analytical processing or a similar technology.
----------------------
2. Dashboards: Dashboards are installed in computers to monitor
information in a database. It reflects data changes and updates on-screen ----------------------
often in the form of a chart or table, which enables the user to see how the
----------------------
business is performing. Historical data also can be referenced, enabling
the user to see where things have changed, e.g. increase in sales from ----------------------

Notes the same period considering last year. With this functionality, company’s
performance can be overviewed.
----------------------
3. Text-mining Tools: It has an ability to mine data from different kinds of
---------------------- text, for example, from Microsoft Word and Acrobat PDF documents to
simple text files. It is done by scanning the content and converting the
---------------------- selected data into a format, which is compatible with the tool’s database.
It helps in providing users with an easy and convenient way of accessing
----------------------
data.
---------------------- To undertake simple data mining exercises, internal auditors can use
spreadsheets to produce summary tables. Using the spreadsheet, auditors can
----------------------
review complex data in a simplified format to find the underlining assumptions
---------------------- or information.
----------------------
In addition to using a particular data mining tool, there are variety of
---------------------- data mining techniques like artificial neural networks, decision trees and the
---------------------- nearest-neighbor method which internal auditors can select. The techniques are
as follows:
---------------------- ●● rtificial neural networks: These networks are non-linear, predictive
A
---------------------- models that learn through training. Auditors can easily use these models
for reviewing records to identify fraud. Neural networks are difficult
---------------------- to implement, require all input and resultant output to be expressed
numerically, so it needs some sort of interpretation depending on the
---------------------- nature of the data-mining exercise.
---------------------- ●● Decision trees: These are tree-shaped structures representing decision
sets. These decisions generate rules, for classification of data. This
---------------------- technique is useful for building understandable models. With the feature
---------------------- of simplicity and clarity, this technique is most commonly used and
implemented.
---------------------- ●● The nearest-neighbor: This method classifies data-set records based on
---------------------- similar data in a historical data-set. The nearest-neighbor method relies
more on linking similar items and so works better for predictive enquiries.
---------------------- In order to apply advanced data mining techniques properly, it is essential
to have a flexible and interactive data mining tool, which is fully integrated
----------------------
with a database or data warehouse. When a data mining tool is integrated with
---------------------- the data warehouse, it simplifies the application and implementation of mining
results.
----------------------
The real value behind data mining is building a model based on user-
---------------------- specified criteria from already captured data, e.g. an organisation looking to
acquire new customers can create a model for their existing customer. Modeling
---------------------- also can be used in audit departments to predict the number of auditors required
---------------------- to undertake an audit plan based on previous work done.
----------------------

Summary Notes
●● I t is important for the marketing department to contribute to business ----------------------

through loyalty programmes. It also measures and demonstrates its
----------------------
contribution to profits, though the misconception is that marketing is a
cost centre, not a profit centre. ----------------------
●● oyalty programmes have been present in the market for numerous decades
L
----------------------
now. However, after the advent of e-commerce, these programmes have
taken a new dimension, namely the reward card app. ----------------------
●● RM for FMCGs has evolved from a customer facing application to a
C
----------------------
customer-centric strategy that manages the complete cycle from customer
needs to product delivery. ----------------------
●● here are different metrics for CRM success. Which ones you choose to
T
adopt depends mainly on your sales and marketing goals. ----------------------
●● pecialised B2C solutions are available in some areas like mortgage,

S ----------------------
insurance and education.
----------------------
●● hanges in data mining techniques enabled organisations to collect,
C
analyze and access data in new ways. The danger in this process is that ----------------------
with the help of data mining exercise, important customer information
could be exploited by an outsider, e.g. hackers. ----------------------
●● I nternal auditors need to be aware of the different kinds of data mining ----------------------
tools, so that after purchasing, these tools will match with the organisation’s
current detective needs. ----------------------
●● sing the spreadsheet, auditors can review complex data in a simplified
U ----------------------
format to find the underlining assumptions or information.
----------------------
●● I n order to apply advanced data mining techniques properly, it is essential
to have a flexible and interactive data mining tool, which is fully integrated ----------------------
with a database or data warehouse.
----------------------
1. Define customer loyalty and elaborate factors which help in making a ----------------------
loyalty programme successful.
----------------------
2. What are the best practices used in building of client relationship?
----------------------
3. State the importance of CRM in fast moving consumer goods.
4. Describe five metrics for CRM value system. ----------------------
5. Write a note on data mining with its different tools and techniques. ----------------------
----------------------
----------------------
----------------------

Notes Answers to check your Progress
----------------------
1. True
---------------------- 2. True
---------------------- 1. In order to be an effective tool for your business, a reward card app has to
offer tangible value to customers.
---------------------- 2. Turning customers into ambassadors for your brand is essential to growth
in your revenue.
----------------------
---------------------- 1. True
2. True
----------------------
---------------------- 1. True
---------------------- 2. True
----------------------
Fill in the blanks.
---------------------- 1. Companies implement CRM measurement very differently based on their
internal decision-making styles.
----------------------
2. Keeping track of customer satisfaction is one of the most important
---------------------- jobs in an organisation. It is the best predictor of future success of your
organisation.
----------------------
---------------------- 1. Hughes, Arthur Middleton. 2003. The Customer Loyalty Solution: What
Works and What Doesn’t in Customer Loyalty Programs. McGraw Hill
---------------------- Professional.
---------------------- 2. Linoff, Gordon S., Michael J. A. Berry. 2011. Data Mining Techniques:
For Marketing, Sales, and Customer Relationship Management. John
---------------------- Wiley & Sons.
3. Kumar, V., Werner Reinartz. 2012. Customer Relationship Management:
----------------------
Concept, Strategy, and Tools. Springer.
---------------------- 4. Page, Kogan. 1993. Creating Customer Loyalty.
---------------------- 5. Payne, Adrian. 2012. Handbook of CRM. Routledge.
6. Tsiptsis, Konstantinos, Antonios Chorianopoulos. 2011. Data Mining
---------------------- Techniques in CRM: Inside Customer Segmentation. John Wiley & Sons.

IT-Enabled CRM
UNIT
8
Structure:
8.1 Introduction
8.2 Emergence of CRM
8.2.1 Database Marketing
8.3 Pitfalls of IT Focus in CRM
8.3.1 Ethical Issues − Customer Privacy
8.4 Sustaining Customer Relationship
8.5 Segmentation of Service
8.6 Measurement of Service
8.6.1 Monitoring of Customer Satisfaction
8.6.2 Analysing Customer Defection
Summary
Keywords
Suggested Reading
IT-Enabled CRM 129

Notes
Objectives
----------------------
----------------------
●● Chalk out the emergence of CRM
---------------------- ●● Elaborate on customer privacy as an ethical issue
---------------------- ●● Explain the importance of service in building relationships
----------------------
----------------------
8.1 INTRODUCTION
---------------------- Customer Relationship Management (CRM), also known as relationship

marketing, has recently emerged as an integral marketing concept in the
---------------------- business world. In an attempt to reach and connect with customers in an
environment highly saturated with products, advertisements and promotions,
---------------------- businesses are implementing a customer relationship management component
---------------------- in their marketing schemes. CRM practices enable marketers to build long-
lasting relationships with consumers at the individual level through the use and
---------------------- management of a number of different programmes and key components.
----------------------
8.2 EMERGENCE OF CRM
----------------------
A number of factors have contributed to the emergence of customer
---------------------- relationship management including technology, total quality management,
growth in the service industry and heightened customer expectations. Technology
---------------------- is at the heart of CRM development and is essential on multiple levels of the
process. Some believe that technology can be credited with the wide acceptance
----------------------
of relationship marketing (Hennig-Thurau & Hansen, 2000). The customer
---------------------- database and software technology enable firms to track consumer purchase
behaviour, product preference and personal contact information (Formant, 2000).
---------------------- Technological advancements in database programs have allowed marketers to
improve direct marketing tactics through individualisation (Parvatiyar & Sheth,
----------------------
1995). Once customer patterns are recorded in the database, the software can
---------------------- cater direct marketing efforts, such as emails or mailers with coupons and special
offers, to each individual customer. This customer value can only be delivered
---------------------- by highly sophisticated databases that combine information from several
external and internal sources regarding demographics, psychographics, survey
----------------------
results and purchase patterns (Formant, 2000). Technology is also imperative in
---------------------- creating customer-friendly and easily accessible websites where customers can
enter information, provide feedback and explore product offerings.
----------------------
The practice of total quality management has also contributed to the
---------------------- development of customer relationship management. Total quality management
is the strategic management of cost and quality control. It integrates all divisions
---------------------- and levels of a firm with the goal of emphasising employee teamwork, constant
---------------------- improvement, quality measurement and efficient problem solving (Powell,

1995 & Spencer, 1994). Total quality management results in closer relationships Notes
between firms, suppliers and customers in order to add value and ensure quality
control all along the production chain (Parvatiyar & Sheth, 2001). The practice ----------------------
of maintaining and strengthening those relationships result in firms adopting
customer relationship management. ----------------------
In addition to the practice of total quality management and the advent of ----------------------
new technology, the growth of the service industry has drastically impacted the
----------------------
emergence of customer relationship management. Unlike products, services are
intangible and consumption is tied closely with production. Therefore, services ----------------------
are delivered directly from the service provider (or the firm) to the consumer
without the use of middlemen in the distribution channel (Parvatiyar & Sheth, ----------------------
2001). As middlemen disappear from the equation, it is more common to see
----------------------
customers as the “co-producers” when they customise products and interact with
employees and websites on a more intimate level (Vargo & Lusch, 2004). The ----------------------
necessity of this direct contact fosters an environment in which relationships
naturally form, but the service quality of the provider is essential in developing ----------------------
a long-term, satisfactory relationship (Crosby, Evans & Cowles, 1990). In
----------------------
order to capitalise on profitable consumers and to maintain and strengthen the
producer-consumer relationship, firms are turning to customer relationship ----------------------
management.
----------------------
With every customer interaction that takes place within a firm, there is a
possibility that customer expectations will not be met. The ending outcome can ----------------------
meet, exceed or fall short of customer expectations. As competition increases
among firms, however, there is a greater emphasis on customer satisfaction ----------------------
and in turn, customer expectations are increasing. Although some customers
----------------------
value price over all other characteristics, many customers are not willing
to compromise when it comes to products and services; therefore, firms are ----------------------
adopting the practices of customer relationship management to ensure those
expectations are met (Parvatiyar & Sheth, 2001). ----------------------
8.2.1 Database Marketing ----------------------
Database marketing is a form of direct marketing using databases of ----------------------
customers or potential customers to generate personalised communications in
order to promote a product or service for marketing purposes. The method of ----------------------
communication can be any addressable medium, as in direct marketing.
----------------------
The distinction between direct and database marketing stems primarily
from the attention paid to the analysis of data. Database marketing emphasises ----------------------
the use of statistical techniques to develop models of customer behaviour,
which are then used to select customers for communications. As a consequence, ----------------------
database marketers also tend to be heavy users of data warehouses, because ----------------------
having a greater amount of data about customers increases the likelihood that a
more accurate model can be built. ----------------------
----------------------
----------------------
IT-Enabled CRM 131

Notes There are two main types of marketing databases:
●● Consumer databases
----------------------
●● Business databases
---------------------- Consumer databases are primarily geared towards companies that sell
---------------------- to consumers, often abbreviated as B2C (business-to-consumer). Business
marketing databases are often much more advanced in the information that they
---------------------- can provide. This is mainly because business databases aren’t restricted by the
same privacy laws as consumer databases.
----------------------
The “database” is usually name, address and transaction history details
---------------------- from internal sales or delivery systems or a bought-in compiled “list” from
another organisation, which has captured that information from its customers.
----------------------
Typical sources of compiled lists are charity donation forms, application forms
---------------------- for any free product or contest, product warranty cards, subscription forms and
credit application forms.
----------------------
The communications generated by database marketing may be described
---------------------- as junk mail or spam, if it is unwanted by the addressee. Direct and database
marketing organisations, on the other hand, argue that a targeted letter or e-mail
---------------------- to a customer, who wants to be contacted about offerings that may interest the
customer, benefits both the customer and the marketer.
----------------------
Some countries and some organisations insist that individuals are able
---------------------- to prevent entry to or delete their name and address details from database
marketing lists.
----------------------
Evolution of database marketing
----------------------
The growth of database marketing is driven by a number of environmental
---------------------- issues. Fletcher, Wheeler and Wright (1991) classified these issues into four
main categories:
----------------------
i. The changing role of direct marketing
----------------------
●● The move to relationship marketing for competitive advantage
---------------------- ●● The decline in the effectiveness of traditional media
---------------------- ●● The overcrowding and myopia of existing sales channels
ii. Changing cost structures
----------------------
●● The decline in electronic processing costs
---------------------- ●● The increase in marketing costs
---------------------- iii. Changing technology
---------------------- ●● The advent of new methods of shopping and paying

●● he development of economical methods for differentiating
T
---------------------- customer communication
---------------------- iv. Changing economic conditions
---------------------- ●● The desire to measure the impact of marketing efforts.

●● The fragmentation of consumer and business markets. Notes
Shaw and Stone (1988) noted that companies go through evolutionary
phases in developing their database marketing systems. They identify four ----------------------
phases of database development as: ----------------------
1. Mystery lists
----------------------
2. Buyer databases
----------------------
3. Coordinated customer communication
4. Integrated marketing ----------------------
Although organisations of any size can employ database marketing, it is ----------------------
particularly well-suited to companies with large numbers of customers. This
is because a large population provides greater opportunity to find segments of ----------------------
customers or prospects that can be communicated with in a customised manner. ----------------------
In smaller (and more homogeneous) databases, it will be difficult to justify
on economic terms the investment required to differentiate messages. As a ----------------------
result, database marketing has flourished in sectors, such as financial services,
telecommunications and retail, all of which have the ability to generate ----------------------
significant amounts of transaction data for millions of customers. ----------------------
Database marketing applications can be divided logically between those
marketing programmes that reach existing customers and those that are aimed ----------------------
at prospective customers. ----------------------
----------------------
Data warehousing
----------------------
It is a collection of data designed to support management decision-making.
Data warehouses contain a wide variety of data that present a coherent picture ----------------------
of business conditions at a single point in time. It is the electronic storage of a
large amount of information by a business. ----------------------
Development of a data warehouse includes development of systems to ----------------------
extract data from operating systems plus installation of a warehouse database
system that provides managers flexible access to the data. ----------------------
The term data warehousing generally refers to the combination of many ----------------------
different databases across an entire enterprise.
----------------------
Data in the data warehouse must be stored in a manner that is secure,
reliable, easy to retrieve and easy to manage. The concept of data warehousing ----------------------
started in 1988 with the work of IBM researchers Barry Devlin and Paul Murphy.
The need for data warehouse has evolved as computer systems became more ----------------------
and more complex and started to handle increasingly large amounts of data. ----------------------
Data warehouse is a central repository of data. This is created by
----------------------
integrating data from many disparate sources. Data warehouses store current as
well as historical data and are used for creating reports for senior management ----------------------
reporting, for example, annual and quarterly comparisons of sales or production.
----------------------
IT-Enabled CRM 133

Notes The data stored in the warehouse are uploaded from the operational
systems (such as marketing, sales, production, etc.). The data may pass through
---------------------- an operational data store for additional operations before they are used for
reporting.
----------------------
A data mart is a small data warehouse focused on a specific area of
---------------------- interest. Data warehouses can be further subdivided into data marts for improved
performance and ease of use. Alternatively, an organisation can create one or
----------------------
more data marts as first steps towards a larger and more complex enterprise data
---------------------- warehouse.
This definition of the data warehouse focuses on data storage. The main
----------------------
source of the data is cleaned, transformed, catalogued and made available for use
---------------------- by managers and other business professionals for data mining, online analytical
processing, market research and decision support (Marakas & O’Brien, 2009).
----------------------
However, the following are considered to be the essential components of
---------------------- a data warehousing system:
---------------------- a. Means to retrieve data

b. Mean to analyse data
----------------------
c. Means to extract data
----------------------
d. Means to transform and load data
---------------------- e. Manage the data dictionary
---------------------- Using the broader concept the expanded definition for data warehousing
would consist of business intelligence (BI) tools, tools to extract, transform and
---------------------- load data into the repository and tools to manage and retrieve metadata.
---------------------- Data mining
---------------------- Data mining is the process of analysing data from different perspectives
and summarising it into useful information − the information that can be used
---------------------- to increase revenue, cut costs or both.
---------------------- Technically, data mining is the process of finding correlations or patterns
among dozens of fields in large relational databases.
----------------------
Data mining is a relatively new term. Companies have used powerful
---------------------- computers to scan through volumes of supermarket scanner data and analyse
market research reports for years. However, continuous innovations in computer
---------------------- processing power, disk storage and statistical software are dramatically
increasing the accuracy of analysis while driving down the cost.
----------------------
Working of data mining
----------------------
While large-scale information technology has been evolving separate
---------------------- transaction and analytical systems, data mining provides the link between
the two. Data mining software analyses relationships and patterns in stored
---------------------- transaction data based on open-ended user queries. Several types of analytical
----------------------

software are available: statistical, machine learning and neural networks. Notes
Generally, any of the four types of relationships are sought:
----------------------
●● Classes: Stored data is used to locate data in predetermined groups.
For example, a restaurant chain could mine customer purchase data ----------------------
to determine when customers visit and what they typically order. This
information could be used to increase traffic by having daily specials. ----------------------
●● Clusters: Data items are grouped according to logical relationships or ----------------------
consumer preferences. For example, data can be mined to identify market
segments or consumer affinities. ----------------------
●● Associations: Data can be mined to identify associations. The beer-diaper ----------------------
example is an example of associative mining.
●● Sequential patterns: Data is mined to anticipate behaviour patterns and ----------------------
trends. For example, an outdoor equipment retailer could predict the ----------------------
likelihood of a backpack being purchased based on a consumer’s purchase
of sleeping bags and hiking shoes. ----------------------
Data mining consists of five major elements: ----------------------
●● xtract, transform and load transaction data onto the data warehouse
E
system. ----------------------
●● Store and manage the data in a multidimensional database system. ----------------------
●● rovide data access to business analysts and information technology
P ----------------------
professionals.
●● Analyse the data by application software. ----------------------
●● Present the data in a useful format, such as a graph or table. ----------------------
----------------------
Fill in the blanks.
1. CRM practices enable marketers to build long-lasting relationships ----------------------
with consumers at the ____________. ----------------------
2. _______ contain a wide variety of data that present a coherent picture
of business conditions at a single point in time. ----------------------
----------------------
Activity 1 ----------------------
1. Surf the Internet and find out the top three companies providing data ----------------------
mining tools for analytics.
----------------------
2. Visit the library and study the model used by Wal-Mart for data mining
for CRM. ----------------------
----------------------
----------------------
IT-Enabled CRM 135

Notes 8.3 PITFALLS OF IT FOCUS IN CRM
---------------------- 10 CRM mistakes and how you can avoid making them.
---------------------- 1. The end-user is not considered when a crm solution is selected: For
successful implementation of CRM, organisations should involve the
---------------------- end- users actively before looking at alternatives as options. Explain to
the people who will be using the CRM solution how it will benefit them
---------------------- as well as the company as a whole. “The discussion should focus on
---------------------- CRM as a tool for improving the organisation and achieving important
organisational goals like enhancing revenue, reducing costs, automating
---------------------- processes and saving time.”
---------------------- 2. Not choosing a crm solution that is sales representatives (i.e.,

mobile) friendly: One of big pitfalls and the biggest problem with CRM
---------------------- systems is getting the sales representatives to use them. “Desktop CRM
systems were designed for management in offices, rather than for sales
---------------------- professionals on the move. To see higher engagement, businesses should
---------------------- choose user-friendly mobile CRM solutions that integrate effectively with
current systems, while facilitating real-time updates as they make phone
---------------------- calls, visit customer’s offices and schedule appointments.”
---------------------- 3. Choosing a CRM solution that cannot scale: Generally, it has been seen
that businesses choose CRM solutions looking at the current state of the
---------------------- business. The CRM solution may be adequate for the first few years, but
what happens when a business grows in terms of volumes and customers,
----------------------
when the business has more customers and more orders? Businesses need
---------------------- to carefully assess their data when choosing a CRM solution, keeping the
future of their business in mind.”
----------------------
4. Lack of social media integration--or ignoring social media as a crm
---------------------- tool: In today’s social media-driven world, it is essential to have a CRM
system that includes your social media interactions with customers. But
---------------------- organisations should ensure that it’s not enough to merely collect and monitor
the information. Businesses need to intelligently listen to their customers and
----------------------
actively engage them over social platforms like Facebook, Twitter, etc.
---------------------- 5. Not integrating your CRM system with other key systems: To
optimise your CRM investment it must be integrated with other systems.
----------------------
For example, companies which integrate their email with their CRM
---------------------- cite year-over-year revenue gains of 22.7 per cent vs. 13.4 per cent for
companies who don’t, according to Aberdeen Research.”
----------------------
6. Lack of defined business processes: CRM should not be looked at as a
---------------------- glorified mailing list or address book. The true value of CRM comes in the
grouping of the customer information (contact details, sales opportunities)
---------------------- and how that information relates to each other. Organisations should
---------------------- sketch out a workflow diagram that depicts the customer life cycle. Such
----------------------

visual tool aid in not only customising CRM, but fully taking advantage Notes
of its functionality.”
----------------------
7. Inconsistent nomenclature; no guide for how to refer to accounts:
“Many companies have redundant entries for same account, for example, ----------------------
Tata, TELCO and Tata Motors, thus making it difficult to prioritise and
capture information. When this problem persists, sales representatives ----------------------
often end up abandoning CRM and using spreadsheets, negating the
----------------------
millions of dollars large organisations invest in CRM. The solution to
such situation is: ----------------------
a) To ensure that each account should only be in the system once and
----------------------
eliminate duplicate entries.
b) Customers and prospects should be organised into a hierarchy ----------------------
capturing multiple buying centres within business units and parent-
----------------------
child companies.
c) Account names should be matched to other databases like internal ----------------------
systems (e.g., purchase history and transaction database) to enable ----------------------
enhanced insight into the customer within the CRM system.
8. Too many fields: The sales executive should be required to fill in only ----------------------
the most important details about each contact or opportunity. Then the ----------------------
salesperson can fill out more detailed information when it becomes
available. The system should ensure that within each record, it is easy for ----------------------
the sales team to fill out the information so they don’t get bogged down in
small details only. ----------------------
9. Being overly ambitious: Often, companies are so excited about their ----------------------
new CRM system, they set too ambitious goals and deploy features that
confuse or intimidate users who are unfamiliar with the system. ----------------------
To increase the likelihood of user adoption, companies should clearly lay ----------------------
out a multi-step plan that delivers value iteratively, beginning with quick
----------------------
wins that deliver high value in a short amount of time. This will keep
users happy and it will also help to achieve a better return on investment. ----------------------
10. Not establishing metrics to measure success: “Implementing CRM/
----------------------
Social CRM without a clearly defined goal will lead to no gain at all.
There should be evaluation parameters for each of the proposed business ----------------------
areas that will be impacted by the system and these should be measured
on a regular basis. ----------------------
8.3.1 Ethical Issues – Customer Privacy Overview ----------------------
Overview ----------------------
Privacy issues are not new. Villanueva, J et al (2002) stated that
customer attitudes towards privacy are always emotionally charged. Generally, ----------------------
consumers are concerned about what kind of information is collected and how ----------------------
the information is collected, used and shared.
----------------------
IT-Enabled CRM 137

Notes With the help of World Wide Web (www) online transaction have
become very popular. The web provides a good source for businesses to obtain
---------------------- information about the customer.
---------------------- Reasons for privacy concerns
It is reasonable for customers to have the concerns. In fact, many examples
----------------------
prove that a customers’ normal life is disturbed because private information is
---------------------- known by others.
Before the invention and spread of Web, people could control such
----------------------
situations by refusing to provide personal information. However, now customers
---------------------- must provide their personal information if they want to use the Internet.
---------------------- Once information is given, it automatically gets recorded in the database.

