PRESENTED BY Section E Ira Nupur Saxena Prerna Dixit

What is CRM?
y Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer customer.
y CRM is a management approach a model that puts a customer

at the core of a company processes and practices. practices.
y CRM leverages cutting edge technology integrated strategic

planning up-close and personal marketing techniques and upOrganization development tools to build internal external relationships that increase profit margins and productivity within a company. company.

CRM Definition
y CRM is a cross functional process for achieving:
y A continuing dialogue with customers y Across all their contact and access points, with y Personalized treatment for the most valuable customers y To increase customer retention and the effectiveness of

marketing initiatives

CRM Components
y CRM¶s can be broken down into three key components.
Front Office Operations (sales, arketing, service etc)

Interaction Wit C sto ers (e ail, letters, p one, eetings, fax etc)

Operational

Collaborative

Analytical

En ance Co pany elations ip it C sto er

Evolution Of CRM

The Customer Relationship
y Target y Find y Understand y Attract y Qualify y Close y Learn from y Develop
Develop Attract Engage

Need For CRM
y To meet the changing expectations of customer due to:

(a) social and demographic factors. (b) economic situations. (c) educational standards. (d) competitors product (e) experience.
y Loyal customers are the source of most profits
y y y y

A relatively small percentage of customers may generate most of the profits. Marketing cost and efforts are less for existing customers. Dissatisfied customers tell others about their experiences. So do satisfied customers.

y Slowing the rate of defection grows the customer base. y Reducing costs (e.g. through self-service).

Customer Life Cycle Management
Customer Need Assessment and Acquisition

Customer Retention and Referrals for new Customers

Customer development Through Personalization and Customization

Customer Equity Leverage through Cross Selling and Up Selling

CRM Process Frame ork CRM Process Framework
ormation
Pur ose -increases e ectiveness -improve e iciency

anagement & Governance Team tructure ole peci ication Planning Process

Performance

Programs - ccount gmt - etention ktg. -Co-op greement - trategic Partnership

Process lignment onitoring Process Communication Employee otivation

elations i Performance - trategic - inancial - arketing ‡ etention ‡ atis action ‡ loyalty

Partners -Criteria -Process

Employee Training
Evolution -Enhancement -Improvement

Service Quality Model
Word - of- Mouth Communications Customer Personal Needs Ex ecte ervice ast Experience

Perceived ervice Service rovider ervice elivery Service quality specifications Management perceptions of Customer Expectations External Communications to Customers

Service Quality

aps

Gap 1 : ot knowing what customers expect Gap 2 : ot selecting the right service design standards Gap 3 : ot delivering to Service Standards Gap 4 : ot matching erformance to romises Gap 5 : erceived Service and Expected Service

Gap Analysis Grid
SATISFACTION I M High P O R T A Low N C E
Low
Attributes that need attention area where priorities should be focused

High
Current company strength

Low Priority

Unnecessary strengths possible over skill

The Key Stages of CRM
Stage Satisfactio Base State Re-active Culture
Meet customer ee s Respo to complai ts Mi imal evaluatio of customer service levels

Performa ce Base

Pro- ctive

Evaluate customer perceptio I e tify customer rete tio factors

Commitme t Base

Very Proctive

Evaluate multiple customer ee s Co ti uous i bou /outbou flow a fee back Co ti uous improveme t

Electronic Customer Relationship Management

Latest paradigm in the world of CRM

NEED OF e-CRM
y Due to the introduction of new technology y Due to globalization

(to satisfy the customers at global level) Sometimes customer itself prefer to do online purchasing.
y Basically e-CRM is concerned with attracting &

keeping economically valuable customers & eliminating less profitable ones.

Difference etween CRM And e-CRM
CRITERION CRM e-CRM

Customer Contacts

Traditional Means-Retail Store, Telephone Or Fax

Through Internet, - Mail, Wireless, Mobile And PDA Technologies Designed For Frontend As Well As bac end Applications Through RP, Data Mart And Data Warehouse Here, Browser Is The Customers Portal To eCRM

System Interface

Wor s With Bac end Application Through RP System

System

IT Requires PC Clients To Download Various Applets And Applications.