And then the customer is flooded with endless e-mail or promotion magazines
---------------------- or even telephone calls. When people registers on a website to subscribe any
book, they have to provide one e-mail address and their charge card number
---------------------- (debit or credit card). Once this is done the person’s e-mail box gets filled with
---------------------- spam automatically and all of it from unknown organisations.
What is more serious is that sometimes companies get to know family
---------------------- details like how many people are there in the family and where they usually
---------------------- go for holidays or even where their children study. All of these make customer
vulnerable.
---------------------- The situation disturbs many customers. They certainly do not want such
---------------------- information to be shared publically and to waste time on those non-useful phone
calls or emails or letters. They also want to ensure physical safety and avoid
---------------------- embarrassment. Therefore, they claim that they want to protect their privacy.
---------------------- Effects of privacy issues
Although customers strongly oppose the misuse of their personal
----------------------
information, they cannot do anything to stop companies. The only way is
---------------------- to avoid online transaction even if they offer lower or better prices, because
providing personal information to an unknown website is a very big price to pay
---------------------- for a few percentages of discount.
---------------------- The situation has negative effects on good CRM. As an effect of the
privacy issues there would be fewer transactions and with fewer transactions,
---------------------- companies would not have enough opportunities to communicate and know
---------------------- customers. In such a situation of decrease in online transactions, the channel of
Internet cannot make its function effectively. As a result, companies do not get
---------------------- to know exactly the needs and wants of the customers exactly and provide right
kind of services. This definitely affects the profitability of companies.
----------------------
Need of alleviating privacy concerns
---------------------- In today’s market the companies have to accept that privacy protection
---------------------- is not an optional or additional activity. The modern technology has provided
enough opportunities and effective ways and means to know and satisfy
---------------------- customers’ requirements.

There has been a major growth in cases of information abuse. Customers Notes
also have become more aware of their privacy protection. Girard, D. (2000)
pointed that while Internet provides direct communications opportunities for ----------------------
companies, it also makes privacy a main concern in the customer’s mind.
----------------------
The following points are the main reasons for resolving the issue:
----------------------
1. The dilemma situation: In today’s context many companies fall into a
dilemma situation. On the one side, as Mckenzie, R (2002) stated Internet- ----------------------
powered customers request personalised services based on obtaining large
amount of information. If they can’t get satisfied services, they won’t ----------------------
keep loyalty. A strong and visible customer privacy programme can lead
----------------------
to customer loyalty. (Barney Beal, News Editor, 2 March, 2005).
On the other side, with the responsibility of privacy protection, companies ----------------------
do not prefer to take radical actions on information collection. Otherwise,
----------------------
they will face the risk of intruding into private life of the consumers. The
result of such action is the customers’ distrust which leads to customers ----------------------
giving businesses to competition.
----------------------
2. Living on customer information: With development of e-commerce,
business companies have more dependence on customer information. ----------------------
With the data about the consumers so collected, companies analyse
customer behaviours and their taste and preferences. Such analysis ----------------------
helps in designing specific and focused services for different customers. ----------------------
Companies can get repeat customers only if they meet customers’
requirements in the best possible manner and make customers happy. ----------------------
And in today’s e-commerce era, some business websites make profits by ----------------------
providing products with collected customer related information.
www.DoubleClick.com is a typical example. It collects and analyses ----------------------
customer information in order to know what customers often do and what ----------------------
their preferences are. With help of such information, it can develop tools for
marketers to plan and analyse marketing programmes so that marketers can ----------------------
make their marketing campaigns successful. It is the reason why DoubleClick
leads in helping marketers reach customers in the highly competitive era. ----------------------
Therefore, high level of customer information is very vital for such ----------------------
websites. However, with privacy concerns, such website cannot be in normal
----------------------
operation at all as abundant information would not be available to them.
Facing such threats, companies must develop solutions for privacy ----------------------
concerns immediately. But what’s more important is that the solutions must be
----------------------
effective.
Solutions for privacy issues ----------------------
1. Current solutions: In fact, many companies have fully realised customers ----------------------
are greatest assets. Effective protection of information is a key factor to
keep assets with them and increase customer trust (Nykamp, M. et al, ----------------------
2002, www. dreview.com). In this way company’s profitability can also ----------------------
be increased in the long run.
IT-Enabled CRM 139

Notes Many companies regulate privacy policies that ensure customer
information is not abused and is properly protected. In order to get
---------------------- customers trust their website, all kinds of privacy statements are also
published on the website. However, many of them are not as effective as
---------------------- expected. The following are some of the reasons:
---------------------- i. Changeable policies: Although many policies are regulated,
these policies only can be had for a short period. After some time,
----------------------
policies may be changed. The problem is more serious for online
---------------------- companies. For instance, AOL recently changed its privacy policy
to allow selling of customer information (Bergeron, B. 2002. p.24).
---------------------- Consequently, many online customers feel they can’t verify whether
their identity and purchasing records are sold to others or not.
----------------------
ii. Ineffective statements: Currently when customers are asked
---------------------- to provide non-public information, they receive certain privacy
statements. These statements usually present personal information
----------------------
that can be protected. Actually, these statements don’t imply that
---------------------- personal information can be treated as privacy (Loshin, D. 2002
www.dmreview.com). On the contrary, they only inform customers
---------------------- that their personal information can’t be kept private.
---------------------- Usually the statements list some names of organisations that can share the
customer information. As for customers they don’t have any options about
---------------------- it. They would think such statements they get is just like an information
letter for broadcasting their information.
----------------------
2. Proposed solutions: With such poor solutions, customers cannot
---------------------- feel comfortable and safe at all. On the contrary, they will have more
---------------------- dissatisfaction. Companies also can be affected negatively. So they must
treat the problem with utmost seriousness and take effective actions.
---------------------- Before companies adopt new and useful methods, they must have very
---------------------- clear ideas in their minds.
a. They should know resolving privacy problem isn’t a form of words.
---------------------- Whiting, R. (2002) addressed that companies have the responsibility
---------------------- to make privacy work by adopting information technology and
human training.
----------------------
b. Companies should have the awareness of investing capital on
---------------------- improving privacy policies. Although the cost for privacy is hard to
predict and count, they also should make the necessary investment
----------------------
c. Wise company leaders should know which is more valuable between
---------------------- certain amount of cost and achieving long-term customer trust.
---------------------- With these ideas companies can address the privacy issues and the
following proposed solutions can help companies with the their privacy
---------------------- problem.
----------------------

i. Visualising collected information: When companies want to Notes
collect information from customers, the customer should be
informed in advance and they should know that their information ----------------------
may be shared. The customer should have the freedom to decide
whether they want to give out their personal information. ----------------------
Even if customers have provided information, companies also need ----------------------

to let them know what information is collected and how it will
----------------------
be used and with whom they will share the information. And the
customers should have the control on the use of information. ----------------------
ii. Promoting understanding about privacy policy: Once the
----------------------
privacy policies are formulated, the company should let customers
understand and believe them. It is a valuable opportunity for the ----------------------
company to build trust with customers. Companies can achieve this
by using their website, e-mail or sales calls. The message to the ----------------------
customer must be simple and allows customers to know companies’
----------------------
understanding about privacy concerns.
iii. Increasing customer trust about the third party: Usually any ----------------------
business company would have interaction with third parties and
----------------------
the customer’s information may be shared between them. If the
customer has poor confidence in the third party, it affects their trust ----------------------
with the company also correspondingly.
----------------------
It is the responsibility of the company to instill enough confidence
in the customers and let them believe the third party is also obligated ----------------------
to protect the privacy.
----------------------
iv. Using information technology: In order to improve privacy
protection, some technologies should be adopted. Especially in the ----------------------
web era, there are more risks of abusing information during online
transactions. ----------------------
Companies should adopt security system to prevent competitors ----------------------

invading their customer database. And when customer types their
personal information over Internet, some technologies also should ----------------------
be used to allow customers choose whether they want information ----------------------
shared or whether they need these services.
----------------------
v. Government interference: Privacy is not only about business but
also is a policy issue. So government should regulate legal policies ----------------------
to constrain privacy protection. In fact, some countries, such as US
and Canada have published registration for privacy protection and ----------------------
get positive impacts.
----------------------
[Ref.: Sun, Zhiwei. “Customer Relationship Management and Privacy”.
International Business Research. January 2009] ----------------------
----------------------
----------------------
IT-Enabled CRM 141

Notes 8.4 SUSTAINING CUSTOMER RELATIONSHIP
---------------------- Customer service is the key to the structure of an effective CRM strategy.
Organisations have to ensure that there is a clear identification of the key service
---------------------- level indicators and a clearly defined performance measurement structure is
present.
----------------------
1. There’s nothing wrong with over-servicing a customer: Always take
---------------------- their calls, always answer their emails in a timely fashion, always take a
---------------------- ‘we-can- get-it done” attitude with everything you do.
2. Be respectful of who’s paying the bill: Customers have ideas and many
---------------------- times they’re very good ideas. But even if it’s not such a hot idea, you still
---------------------- need to address it along with other suggestions.
3. Don’t make promises you can’t keep: The best way to lose credibility is
----------------------
to blow a deadline or submit an invoice that’s above the approved estimate.
---------------------- Promise what you can deliver; not what you think you can deliver.
4. Know where you’re going: Most projects need some kind of road map
----------------------
to keep everyone on track to reach the end goal. Project briefs, content
---------------------- outlines and trade show graphic plans are good ways to do this. Even
better…a full- year/multi-year plan.
----------------------
5. Never say a blunt no: There’s always a way to get something done. It
---------------------- may not be the perfect way or the cheapest way. Please remember, if you
don’t do it, somebody else will.
----------------------
Sustaining a relationship is a two-way thing. But if you provide top-notch
---------------------- service, thoughtful ideas and a willingness to do whatever it takes to get the job
done, what’s there not to like?
----------------------
---------------------- Good quality of service is the basic building block for creating a sustainable
---------------------- relationship with the customers. It is through a good quality of service that
you become part of the customer’s team and can establish a basis for a long-
---------------------- term relationship. In fact, it has been seen that a lot of new sales prospects are
generated though the service route. Providing a really good quality of service
---------------------- creates goodwill in the minds of the customer which actually works to cement
---------------------- the foundation created by good product delivery.
---------------------- 8.5 SEGMENTATION OF SERVICE

---------------------- Customer Segmentation for Service
---------------------- Almost all companies have some basic product segmentation. Normally
this is an ABC classification by volume, where A items make up 20 per cent
---------------------- of the products but 80 per cent of the volume. More sophisticated companies
have more specific ABC coding—by sales dollars or even by profit margin. In
---------------------- general, companies do not explicitly consider segmentation for a key metric in
---------------------- the supply chain service.

Service segmentation is an important design strategy that can result in Notes
huge savings and ultimately a competitive advantage. This segmentation should
include a review of both products and customers to accurately assess the market. ----------------------
Most manufacturers of Consumer Package Goods (CPG) understand the ----------------------
basic idea of service segmentation by customer—they know that if customers
like a big-box store don’t get the highest service, the supplier may get penalised ----------------------
by additional charges, shelf space or both. Their customer segmentation is
----------------------
simple—the big-box stores of the world get product first, then all other customers.
This method is too simple to be effective. In fact, companies should take a look ----------------------
at both their products and customers in a service matrix to understand how to
optimise inventory and other costs. ----------------------
Products can be split into three categories: ----------------------
i. High for key products in terms of volume, margin or innovation;
----------------------
ii. Medium for steady, core products; and
----------------------
iii. Low for order fillers, low volume or low margin products.
Service levels can be set in varying degrees for this side of the matrix. ----------------------
However, keep in mind that some low items will be on the same order as high ----------------------
items and the minimum service level set may drive all products if backorder
policies are not set. ----------------------
Customers can also be split into several categories, sometimes more than ----------------------
one.
----------------------
Partner customers represent those with high volumes and margins and those
with whom the supplier has a long-term growth interest. core customers are ----------------------
those who provide a steady source of income but may not be considered growth
opportunities. ----------------------
Sporadic customers are those who do not provide a steady volume and are ----------------------
therefore not given preferential treatment for service (in some cases additional
lead time is given for order fulfillment). Low volume customers require small ----------------------
lot sizes and multiple items and may be even charged a premium. Finally, ----------------------
Prospective Customers represent the potential for increased per cent volume
to the total business and may be given special consideration until they move ----------------------
into another class.
----------------------

1. ___________ are those who provide a steady source of income but ----------------------
may not be considered growth opportunities.
----------------------
2. A strong and visible customer ___________ programme can lead to
customer loyalty. ----------------------
----------------------
IT-Enabled CRM 143

Notes
Activity 2
----------------------
1. Check the website of a public limited company for their ethical policy
----------------------
and compare it with a government company.
---------------------- 2. Visit and check the services provided by the grocery store in your area
and the nearest supermarket. List down the differences between the
----------------------
two.
----------------------
---------------------- 8.6 MEASUREMENT OF SERVICE

---------------------- By measurement of service we mean the techniques used by organisations
to determine how customers perceive the value of services and products received
----------------------
by them.
---------------------- “How are we doing?” It’s a natural question for any individual or any
organisation. In some cases the answer is easier because the objective criteria
----------------------
for success are simple, obvious, easy to collect and easy to analyse. For example,
---------------------- the measurement of service for a bricklayer is the number of bricks laid in a day
and the quality of the workmanship.
----------------------
How do we measure service organisations?
---------------------- The process of measurement is not simple, obvious or easy to evaluate.
---------------------- This is mainly due to a service organisation’s multiple objectives which often
are in conflict with each other. Service organisations need to be:
----------------------
i. Efficient in their use of resources
---------------------- ii. Effective in the eyes of the customer. (And as a further complication
of the matters, many service organisations have multiple customer
----------------------
constituencies, presenting more opportunities for conflicting effectiveness
---------------------- objectives!)
How do we measure service effectiveness?
----------------------
There are mainly two broad approaches in existence − internal and
---------------------- external service measurement techniques.
---------------------- 1. Internal Service measurement techniques. By “internal” measurement
techniques, we mean that the customer is not directly involved in the
---------------------- measurement process. Rather, employees or contractors are put in the
---------------------- shoes of the customer. The two internal measurement techniques that are
applied are:
---------------------- a. Call monitoring. This technique is used in call centres. A third
---------------------- person would listen to the service interactions and judge the quality
of the service delivered on a pre-established score sheet. Such
---------------------- monitor might do more than listening. They may also be “shadow
monitoring” by watching the agents’ computer screens remotely.
----------------------

Advantages Notes
1. This is unobtrusive. The customer is not put any burden and the
----------------------
service agents do not know when they are being monitored.
2. Evaluation can be done in real time also. Therefore, the identified ----------------------
process issues can be addressed and remedied quickly. This
----------------------
eliminates the possibility of more customers becoming dissatisfied.
3. Every service agent is measured against established criteria. ----------------------
Disadvantages ----------------------
1. The monitors are applying their own qualitative assessments of the ----------------------
agents’ words and deeds. Multiple monitors are needed to ensure
fairness. ----------------------
2. The monitors must be trained and calibrated to be sure they are all ----------------------
measuring the same way.
----------------------
Most importantly, the criteria on the score sheet must reflect what is truly
of concern to the customer. Some score sheets have arbitrary requirements ----------------------
that may not be important to customers, such as greeting the customer
by name at least three times. Also, the score sheets typically derive an ----------------------
overall score by applying weights to the different sections. How were
----------------------
these weights derived? Typically, they are a managerial judgment, perhaps
driven by short-term hot buttons and not derived statistically. ----------------------
b. Mystery shopping. Most of us have heard of this technique since it’s
----------------------
used heavily in consumer industries and search engine ads barrage us
to get paid while you shop or eat. The concept is applicable in most ----------------------
of the service environment. With mystery shopping a contracted
person pretends to be a customer and tries to “exercise” the various ----------------------
paths possible in a service interaction. The “shopper” has a score
----------------------
sheet similar in concept to call monitoring score sheet.
Advantages ----------------------
The ability to explicitly test service scenarios to see how the agents and ----------------------
the system as a whole perform. In other measurement techniques, you
take what you get. Also, while a shopper does waste a service agent’s ----------------------
time, no real customers are directly affected. ----------------------
Disadvantages
----------------------
1. High cost – The process is highly labour intensive. It is prohibitively
expensive to generate many “shopping” experiences with every ----------------------
service agent. Thus, this technique is not very suitable for quality
----------------------
control monitoring.
2. The shoppers need to be trained and aligned to the needs of the ----------------------
process of mystery shopping. The score sheet needs very rigorous
----------------------
development and summaries of the results must be legitimate.
----------------------
IT-Enabled CRM 145

Notes 2. External Service measurement techniques: In contrast to the
internal techniques where simulation of being a customer is done,
---------------------- the external measurement processes captures feedback directly
from the actual consumers of the service.
----------------------
a. Unsolicited comments: The first external measurement technique
---------------------- is one that just appears and is not actively solicited. Complaints
or compliments are taken as the situations where the customer has
----------------------
taken the initiative to tell us about their feelings. Few customers
---------------------- will take the extra effort and time to send feedback. So, it befits an
organisation to make it easy for the customer to deliver comments.
---------------------- Toll-free hot lines and survey forms on the company’s Internet
home page are some of the ways to promote this free research.
----------------------
The key advantage in such a system is cost. It’s very inexpensive
---------------------- for the value that is received. If someone took the time to complain,
it probably has a seed of truth to it. They are telling us where our
----------------------
system actually failed or supported them.
---------------------- The shortcomings are high. Clearly, these comments could
represent extreme positions. They are not typical and need to be
----------------------
interpreted. Many companies post survey forms on their websites
---------------------- and believe the results can be generalised to all customers.
---------------------- The other external measurement techniques are where we actively

solicit feedback from our customers.
---------------------- b. Personal interviews: A structured interview is the simplest way
---------------------- to collect information from the customers. These could be done
through email exchanges, by phone or in person.
---------------------- The key advantage of interviews is the richness of detail they
---------------------- provide. Companies learn not just the type of issue − positive or
negative − but also the detail behind it. If the sample is selected
---------------------- scientifically then this method would capture feedback not just on
the extremes, but the entire range of customer feelings.
----------------------
Interviews have their challenging requirements. For the data to
---------------------- have meaning it must be collected in at least a semi-structured
approach. This means that a systematic development of questions is
----------------------
required so as to guide the interview. Good interviewing skills are a
---------------------- must and very good coordination among multiple interviews is also
required. This is a labour- intensive process, especially in case of
---------------------- in-person interviews.
---------------------- c. Focus groups: It is also known as “small group interviews”.
Focus groups have similarity in terms of most of the strengths and
---------------------- weaknesses of personal interviews. Rather than interviewing each
person individually, they are interviewed collectively in group over
----------------------
the course of an hour or two.
---------------------- The key advantage of focus groups is the interaction among the

participants, making for even richer detailed feedback than with Notes
individual interviews. Companies really get the “why behind
the what” of customer issues. This also leads to efficiency since ----------------------
feedback is gathered from a dozen or so people at once.
----------------------
The key challenge is logistical. Planning and execution are of vital
importance. The customers must be clustered geographically, unless ----------------------
of course the company is using an online discussion group to serve
----------------------
as a web- based focus group. The moderator’s ability to facilitate a
good discussion is absolutely critical. ----------------------
d. User group feedback: User group meetings provide an opportunity
----------------------
for collection of a wealth of information. They are used to collect
feedback about the level and quality of service offered. ----------------------
That strength is also the weakness of the approach. The users who
----------------------
give the feedback are the current customers and the feedbacks in
all probability will drive product ideas toward improving their own ----------------------
use of the product rather than product ideas that will appeal to an
expanded market. ----------------------
e. Mass administered surveys: If surveys are done properly they are ----------------------
a great way of telling us how our customer base as a whole feels.
Companies gather structured data from a sample of our “population” ----------------------
and one can then generalise these results from the sample to the ----------------------
population.
The key benefit of the survey technique is that it provides a broad ----------------------
overview of how the customers feel, identifying strong and weak ----------------------
points in the service system of the company.
To generate meaningful data, surveys have strong requirements. Some ----------------------
of these are: ----------------------
1. The survey questionnaire must avoid introducing bias.
----------------------
2. The questions must reflect the true issues of concern to customers.
----------------------
3. The resulting data must support the desired analysis.
4. The survey administration has to avoid biased results. ----------------------
5. The survey must get enough responses for statistically significant ----------------------
findings.
----------------------
6. The survey data analysis has to be executed correctly to give out the
message buried in the numbers. ----------------------
Every research technique has strengths and weaknesses. ----------------------
If we read the above descriptions, we will see that some techniques (e.g.,
----------------------
focus groups and interviews) are good at generating detail-rich findings while
others (e.g., surveys) are good at getting summary findings as representative ----------------------
of the customer base. What is actually needed is a portfolio approach. As the
financial portfolio is to have a balance of investment instruments in the same ----------------------
IT-Enabled CRM 147

Notes manner the service measurement approach should also be a mix of different
approaches.
----------------------
Rigorous application of a portfolio of different service effectiveness
---------------------- measurement techniques helps to ensure that we truly understand how our
customers view us and how to address those issues.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.1: Measurement of Service
----------------------
Source - Fred Van Bennekom, Dr. B.A., Principal Great Brook Consulting,
---------------------- (http://www.greatbrook.com/service_measurement.htm)
8.6.1 Monitoring Customer Satisfaction
----------------------
Customer satisfaction is defined as “the number of customers or percentage
---------------------- of total customers, whose reported experience with a firm, its products or its
---------------------- services (ratings) exceeds specified satisfaction goals.
In a competitive marketplace where businesses compete for customers,
---------------------- customer satisfaction is seen as a key differentiator and increasingly has become
---------------------- a key element of business strategy.
3. Monitor your social media presence: Social media is a place where your
----------------------
customers are going to offer unbiased and uncensored opinions relating
---------------------- to your company. Make sure that you can learn from what your customers
are saying about your business. Engage customers to discuss products and
---------------------- encourage them to join your Facebook, Twitter and Google Plus pages for
regular updates.
----------------------
4. Communicate with customers via phone or email: As soon as a customer
---------------------- makes a purchase, invite that customer to send you a phone call, email
or quick comment about their experience. Your customers are often
----------------------
willing to tell you what your business does right and what it does wrong,
---------------------- especially if there is some form of incentive for the customer. Phone calls
and emails are a preferred way to leave feedback because the customer
---------------------- can talk to or get a reply from a real person.
---------------------- 3. Have your customers take surveys: Customers are sometimes willing to
take surveys and rate their experiences with a company. You can make a
survey even more attractive to a customer by offering a prize or incentive Notes
to anyone who returns a completed questionnaire.
----------------------
4. Use your website to solicit feedback: Your company website is a great
place for customers to leave feedback regarding their latest experience ----------------------
with your company. You should have comment boxes, links to corporate
email addresses and other options for customers to leave feedback. ----------------------
Companies can also invite customers to leave comments on company
----------------------
blog.
5. Ask them directly: It never hurts to ask a customer for direct feedback ----------------------
while they are shopping in your store or on your website. You can take a
----------------------
minute or two to simply ask how they thought the service was and if they
found everything that they were looking for. In general, happy customers ----------------------
will be able to find what they need and get on with their day.
----------------------
Your customers should always come first. Therefore, take the time to
make sure that they are happy with the products and service they receive from ----------------------
your company. Asking them directly, monitoring social media feeds and having
them take surveys are all great ways to ensure that your customers are happy ----------------------
with your company.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.2: Sample five-point Satisfaction Scale for Service
8.6.2 Analysing Customer Defection ----------------------
Customers often shift their business to competitor companies when they ----------------------
feel that their needs and wants are not being met or if they experience breakdown
in customer service or poor quality of service or products. ----------------------
Why customer defects ----------------------
Below are the five main reasons why customers defect. ----------------------
1. Intentionally pushed away: It is logical to push away an unprofitable
----------------------
client. They are not worth pursuing if they cannot be turned profitable.
This is directly connected to the 80/20 rule. And it always makes business ----------------------
sense to shake up the organisation structure regularly to check the loose
ends. ----------------------
2. Unintentionally pushed away: If we lose profitable clients accidentally, ----------------------
we’re really making a big mistake. The companies must look at the service
issues. Find out how the problems are being resolved. Are the customer ----------------------
complaints being attended promptly and courteously?
----------------------
IT-Enabled CRM 149

Notes 3. Pulled away: That obviously means the competitor gave them more
attention, a better deal or better service. Customers are like teeth, if one
---------------------- was to totally ignore them, they fall out.
---------------------- 4. Bought away: This is connected to the marketing and sales because it
means that the competition made a strategic move to give your client
---------------------- a compelling financial reason to switch. If a company is not doing its
marketing with compelling offers then it is like a sitting duck, waiting for
----------------------
the competition to beat it to the punch.
---------------------- 5. Moved away: If the customer no longer needs what the company sells
or has moved out of its geographic trading area, there’s really nothing
----------------------
that a company can do. These are the normal phenomenon of business.
---------------------- Although it is strongly suggested that the company should try and get a
testimonial or referral before the customer moves away.
----------------------
---------------------- Summary
---------------------- ●● I n an attempt to reach and connect with customers in an environment highly

saturated with products, advertisements and promotions companies use
---------------------- customer relationship marketing as a tool. Technology has been the prime
contributor to the growth of CRM. Once customer patterns are recorded
----------------------
in the database, the software can cater direct marketing efforts, such as
---------------------- emails or mailers with coupons and special offers, to each individual
customer.
---------------------- ●● ata based marketing uses the customer data maintained in the data
D
---------------------- warehouse in designing an effective and personalised marketing
programme.
---------------------- ●● ustomer satisfaction measurement is an integral part of the process of
C
---------------------- CRM and the same is done using internal or external tools of measurement.
Such measurement gives a clear understanding of the reasons for customer
---------------------- defection and companies can take corrective or preventive actions to
check the same.
----------------------
---------------------- Keywords
---------------------- ●● ata warehousing: It contain a wide variety of data that present a
D
coherent picture of business conditions at a single point in time. It is the
---------------------- electronic storage of a large amount of information by a business.
---------------------- ●● ata mining: The process of analysing data from different perspectives
D
and summarising it into useful information.
----------------------
●● atabase marketing: A form of direct marketing using databases of
D
---------------------- customers or potential customers to generate personalised communications
in order to promote a product or service.
----------------------
----------------------

Notes
----------------------
1. Explain the term database marketing.
2. Explain the role of information technology in CRM. What are the ----------------------
problems faced by the organisations in using IT in CRM?
----------------------
3. Give your comment on the issue of organisations using personal
information of consumers for commercial use. ----------------------
4. Explain different internal service measurement techniques. Give their ----------------------

advantages and disadvantages.
----------------------
5. List down the different reasons for customer changing their supplier of
products or services. ----------------------
6. Write short notes on: ----------------------
i. Data warehousing
----------------------
ii. Data mining
----------------------
iii. Focus group interviews
iv. Mass administered surveys ----------------------
----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. CRM practices enable marketers to build long-lasting relationships with
consumers at the individual level. ----------------------
2. Data warehouses contain a wide variety of data that present a coherent
----------------------
picture of business conditions at a single point in time.
1. Core customers are those who provide a steady source of income but may ----------------------
not be considered growth opportunities.
2. A strong and visible customer privacy programme can lead to customer ----------------------
loyalty. ----------------------
----------------------
Suggested Reading
----------------------
1. Batterley, Richard. 2003. Leading Through Relationship Marketing.
Australia: McGraw-Hill. ----------------------
2. Garikaparthi, Madhavi.2003. eCRM: Concepts and Cases. ICFAI ----------------------
University Press.
----------------------
IT-Enabled CRM 151

Notes 3. Kaushik, Anjali and M.P. Jaiswal. 2002. e-CRM: Business & System
Frontiers. New Delhi: Asian Books Private Limited.
----------------------
4. Shajahan, S. 2004. Relationship Marketing. New Delhi: McGraw-Hill.
---------------------- 5. Sheth, Jagdish and Atul Parvatiyar. 1999. Handbook of Relationship
Marketing. New Delhi: Sage Publications.
----------------------
6. Sheth, Jagdish N, Atul Parvatiyar and G. Shainesh. 2001. Customer
---------------------- Relationship Management: Emerging Concepts, Tools and Applications.
New Delhi: McGraw-Hill.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Case Studies
UNIT
9
Structure:
1. Introduction to CRM
1.1 Dizzy Tour
1.2 The Midas Touch
1.3 Trust and Risk
1.4 The Paratha Tale
2. Introduction to E-CRM
2.1 A Case of Tesco
3. Sales Force Automation
3.1 The Force named ‘Sales Force’
3.2 Furniture Marketing
3.3 V.K. Saraf and R.B. Pai Electrical Engineers
3.4 Telebanking in Pragati Bank Ltd.
4. Enterprise Marketing Automation (EMA)
4.1 A Customer Unattended is a Customer Lost
4.2 Hotel Black Pearl (HBP)
5. Implementing a CRM Programme
5.1 A Government Run Hospital
5.2 SSM Textile Mill
5.3 Primex-O Components Ltd.
5.4 S for Structure; S for Satisfaction
6. M-CRM and Application Service Provider (ASP)
6.1 HP Utilisation of SAP CRM
7. Customer Loyalty and Loyalty Programme
7.1 Shri Ganga Electronics
7.2 Flying High
7.3 Data Management - SPDP Bank
8. IT-Enabled CRM
8.1 Relationships and Retention: Go All Bike
8.2 Travel Travails
8.3 Fun Spot
8.4 Super-SP Mall
8.5 Losing out
9. Best Practices in CRM and Future of CRM
9.1 Funfin Mutual Fund
9.2 New Food Products Marketing
Case Studies 153

Notes 1. INTRODUCTION TO CRM
---------------------- 1.1: Dizzy Tour
---------------------- Objectives:
●● Examine why tourism in India is really an infant industry with regard to
---------------------- this case study.
---------------------- ●● Identify characteristics of professionalism.
---------------------- Jayant wanted to spend his vacation touring with his family. One of the
places that he had not visited was Madhya Pradesh. He sought the services of
---------------------- the Madhya Pradesh Tourism board. The board provided them with a guide.
They also offered a Trax vehicle but one was needed to drive it or had to hire the
---------------------- services of a driver; the rates of hiring a driver were exorbitant. Jayant decided
---------------------- to drive the vehicle. This was his experience in his words.
I think the MP Tourism seriously needs to have a second look at its
---------------------- service and reconsider it in the light of the potential that it can harness. I am
---------------------- bringing this issue as I love to travel and apart from experiencing new places,
I love to shoot pictures of the places I visit because that gives me a thrill when
---------------------- I see the pictures after few years. The pictures also help bringing the best of
conversations when you are describing the place to your friends and relatives.
----------------------
I had never been to Madhya Pradesh and their tourism is also not as
---------------------- developed as some of the other states such as Kerela, Rajasthan, J&K in but
they have some of the best places which can help them promote tourism. Places
---------------------- such as Khajuraho temples; Amarkantak, a pilgrimage; Bandhavagarh National
---------------------- Park; Gwalior Forts; Mandu - the City of Joy surrounded by defences, both
natural and manmade; Panchmarhi-the queen of Satpuras, which is known as
---------------------- wealth of beauty.
---------------------- We left Jabalpur at around 3:30 p.m. and thought that we would stop in
between for a quick meal. After about 30 minutes of drive on the highway,
---------------------- we stopped in front of a restaurant to have lunch and before getting out of the
vehicle asked a gentleman till what time Den (a respectable restaurant) is open
----------------------
and he told us you have to be there by five.
---------------------- We decided against us having lunch there and thought it would be better
if we see the Beda Ghat (on Narmada River) first and have a meal once we are
----------------------
through with it. After reaching our destination, we were followed by all kinds
---------------------- of touts, guides, rickshaw drivers to tender their services. There is quite a bit of
distance to cover where private cars/taxis park to reach the ghat, from thereon
---------------------- you either need to go walking yourself or hire an auto rikshaw. We took an auto
rickshaw (charged Rs. 50 for 7 adults) from there and reached there at around
----------------------
5 p.m. We got the tickets (Rs. 20 per ticket) and were about to stand in a queue.
---------------------- Our guide was nearby for ‘assistance’ (if we pay extra for his services). He tried
his best but as there was quite a long queue, his contacts did not work. So we
---------------------- kept stranded in a queue for about half an hour before we could get a view.
---------------------- As we entered the narrow path leading to the ghat, it became increasingly

suffocating because of the humid climate and the crowd that was already present. Notes
A proper system was lacking. It was a wonderful sight, but I was not allowed
to take pictures, as our guide did not permit us. (He was perhaps so frustrated ----------------------
by now, he made his own rules!) However, later I learnt that photography in
only certain sections of the ghat was not permitted. Just as we moved out of the ----------------------
ghat, a little further down the road we spotted Pizza Hut and decided to have a ----------------------
quick meal before we drove back to Jabalpur. The meal that intended to a short
one took more than an hour due to a large crowd. The absence of the tourism ----------------------
boards’ eatery facilities became very conspicuous. Feeding the guide was also
our responsibility though until now the guide was of little help to us. ----------------------
We rested that day and decided to move ahead to the Khajurao temples ----------------------
early next morning. It was a long journey and took us nearly twelve hours; we
----------------------
reached by 5 pm. We rested a while and went on to visit the temple site. It was
marvellous. The Chandella art and architecture was at its precious beautiful. ----------------------
However, on enquiring about various facets, history and myths associated with
the temple, our guide was found to be unwilling to assist. I had to pay him ----------------------
something extra to get more information.
----------------------
At night, we decided to have dinner at one of the restaurants suggested by
our guide. The restaurant was set in a medieval setting. However, the prices of ----------------------
food served there seemed to be priced well beyond my expectations. Not to spoil
----------------------
the mood, I decided to continue with the plan of having supper here. We had a
wonderful dinner, but very soon my stomach began to churn on seeing the total ----------------------
bill. It came to Rs.12,000 for five people including our guide. On inspecting it
further, I learnt that our guide had managed to purchase, three bottles of one ----------------------
litre each of whisky!
----------------------
It was only after returning to our lodge that I blew my head. He consumed
that liquor and began to verbally abuse my family and myself. It was then that ----------------------
I decided to get rid of him. I approached the local Madhya Pradesh Tourism
----------------------
office and complained only to be told that I have to pay his fees as decided, for
the whole journey! Now this really irked me. ----------------------
Why should I pay him the whole fee, when I am disassociating him from ----------------------
me? I was told that it was the rule. And if I did otherwise, a police complaint
could be lodged! ----------------------
This is where my tour ended and I returned to Mumbai. Of course while ----------------------
returning the vehicle, I had to pay extra for damages and wear and tear!!
----------------------
Questions
----------------------
1. What was missing in terms of CRM in this episode? ----------------------
2. Do you think there was a gross absence of professionalism?
----------------------
3. Suggest ways to improve professionalism with regard to CRM especially
in government run organisations. ----------------------
----------------------
Case Studies 155

Notes 1.2: The Midas Touch
Objectives:
----------------------
●● Justify the importance of culture in customer relations
----------------------
●● State the importance of communication, adaptability and innovation
---------------------- At 98 years of age, with over 76 years of experience in the gold business,
Anant Ganesh Gadgil- popularly known as Dajikaka Gadgil, the founder of PN
---------------------- Gadgil and Sons is the proud owner of a chain of more than fifty outlets spread
---------------------- out across the city of Pune, itself. They also have outlets all over the state in
major cities.
----------------------
P.N. Gadgil and sons, the Jewellery enterprise, as it is popularly known,
---------------------- was established in the year 1832 in Sangli, a small city in Western Maharashtra.
They set up a shop in Pune city in 1958. Its initial customer base in the city was
---------------------- pathetically low, as it had to compete with other entrenched jewellery guilds
such as the Jhaveri’s and Khari Pedhi, among others. Its initial customer size
----------------------
was retained on personal relationships. Today they have a customer base of one
---------------------- million in Pune city alone. On being asked how this was possible, a manager
of an outlet in the heart of the city explains “Trust is what enables us to retain
---------------------- and expand our customer base. In our business, breach of trust spells doom.
We ensure quality and transparency. We have in many instances even sold our
----------------------
goods on credit to loyal customers.”
---------------------- When this business enterprise established itself in Pune, it only specialised
in gold jewellery. However, today its range spans from silverware to diamonds
----------------------
and gems also. It also exports some of its products to Southeast Asia and Europe.
---------------------- Having understood their customer base, which is highly heterogeneous, their
products reflect a mix of modern and traditional outlook.
----------------------
“Our society is a cauldron of cultural heterogeneity and this plurality is
---------------------- represented in the products that we manufacture. For instance, we have tailor
made ornaments for festivals, weddings and for various other occasions. And
---------------------- thus, our customer base spans a spectrum ranging from traditional to modern,
---------------------- from Pan Indian to Pan global. We customise and tailor-make our products,
ensuring customer satisfaction.”
---------------------- In this business, the customer base is usually highly stratified in terms
---------------------- of income and class. Thus, catering to the lowest income group and also the
economic elite requires a high level of sophistication. Moreover, the business
---------------------- does witness seasonal fluctuations.
---------------------- “To ensure accessibility to our outlets, we work on all days. This has
enabled us to attract more customers. Moreover, in a fast paced city as Pune,
---------------------- time is vital for the customer. We endeavour to provide all facilities for the
convenience of our customers.”
----------------------
As technology allowed the scope of business to expand far beyond where
---------------------- it had been before, the personal connection begun to shrink rapidly. To remedy
----------------------

this situation, we have developed various strategies, including the development Notes
of online surveys to query customers on their thoughts and opinions.
----------------------
We have trained sales personnel who are usually multilingual. We
ensure that our personnel are drawn from various cultural backgrounds. With ----------------------
the customer at the centre of our business plans, we take extreme care not to
disappoint them in any manner. ----------------------
“In our haste to please people and close sales, we often make promises ----------------------
that we cannot keep. We tell a customer we will deliver by 3.00 p.m., forgetting
that we made a similar commitment to several other people. We promise to ----------------------
return a call by the end of the day but get caught up in other tasks and forget.
----------------------
Or a salesperson tells a client that a back-ordered product will be available on
a certain day without first confirming this. These situations end up causing us ----------------------
stress and strain the relationships we have developed with our customers.
----------------------
Customer service, like any aspect of business, is a practised art that takes
time and effort to master. All you need to do to achieve this is to stop and switch ----------------------
roles with the customer.
----------------------
What would you want from your business if you were the client? How
would you want to be treated? Treat your customers like your friends and they ----------------------
will always come back.”
----------------------
Questions ----------------------
1. Is trust an important facet in this case study? Elaborate. ----------------------
2. Why is good communication so important according to this case study? ----------------------
3. How was this enterprise able to enlarge its customer base? Delineate its
customer relations strategies. ----------------------
1.3: Trust and Risk ----------------------

Objectives: ----------------------
●● Examine various strategies to build up a customer base
----------------------
●● Assess the importance of risk taking in expanding customer base
----------------------
Sharmila, a middle-aged maidservant in a Mumbai suburb had bought
a stove, refrigerator, Video Cassette Recorder (VCR), stereo system, bed and ----------------------
a closet in just two years. All the appliances were purchased from the local
Mazda stores on loan. The interest on the loans did not cause Sharmila any ----------------------
worry since all the loan installments fitted into her monthly budget.
----------------------
With a monthly salary of Rs. 3500, she had never thought she could afford
all these products as well as provide the basic necessities to her four children. ----------------------
Mazda stores considered her creditworthy and worked out a personalised
----------------------
financial assistance plan for her so that all loan installments were less than 50
per cent of her monthly salary. ----------------------
Similarly, Chameli, a cleaning woman, always dreamt of a kitchen kit but
----------------------
Case Studies 157

Notes she knew that it was beyond her means due to her modest salary. Somebody
advised her to visit the Mazda stores. She went to the nearest store. There, she
---------------------- was asked to fill up a simple loan application form and was told that she could
buy the kitchen set. At last, she became a proud owner of a kitchen set, a luxury
---------------------- among the lower income groups of India.
---------------------- Similar was the case of a truck driver from Sholapur who gave a surprise
gift of a kitchen sink with a cabinet and a washing machine to his wife. Mazda
----------------------
stores not only gave him credit but also delivered the purchases at his doorstep
---------------------- so that he could see the surprise and happiness on his wife’s face when she
received the purchases. He said it was the biggest gift he ever gave to his wife
---------------------- and Mazda stores made him a proud husband.
---------------------- Most of Mumbai’s low-income population had similar stories to narrate.
When they entered Mazda stores, they did not just buy a stove or a television
---------------------- set or a piece of furniture but a dream that they had never thought they could
realise with their meagre salaries. Mazda’s innovative installment sales schemes
----------------------
unlocked the purchasing power of Mumbai and India’s enormous working class
---------------------- and catered to the needs of low-income groups while earning good returns for
the company.
----------------------
Mazda stores are making it clear what they want as shopping experience.
---------------------- Often more than technology-centred approaches, they prefer low prices;
friendly, knowledgeable, fast and personalised service; products that are easy to
---------------------- find and that cater to needs of all classes of society- a ‘customer-centric’ store.
---------------------- As Mr. Mehta, the CEO of the Mazda stores, comments “We have
developed an integrated view of the customer by uniting all pieces of data
---------------------- gathered across all sections of society.
---------------------- We insist on tailoring the shopping experience to different customer needs
and shopping occasions, including across different segments, local markets and
---------------------- product categories. We are also incorporating technological innovations but
---------------------- not at the cost of human inputs. We are evaluating emerging technologies as
they fashion the store of the future. These technologies include self-checkout,
---------------------- intelligent shopping carts, guided selling and interactive product displays that
meet consumers.”
----------------------
Mazda has catered to the needs of all classes and communities of society
---------------------- in Mumbai and India. What began as a small enterprise is today a huge chain
of retailing. Mazda outlets span all over the country. Today, their customer base
---------------------- ranges from very rich to extremely poor classes.
---------------------- Mr. Mehta adds, “We do not need to spend much on advertisement now,
as our store itself has become a household name. Word of mouth is loud enough
----------------------
an advertisement for our organisation. Moreover, since our employees belong
---------------------- to various strata of society, spreading any information becomes easier. We
believe in treating our customers as Gods and for this, even if we have to go
---------------------- out of the way to expand our customer base in the face of risk, we go ahead.
Initially, we did have problems relating to providing installment payments for
----------------------

goods purchased, especially from the weaker sections of society, but over time, Notes
we have developed good trust networks with the aid of our employees, who
function dually as employees and public relation persons.” ----------------------
Another interesting feature of the Mazda stores is the training that they ----------------------
provide to the employees. Most of them belong to low-income groups. They are
trained in human relation skills such as communication, knowledge of various ----------------------
products and installment schemes, inter and intra group dynamics and so on and
----------------------
so forth. Building a good team is the first step towards attracting and retaining
customers; this is what Mr. Mehta believes in. ----------------------
Questions ----------------------
1. What is the strategy through which Mazda ensures a huge customer base? ----------------------
2. Comment on the viability of the strategy of using employee networks to ----------------------

spread a good word about the organisation.
----------------------
3. How important is training of employees in the arena of customer relations?
----------------------
1.4: The Paratha Tale
Objectives: ----------------------
●● Identify weaknesses in customer care ----------------------