Contd..
CRITERION Customization and Personalization CRM Different People Require Different Information ut Personalized Views For Different Audience Are Not Possible Here System Is Designed Around Product And Job Functions. Here, Applications Are designed Around One Department Or usiness Unit. Implementation Is Longer And Costly. eCRM Personalized Views ased On Purchase Are Possible.

System Focus

System Is Designed Around The Customers Need. nterprise Wide Portals Are Designed And Not Limited To A Single Department. System Implementation Require Less Time And Cost.

Systems Maintenance And Modifications

Process of e-CRM

Benefits Of e-CRM
y Convenience y Improvement in overall quality of customer experience y Increased profitability

According to Anderson consulting a typical $1b company can gain up to $130 million through ECRM. Another study shows that 10% gain in repeat customers can add about 10% in the company¶s profit.
y Increased customer loyalty

It include personalization concept of time saving. collaborative filtering personalization s/w

y More effective marketing. y Improved customer service and support.

Through ECRM right tools helps sending right orders to right customers at right time.
y Greater efficiency and cost reduction.

Pitfalls
‡ Huge money is required to implement ECRM. ‡ Highly knowledge requiring process. ‡ Results are not according to expectations. ‡ Sales and Marketing are reluctant to adopt new automated

CRM system.

e-CRM Implementation Steps

Categorizing Customers
H i g h
*You have no choice but to handle them very carefully. Will consume energy. #Think of innovate ways of getting them on your side, but the cost of acquisition must be controlled *Cultivate relationship. relationship. Spend energy Go out of your way # Think of strategies to move them away from competition Will consume disproportionately high energy * Very cautious decision needed ReRe-e amine business plan strategy. strategy. Evaluate that your loss does not become nightmare for you # Needs in-depth strategic review inas acquisition alone and dissatisfaction later could be more harmful

L o w

* Focus on short term profitability Spend minimum energy to meet your objectives # Don¶t pursue Use opportunity as it comes Short term acquisition should not affect Long term image

Low
rofitability otential * Existing Customer # Potential Customers

High

Economics Of Customer Retention

³Winning back a lost customer can cost up to 50-100 times as much as keeping a current one satisfied.´ Rob Yanker, Partner, McKinsey & Company

Understanding your customer is key to retention ..

Determinants Of Customer Added Value
Image Value Product Value Services Value Monetary Price Time cost Energy cost Psychic cost Total customer cost Total customer value Customer delivered value

Myths of CRM
‡ CRM is rimarily about Technology ‡ Successful CRM projects are managed by IT ‡ ³Executive buy-in is the key´ ‡ ³We need to roll this out across the enterprise ASA ´ ‡ ³CRM systems are intuitive«. Users will only need some initial hand holding.´

CRM: Not A Panacea
y Not feasible for every market and customers y customers don t want to be committed to every brand/relationship y Not feasible for low-involvement, habitual purchasing in 2 or 2C y Some markets/customers may have low personalization potential . y Shopping agents used by consumers undercut the idea of relp s. y The organizational capability to produce a

seamless/personalized experience is more difficult to master than a transactional approach. service is differentiated.

y Lower tier customers may become disaffected when they find out

CRM: Not A Panacea
y ³ ast history with other management fads and mounting evidence from the field suggests that most firms will fail to gain even a fleeting advantage from their CRM initiatives. Many will be purely defensive, having been initiated to keep up with the leaders or to narrow disadvantages. Meanwhile, firms such as Oracle, Siebel and the eppers and Rogers Group are busily diffusing best practices, and hundreds of software vendors are making their latest database, call center, and sales force automation software widely available and economical to use, thus ensuring that all competitors are equally equipped.´ -- George Day

Customer atisfactio is A Movi g Target

References
y Websites:

- ephany.com - google.com