●● Assess the role of the manager in the context of this case ----------------------
‘Talisma’ is a part of the ‘Sands and Dune’ resorts chain of restaurants
and is supposed to be a high-end restaurant. Unfortunately, my recent dining ----------------------
experience seemed to show otherwise. ----------------------
I am narrating the following experience at Talisma (C.P of Delhi) to give
one a sense of what happened. I was looking forward to a night out with my ----------------------
friends. Trying a restaurant that I hadn’t been to but had heard good things ----------------------
about. I was sorely disappointed.
The reservation had been made for 6-8 people so we were seated at a table ----------------------
for eight. Four of us got there a little early and we were provided with water and ----------------------
asked if we would like anything to drink. We all said water was fine for now (we
were still waiting for others). Two more people showed up and we figured that ----------------------
the other two that were may be’s had confirmed their inability to accompany us
to two of the present members. We immediately informed our server that there ----------------------
would only be 6 of us. ----------------------
We ordered our meals with Radika going last because she wasn’t sure
----------------------
what to get (she is vegetarian and all the entrees were meat). When the waiter
got to Susan, she asked “Are there any vegetarian options other than parathas?” ----------------------
and he answered “Yes, the top two” (he had heard “are there any vegetarian
options of the paratha?”). When she looked confused, he asked, “Have you read ----------------------
the menu?”, made a huffing noise and came around to her side of the table to
----------------------
point out the two vegetarian paratha options.
----------------------
Case Studies 159

Notes We were brought papad and salad and then the two appetizers we had
ordered. Seema wanted salt for her soup and we wanted more butter but our
---------------------- server was nowhere to be found. Eventually with a few spoonfuls of soup left,
he came by and we were able to request the salt.
----------------------
When he brought the main course, he almost knocked over all our glasses
---------------------- in his rush to slam them down. By this point, we were quite disappointed with
his service and attitude and decided that we would eat dessert somewhere else
----------------------
and he would be getting a smaller tip than we usually leave.
---------------------- He came by to take our plates and asked if we would like to see the dessert
menu. We said no, we were good. He brought us our bill. He had added in pen
----------------------
a 15% gratuity. Since we were not a group of eight and were not happy with his
---------------------- service, we wanted to ask why this had been added. Again, he was nowhere to
be found.
----------------------
Seema went up to the bar and asked why this had been added. She was told
---------------------- that it is their policy to add a gratuity to groups of eight or more. Since we had
booked and used a table for eight - they had added the gratuity. Seema explained
---------------------- that we were not happy with the service we’d received, so the bartender offered
to send the manager over to our table.
----------------------
Our server arrives. “Actually, I am the manager. I understand you were
---------------------- not happy with the service?”
---------------------- “No, we weren’t. We found that you were rather rude to us.”
---------------------- “I think in fairness, the rudeness is on both sides. You had a reservation
for eight and only six people showed up. You are all drinking water and taking
---------------------- up a table for eight. That costs the business a lot of money.”
---------------------- Is this the way for a manager of a so called high-end restaurant to talk to
customers? To me, at that moment in time, the manager should have tried to
---------------------- find out what went wrong and apologise. Starting to insult the customers is not a
good idea! Was it right for the manager to lecture the customers about ‘drinking
----------------------
water’ and costing ‘the business a lot of money’?
---------------------- I hate to mention this, but I doubt this kind of attitude is acceptable to
even the less classy restaurants.
----------------------
“That should have been made clear to us when we booked the reservation,
---------------------- I said.” “It’s on the menu. You could read the menu”
---------------------- “On the menu, it says for groups of eight, we are not a group of eight.”
---------------------- “Well, your reservation was for eight….look forget it…take the gratuity
off…if you want to pay just the Rs. eighteen hundred and sixty five…that’s
---------------------- fine….forget about it.”
---------------------- So we did exactly that…we left eighteen hundred and sixty five rupees
and walked away rather disappointed.
----------------------
----------------------

Questions Notes
1. Do you think that the behaviour of the Manager was warranted? ----------------------
2. On whom does the onus lie in this case? The customers or the Management? ----------------------
Explain.
3. Identify and explain why you think the customer is so important with ----------------------
reference to this case. Is it always the fault of the service provider? ----------------------
4. Suggest ways to ensure better customer care, with reference to this case.
----------------------
2. INTRODUCTION TO E-CRM ----------------------
2.1: A Case of Tesco ----------------------

Objectives: ----------------------
●● Find out the significance of customer data in knowing customer culture
----------------------
●● Explain the system followed by Tesco in segmenting customers
The case describes how customer relationship management has made a ----------------------
major impact on the way UK’s largest supermarket chain, Tesco, carries out its ----------------------
business. It gives a detailed insight into how (and why) the company streamlined
its product development, store design / layout and promotional strategies based ----------------------
on an understanding of its customer’s requirements.
----------------------
The company attributes the loyalty to a tight focus on the customer.
----------------------
Tesco’s executives try to discover firsthand what it means to serve customers.
Every one of its senior managers and executives spends a week a year working in ----------------------
Tesco stores, checking out customers and stocking shelves. Tesco Chairman, Sir
Terry Leahy worked at the fish counter and the warehouse. The program results in ----------------------
new proposals for better customer service, such as one that called for the bar code
----------------------
to be printed on both sides of case of beer so customers have to spend less time at
cash registers waiting for their goods to be scanned. ----------------------
Data is at the heart of Tesco’s Customer culture. Tesco’s analysis showed, ----------------------
for example, that about a quarter of its customers are higher income and that,
moreover, it was losing some of their expected spending to market competitor ----------------------
Marks and Spencer. One of the problems was that Tesco did not have the high-
end products to compete for the up market customers. It used its data to develop ----------------------
an entire private, label product line, Tesco Finest, which lured back the big ----------------------
spending customers.
Tesco has divided its customer base into six major dimensions based on ----------------------
customer shopping patterns, such as finer foods, healthy, convenience and price- ----------------------
sensitive. Each of those are divided into smaller segments – healthy shoppers,
for example, consist of those looking for organic food, those who eat healthily, ----------------------
and those looking to lose weight. Tesco can then send customised marketing
messages to those people through direct mail, cash register messages and its ----------------------
----------------------
Case Studies 161

Notes website.
Tesco found through surveys that customers resented the candy stands
----------------------
that tempt young children. They also wanted the stores less cluttered, with fewer
---------------------- off-shelf displays. Both kinds of displays are big sources of impulse purchases,
so grocery stores tend to hold onto them regardless of customer complaints.
---------------------- Tesco analysed its customer information to see how customers would react, and
realised that the increased loyalty would offset lost sales.
----------------------
“The effect of customers shopping here rather than elsewhere balances it
---------------------- out,” Davisdon says. Tesco removed all of the candy stands and half of its off-
shelf displays and had its best holiday season yet last year.
----------------------
---------------------- Questions
---------------------- 1. What are the different segmentations of customers, as done by Tesco?
---------------------- 2. Explain the importance of data in the strategy of Tesco with an example
from the case.
----------------------
---------------------- 3. SALES FORCE AUTOMATION
---------------------- 3.1: The Force Named ‘Sales Force’

Objectives:
----------------------
●● Illustrate the situation that almost every company goes through during its
---------------------- ‘growth’ lifecycle stage
---------------------- ●● xplain the concept of Sales Force Automation by depicting a non-
E
automated sales situation
----------------------
As a National Manager at Trust Insurance Pvt. Ltd. (TIL), Anupam had
---------------------- trod his way up, with much difficulty, through every major obstacle at TIL.
Today, while preparing for evening board meeting, Anupam figured out that in
---------------------- some of the areas, situation was slipping out of their hands. Competition in the
Indian Insurance Industry, especially from newly entered private players, was
----------------------
making striking inroads into some of their stronghold segments.
---------------------- Given the muscle power and big plans of new players, Anupam had
expected some customers to switch over to the newbies. However, all this was
----------------------
happening too fast and that too, worriedly, on a much bigger scale. “Anupam,
---------------------- at all costs we must arrest this massive outflow of customers to competition,”
insisted Sanjay Agnihotri, CEO, TIL.
----------------------
After a stupendous growth of nearly 400% in the last fiscal, along with
---------------------- stiff competition and margin pressures, TIL was even facing problems internally.
Systems and processes, monitoring and control of Sales Force activities were
---------------------- off late turning into bigger issues.
---------------------- Anupam blinked and stared at the computer screen again. The Progress
reports from all parts of the country, region wise should have been sent to
----------------------

his e-mail id. These reports were for his perusal and further planning. By all Notes
measure, the bi-monthly reports should have been in his inbox at least an hour
back. However, he was shocked to see no sign of reports from Northern and ----------------------
Southern regions. Also the Microsoft Excel report sheets received from Western
and Eastern regions were not as per the ‘format’ sent by him last night. As this ----------------------
information was to be used for his evening presentation, Anupam wanted all ----------------------
regions to send their individual data in one single structured format.
----------------------
Calls to Western and Eastern Regional Managers, made him realise that
the regional teams had sent their reports before opening Anupam’s mail in the ----------------------
‘latest’ format. The regional teams were now compiling last two months data as
per the ‘new’ format and assured him that it will be sent across soon. ----------------------
The other two regions were the ones where Anupam faced bigger problems. ----------------------
In the last three quarters, North and South regions have been showing growth
rates far lower than the rest of the country, primarily because of intense rivalry ----------------------
in these regions between TIL and its close competitors. These sales teams were
----------------------
thereby facing pressure on both ends; one being the market-end where new
entrants were snatching customers and the other was internal, i.e. the company- ----------------------
end where the seniors were additionally ‘pressurising’ by closely monitoring
their activities and results. ----------------------
Samuel, Regional Manager, South was unhappy with the way the company ----------------------
was operating internally. Last week, he and Anupam had an argument over the
‘non- constructive’ activities his sales team was getting into. Samuel was of the ----------------------
opinion that collating and sending data, making reports and projections were
----------------------
‘non-sales’ functions and should be done, not by sales executives, but by some
‘back-office’ staff. His request for manpower in office for such ‘data’ related ----------------------
work repeatedly fell on deaf ears. On the other hand, Anupam believed that
every salesperson should manage his/her own business and thus conduct all ----------------------
possible analyses. Samuel obviously did not agree with his point.
----------------------
Regarding the pending report, Anupam called up Samuel. “Anupam,
some of my sales guys are working on ‘your’ report. In an hour or so, it ----------------------
will be sent across”, confirmed Samuel. Anupam couldn’t tolerate Samuel’s ----------------------
lackadaisical attitude, “Samuel, you do know the urgency of this report. Why
didn’t you assign this task to all your salespeople? It would have got over by ----------------------
now.” questioned Anupam.
----------------------
It was time Samuel gave his piece of mind. “Honestly, I find this entire
situation strange, Anupam. In last few months, almost 50% of my sales teams’ ----------------------
time has been spent in office doing ‘non-sales’ work like data entering and data
analysis. Reasonably, how can you, and even me, expect the ‘stretched’ targets ----------------------
to be met by them when they are made to sit in front of computers for such ----------------------
data work, especially when competition is out there in the market snapping our
customers? ----------------------
Anupam was amused to hear such remarks “How can you belittle the ----------------------
importance of reports and analysis which have been our proven strengths so
far?” ----------------------
Case Studies 163

Notes Samuel replied, “Anupam I am not against reports. My sole point is, sales
function employees are trained to be closer to customers so that they understand
---------------------- them well and meet their targets. ‘Non-sales’ activities like data entering, report
making and forecasting should be done by other people with minimum inputs
---------------------- from the sales force. In fact, our sales force should be the ‘user’ of these reports
---------------------- than ‘maker’ of them. The day ‘we’ start sending these reports to our sales force
on a regular basis, our guys will get required support from within to fight it out
---------------------- in the market. That’s the least we can do in response to our competitors’ ‘Sales
Force Automation’ suites.”
----------------------
Anupam could vaguely recall some concepts of SFA learned in a workshop
---------------------- held couple of months back. “How is this remotely related to a software called
SFA?” he thought. He ended the debate “Samuel, your outlook suggests as if
----------------------
‘we all’ are working for your Sales force and not, as I believe, the other way
---------------------- round. By the way, I want your region’s report sent to me within half an hour”.
---------------------- Questions
---------------------- 1. What according to you are the possible root causes of problems at TIL?
---------------------- 2. Reading the comments of Anupam and Samuel, whom do you agree
with? Why?
----------------------
3.2: Furniture Marketing
----------------------
Objectives:
---------------------- ●● valuate the changes in marketing strategy that accompanies
E
---------------------- transformation of roles of a customer as a ‘passive’ consumer to that of an
‘active’ actor
---------------------- ●● ssess the role of a customer in shaping market demand, with respect to
A
this case.
----------------------
Bhosle and Company is one of the firms in Kolhapur, working in the
---------------------- furniture industry. It employs 100 people. Shri. Bhosle started this firm in 1973.
The firm sells high priced custom made furniture. The market is relatively
----------------------
small; its profitability is very high. In 2003, after the death of the proprietor,
---------------------- his son predicted the boom in the furniture industry and decided to expand.
He purchased another furniture industry in 2004 and doubled its production
---------------------- capacity.
---------------------- Sales have traditionally been carried on by a very limited number of
high class furniture outlets and company salesmen. The company has complete
---------------------- control over both marketing and production processes. The company has small
---------------------- inventory and has printed some catalogues for furniture stores and individual
interior decorators. The company has also a small showroom at Kolhapur. They
---------------------- participate in exhibitions all over Maharashtra. The salesmen are paid very
high salary, but the proprietor feels that high selling expenses are necessary to
---------------------- maintain top image of the firm’s line of products.
---------------------- Mr. Bhosle, the proprietor is considering the possibility of changing

marketing structure. The channels of distribution can be two tiers or one Notes
tier distribution system. One tier distribution system can be direct, from the
manufacturing company of Mr. Bhosle to the company showroom directly from ----------------------
where the consumers can purchase the furniture.
----------------------
Other distribution system can be company manufacturing unit to the
dealer from where the customer can purchase the furniture. ----------------------
Three tier distribution system means having company’s manufacturing ----------------------
units at different showrooms and furniture shops where these showroom owners
and furniture shop owners can sell their brand to the customers. Many agents ----------------------
have been offering agency in different parts of Maharashtra, but he has rejected
----------------------
the offers, as he feels he will lose control on marketing.
A customer relations department was created at the head office to monitor ----------------------
the transactions with their customers; its basic functions are as follows:
----------------------
●● Maintain a database of present customers and their purchases
----------------------
●● Maintain a complaint register
●● Understand the needs of the customer for customisation ----------------------
A customer relationship manager should be appointed . ----------------------
However, two large showrooms in Mumbai have recently contacted him in
----------------------
reference to handling his product. Both showrooms offered to sell the products
of the company in Mumbai and sub-urban areas and have agreed to show ----------------------
substantial sales in all furniture items manufactured by Bhosle and Company.
Mr. Bhosle has spoken with his Factory Manager and Sales Manager and has ----------------------
asked them to come to his office to discuss all possibilities. Various showrooms
----------------------
and furniture stores want to purchase furniture from Bhosle and sell with their
label on it, but Mr. Bhosle is reluctant, as he feels that once he sells the furniture ----------------------
to these people, he would not be in a position to market the furniture as he wants
and according to the customers’ needs. ----------------------
Still some showrooms from Mumbai like Akbarali have approached Mr. ----------------------
Bhosle and offered him to sell almost all the furniture. His main fear is that
agents will not pay any attention to the customisation aspect. Mr. Bhosle has ----------------------
thought of Sales Managers in the marketing department of his organisation, ----------------------
which is a new development within his company. He could consult Sales
Mangers and Factory Managers in regards to the sale of furniture to showrooms ----------------------
like Akbarali from Mumbai and other areas of Mumbai.
----------------------
Questions ----------------------
1. What do you think could be the customer relations solution for this ----------------------
situation?
----------------------
2. How would you help Mr. Bhosle succeed with his customer orientation
aim? ----------------------
----------------------
Case Studies 165

Notes 3.3: V.K. Saraf and R.B. Pai Electrical Engineers
Objectives:
----------------------
●● xplain CRM solution for an industrial product among the value chain
E
---------------------- for success in the industry
---------------------- ●● I dentify the challenges faced in establishing a distribution structure for
industrial products V.K Saraf and R.B Pai are brilliant electrical engineers.
---------------------- After their graduation from College of Engineering, Pune, they decided
to set up their own business. Right from their college days, they had
----------------------
developed different types of electrical coils used in electrical pumps. But
---------------------- they finally settled for an idea of innovating electric pumps. They decided
to manufacture Electric pump sets. Both Saraf and Pai came from middle
---------------------- class families. As such, raising finance was always a problem with them.
---------------------- The product manufactured by them - electric pumps- was offered for
various industrial purposes as well as for household purpose. The technology
---------------------- used was far better than the conventional pumps. The features and utility of the
product outperformed the local manufacturers and some reputed manufacturers.
---------------------- To understand the market conditions, an information collecting exercise was
---------------------- carried out.
The following were the findings of the market research survey:
----------------------
●● he market for medium range electric pump sets is dominated by small
T
---------------------- scale manufacturers.
---------------------- ●● he local manufacturers were customising as per the needs of the customer
T
and offering them the product.
----------------------
●● heir services ranged right from creating awareness to the customer till
T
---------------------- the delivery and installation of the pump.
●● lso warranty and guarantee and credit schemes were a part of the services
A
---------------------- being offered by the local manufacturers.
---------------------- ●● he local agent would depute his representative for training the customer
T
on how to use the electric pump.
----------------------
●● he local manufacturer sees that the customer complaints are attended to
T
---------------------- in time.
---------------------- ●● he manufacturers have their own distribution channels, but these
T
distribution channels are personally monitored by the sales department of
---------------------- the company.
---------------------- ●● hey offered their electric pumps to a friend of theirs who owned a large
T
electrical goods service station.
---------------------- An expert industrial marketing consultant was appointed to analyse the
competencies of the firm. Their electric pump was compared with the other
----------------------
competitors in the market. He found the pumps sets very satisfactory. He asked
---------------------- the engineers to make more pump sets but the engineers found that they were
making around 15-20 electric pump sets per month. The only outlet available to
---------------------- them for marketing their electrical pump sets was one dealer whose name was

Electrical Service Station. They found that their product quality was superior Notes
and prices were almost 20 % lower than their competitors. They were thus very
confident about their products but their problem was how to distribute their ----------------------
product on all India basis.
----------------------
Both Saraf and Pai faced the following difficulties or problems regarding
their business. ----------------------
●● ince both of them are from middle class families, raising funds is always
S ----------------------
a problem.
----------------------
●● They do not have adequate linkage, thus their market is very limited.
●● hey do not know which channel of distribution will be suitable for their
T ----------------------
product, as what they want to distribute the product on all India basis.
----------------------
●● he prevailing market is dominated by small scale manufacturers.
T
Majority are from Delhi and Punjab, having sound financial position, so ----------------------
they have to compete with other manufacturers.
----------------------
●● They want to enter into this business
●● They want to reach the all India market through proper distribution ----------------------
channel. ----------------------
Questions ----------------------
1. Suggest a marketing plan for the manufacturers. ----------------------

2. Suggest a suitable distribution channel to the manufacturers. ----------------------
3. What is the CRM solution for reaching the customer as regards the ----------------------
industrial product?
3.4: Telebanking in Pragati Bank Ltd. ----------------------
Objectives: ----------------------
●● State the importance of CRM for banking industry ----------------------
●● Identify the technology component of CRM for a service industry
----------------------
Pragati Bank is a co-operative progressive bank. Their focus is on building
a strong customer base by using all the latest technologies to woo the customer. ----------------------
Mr. Amit Mehra, Chairman and Managing Director, Pragati Bank Ltd., ----------------------
was quite pleased with the projections his CFO Subrib Khanna showed him for
the last quarter (Q4). He had every reason to be pleased. Having taken over as a ----------------------
CEO of a new fast growing Pragati bank Ltd., he had worked out his long term
----------------------
strategy for customer relationship management with the objectives of:
1. Reducing customer footfalls at the branches through phone banking ----------------------
2. Increasing footfalls at the ATMs of the bank ----------------------
3. Diverting customer communications to call centers for phone banking ----------------------
The Chairman was under great pressure to modernise the banking system
and introduce IT related solutions. He said to his associates, “The writing is ----------------------
Case Studies 167

Notes very clear on the wall, MODERNISE or PERISH” and proceeded further to
refer to an article which he had cut from a business magazine. The article read
---------------------- as follows:
---------------------- The Narasimhan Committee on banking sector reforms suggested
major sweeping changes for the banking sector, one important aspect being
---------------------- automating banking functions and the implementation of IT. The private sector
banks, in order to compete with large and well established public sector banks,
----------------------
are foraying into IT to face cut- throat competition.
---------------------- While the private sector banks are on the threshold of improvement, the
public sector banks (PSBs) are slowly contemplating automation to accelerate
----------------------
and cover the lost ground. To contend with new challenges posed by Private
---------------------- Sector Banks, PSBs are slowly venturing into new areas, a few old big sized
banks are still encountering problems of unionised staff though in the milder
---------------------- way and the employees are still finding their feet in new technologies.
---------------------- It looks like public sector banks need to shift the gears and accelerate
their movements in right direction by automating their branches. Some major
---------------------- areas where they lag behind are ATMs, Internet banking and of course the most
important of all automation, the CRM system known popularly as tele banking.
----------------------
Pragati Bank Ltd. was on the right track. It already had a telebanking
---------------------- system in place but there were some obstacles that were worrying the Chairman.
---------------------- The Bank had realised that the main obstacle was the initial reluctance that
certain customers had towards using the new system so they preferred to
---------------------- continue dealing with a human operator. This category of clients were to be
specifically addressed, in order to show them in a personalised way the benefits
---------------------- of using the system. Mr. Mehra had called a meeting of Senior Vice Presidents
---------------------- including VP (CRM) Mr. Sudip Parmar with a view to monitor the progress in
implementation of CRM components:
---------------------- ●● Customer Retention Planning
---------------------- ●● Appointment of relationship managers
---------------------- ●● A customer based information system

●● Delivering personalised and or differentiated communication strategy
----------------------
During the meeting, Mr. Verma, Sr. VP (CRM) showed him a letter of
---------------------- a telebanking customer that made him worried, the contents of which read as
follows:
----------------------
“In good old days, telebanking was straight forward. You rang up the
---------------------- bank and told the teleoperator your name, your account number and your
requirement. The teleoperator would ask for your address as a counter check
---------------------- and then give you the required information. The whole procedure hardly took a
---------------------- couple of minutes.
But my recent experience with your bank was different. Needing an
---------------------- interest-credit certificate for income tax purposes, I decided to try out your new
---------------------- system.

I dialed the bank’s number and a recorded female voice (RFV) answered Notes
“Welcome to Pragati Bank’s telebanking service. To continue, please press
hash.” I pressed Hash. “To continue in English, please press eight, for Hindi ----------------------
press nine,” the RFV went on. I pressed eight. “If you are an existing customer,
press one, if not, two,” said the RFV. I dutifully pressed one, “For account ----------------------
related information, press one, for interest rates press two, for information on ----------------------
loans…” I hurriedly pressed one.
----------------------
“Kindly enter your eleven digit account number, followed by hash,”
commanded the RFV. I did as ordered. “Now enter your four digit telebanking ----------------------
code if you have received it, otherwise press Star,” the RFV went on relentlessly,
since I had received my code, I faithfully entered it. ----------------------
“The balance in your account is Rs. 15, 450,” the RFV toned. ----------------------
Thank you for using PRAGATI bank’s telebanking services.” I don’t want
----------------------
my balance, I shouted. I want my certificate of interest”. But it was too late. The
phone had been cut off. ----------------------
Grimly, I dialed the bank number again and went through the whole ----------------------
rigmarole, only to be told what my bank balance was, for the second time. A
third try produced the same result. My blood pressure had gone up by 20 points ----------------------
but I had made no progress, I told myself through gritted teeth. But before
beginning to dial again, however, I tried to analyse the system and decide that ----------------------
the best place to break this vicious cycle was at the point where I was supposed to ----------------------
enter my telebanking code. So instead of entering the four-digit code, I pressed
star. “Kindly wait; you are being transferred to a telebanking executive”. Half a ----------------------
minute later, a real live non recorded voice came online, “How can I help you”?
I was about to scream, “Oh! you beautiful wonderful human being, but decided ----------------------
against it. “I need a certificate,” I began slowly, my senses yet to come to grips ----------------------
with my good fortune. I wonder whether this is what you mean good customer
relationship.” ----------------------
For Mr. Mehra, it was a tale of agony. He wondered how many other ----------------------
customers (last annual data 55,000 users) patronising telebanking felt so.
While his balance sheet will show a healthy bottom line, perhaps indicating ----------------------
telebanking is working; the problematic areas of relationship management will
be hidden. ----------------------
Mr. Mehra wondered whether the problem is about efficiency or about ----------------------
human touch. One cannot automate relationships and only humans can create
experience. In the rush to reduce cost and become more efficient, companies ----------------------
mistook improved technologies as the end goal and forgot the human aspects of ----------------------
their businesses, he felt.
----------------------
Mr. Mehra had taken personal initiative in outsourcing call centres with
an investment of 10 crores to bring down the footfall at the bank for bank ----------------------
related services, while the banks branched networks/customer base grew at an
exponential rate. He was keen on developing customer service on the following ----------------------
----------------------
Case Studies 169

Notes parameters which are key in retail banking, namely Reliability, Performance,
Convenience, Responsiveness and Adaptability.
----------------------
But the letter just shown by his VP (CRM) forced him to relook at the human
---------------------- element while not losing the role of technology in the area of communication,
information and business processes for which investments had already been
---------------------- made. Mr. Mehra felt the need for setting up measurable objectives by which
the bank’s progress could be assessed in building lasting customer relationships.
----------------------
---------------------- Questions
---------------------- 1. As a CRM consultant, how can you help Mr. Mehra?
---------------------- 2. What according to you would be the best CRM solution to the agonised
customer?
----------------------
---------------------- 4. ENTERPRISE MARKETING AUTOMATION (EMA)
---------------------- 4.1: A Customer Unattended is a Customer Lost

Objectives:
----------------------
●● Identify your prospective customer and approach him accordingly
----------------------
●● Select appropriate tools to have a completely satisfied customer
---------------------- Mr. Rakesh was a person with a very bad life schedule. He was tied up
with work 6 days a week and had to work on Sundays also. He could find time
----------------------
only on some Sundays for his family. Since long, he has been planning buy a
---------------------- DVD for his family but was confused as to buy which brand from a range of
brands available in the market.
----------------------
He tried collecting information about different DVD players and finally
---------------------- decided to buy a Sony DVD player and he walked in to the Sony showroom on
a Sunday with his family. At the showroom, he expected the showroom sales
---------------------- person to attend to him and give information about the product he wanted to
buy. But that did not happen. Mr. Rakesh moved around in the showroom for
----------------------
about half an hour without any sales executive attending him. When Mr. Rakesh
---------------------- wanted to step out of the showroom, an executive noticed him and approached
him. Mr. Rakesh after spending so much of his valuable time was visibly
---------------------- annoyed. When the executive said “May I help you,” Mr. Rakesh responded
by saying that the company has to realise the significance of a customer. An
----------------------
unattended customer is a customer lost and Mr. Rakesh walked out of the
---------------------- showroom without buying anything. Instead, he walked in the next showroom
of a different company and bought a DVD from there.
----------------------
Though Sony had established itself in the market, it failed in establishing
---------------------- a proper relationship with the customer and thereby kept on losing the market
share over the period.
----------------------
----------------------

Questions Notes
1. Customers do expect good service over good offers or schemes. Justify. ----------------------
2. How do you think the executive should have handled the situation? ----------------------
3. Were there any chances to retain Mr. Rakesh as a Sony customer? How?
----------------------
4.2: Hotel Black Pearl (HBP)
----------------------
Objectives:
●● Find the reasons for the customers leaving the HBP ----------------------
●● Find out the competitive advantages of Hotel Sapphire ----------------------
Hotel Black Pearl is located at the scenic hill station Mahabaleshwar in
----------------------
Maharashtra. Tourist trade is flourishing at this hill station, known for cool
and pleasant climate, high mountains, deep valleys, lushgreen forests and the ----------------------
Venna Lake. Mahabaleshwar is also known for strawberry plantations, leather
handicrafts and pure honey. ----------------------
Hotel Black Pearl has earned a reputation for its courteous service, ----------------------
comfortable accommodation and its locational advantage in being situated near
a point of great scenic beauty. Patronage to the hotel comes from middle and ----------------------
upper middle class. Repeat customers are plenty.
----------------------
However, during the last 5/6 years, the overall clientele are reduced.
People still crowd at their restaurant, but occupancy of the lodge-rooms is ----------------------
declining. There were some murmurs of disapproval about leaking taps and ----------------------
toilets in the lodge, bugs and pests in the rooms and of minor damage to the
tourist vehicles kept in the hotel garage. Even a couple of small thefts in the ----------------------
lodge were reported. But the Management did not consider these seriously.
----------------------
Recently, a new hotel, ‘Sapphire, has come up in the neighbourhood. It
seems to be doing well, indeed. Since its opening, business of Black Pearl has ----------------------
been remarkably affected.
----------------------
Questions ----------------------
Advise the Management of the hotel on the following aspects: ----------------------
a. How to improve the room-occupancy of the lodge? ----------------------
b. Proposals for attracting newer segments of society to the hotel; especially
the youth and the corporate segment ----------------------
c. Advertising policy ----------------------

d. Development of more goodwill in the public ----------------------
e. Diversification proposals
----------------------
f. Use of technology to create a promotion campaign for customer attraction
----------------------
----------------------
Case Studies 171

Notes 5. IMPLEMENTING A CRM PROGRAMME
---------------------- 5.1: A Government Run Hospital
---------------------- Objectives:
●● Identify and examine various customer perceptions (stereotypes)
----------------------
●● Analyse the reasons for motivation of the service provider
---------------------- I am a government servant employed by the Maharashtra State services.
---------------------- My foot had been sore for a couple of weeks and it wasn’t getting better. I usually
would ignore that, but I was about to leave on a two-week vacation (annual
---------------------- vacation) with my wife Neeta to Konkan to celebrate our 10th anniversary.
I was strongly urged by my doctor to see a specialist at the Sassoon hospital
---------------------- (Government hospital)
---------------------- I narrate my experience as a customer at a government run hospital. I
am politically sympathetic to the idea of a government-supported system but it
---------------------- was another thing to actually go to the emergency room of a state run hospital.
---------------------- After all, I had heard the horror stories- long waits in incompetent, dirty, and
substandard medical facilities; bad doctors and faulty diagnoses and of course,
---------------------- incredible bureaucracy.
---------------------- So I prepared myself. I brought a big Marathi novel to read, along with
my eyeglasses, a bottle of water (no telling what they would not have in such
---------------------- hospitals), and emotionally steeled myself for the ordeal. The waiting room was
actually quite peaceful and not crowded, I noticed, as I walked up to reception.
---------------------- The woman at the reception desk smiled. I didn’t expect that.
---------------------- ‘Can I help you?’ ‘Yes,’ I replied, “You see, I am a government employee
(Section officer at the District Collector office) and I have a sore foot, which I
----------------------
normally wouldn’t worry about but we are going for two weeks on vacation,
---------------------- and I was advised to come here.
“What do you need from me?” I asked hesitantly. “Just your name and
----------------------
address,” she replied with another smile. She told me it would take about 10
---------------------- minutes to see the nurse.
---------------------- I settled into the waiting room chair, looked around at all the people who
didn’t seem to be in any distress, and opened my book for a good long read.
---------------------- It was five minutes before the nurse called me into a little office adjacent to
the waiting area, which seemed to be an intake room. She was pleasant and
---------------------- professional as she asked me what was wrong and how long I had felt the
---------------------- soreness. She gently examined my foot and then told me I would be called in to
see a doctor in about 10 minutes. “Sure thing,” I thought. So I went back to the
---------------------- waiting room and settled in again to read my novel.
---------------------- It was five minutes before a young woman appeared and called my name,
“Mr. Kadam?” She was a young doctor (maybe a newly passed out M.B.B.S
---------------------- student, on probation from the adjacent medical college- B.J Medical College).
She was also very pleasant and professional, taking time to ask me lots of
---------------------- questions about how I might have hurt my foot, etc. She examined the injured

foot carefully, told me that it didn’t necessarily look broken, but that we should Notes
get an X-ray to make sure. I waited in her examining room for a couple of
minutes while she called down to the X-ray department to say that I was on the ----------------------
way.
----------------------
Then she came back and escorted me herself.
----------------------
When I got to X-Ray, I checked in by just saying my name and took a
seat in the waiting area. Finally, I was going to get to read my book, I thought. ----------------------
But five minutes later, the technician came out to bring me in. She took her
time with me, taking several different angles of my foot. When I was done, she ----------------------
sent me back to my young doctor, with another smile. This time the wait was
----------------------
a full ten minutes because, I later learned, the doctor was reading the results of
my X-ray, which had already been sent to her computer. She showed me what ----------------------
looked to her like a fracture of my fourth metatarsal bone, but said she wanted
to consult with the orthopedic specialist. I waited about ten minutes more while ----------------------
she did that and so got a few more pages read.
----------------------
She then came back with the definitive diagnosis-my fourth metatarsal
bone was indeed fractured. She went over their preferred treatments. Normally, ----------------------
if this injury had just happened, they would put me in a cast to hold the broken
----------------------
bone in place and give me crutches. They were still happy to do that now. But
since I had been already walking on it for over a week and the bone was still in ----------------------
the right place, I could also have the option to just use a therapeutic soft boot to
keep the weight on my heel and off my fourth and fifth metatarsals. While the ----------------------
fracture was at the base of the fourth metatarsal, as she carefully explained and
----------------------
showed me on the X-ray, the pain was being felt lower down-across both my
fourth and fifth metatarsals area. If I chose the boot, I could still swim and get ----------------------
around a little easier, but I would have to really try to keep my weight off the
injured area. I chose the boot and she told me she would be back in a minute. ----------------------
It was actually about two minutes before she got back and I was getting ----------------------
nowhere with this novel. She handed me a very stylish black boot (so much
better than other colours for fashion coordination), and gave me my final ----------------------
instructions—be very cautious about the foot, try to stay off it as much as ----------------------
possible but keep it mobile and flex it so the blood circulates, and also to consult
with my home physician. Then she wrote me a nice long letter for my home ----------------------
doctor, describing their diagnosis and treatment. She then wished me the best
of luck, hoped I would have a great vacation despite my foot, smiled, and sent ----------------------
me back to the front desk. ----------------------
“How can I call a rickshaw?” I asked. “Oh, I’ll do that for you,” she
said. “Just take a seat over there and the rickshaw will be here in about 10 ----------------------
minutes.” As I sat there, I realised something. Nobody had ever asked me to ----------------------
pay. Everything was free, including my nice new boot. How about that? Why
do we think health care is a right for well to do citizens alone? Amazing. ----------------------
The cab came in 5 minutes. I was back home in just over an hour from ----------------------
when I left- with my letter, my boot, and my tale of smiling, pleasant, and
----------------------
Case Studies 173

Notes efficient health care workers. In about six weeks, I too will spring back to work,
thanks to a government run hospital! In the meantime, I will keep my foot up
---------------------- … and maybe get that novel read.
----------------------
Questions
----------------------
1. What are the processes that lead to stereotype customer perceptions?
---------------------- 2. Why are government run organisations always seen in bad light as regards
---------------------- customer service and consumer rights?
3. What does this case tell us about ‘breaking’ stereotypes?
----------------------
4. Suggest ways and methods to promote a customer friendly ambience in
---------------------- public organisations.
---------------------- 5.2: SSM Textile Mill
---------------------- Objectives:
●● Explain the present status of Textile Industry
----------------------
●● Give an overview of the major issues faced by the company
---------------------- Textile industry is one of the oldest industries in India. Several business
---------------------- houses have their origin in this industry. In the mid 80s, the power loom sector
suffered a major setback due to the vested interests of the textile mills of the
---------------------- organised sector. While the power looms sold cloth as a commodity, the mills
tried to establish their products as brands. The post liberalisation period has
---------------------- seen emergence of large number of foreign brands in the country. It is in this
---------------------- scenario, that Safire Spinning Mills (SSM) had to carve out a place for itself.
SSM is the flagship company of the MNJ Bikaner Group. It has been
---------------------- the largest producer and trader of yarn in the country and caters to the large
---------------------- demands for blended yarns and grey cloth fabric used for children’s school
uniforms. In 1994, the yarn business faced severe crunch owing to over capacity.
---------------------- From 1995 onwards, SSM became a late follower of the industry trends as other
competitors already moved up the value chain.
----------------------
Textile manufacturing is basically constituted of the processes of spinning,
---------------------- weaving, processing and marketing. More than 50% of the value is concentrated
in weaving and processing. Moving up the value chain from spinning involves
---------------------- large investments in machinery and labour. Graduating to market requires
---------------------- customer proximity and this is the biggest challenge traditional spinning mills
like SSM had to face if they were to sustain themselves in a highly competitive
---------------------- globalised market.
---------------------- At another level for SSM, it was a matter of cultural transformation of
the organisation long used to a conservative mentality. The Vice Chairman and
---------------------- MD are orthodox and are trying to grapple with the new order. From the market
side, it has long been troubled with its commitment to the loyal middle class
----------------------
customers as it had to simultaneously pay attention to the upwardly mobile
---------------------- upper middle class customers.

SSM wanted to have its share in export market as well as rural markets. It Notes
excelled in basic textile processing but was trying hard to attain sophistication
in house production of readymade garments. It has been a late mover and losing ----------------------
out to competitors Welmonds F Kumar.
----------------------
Another challenge that SSM has to face is when the global textile industry
enters the era of no quotas. ----------------------
----------------------
Questions
----------------------
1. Suggest how SSM should manage its value chain effectively. Should it try
to imitate its market leaders? ----------------------
5.3: Primex-O Components Ltd. ----------------------
Objectives:
----------------------
●● Justify the need of proper interface in market
----------------------
●● Recognise the importance of retaining front end officials
The Think-Tank members of Primex-OGV Components Ltd. were truly ----------------------
engrossed in deep thinking and dedicated discussions. They had a valid reason to
----------------------
do so. Their CEO (Chief Executive Officer) Mr. Keswani had called a breakfast
meeting today morning and had thrown open this topic for them. ----------------------
It all started in the recent visit of Mr. Keswani to their proposed new
----------------------
plant at Uttaranchal. Mr. Keswani had hosted a small get together followed by
cocktails and dinner. The invitees were COOs (Chief Operating Officers) and ----------------------
Directors of few automobile components and ancillary manufacturing units in
the recently flourishing Uttaranchal. One step less were only the Plant Heads of ----------------------
two companies who were the SBU Heads (Strategic Business Unit Heads).
----------------------
Mr. Keswani was heading the Parent Plant of Primex-OGV Components
Ltd. in Pune. Suppliers of Press Parts and small machined precision components ----------------------
Primex-OGV Components Ltd. was existing for the last six years but still ----------------------
was not able to make a major breakthrough. Supported with some high ended
connections in the top brass of Automobile Manufacturers in Pune, Primex- ----------------------
OGV could gain entry and slowly tried to get detached from the family concern
tag to being a professional organisation. The whole process took a long time and ----------------------
saw five CEOs change positions in first four years of operations. By this time, ----------------------
the Industry in and around had labeled the organisation as an unstable one for
this reason. In his introductory visits to the industry majors at senior levels, Mr. ----------------------
Keswani had got an idea of such feelings. There are no direct comments at the
helm of any organisation but when good wishes for his entry were supplemented ----------------------
with comments as ‘At last we feel there shall be a longer leadership’ or ‘Good ----------------------
that now you are in, we are sure you shall make the organisation more stable’
gave him a hint on the prevalent sentiments in the market. Since then, Mr. ----------------------
Keswani was pondering on this point and had tried to study the overall work
environment and any effects of the same resulting into this higher level of ----------------------
turnover. ----------------------
Case Studies 175

Notes Things were rapidly changing and within six months of Mr. Keswani’s
joining, the Management of Primex-OGV had taken a policy decision to follow
---------------------- the general industry trend so far as the plant in Uttaranchal was concerned. A
deep study of the prospects vs. the risk was done and the process to expand was
---------------------- initiated. It was a major decision involving high costs, creation of infrastructure,
---------------------- organising set of talented personnel and getting an assurance of long term
business association from the Industry Majors. Primex-OGV was successful in
---------------------- getting through with a properly documented Memorandum of Understanding
(MoU) that was carefully worded. This made Primex-OGV one of the ‘Long
---------------------- Term Partners in Progress’ for a Two-Wheeler Manufacturer on a long-term
---------------------- basis. Primex-OGV had however ensured that such MoU does not bind them
to being associated with this Auto Manufacturer ONLY, but also allows them
---------------------- to be suppliers to other industry too, of course with some ethical restrictions
and within the frame of following the best practices in the industry. Subsequent
---------------------- to this, it was a matter of proper program implementation and barring a few
---------------------- jump-overs, things were efficiently lined up by Mr. Keswani and his team. The
Project was in the last stage and the Management of Primex-OGV had decided
---------------------- to inaugurate the plant in the next month. Mr. Keswani had been to the plant to
finalise few contractual services and in this visit he had planned the small get
---------------------- together.
---------------------- The prime intention to have such small get together was to make
the presence of Primex-OGV felt in the market, start building harmonious
----------------------
relationship with the local heads of the different potential customers, carve a
---------------------- place for Primex-OGV in the newer location and also to have some market
intelligence activities done simultaneously.
----------------------
Mr. Keswani was sure that as it happens in such parties, normally every
---------------------- participant tries to discuss more on non-official matters as weather and sports
and politics and slowly comes down to the present Industrial scenario, the same
---------------------- followed here.
---------------------- Slowly it came to the level when Mr. Keswani could really seek some 360
degree feedback that he wanted about Primex-OGV. The general opinion about
---------------------- the capabilities of Primex-OGV was fairly good and that was supported with
few endorsements and positive assurances and follow-up official meetings for
----------------------
further discussions were finalised there itself.
---------------------- Only one point was raised by Mr. Sen, a factory head of one of the
---------------------- customer organisations who also was shifted recently from Pune to Uttaranchal
to head a Sub-Assembly division there. He expressed his serious concern on
---------------------- the frequent changeover of the Primex-OGV team members. This included the
Marketing Heads, the middle order and the front end CRM Officers, the Quality
---------------------- Assurance Team members and so on. His observations were worth listening
---------------------- for Mr. Keswani. Mr. Sen had noticed that due to these frequent changeovers
in the front end team, there was a regular and periodical break in the chain of
---------------------- communication and interactions. This had deep results and severe impact on the
day to day running. In a big way, normally the interface between the Supplier
---------------------- and the Purchaser is the CRM Officer of the Supplier. It is as good as that the

CRM Officer nominated for a Customer Account has to be treated as an internal Notes
customer by the Supplier Organisation. The prime aim of the Organisation has
to be to satisfy and service this internal customer so that the actual end customer ----------------------
is delivered the goods and services up to his level of satisfaction. Now, as there
was a frequent changeover in these officers at Primex-OGV end, all information ----------------------
and observations shared by the customer with them were normally lost and ----------------------
vanished with their disappearance. This broke a link established over a period
of time and the customer officials felt reluctant to re-give all the information ----------------------
they had given to the previous CRMs. All this resulted in confusion at times.
Though the Organisation was capable of delivering goods, it was labeled as not ----------------------
so reliable so far as the availability of past records and data were concerned. Mr. ----------------------
Sen just had a small question to Mr. Keswani. ‘Will the same repeat in the new
plant or is Mr. Keswani planning to look-over with some proper change in the ----------------------
organisation’s way to ensure that the CRM link is not broken?’
----------------------
It was this point that had triggered numerous questions in the mind
of Mr. Keswani who felt that more stress was needed to keep the CRM link ----------------------
uninterrupted. Mr. Keswani had called for the morning breakfast meeting to
----------------------
discuss these points.
----------------------
Questions
----------------------
1. List out ten points that can hamper proper customer service in the absence
of correct CRM link. ----------------------
2. If you were the member of advisory board to Primex-OGV, what ----------------------

suggestions would you give to Mr. Keswani to streamline the CRM
----------------------
activities?
3. Do you think that the point by Mr. Sen is so important that Mr. Keswani ----------------------
at CEO level needs to pay attention to it? If yes, why?
----------------------
5.4: S for Structure; S for Satisfaction
----------------------
Objectives:
●● ive an overview of the practical approach at situations faced by
G ----------------------
customers, channel partners and company management ----------------------
●● iscuss the impact of lack of appropriate organisation structure, systems
D
and coordination between different functions. ----------------------
“Sir, I would have solved your problem if you had placed your order of ----------------------
microwave oven at this showroom. Since you ordered it over the Internet, you
will have to enquire about your electronic order at our Call Centre”, stated the ----------------------
Customer Support Executive at ‘Best Electronics’, Pune Showroom. ----------------------
“But the Call Centre directed me to this showroom, saying that any of the
‘Company owned’ showrooms should be able to look into this matter. Moreover, ----------------------
I was informed that with this transaction number from my Internet order, I would ----------------------
be able to take home a microwave from this showroom”, expressed the puzzled
customer Rajesh Das, as he passed over his transaction number to Sandeep. ----------------------
Case Studies 177

Notes Best Electronics (BE) has been operating in the Electronics Industry in
India for the last 10 years through different distribution channels. Apart from
---------------------- selling through the conventional 2-level (Wholesaler, Retailer) distribution set
up, it also had its wholly owned showrooms in few cities.
----------------------
“Sir, that’s not feasible. At this BE showroom, we take orders only from
---------------------- our walk-in customers for all electronics items. In fact, our Mumbai Head
Office handles all such Internet transactions. We at the local or branch office
----------------------
are, thereby, not in a position to help you out,” said Sandeep, the CS executive.
---------------------- “See, this is too much for me to handle now. It’s been 15 days that I paid
over Internet using my credit card for this Microwave oven. As mentioned on
----------------------
the website, I was supposed to get home delivery of my product in just 7 days.
---------------------- For the last few days, I have been running from pillar to post, but to no avail,”
blasted Rajesh.
----------------------
Discomfited by the response at the Showroom, Rajesh called up the head
---------------------- office the same evening. After a few call transfers, Rajesh was speaking to
Sunil Jain, Head of ‘Web Operations’. Sunil gave a patient listening to Rajesh’s
---------------------- situation and felt apologetic for his plight. He was, in fact, bewildered by the
fact that the company owned showrooms were not informed of the systemic
----------------------
changes that have taken place at BE.
---------------------- Prior to the organisation overhaul, any Internet order was processed and
---------------------- delivered from the Mumbai HO. This one-on-one dispatching of products to
customers’ addresses was leading to heavy transportation costs, ultimately borne by
---------------------- the company. This was making the entire ‘e-channel’ business unviable for BE.
---------------------- A month ago, in order to leverage the benefits of its existing physical
infrastructure and its clout in the market, BE decided to amalgamate its
---------------------- ‘traditional’ channel of distributors, dealers and retailers with the new and
upcoming ‘web channel’. Under this new system, an order received over the
---------------------- Internet was processed centrally at Mumbai HO and was then directed to the
---------------------- nearest showroom/retailer. While directing orders to different channel partners,
‘Company-owned showrooms’ were given priority over the third party dealers/
---------------------- retailers.
---------------------- With receipt of necessary details, this retail outlet would then source the
electronic item from its local/regional warehouse and complete the transaction
---------------------- by delivering the item to customer’s address. Sales and Post-Sales activities like
Installation, Documentation, and Servicing were further the responsibilities of
---------------------- the local office. This also ensured that BE was reaching even to its remotest
---------------------- customer.
Having heard the entire ‘tale’ of Rajesh, Sunil was able to realise where
----------------------
things were going wrong. He apologised for the delay and assured Rajesh that
---------------------- within two days his microwave would be at his doorstep. With just two phone
calls, one to National Manager, Web-Ordering and the other to Store Manager,
---------------------- Pune Showroom, Rajesh’s Microwave oven was on its way to his residence.
---------------------- Sunil looked at his computer screen and realised that this is just the

tip of the iceberg. This was his 9th customer complaint of the week that was Notes
originating because of the same issue.
----------------------
The transition from centralised delivery to decentralised process was not
turning out to be as smooth as desired. The Sales and Marketing departments of ----------------------
all products were not fully ‘integrated’ with the web channel. In order to have
proper control and effective division of responsibilities, BE was divided into ----------------------
so many departments and product lines that on ground, each of them acted as a
----------------------
different company.
Lack of seamless communication between these ‘individual companies’ ----------------------
was resulting into customer dissatisfaction. With the explosive growth of Web
----------------------
Channel, Sunil already started feeling the heat of excessive differentiation in
their organisation structure. Along with merging of distribution channels, he ----------------------
had proposed fusing of few internal departments at BE. Although the latter was
not approved, only the channels got merged. ----------------------
Given the tough-minded leadership at BE, Sunil pondered over the issue ----------------------
of existing ‘differentiated’ organisation structure and a possible ‘integrated’
structure with its considerable impact on customer satisfaction. After gazing at ----------------------
the ceiling for a while, Sunil turned to his computer and was now determined to
----------------------
raise the organisation structure issue at tomorrow’s board meeting.
----------------------
Questions
----------------------
1. Assuming Sunil to be your colleague, support him in his presentation to
----------------------
the board with your views on organisation structure and its impact on
Customer Satisfaction. Also mention the pros and cons of ‘differentiation’ ----------------------
and ‘integration’ organisation structure.
----------------------
2. How do you foresee the short-term and long-term future of BE with its
different departments acting as single entities rather than working in ----------------------
unison?
----------------------
6. M-CRM AND APPLICATION SERVICE PROVIDER (ASP) ----------------------
6.1: HP Utilisation of SAP CRM ----------------------
Objectives:
----------------------
●● Describe the working of HP before and after the implementation of CRM
----------------------
●● Explain how CRM tools can be used to integrate various organisational
functions ----------------------
Based in Palo Alto, CA, Hewlett Packard (HP) is the world’s largest IT
----------------------
company with revenue of over $114 billion in 2009. HP’s Imaging and Printing
Group (IPG) is primarily responsible for the company’s printing and scanning ----------------------
hardware and supplies. With customers throughout the globe, HP utilises
multiple channels to provide customer support – phone, email and online chat. ----------------------
Before their SAP CRM implementation, IPG utilised three completely ----------------------
Case Studies 179

Notes separate systems to provide customer support. There was one system for email
support, another for phone support and a third for online chat support.
----------------------
Since these systems were from three separate vendors, the communication
---------------------- and syncing capabilities were limited. For example, when customers called in
for phone support, the interaction history was not available for other non-phone
---------------------- representatives to access. A customer service representative providing chat
support was unable to pull up a customer’s call-in or email history. As a result,
----------------------
customer service representatives were not always properly equipped to get a
---------------------- 360 degree view of the interaction details and history of every customer.
In order to provide a better customer service experience, the company
----------------------
looked for a solution that would seamlessly combine the phone, email and chat
---------------------- channels into system. Ultimately, HP chose SAP CRM and iServiceGlobe as a
vendor to assist the HP business team in the implementation.
----------------------
Though HP internally managed the SAP CRM implementation, they
---------------------- engaged iServiceGlobe to assist with the project because of the company’s
subject matter expertise.
----------------------
As a result of HP’s global presence and specific needs, high level of
---------------------- customisation was needed for their implementation. HP chose to implement
SAP CRM on a single global instance. Rather than having a separate CRM
---------------------- system based on region, HP throught that the application service provider set
---------------------- up a singular system that all HP users across the globe could access. The ASP
customised the system based upon the HP representative’s location, enabling
---------------------- the application to meet the social, legal and cultural needs of that region.
---------------------- For example, in Hong Kong, each time a service ticket is created, privacy
options have to be provided to the customer. However in Japan, privacy options
---------------------- only have to be given to the customer one time. Since customer interactions
from Hong Kong and Japan were both housed in one central CRM system, the
---------------------- ASP had to customise the application so that the representatives servicing Hong
---------------------- Kong would know to provide customers’ privacy options each time a service
ticket was created.
---------------------- Other customisation provided in the implementation process included the
---------------------- creation of specific privacy options that were initially not included in SAP CRM
4.0 (Note: these privacy options were included in the SAP CRM 6.0 release).
----------------------
Since going live, the SAP CRM implementation with HP has been a
---------------------- success. Now, when any customer contacts HPs IPG via phone, email or chat,
the customer service representative knows the complete interaction history of
---------------------- that particular customer. Customer service and call center managers are able
to better prioritise customer needs and have a more detailed view about each
----------------------
and every customer. Though it can be attributed to multiple factors, since the
---------------------- implementation of SAP CRM, HP’s market share has also increased.
----------------------
----------------------

Questions Notes
1. Study and comment of the role played by the application service provider ----------------------
in ensuring better customer response by HP.
----------------------
7. CUSTOMER LOYALTY AND LOYALTY PROGRAMME ----------------------
7.1: Shri Ganga Electronics ----------------------
Objectives:
----------------------
●● Justify the need of proper after sales service
----------------------
●● Recognise the impact of sales promotion
The female members of AkashDeep Society in one of the growing towns ----------------------
in Northern Maharashtra were enthused by the idea of witnessing a promotional
----------------------
demo of a leading brand of washing machine. The reason was genuine. This
society was a medium sized society of 12 buildings of 16 flats each. Occupants ----------------------
were mostly from the middle class and that too the salaried middle class. The
style of living was generally a progressive step from the lower middle to the ----------------------
so called middle class. Barring a ten percent of the homes, rest all had not
----------------------
experienced the usage of advanced gadgets.
The two representatives of Shri Ganga Electronics reached on a Saturday ----------------------
in the afternoon and announced that they would like to divide the group into two ----------------------
for better interaction and one to one communication. There were some twenty-
two members gathered and by now they were enjoying within themselves. At ----------------------
the end of both sessions, the two representatives were sure that they would
be able to crack a good deal. Their proposals to offer better freebies and the ----------------------
financial installments scheme and bank loans were lucrative and the comfort ----------------------
levels they had presented in making the whole transaction smooth were equally
impressive. ----------------------
Also as the plumbing connections were offered free of cost, the normal ----------------------
post-purchase installation headache in such purchases was completely avoided.
It was decided unanimously that the next meeting has to be done on the next ----------------------
day, Sunday noon so that the male members could be roped in for the approvals
as well as the positive conclusion. As it is, it was the start of the festive period ----------------------
and there was no reason for a negation considering the expected flow of money ----------------------
from sources as bonus and incentives etc. As the proposal was with financial
backup without much hassles, it looked all the more attractive. ----------------------
The result was encouraging for the Shri Ganga Electronics representatives. ----------------------
They could bag an order for total thirteen washing machines. Eight of these
were the semi-automatic ones with the twin tub and five were of the advanced ----------------------
logic circuits enabled, which allowed a total one touch process and timer-
enabled washing cycles. The formal paperwork of the financial loan proposals ----------------------
were through and completed in total three days and immediately the families ----------------------
were ready for receiving the deliveries. Deliveries were assured ex-stock and
accordingly were received too. The programme was to complete all installations ----------------------
Case Studies 181

Notes by Saturday evening max. All was fine and in order by Saturday evening. The
deliveries were completed and the actual testing happened in presence of
---------------------- installation team. The members acknowledged the deliveries and successful
installation on the Challan form and the deal was concluded.
----------------------
Next day, Mrs. Choudhary in the B-Wing Flat number 12 faced a problem
---------------------- in operating the machine. They had gone for the advanced automatic digilogic-
xmp machine with one touch function. The water was all clogged over in the
----------------------
machine. The drain tube choked and the machine had stopped working. Mrs.
---------------------- Choudhary attempted to recall all what they had seen in the demo clipping and
were told on the previous day and applied all, but in vain. She tried another two
---------------------- times and then called Mr. Choudhary for help. Things were repeated as per the
manual and did not solve the problem. Mrs. Choudhary inquired at the other
----------------------
four members who had purchased the same variant and understood that their
---------------------- things were quite fine and they faced no problems. Finally, a call made to the
Shri Ganga Electronics shop received a reply that on Sundays the technicians
---------------------- are not available and the complaint could be attended only on Monday. The
representatives who had given the demo and sold the machines were courteous
----------------------
to understand the case but helpless as they were not able to tackle it technically.
---------------------- They too assured of sending the technician on the next day. The Choudhary
family was upset and felt their Sunday was ruined.
----------------------
Next day, the technician came and inspected the machine. All connections
---------------------- were correct and the flow was ok but still the problem persisted. A deeper
inspection brought the conclusion that the cutout timers were not working and
---------------------- the circuit had some problem. This was beyond their normal scope of work and
the machine needed to be sent back to the Company for repair. The Choudharys
----------------------
were shocked. They had just got the delivery yesterday; they had not even used
---------------------- it once and now it needed a repair and that too at the Company Service Centre.
The technician also informed that this takes minimum four weeks period, as the
---------------------- Service Centre too had many jobs in hand and that if it is beyond local repairs,
it shall be sent back to the Company as it was a warranty repair. The very idea
----------------------
of opening the machine for investigations on the first day of purchase made Mr.
---------------------- Choudhary totally restless and uncomfortable. They demanded that the Dealer
replace this machine on the spot.
----------------------
The Dealer was not ready for the same. His point was that the particular
---------------------- serial number machine was sold and any replacement can be done only by the
Company. For this, it was essential that the Service Centre first registers the
---------------------- complaint, attempts a rectification to the expectation of the customer and if this
is not through, sends it back to the Company for further decision. Legally too,
----------------------
the machine was in the custody of Mr. Choudhary and was under warranty for
---------------------- repair and replacement if the need be on total investigation. So any replacement
at this stage was not possible. Mr. Choudhary then asked for a temporary
---------------------- replacement meaning the dealer should provide any other washing machine that
the Choudhary family could use till their own one is back in order. The dealer
----------------------
said this never comes as part of the agreement and they cannot provide substitute
---------------------- for all machines that they get back for repairs. He agreed that it was unfortunate

to have such experience immediately but any temporary substitute was out of Notes
question. They jointly called the Regional Sales Manager of the Company and
explained him the situation and the demand by Mr. Choudhary as well as the ----------------------
reply from the Dealer. He was a very polite and accommodating person who
listened carefully and attentively. However, he too expressed his inability to ----------------------
provide the solution that Mr. Choudhary expected. The only assurance he gave ----------------------
was to expedite the repairs process, but this failed to pacify Mr.Choudhary who
openly cursed his decision to choose the product and threatened to pull both the ----------------------
dealer and the Company in Consumer Court.
----------------------
Questions ----------------------
1. Is Mr. Choudhary justified in demanding a complete on-spot replacement ----------------------
of the machine and why?
----------------------
2. How could the Shri Ganga Electronics Staff have handled this situation
still effectively? ----------------------
3. What policy decision is needed at Company level to take care of the first ----------------------
hand feedback from the front end CRM team?
----------------------
7.2: Flying High
Objectives: ----------------------
●● Examine the interface between trust building and customer satisfaction ----------------------
●● ind possibilities of innovation in customer satisfaction especially through
F
----------------------
the lens of modern technology
On 1994, a NatWest airways (NW) Boeing 747 crashed in Bombay. This ----------------------
was the first major accident in more than 29 years of the airline’s operations.
----------------------
81 passengers of the 179 on board were killed. The following day, NatWest
airways announced $25,000 in compensation to the families of those who had ----------------------
died, to help them cover immediate expenses.
----------------------
When NW management discovered that it was pilot error that had caused
the mishap, the airline offered an additional $350,000 per family - a figure almost ----------------------
five times the amount the company was liable to pay. The Deputy Chairman
and Chief Executive Officer, Mr. Parth Singh, said that the company took ----------------------
‘full responsibility’ for the accident. No airline had ever before accepted full ----------------------
responsibility or been so generous in compensation in the case of an accident.
Over the years, NW has become a role model for ‘service’ in the airline ----------------------
industry. From the very beginning, it had focused on customer satisfaction as its ----------------------
highest priority. It constantly brought about innovations in its service to retain
its existing clients and to attract new customers. NW tried not just to satisfy its ----------------------
customers, but to ‘delight’ them.
----------------------
NW won many awards for its continuous efforts to maintain service
standards, both in-flight and on the ground. It was awarded the ‘Airline of ----------------------
the Year’ and ‘Best Trans- Asia Airline’ awards in 2003 and the ‘World’s Best
----------------------
Case Studies 183

Notes Service Award’ by Travel and Leisure magazine (US), in the same year. In the
preceding years, it won awards in several categories such as ‘Best Long-haul
---------------------- Airline’, ‘Best First Class’, ‘Best Economy Class’, ‘Best Foreign Airline’ and
‘Best Crisis Management’.
----------------------
NW was the airline that initiated the focus on customer service in the
---------------------- airline industry. In 2000, in a study on airline reputation by the Reputational
Institute (a private organisation researching corporate reputations) and Harris
----------------------
Interactive (a global Internet research firm), NW topped the list of international
---------------------- airlines in the categories of safety and trust, customer service and food.
Analysts felt that NW’s superior customer service has been the primary
----------------------
reason for its profitability over the years. NW was profitable right from its
---------------------- inception. Though its fares were higher than that of its competitors, passengers
did not mind paying a premium because of its exceptional customer service.
----------------------
NW started off as Columbo Airlines in 1947. The airline operated
---------------------- services in Kathmandu, Delhi, Bombay, Calcutta, Singapore, Kuala Lampur,
Ipoh and Penang. After the Second World War, Malayan Airlines grew rapidly
---------------------- and by 1955 it flew nearly 200,000 passengers a year. The Columbo airline was
renamed NatWest Airways 1973.
----------------------
When asked about the secret of the success of the NW airlines, Mr. Parth
---------------------- stated, great customer service is the goal for every business, large or small, or
---------------------- at least, it should be.
Businesses depend on clients to generate sales for their products and
---------------------- services. When customer satisfaction is high, people are referred to a business
---------------------- by word-of-mouth marketing. The key to develop a growing business is to
make people so satisfied with a product that they ‘tell and sell’ others about it.
---------------------- Word of mouth marketing is the best form of advertising in existence. Customer
satisfaction for every sale and real testimonials are the basic building blocks
---------------------- of a successful business. When someone has a good experience, they tell other
---------------------- people about it. On the other hand, when people have bad experiences, they go
out of their way to let everyone know.
---------------------- The NW airlines ensured that customer feedback was taken seriously
---------------------- and on a priority basis. Mr. Parth argues, “Common feedback questions are
posed to get responses that will help deliver services more effectively. One way
---------------------- to do this is to have customers grade service and satisfaction levels based on
specific aspects of the service. Another way is to provide Yes or No questions to
---------------------- indicate if customers want a specific service. Feedback forms can also provide
---------------------- a comments section to get personal evaluations from customers.
These evaluations are very useful to include in marketing campaigns as
----------------------
testimonials from clients. For anyone who has ever gone on a luxury holiday,
---------------------- the thing they remember most about a trip is the way they were treated, in other
words: the customer service. Of course, a vacation is the main reason for going
---------------------- away, but when asked by friends or family if they had a good time somewhere,
and if they would do it again, the response is usually ‘Yes!’ if the service is
----------------------
good. Nothing gets people talking better than a smile and a great deal.

Product testimonials based on great experiences are the best marketing tool Notes
in the world. Doing business is not always about money. It’s about relationships,
building trust and offering an exceptional product at a great price.” ----------------------
----------------------
Questions
----------------------
1. What is the role of a CEO vis-à-vis customer service with reference to
this case study? ----------------------
2. Was the management’s judgement misplaced while offering such a huge ----------------------
sum of money to families of the air accident?
----------------------
3. How does customer feedback facilitate building trust and positive
customer relations? ----------------------
7.3: Data Management - SPDP Bank
----------------------
Objectives:
----------------------
●● Justify the need of recording sequence of dealings as customer
●● Identify the causes of leaving customer dissatisfied in spite of proper ----------------------
systems
----------------------
Mr. Tarun Anand, along with Mrs. Sheetal Anand, was proudly looking
at their well- furnished flat. Mrs. Sheetal Anand was more than delighted as ----------------------
they walked across the kitchen. The Interior Designer had not only followed
----------------------
their suggestions but had constructively contributed to make the kitchen more
comfortable and user-friendly. All gadgets were of elite class and renowned ----------------------
brands. Mrs. Anand was just expecting one more addition to it─ a microwave
oven. ----------------------
It so happened that Sheetal had suggested a replacement of their old oven ----------------------
and as a wife usually puts forth a demand, had very sweetly opened this dialogue
with Tarun in the late evening one Sunday. Incidentally, Tarun was browsing the ----------------------
net for some information at that time and he came across a pop-up advertisement ----------------------
from SPDP Bank. As Tarun himself had his savings bank account as well as
Credit Card SPDP Bank, his eyes glued on the advertisement automatically. ----------------------
The advertisement said ‘Banking with SPDP has been more rewarding now.
SPDP announces premium schemes for Premium Card Holders which entitled ----------------------
the holders for redeeming their Reward Points accumulated on the Card with ----------------------
added advantage’. Out of sheer curiosity, Tarun opened the Banks’ website to
gather more details. The offer was truly interesting. Couple of new products ----------------------
were added to the list and now the customers had a wide range to make a good
choice. The list contained, gift vouchers, apparels, kids’ items, books and music ----------------------
store offers, appliances and so on. ----------------------
Sheetal too joined him and to her surprise her most wanted item of the day
– the microwave oven – was in the list. They opened the full description of the ----------------------
product and saw that it really was a lovely item. Equipped with latest features ----------------------
and perfectly elegant looks and coupled with very lucrative redemption offer,
this product belonged to an International Brands Stable. It was on a redemption ----------------------
Case Studies 185

Notes of 3799 reward points and handling charges extra at Rs 100/- each per item.
Tarun quickly checked his last monthly statement of SPDP Bank Credit
----------------------
card where the accumulated points had crossed 4000 mark already. As it
---------------------- was a ‘free-for-life’ card he had no reason to retain any points for the annual
subscription also and so when Sheetal suggested opting for this item, Tarun
---------------------- lifted the phone immediately to place the request on the 24-hour Credit Card
helpline. Complying with all the verification formalities, Tarun placed the order
----------------------
for this redemption. Yashada, the girl at the helpline desk briefed Tarun that
---------------------- the normal time period is four weeks but could be reduced in case the items on
demand are available ex-stock. SPDP Bank had a procedure of intimating the
---------------------- despatch to the customer in advance so as to facilitate the transaction. Tarun
repeated all details twice to avoid any telephonic error and concluded the call
----------------------
with a warm bye-bye.
---------------------- Since then five weeks had passed and the oven had not reached them. The
corner position in the L- shaped platform was vacant and Sheetal felt it was high
----------------------
time to remind SPDP – Card Division on this delivery. Tarun called the Bank
---------------------- Help Line and was told to call back on the third day as they wanted two working
days to forward the query to their National Head Office at Chennai. Tarun noted
---------------------- the day and date and the helpline officer’s name as a usual part of his habit. The
third day he called and learnt that the oven was already despatched and they
----------------------
should get it any time. The Helpline officer also asked him to check for a letter
---------------------- referred as SPDP/RWP/PNA/0702 sent a week ago intimating the despatch.
Unaware of receipt of such a letter, Tarun checked with Sheetal and she too was
---------------------- unable to trace any such letter. On a subsequent telecall to the Helpline to ask
the courier details, they again wanted a buffer of two days to get the information
----------------------
from Chennai. This was beyond Tarun to digest that everything was said by the
---------------------- Bank to be online and in reality, every information took enduring periods to
conclude. Still keeping his cool, he called once again after two days and got the
---------------------- courier docket details.
---------------------- But the real shock was yet to come. The courier person said that the oven
has been resent to Chennai, but the reason could be told only when the field
---------------------- delivery boy will be back in the evening. The whole investigation led to the fact
that the Chennai office had not given the telephone number of the consignee, i.e.
----------------------
Tarun Anand. The standard instruction from the Courier Head Office in case of
---------------------- handling such deliveries for this SPDP Bank was that either the consignee calls
the courier office to claim the delivery or the courier office calls the consignee
---------------------- to inform the delivery and confirm the availability to execute this physically.
In this case, as the letter was not received by Tarun, they could not call. So,
----------------------
there was no contact from the consignee side. The Courier office worked in
---------------------- the framework and as there was no telephone number, they did not call and as
there was no call from Tarun, they waited for fourteen days and returned the
---------------------- consignment to the Company. This was their cargo division and they disowned
any association with the documents division that was supposed to deliver the
----------------------
letter to Tarun informing the delivery. The document division said that the letter
---------------------- meant for Mr. Tarun Anand was never received at their end and so they were

at no fault at all. The Helpline division of the SPDP Bank said as usual that Notes
they will forward the complaint to the Chennai Head-Office and if Tarun gives
in writing the consignment can be called back afresh. Waiver of the Handling ----------------------
Charges for the consignment returned to Chennai also could be decided on by
the Chennai Head Office and this could take seven working days. They did not ----------------------
forget to say a ‘have a nice day’ in spite of the frustrating experience Tarun was ----------------------
undergoing with total two weeks of follow-up with different agencies.
----------------------
Questions ----------------------
1. Are the expectations of Mr. Tarun Anand, as a corporate customer, fulfilled ----------------------
and if not why?
2. Who should be blamed for the whole confusion and why? ----------------------
3. What steps should the Bank take to regain the confidence of such ----------------------
customers and retain them for long?
----------------------
8. IT-ENABLED CRM ----------------------
8.1: Relationships and Retention: Go All Bike ----------------------

Objectives: ----------------------
●● Justify the need of proper documentation in closing transactions
----------------------
●● Identify the causes for the lack in understanding customer satisfaction
----------------------
Today was a dream come true day for Sanjay and Kartik as they entered
the Two Wheeler Showroom GO ALL BIKE. All payments were made and they ----------------------
had just to take the delivery of the motorcycle. The showroom was literally
overcrowded, as it was the festive season and individuals and families thronged ----------------------
the reception area and lobby.
----------------------
Even though both were a bit tired after the daily grind in their courier
office routine, their enthusiasm was not less as it was the first bike of their ----------------------
life. They had to wait more as compared to their college friends who by now
----------------------
were more settled and steady with better professions and jobs. Only graduation
in commerce was not enough for them to make better roads in life and this ----------------------
they had understood in a better way now after walking in various offices and
business places to make deliveries of the couriers. The pompous atmosphere in ----------------------
many such places made them feel that they should have been more serious on
----------------------
taking at least some post graduation studies, but now it was somewhat late and
not feasible for other personal reasons too. It was their inner desire to be treated ----------------------
honourably and respectfully as important customers.
----------------------
Finally, they could make some way and find a place at the receiving
counter to complete the paper work formalities. The girl at the counter was quite ----------------------
receptive and gave a warm smile welcoming them. She asked them to produce
papers of their bank hypothecation and advance payment receipts. This was a ----------------------
lengthy process and by the time it was completed, they were more than eager to
----------------------
Case Studies 187

Notes take the possession. Sanjay took out the list of accessories they had ordered to
be fitted in the showroom itself and then asked what the next procedure to fulfill
---------------------- was. They were advised to make all the payment for this too and they reached
the payment counter. All was too exhausting and running between counters was
---------------------- never so interesting.
---------------------- A freshly added sparklingly silver and another jet black bike was getting
ready at the delivery area to cruise with the new owner-mates, Sanjay and
----------------------
Kartik. A glance at both the bikes made Sanjay and Kartik forget all the pain
---------------------- that they had to undergo in completing the paperwork and organising for the
funds provision etc. They were lucky enough to get good rhythmic registration
---------------------- numbers and both walked around the bike twice to see it from all the angles.
The delivery department attendant came forward with a checklist of all the
----------------------
accessories they had ordered for fitments and started tick marking all items
---------------------- fitted accordingly. Sanjay noticed that only the Right Hand Side mirror was
fitted and the Left Hand Side mirror was not fitted. Instead a rubber cap was
---------------------- placed loosely on the hole provided for fitting the LHS mirror. The same was
with the other bike. By this time, the Delivery attendant had inspected the bike
----------------------
and filled the delivery form and placed it in front of both these boys to get
---------------------- their acknowledgement of taking deliveries of the bikes in proper condition and
order. Sanjay asked about the LHS mirror status and they were told that the LHS
---------------------- mirror was not in stock so the same could not be fitted. Both went through the
manual and got it reconfirmed that the LHS mirror too is a part of the standard
----------------------
factory fitted accessory and has to be a part of the vehicle by default.
---------------------- The delivery attendant was not able to reply this properly and kept repeating
that there is no stock and it has not come from the factory. Sanjay demanded
----------------------
that they be taken to the showroom Manager to seek his help in getting the LHS
---------------------- mirror immediately. They were then taken to Mr. Khanna who was the manager
at that delivery section. Even he responded with the same answer and suggested
---------------------- that if Sanjay and Kartik are so bent on taking the delivery with the LHS mirror
fitted then they shall have to wait for another two days until they get the mirrors
----------------------
from the factory. Now this was a point they were not prepared to face. On one
---------------------- side, the vehicle was ready and on the other, this point was not getting resolved.
Time also was running fast and it was already 9.00 p.m. Finally, they asked
----------------------
Mr. Khanna to give them in writing that the mirrors shall be made available in
---------------------- two days’ time and then could take the delivery immediately if there was such
a written assurance. The Delivery Manager expressed his limitation and said
---------------------- this could be only done by the GM of the Showroom. However, the GM had
already left for the day at 8.00 p.m. and the only departments working were
----------------------
the Delivery related departments. After two – three rounds of discussions with
---------------------- the available staff, it was decided that the balance mirrors shall be fitted in a
weeks’ time after the stocks are received from the factory. However, the Dealer
---------------------- staff refrained from giving this in writing and the duo had no choice but to take
deliveries on the trust element in mind.
----------------------
To their utmost surprise, even after making three visits in a fortnight, they
---------------------- received only negative answers as ‘stocks are awaited’, ‘stocks are depleted’,

‘factory is sending less stock’, ‘there is shortage of mirrors at all dealers’ and Notes
so on. One evening, Sanjay had an idea in his mind. Instead of going to the
Delivery Department for getting the mirrors fitted, they walked directly to the ----------------------
Spare Parts Counter and enquired about the mirrors. The tone was as if they
intended to purchase mirrors for their bikes. The person at the counter asked ----------------------
the model details and immediately showed the mirror on sale and informed ----------------------
the price of Rs 150/- per mirror. On the stocks available, he confirmed that
they had adequate stock and was willing to sell two sets to them. Sanjay and ----------------------
Kartik thanked them for the information and went to the delivery department
for asking the mirrors where they were once again replied with a stock shortage. ----------------------
This was the end of the patience for the duo and they banged the counter and ----------------------
demanded to speak to the Floor Manager and questioned how the Dealer had
mirrors for sale but did not have mirrors for standard fittings. ----------------------
----------------------
Questions
----------------------
1. Do you feel that the overall background of the customer makes a difference
in closing the whole deal successfully and if yes, how? ----------------------
2. What in your opinion would have been the right way to face such situation ----------------------
as a customer? Do you think that what Sanjay did in the end was justified?
----------------------
3. How could the Showroom Managers be trained more effectively so that
they do not lose credibility in the market? ----------------------
8.2: Travel Travails
----------------------
Objectives:
----------------------
●● Explain how monopoly can be detrimental for effective customer care
●● Identify how processes can be streamlined for an effective CRM ----------------------
Following are taken verbatim from an Indian Raiways patron. ----------------------
I narrate two separate incidents I experienced as a customer with the ----------------------
Indian Railways. One was when I had booked a train ticket from www.irctc.
co.in for Delhi - Jammu - Delhi in 3tier AC. Due to heavy rush, my return ticket ----------------------
was on waitlist and did not get confirmed even on the travelling date. I could
not check the status of the ticket and checked it at the Jammu station only, as I ----------------------
had just returned straight from my visit to Vaishnodevi Bhawan and Patnitop. I ----------------------
went to the reservation counter to see if the ticket could be cancelled, as it was
still on waiting list. The official at the counter told me as this is a ticket booked ----------------------
from internet, I needed to cancel it from there and the payment made will be
credited to my credit card/ debit card account. ----------------------
When I reached Delhi next day, I tried to cancel the ticket from internet, it ----------------------
alerted that this ticket cannot be cancelled from internet as this is i-ticket. Then
I checked on the site for more details and found that e-ticket (which you print at ----------------------
your end can be cancelled but i-ticket which is sent to you as a normal railways ----------------------
printed ticket cannot be cancelled online).
----------------------
Case Studies 189

Notes I called up the customer care and briefed them about the issue and was told
to take this ticket to any computerised booking centre; from there, you get your
---------------------- ticket cancelled and you will be given TDR (Ticket Deposit Receipt), which
further needs to be sent to Chief Commercial Manager, Northern Railways via
---------------------- normal post and then your account will be credited.
---------------------- My father went to the nearest booking centre and was told this kind of
cancellation is only done at window no.18 at New Delhi railway station. He
----------------------
went there and got the TDR after standing in queue for 2 hours.
---------------------- After having gone through such a horrid time, the money was not refunded.
What Indian Railways need to understand is that passengers book tickets online
----------------------
because they want to avoid queues and due to paucity of time to engage in
---------------------- conventional possibilities of reservation of tickets. They need to have some
respect for time of their customers. If they could make cancellation of e-tickets
---------------------- online, it should not be that difficult to do the same for i-tickets. Just hoping
that this ministry tries to improve their system of working to cause customers
----------------------
less agony and keep them happy but Indian Railways is a monopoly ─ nobody
---------------------- bothers; customers do not have a choice.
They also should give an option to customer to book return ticket online.
----------------------
The mismanagement is causing loss to the public and simultaneously eroding
---------------------- their reputation and customer base (when one has an alternative mode of
transportation, that is).
----------------------
My second experience was as pitiable as the first. I had a reservation from
---------------------- Bhopal to Howrah. I will label it as my worst travel experience. I could only
manage to get reservation on the second-class fare. When I boarded the train at
---------------------- Bhopal, I was rather taken aback when another passenger claimed that the berth
---------------------- belonged to him. I waited for the T.T to come by to resolve this issue. However,
it took about an hour and a half for the T.T to come to our compartment. On
---------------------- having displayed my ticket, I thought the matter was resolved. However, it was
learnt that my co-traveller also had a ticket for the same berth and same dates!
---------------------- How was this possible?
---------------------- Without admitting the fault of the Indian Railways, the T.T fervently
began making enquiries. Soon enough, I learnt that it was a mistake on my part
---------------------- to have booked the ticket through a travel agent (one, with whom, I have always
---------------------- done not only for railway travel but also for airways for the past 10 years)
With so much commotion, I realised that I stood little chance to secure
---------------------- that berth- more so, on the principle of first come first serve basis. I had to pay
---------------------- that extra sum to get hold of a berth in another compartment. On the arrival of a
station, I shifted only to learn to my horror that the same berth had been given
---------------------- to another passenger also and that too on payment just like me! He too had a
receipt that mentioned the seat number and the amount paid, though what I paid
---------------------- seemed higher (of course)!
---------------------- I frantically began searching for the T.T only to realise that he had got off
the previous station. By this time I had already traversed half the distance to
----------------------

Howrah. With aching muscles and joints, I was unwilling to take on the system Notes
any longer. Thankfully the passenger who was also similarly duped agreed to
accommodate me. I spent the rest of my journey sitting. ----------------------
----------------------
Questions
----------------------
1. What do these two incidents highlight?
2. Why is it that even after such advancement in communication technology, ----------------------
Railways continue to suffer in the area of CRM? ----------------------
3. Is it a lack of professional culture that can account for such incidents?
----------------------
4. Why is monopoly detrimental to an effective CRM?
----------------------
5. Suggest some ways to improve this system.
8.3: Fun Spot ----------------------
Objectives: ----------------------
●● Evaluate reasons for high levels of customer retention ----------------------
●● Examine how training and managerial skill can infuse a ‘work is play’
philosophy within an organisation’s employees ----------------------
This is a story that Mr. Chavan narrated relating to his customer ----------------------
experience. The other day I overheard a unique conversation. This conversation
took place between a patron and an employee of the restaurant. The patron, ----------------------
obviously a regular customer of the restaurant, was commenting on how he
did not understand the success of ‘Casasta’ restaurant chain that specialises in ----------------------
pastries and ice creams. ----------------------
“How can a company be so successful by charging Rs. 100 for a cone
of ice-cream when a person can buy the same for Rs. 10 from the corner shop ----------------------
restaurant,” he asked. The employee warmly smiled back and said, “I don’t ----------------------
know”. After a few more minutes of conversation, the two waved to each other
and said their good-byes. It was at this moment that I started to smile because ----------------------
the answer to the patron’s question was staring him in the face, he was just too
blind (or too close) to see it. The answer is great customer relations. ----------------------
An old friend of mine, who worked at Casata, told me that employees are ----------------------
instructed during training to remember the regulars’ names and to be friendly
and energetic towards everyone. Thus, the employees help produce a friendly, ----------------------
casual atmosphere ─ so friendly that many people rather meet their friends at
----------------------
Casata than at their own homes.
Casata employees are generally very helpful as well. Customers usually ----------------------
come as a family. The employees take to entertaining the younger lot, so that the
elders can have time for conversation. I have seen customer after customer ask ----------------------
employees how to make their favourite pastries at home. Every employee asked ----------------------
has always taken the time to thoroughly describe the process and has never said,
“Sorry, I’m too busy”. I have even seen employees give free helpings to regular ----------------------
customers, especially so to their tiny customers.
----------------------
Case Studies 191

Notes A memorable incident that I can never forget dates to a couple of months
back. This was the time when the world cup (cricket) was being played. On that
---------------------- particular day was a match between India and Pakistan. Some of the teenage and
even middle-aged cricket fans requested the staff to provide a T.V. screen so that
---------------------- they can tune in to the latest. The particular employee conveyed this message to
the Manager. The Manager did try to get a T.V screen, but in vain. However, not
----------------------
one to give in, he arranged for the cricket fans to be accommodated and served
---------------------- food in the conference room that had an LCD facility. This was connected to
his laptop which, through some technical assistance, turned into a mini movie
---------------------- theatre.
---------------------- The management used this occasion as an opportunity to make a really
lasting impression on their clientele. Most customers are much more loyal if they
---------------------- have had a satisfactory experience. Casasta knows how to keep its customers
---------------------- happy. They offer every person who enters one of their stores an opportunity to
place membership. The membership is lifetime and only has a one-time charge
---------------------- of Rs. 500 during signup.
---------------------- When one becomes a member of Casasta, the store sends you a 10%
refund on all of your purchases at the end of the year. The refund can go towards
---------------------- any purchase at its stores or one can even exchange it for cash. Casasta doesn’t
stop there. They give back to the community by supporting hundreds of local
---------------------- efforts to promote primary education especially for street children, cleanliness
---------------------- drives, traffic education etc. The Casasta stores partner with local groups to
improve local areas through participatory learning. By partnering I don’t mean
---------------------- they make a contribution to the group, even though they do that too. I mean that
store employees get together in groups and go out to do the work themselves.
----------------------
Their stores may not have reached an international status yet, but they
---------------------- have taken off in India. So what makes them special? If ever you get the chance,
do visit one of their stores.
----------------------
Just take a look at their website to get a flavour of what they do.
----------------------
They are systemised. They work to a system. The shops are always
---------------------- immaculately presented. Often in spectacular contrast to their neighbours. Their
people are bright, energetic and full of smiles. Casasta regularly features in lists
---------------------- of the best companies to work for. Their sandwiches, cakes and ice creams are
extraordinary. Just reading about how they make their products is enough to
----------------------
convince you.
---------------------- Visit a few of their stores and you start to see some of the systems in
---------------------- operation. Basic systems for how the stores will look. What materials do we use
to help keep them clean and make them easy to maintain? How to layout the
---------------------- store to make it easy for people to select their food, pay for it and take it away?
How should our sandwiches be displayed and what type of cups are we going
---------------------- to use?
---------------------- Speak to some of their people. Find out what you would have to do to
get a job at Casasta. Find out about the morning briefings that cause the team
---------------------- to come running into work, laughing and punching the air. Find out about the

mystery shopper programmes and the incentive programmes. These things do Notes
not just happen by accident or even occasionally. They happen consistently,
time and again. The result is that the customers know exactly what to expect ----------------------
─ fast and friendly service, superb food, great ambience and most of all, their
inherent desire to delight the customer. ----------------------
----------------------
Questions
----------------------
1. What are the strategies employed by the Casasta chain to ensure customer
loyalty? ----------------------
2. How important is brand name for business? Has Casasta achieved this ----------------------
objective?
----------------------
3. How important is training as a component in customer relations
management? ----------------------
4. Can you suggest how to improve customer relations at the Casasta stores? ----------------------
8.4: Super-SP Mall
----------------------
Objectives:
----------------------
●● Justify the need of proper clarity on internal co-ordinations
●● Describe the consequences of lack of cross-grid of communication ----------------------
Ronak and Aditi had planned to pay a visit to the newly opened Super- ----------------------
SP Mall just a kilometre away from their home. Reading in the Newspapers
and watching on the local channels had made them aware that this Super- ----------------------
SP Mall had started with a big bang in the last month. Being the 5th of its ----------------------
kind in the State and the 17th Nationwide, the media exposure too had been
exhaustive. A lot was said and heard about the range on display and sale and ----------------------
the most competitive prices offered. Virtually, every alternate day, there used
to be a promotional brochure with beautiful layout circulated freely with daily ----------------------
newspaper copy. Naturally, all this had aroused the curiosity of Ronak and Aditi ----------------------
and they decided to celebrate this week end by spending some time in the Super-
SP Mall followed by a dinner and a movie for their seven year old daughter, ----------------------
Neha.
----------------------
Parking their car in the virtually full parking lot, Ronak and Aditi walked
up the stairs. Every corner was spick and span and flooded with products on ----------------------
display. Tall Showcases in a neatly organised manner were lined up along
the wall sides. One full of cosmetic and healthcare items, other with dress up ----------------------
accessories and so on. The three storeyed mall was all glittering and shining ----------------------
with lights and their reflections. Attendants in bright red coloured dresses
wearing polished belts and bearing name plates on their overcoats placed on ----------------------
every ten feet distance were on their alert and ready to assist quickly. Overall,
the complete atmosphere was young and pleasant. ----------------------
As a usual habit, Aditi insisted to go around all the three floors, have ----------------------
a look at all commodities and then decide to start adding to the basket. Both
----------------------
Case Studies 193

Notes hailing from middle- class families, they never felt like squandering on show-
off items and had an inherent attitude of being choosy and selective. In fact, at
---------------------- the back of their mind, they had always owed the credit of their success in IT
and Bio-Medical careers to the studious middle-class environment in which
---------------------- they were born and brought up. In nine years of their married life, Aditi too
---------------------- had been groomed by the habits of Ronak of being particular in checking the
details of the product manufacturer, date of manufacturing and weight, MRP
---------------------- etc. Slowly this also was becoming a way of purchase for their daughter Neha.
Also they both had a unanimous opinion that they should not lose opportunity
---------------------- to buy any product of any reputed Company offering any freebie or with offer
---------------------- as ‘buy one get one free’ etc. The reason was simple – No Good Company
offers schemes round the year. Schemes are only for a particular period, either
---------------------- to boost sales or to compensate for less sales in previous month or quarter, to
clear stocks for various reasons as change in packing, launch of the next version
---------------------- in same category or even just to promote the brand. Being ardent believer of this
---------------------- theory, this young couple literally hunted for such products in every showcase.
Having completed the stroll on all three floors, Aditi started picking
----------------------
products one by one and gradually their basket started getting heavier. Mused
---------------------- with the surroundings, Neha too started picking products and insisting her
mama to buy for her. Seeing them busy on their own Ronak started watching
---------------------- for new items and his eyes fell on the board ‘Buy One get Two Free’ and just
next to it ‘Buy One get One Free’. Reaching near to it he saw that those were
----------------------
Aluminium foils from two different companies displayed under respective
---------------------- boards and bundled together in rolls of three and two with cello tapes. Thinking
that Neha can have better fresh wrapped food in her school lunch breaks he
---------------------- called both Aditi as well as Neha and asked their opinion. Neha jumped happily,
not because she was aware of the retention of nutritional values in the food
----------------------
in such packing but just because she recalled she had eaten some stuff from
---------------------- these kinds in her recent air journey and also her two friends carried tiffin in
such packing. Aditi and Ronak decided to buy the ‘Buy One Get Two Free’
---------------------- pack from ‘SU-wrap’ priced at Rs 48/- per roll. Curiously Ronak compared the
two Companies and found that the length of the rolls in every pack was same-
----------------------
9 meters and the other company “Keep-O-Fresh” offering ‘Buy One get One
---------------------- Free’ priced at Rs 46/- per roll, too was an equally reputed Company. Ronak
being an analytical programmer by profession just compared within a flash of
---------------------- a second and was surprised to think how Aluminium foils of same length and
weights can be sold at so varied rates. To satisfy this query, he called the Super-
----------------------
SP Mall attendant nearby and asked to clarify. The Super-SP Mall attendant
---------------------- read the details and still confirmed that it was just a promotional offer and the
‘Buy One Get Two Free’ was their Store Offer. Ronak picked one set of the
---------------------- same and added to Aditi’s basket. By then, they had packed for the day and left
towards the billing section.
----------------------
The queue at the billing was long and tiresome. All four counters had
---------------------- same load and customers too seemed to be bored, waiting anxiously for their
turn to come. Finally, the billing person started with Aditi’s basket. One after
----------------------

the other item was held in front of the bar-coding machine and the item details Notes
and rates kept flashing with beep. As it came to the Aluminium foils wrapping,
the person at the billing counter said to Ronak, “Sir, all these shall cost Rs. 48/- ----------------------
each and you shall have to pay for three of these to Rs. 144/-”.
----------------------
An astonished Ronak told that this is as per their offer on the board and
also packed as three together with the tape and so the price has to be Rs. 48/- ----------------------
for all together and not individually. The Billing person entered in different
----------------------
mode and said “No Sir, there is no such offer – there are two companies and
the other has one over one free – I think you have lifted wrongly”. By this time, ----------------------
Ronak was fuming with anger and he blasted out saying “I strongly object to
the phrase ‘lifted wrongly’. We have come for buying and are willing to pay; ----------------------
you have displayed products for sale and have given offers to boost sales. Now
----------------------
if you want to go back on the offer and use such language, I shall refrain from
any purchase. Also call your attendant Ganesh, who confirmed that this is the ----------------------
current offer”.
----------------------
Questions ----------------------
1. Comment with your observations about the overall environment in the ----------------------
mall.
----------------------
2. What in your opinion would have been the right way to handle the problem
and how? ----------------------
3. List out some concrete changes in attitude that can help to avoid such
----------------------
situations.
8.5: Losing Out ----------------------
Objectives: ----------------------
●● Evaluate human component in customer relations ----------------------
●● Examine the importance of mannerism and trust for good customer
relationship ----------------------
We are not sure that companies generally think of customer service as ----------------------
a measure of their corporate responsibility. Customers are key stakeholders
and how one treats them speaks volumes about the kind of company. All this ----------------------
is to say that customer service is an important component of any company’s ----------------------
corporate responsibility profile. Below is a customer’s experience in air travel,
given verbatim. ----------------------
My father had been ill these past few months, necessitating several trips ----------------------
back and forth to Mumbai (from Kolkata). I was generally airline agnostic on
these trips, going with the airline that offered the best fare, given the short ----------------------
notice, though I tried to fly United because I am enrolled in the United Mileage
Plus program. I generally like to fly Jet whenever I go to Mumbai, because it ----------------------
is usually pretty inexpensive and on time. But Jet does not offer a designated ----------------------
‘compassionate’ fare and so it has not always been an option these past few
months. United does have a ‘compassionate’ fare that they offer in cases of ----------------------
Case Studies 195

Notes family illness or death. So, on one trip, I used United and on another I used Jet;
it was just cheaper to do it that way.
----------------------
The last thing you want to do when dealing with illness (or death) is try
---------------------- to fight your way through travel arrangements. So it’s nice that United makes it
less of an expense. As I recently found out, as long as your loved one does not
---------------------- get sick or die around a major holiday, it is relatively hassle-free.
---------------------- Sadly, my father passed away last Friday (June 22). My family is planning
a memorial ceremony for him next Sunday (July 1) in Central Park, Kolkata.
---------------------- Over this past weekend, my sister and I made our travel arrangements back to
Kolkata - she from Delhi, I from Mumbai.
----------------------
A customer service representative answered my call at the United. (I did
---------------------- not get his name). I explained my situation and told him the dates I needed to
travel (leave
----------------------
Mumbai on Friday, return on Monday, to complete some formalities of
---------------------- the hospital). Unfortunately, due to the upcoming holiday, there were no flights
---------------------- available at all that qualified for the compassionate fare on the dates I needed to
travel. I tried to explain to the agent about the ceremony planned for Sunday and
---------------------- that my travel dates are simply not flexible. He assured me there was absolutely
nothing he could do. I started to question United’s ‘compassion’. It seemed like
---------------------- they were only compassionate on slow travel days. That did not seem quite
---------------------- right so I did what any pushy individual would do and I asked to speak to a
supervisor.
---------------------- The representative got his supervisor, Mr. Patel, on the line. After
---------------------- explaining my situation again, Mr. Patel agreed to over-ride the system and put
me on the flights I needed for the relatively inexpensive fare. I was thrilled. If I
---------------------- had booked the flight online it would have been about thrice as much.
---------------------- Next I asked Mr. Patel if he could help me book my sister’s ticket, too,
on the same dates. He looked up flights from Delhi into Kolkota and informed
---------------------- me that nothing was available on those dates for the compassionate fare. ‘Can
you over-ride the system again?’ I pleaded, ‘I will only do it one time. I already
---------------------- helped you once,’ was his response. I didn’t understand. Is there a limit on how
---------------------- many times the customer service representatives can help the same passenger?
I pressed him, explaining again that we could not help the timing of our father’s
---------------------- passing and could he please do whatever he could to get my sister on a flight.
He refused. So, I asked if I could speak to his supervisor - maybe there was
---------------------- someone else who could over-ride the system. This is where it got bad.
---------------------- Mr. Patel proceeded to inform me that he has no supervisor. He is the final
authority in that call centre on customer service and he was done helping us. I
----------------------
pressed him on this assertion - it seemed unlikely to me that he was the last stop
---------------------- on the customer service train.
So what did he do? He told me that not only was he not going to help me
----------------------
further, he was now going to void the flight he already made for me because I
---------------------- clearly did not appreciate the help he was willing to provide and - get this - he
was insulted.
Um...what? Notes
I managed to talk him out of this, although principally, I think I was not
----------------------
at fault.
With no help forthcoming from United, my sister called Jet. She already had a ----------------------
ticket on Jet from Delhi to Kolkota for later in July. It was a rewards ticket (read:
----------------------
free) that she had booked for later in July because we expected my father to still
be alive and we were planning to visit him then. Usually Jet Blue charges a Rs. ----------------------
3000 change fee plus the difference in airfare when you change your flight. In
this case, the difference in airfare was a lot because the other ticket was free ----------------------
and our travel dates fell on a ‘holiday weekend.’ As we had already learned on
----------------------
a previous trip to Kolkota, Jet does not offer a compassionate or bereavement
fare. Not to mention when my sister reserved the other ticket, they told her that ----------------------
because it was a reward ticket, it could not be modified in any way.
----------------------
In spite of all this, she called. Just in case, she got straight to the part and
asked for the manager, because she knew it was a special case and she didn’t ----------------------
want to waste any time. A woman named Seema came on the line and asked
how she could help. My sister told her the whole situation - our dad’s passing, ----------------------
her previously scheduled flight later in the month, her financial constraints.
----------------------
She also said that she understood Jet policies but hoped they could make an
exception. ----------------------
Seema verified all my sister’s information, called the hospital to verify ----------------------
my father’s passing and then changed my sister’s flights. Just like that. For
free. She didn’t charge the Rs. 3000 change fee or the difference in airfare. ----------------------
She didn’t threaten my sister and she didn’t lie to her. She just helped. She was
compassionate. She did her best to help a customer in need. ----------------------
I wanted to call United, cancel my trip and book it on Jet, if only to give ----------------------
them my business. Unfortunately, I really couldn’t afford to do that because the
flight from Mumbai would have been about Rs. 5000 more than the United. But ----------------------
I can assure you that I will do my best to never fly on United again if I can avoid ----------------------
it. And for sure, when there is a choice between United and Jet, I will choose Jet
every time. ----------------------
The stark contrast between the way United handled our situation and the ----------------------
way Jet handled it illustrates the impact corporate responsibility can have on
customer loyalty and therefore its long-term business success. ----------------------
United, by way of Mr. Patel, made an indelible impression on me ─ one ----------------------
that is likely to fundamentally change my behavior when it comes to air travel.
I intend to use up my miles on a trip this year and then get rid of my Mileage ----------------------
Plus credit card. And when I travel on payment, I will not fly United (as long as
----------------------
I have other reasonable choices).
Jet has also created a customer for life in my sister. She signed up for ----------------------
the ‘Blue miles of Jet’ rewards program and has told the story to anyone and
----------------------
everyone who will listen. She wants to make sure Jet remains successful so that
it can continue to offer a different kind of customer experience. ----------------------
Case Studies 197

Notes Questions
---------------------- 1. Do you support the author’s view regarding the treatment meted out to
him by the United employees? If yes, why?
----------------------
2. What would have been a suitable stand of Mr. Patel of the United in such
---------------------- a situation?
---------------------- 3. Comment on the delegation of power (regarding Ms. Seema’s quick

response) in both instances. Does delegation and decentralisation of
---------------------- power and authority to employees ensure better customer satisfaction?
----------------------
9. BEST PRACTICES IN CRM AND FUTURE OF CRM
----------------------
9.1: Funfin Mutual Fund
---------------------- Objectives:
---------------------- ●● Justify the need to consolidate service patterns of approach to customers
---------------------- ●● Recognise the importance of aligning working directives
Sudesh Kumar was waiting in the lounge impatiently. Today was his third
---------------------- consecutive day of being here and still he was not sure of the result. He had
---------------------- couple of experiences in the past that had made him wiser. In last two years, he
had gained the maturity to understand that any deal can be said as concluded
---------------------- favourably only when the cheque is received physically.
---------------------- On many occasions, assurances had not come through, as he was in a
tough competitive field where many things contributed to the end result.
---------------------- However, today he had made up his mind to try his complete patience and hold
on till he could make it through. He had no choice either. It was the last day of
---------------------- their ‘New Fund Offer’ (NFO) and if he was going to get the investment, he had
---------------------- to get it before the last cutout time in the afternoon. Also this was the first NFO
brought up by M-FunFin Mutual Fund after the takeover by the domestic player
---------------------- and the expectation levels were obviously high. No shortfalls in set targets were
permissible; it was just a do or die situation.
----------------------
Sudesh Kumar was representing M-FunFin Mutual Fund as Sr. Sales
---------------------- Executive in their New Delhi Regional Office. M-FunFin Mutual Fund was
a part of an MNC in the Financial Products field and spread over seventeen
----------------------
countries and with an asset management of multi billion dollars. In India,
---------------------- M-FunFin Mutual Fund had started its first Office in Mumbai three years back
and slowly expanded operations in all Metros and Mini-Metros in next one year.
---------------------- Very recently, there still was a change with one of the Top Twenty Business
Houses pumping in money and acquiring a major control in the Management of
----------------------
M-FunFin Mutual Fund.
---------------------- There is always a difference in the way MNCs operate and the way in
which Indian Management controls any business. The Management had, in the
----------------------
first step, instilled more competition by defining the categories of customers
---------------------- and separating the line handling each distinctly. The Sales team was bifurcated

based on handling funds coming from the Industry and the Companies, termed Notes
as Institutional or Corporate Sale, and from the retail market coming from
individuals. The Sales team for the Institutional or Corporate Sales was led by ----------------------
a Territory Manager at the Metro City levels and the Retail Sales were headed
by an Area Manager. Both were supported with adequate Sales Executives and ----------------------
the existing sales team was strengthened in the last three months to bring in ----------------------
a proper manpower to handle the business under respective categories with a
basis of the ‘Asset under Management’. All were given proper orientation and ----------------------
there was a clear bifurcation of the areas of working and at the end of the day
they were made responsible for specific targets. ----------------------
The Back Office Operations girls were trained to give all these reports in ----------------------
uniform manner twice a day on daily basis. A cumulative report of all these was
----------------------
presented on the desk of the CEO in the India Head Quarters at Mumbai sharp
at 9.30 a.m. every morning. ----------------------
At last, Sudesh Kumar who was still strolling in the lush green lounge of
----------------------
the multi locational IT Company got a call on his cell. It was Mr. Kohli on line,
the DGM finance and he asked Sudesh Kumar to be in the discussion room. In ----------------------
the next few minutes, Mr. Kohli walked in and handed over the cheque of Rs
fifty lacs with the application form of their organisation for this NFO ending ----------------------
today. It was for this investment that Sudesh Kumar was there today and for
----------------------
which he had listed various reasons as non-availability of authorised signatory,
held back for want of clear funds and what not. Anyway, Sudesh Kumar felt ----------------------
what ends good was all good. He thanked Mr. Kohli gracefully and was ready
to leave when Mr. Kohli called in for his two other colleagues. All three of ----------------------
these wished to invest in this NFO in individual capacity and handed him their
----------------------
application forms. Sudesh Kumar was quite happy but he remembered that as
per their Organisational norms this was a retail sale and needed to be handled ----------------------
by his counterpart Asif Khan. He politely explained Mr. Kohli that Asif shall
drop in at their Office in the afternoon and process the transactions. Mr. Kohli ----------------------
however was not convinced with this. He said from their point of view at that
----------------------
moment Sudesh Kumar was M-FunFin and they declined to meet more people
from the same organisation just because corporate sales and retail sales are ----------------------
handled by different persons. Instead he said that ideally there has to be a one
point contact for one customer organisation for any and all types of sales on ----------------------
either individual basis or be it clubbed. Sudesh Kumar had no voice to counter
----------------------
and he knew it would be of no use either.
He had to get more corporate investments from Mr. Kohli in future and ----------------------
there was no point in contradicting his reasoning. Sudesh Kumar collected the
----------------------
applications and left for his office. Nevertheless he did not forget to thank them
and assure all of them of delivering the Investment statements on the third day ----------------------
personally.
----------------------
In Office however, things were not viewed with the same perspective.
Retail Sales Executives had always a grudge against the Corporate Sales people ----------------------
as the retails sales executives had to gather in tit-bits to complete the target and
efforts required were more. This was because there always was a limitation ----------------------
Case Studies 199

Notes to the capabilities of individuals to invest in individual capacities whereas the
Corporates had strong financial supports and the investments were in lacs,
---------------------- millions and crores at times. Today also, Asif strongly objected Sudesh Kumar
on his taking the credit for the Corporate as well as the Retail Investments both
---------------------- simultaneously.
---------------------- He argued that Sudesh Kumar should have advised Mr. Kohli that Asif
shall visit and collect the applications and service the whole transactions. This
----------------------
would have, he felt, been the right thing to do as per M-FunFin pattern of
---------------------- handling customers in segmented manner.
Sudesh Kumar disagreed totally. His stand was like this:
----------------------
●● Asif did not know the customers.
----------------------
●● Asif had not taken any pains or efforts to get these three applications.
---------------------- ●● rom customer point of view, only Sudesh Kumar was a single point
F
contact representing M-FunFin to them.
----------------------
●● wo persons of same level, from the same office, meeting the same
T
---------------------- customer officials just because of organisational rules does not seem
justified from the customer’s point of view, as customer officials too have
----------------------
limited time, which they cannot spend for the same activity twice.
---------------------- Both approached the Regional Manager to seek his advice to resolve and
discussions restarted.
----------------------
---------------------- Questions
---------------------- 1. If you were in Mr. Kohli’s place, how would you react to the working
style of M-FunFin? Justify your points elaborately.
----------------------
2. Do you think Sudesh Kumar and Asif were right in defending their stands?
----------------------
3. Is the policy of bifurcating the sales organisational structure of M-FunFin
---------------------- correct? Comment with reasons.
9.2: New Food Products Marketing
----------------------
Objectives:
----------------------
●● Explain possible remedies for customer relationship in case of new
---------------------- products
---------------------- ●● Describe the importance of CRM in FMCG retail

Vaishali Dry Fruits House Limited, a well-known manufacturer dealing
---------------------- in chocolate, dry fruit and beverages launched a new brand of dry fruit milk
shake. The product was given the name go cool. It was positioned as a fun and
----------------------
enjoyable drink targeted at the youth.
---------------------- This company had been into business since last 40 years in the rural parts
---------------------- of Maharashtra. It had been doing extremely well in terms of its profitability
and sales. The price of the product was Rs.20 per 300 ml.
---------------------- This company wanted to diversify into food products on similar lines

like Lays, Kurkure of Pepsi foods and wanted to tap the urban market. It had Notes
identified potato, corn and cheese snack foods for urban markets. Generally
potato, corn and cheese are in demand in the urban markets. Its promise is to ----------------------
sell products using the state of art technology and of consistent quality. The
plan is to apply the strategy suitable to these new products. The company is ----------------------
aggressive in marketing dry fruits and also well known in its business. The ----------------------
competition to this company is from small unorganised firms.
----------------------
Despite its aggressive marketing efforts and commission structure to the
dealers, it could not increase its market share. Hence, the company conducted a ----------------------
survey of consumers to find out the reason behind the same. From this survey,
it was revealed that youth were not ready to consider it as a fun snack. The taste ----------------------
was not relished by the youth and the freshness and crispness of the product
----------------------
were not maintained.
Taking note of these aspects, the company decided to improve upon its ----------------------
products’ performance and wanted to relaunch the products. By establishing
----------------------
product differentiation, it would sell its products. In urban markets, because of
the clutter of brands, these concepts are not acceptable by the consumers. Brand ----------------------
is the main consideration. The urban customer is quality conscious.
----------------------
For effective retailing, the company should:
●● Create product awareness ----------------------
●● Work on regular supply ----------------------
●● Demonstrate and do sales promotion
----------------------
●● Take efforts in handling storing and assembling
----------------------
●● Engage in aggressive advertising
It was mentioned that once an idea is accepted among the urban customers, ----------------------
it sells like hot cakes.
----------------------
Questions ----------------------
1. Should there be emphasis on customer relationship management for ----------------------

launching of new product?
----------------------
2. What customer relationship strategies should be practiced by the company
to achieve success in the market? ----------------------
[Some of the cases mentioned here are taken from the SCDL SLM Cases in CRM, ----------------------
authored by Vidyanand Nayak, Vishal Jadhav, Surya Ramdas and Shashank
Lohokare.] ----------------------
----------------------
----------------------
----------------------
----------------------
Case Studies 201

Notes
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Technology in CRM

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TECHNOLOGY IN CRM

(FOR PRIVATE CIRCULATION ONLY)

COURSE DESIGN AND REVIEW COMMITTEE

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

Copyright © 2016 Symbiosis Open Education Society

Unit No. TITLE Page No.

---------------------- 1.1 INTRODUCTION

1.3 NEED FOR CRM ----------------------

Many companies experience that requirement of CRM with regards to ----------------------

---------------------- Fig. 1.4: CRM Architecture

---------------------- (b) Departmental CRM

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

Match the following. ----------------------

i. Functional CRM a. Useful for all size of organisations ----------------------

1.5 TECHNOLOGY CONSIDERATIONS OF CRM ----------------------

The technology requirements of a CRM strategy include the following ----------------------

---------------------- 1.6 CRM TECHNOLOGY

---------------------- ●● Sales (Business with good knowledge management tools)

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

---------------------- 5. Back Office Customers 2. Sales force

---------------------- Figure 1.5: E -RM through customer life cycle

1.8 CUSTOMER LIFETIME VALUE (CLV) ----------------------

---------------------- Case Study

---------------------- 7. Scrub the data: Information about customers is more important as

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

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

---------------------- The result, evidently, is e-CRM.

---------------------- 2.2 MEANING AND SCOPE OF E-CRM

---------------------- With the help of e-CRM, unconnected customers can be communicated

Fig. 2.1 Evolution of CRM ----------------------

---------------------- Fig.2.2: The System of e-crm

---------------------- 6. E-collaboration: E-collaboration modules reduce call volume and

---------------------- 2.7 SIMILARITIES BETWEEN CRM AND E-CRM

---------------------- 2.8 DIFFERENCES BETWEEN CRM AND E-CRM

---------------------- (1) E-CRM assessment: It is very important to devise numerical measures

---------------------- ●● E-CRM: Electronic CRM concerns all forms of managing relationships

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

---------------------- 1. What is E-CRM? Explain its features.

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

Sales Force Automation (SFA) 35

---------------------- 3.1 INTRODUCTION

Sales Force Automation (SFA) 37

●● Number of deals in your pipeline (#) ----------------------

Sales Force Automation (SFA) 39

Sales Force Automation (SFA) 41

---------------------- Fig. 3.2: Phase-wise Process of SFA

---------------------- i. Phase 0- conceptualisation and initial screening of project SFA:

Sales Force Automation (SFA) 43

---------------------- 3.4 ESSENTIAL FACTORS FOR SUCCESSFUL

3.5 IMPORTANCE AND PURPOSE OF SFA PROGRAM ----------------------

Sales Force Automation (SFA) 45

Strategic advantages Strategic challenges ----------------------

Sales Force Automation (SFA) 47

---------------------- 1. Integrated event management tools

Sales Force Automation (SFA) 49

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

Sales Force Automation (SFA) 51

Enterprise Marketing Automation 53

---------------------- Companies also run marketing campaigns to increase their sales in a

Enterprise Marketing Automation 55

---------------------- 4. Partner management: It is a marketing campaign organisation joins

---------------------- 5. Response management: This gives flexibility in marketing campaigns

Enterprise Marketing Automation 57

a. Registration page with opt-in. ----------------------