You are on page 1of 34

CUSTOMER RELATIONSHIP MANAGEMENT (CRM

)

CUSTOMER RELATIONSHIP MANAGEMENT(CRM)

It is built on the simple and basic principle that relationships lead to Commitment and trust and hence create a wider Zone of tolerance leading to Customer Satisfaction and Loyalty.

Views of what is CRM?

1.It is database marketing emphasizing the promotional aspects of marketing linked to data base efforts.

.2. CRM focuses on one to one relationship with customers that integrates data base knowledge with long term customer retention programme. as a growth strategy.

.maintain and build up network with individual customers and to continuously strengthen the network for the mutual benefit of both sides. .3. individualized and value added contacts over a longer period of time.CRM is an integrated effort effort to identify .through interactive .

which is long term oriented ratehr than short term oriented. The focus of CRM is on cooperative and collaborative relationship between the firm and its customers. .4.

. retaining and partnering with selective customers to create superior value for the customer and the company. CRM is a comprehensive strategy and process of acquiring .5. CRM aims at “customer selectivity” as all customers are not equally profitable for the company to establish relationships with. Hence.

Big picture CRM is a business strategy to select and manage the most valuable customer relationships. .

 Increased competition  .Emergence of CRM Increased cost of acquiring new customers  Possibility of increased sales and profit from existing customers.

. Growing de-intermediation process in many industries due to the advent of sophisticated computer and telecommunication technology that allow producers to directly interact with end users.

 . Emergence of effective data base management systems.  Popularity of TQM which required very closer and meaningful interactions with customers (and suppliers)..

 .JIT and MRP had also underlined the importance of closer relationships with customers (and suppliers)  Growth of Services  Expectations can be managed better in an environment of relationships.

AREAS OF FOCUS  Sales    Customer service Marketing research IT/Marketing automation .

order size and order frequency etc. cost. . profit.  Direct and indirect personal interactions with customers. SALES –  provide information on customer and data regarding revenue.ROLE OF FUNCTIONS IN CRM 1.

CUSTOMER SERVICE  Customer service standards management  Complaint handling  Designing customer loyalty programme 3. analyze and interpret data from customer  Study competitors .2. MARKETING RESEARCH  study and collect .

IT/ MARKETING AUTOMATION  Decide on hardware and software for data collection.  . Decide on equipment and technology for customer communication and continuous interactions.4. storage and analysis.

3 COMPONENTS/PHASES OF CRM  OPERATIONAL  ANALYTICAL  COLLABORATIVE .

own or outsourced. . Operational System  Process  Standards of delivery  Structure. large or small or through Call centres etc.People.PHASES OF CRM.issues in implementation A.

 Technology&equipments . Data warehousing 2.B. Data analysis. Analytical System  Data base management system – 1. Data mining 3.

C. new facilities.)  Channel decision. Collaborative System  Customer Selection. Nurture. telephone. Automatic Complaint handling devise etc. invitations. mail. freebies etc) . month.stage) what( memberships . and Sack.  Contact programmes.discounts. add-ons.Invest. Re-engineer. e-mail/Web.for relationship based on CPA and LTV (also Categorize the above on the basis of Present benefits and Future potential benefits.When (date.Personal. Voice mail.

RELATIONSHIP MANAGEMENT AND GOVERNANCE 3.BUILDING A CRM SYSTEM 1. CUSTOMER RELATIONSHIP FORMATION PROCESSES 2.RELATIONSHIP ENHANCEMENT PROCESS . RELATIONAL PERFORMANCE EVALUATION 4.

It could be  increase profits  increase satisfaction  lower distribution costs  streamlining order processing .financial.) Decide on CRM Purpose. Objective could be . CRM FORMATION PROCESS (A.1. marketing. strategic or operational.

decreasing customer acquisition costs  balance sales/demand  retaining customers  improve marketing efficiencies  saves time _______  .

Identifying customers with whom relationships or contacts have to be established. Customer Portfolio c. Categorize the above into (on the basis of Present benefits and Future potential Benefits. Identifying the the characteristics of present customers b. d.(B) Select parties for establishing relationship a. .

One -to -one marketing.individual account based programmes. easy and quick availability etc. Improved after sales (3). business to business – problem solution.© CRM programmes Decide on Value proposition to be offered. . For mass market – feel proud as owner (2). (1). Eg.

RELATIONSHIP MANAGEMENT AND GOVERNANCE Decision issues  Role specification  team structure  process alignment  Communication methods  Stages of contact.  Employee motivation  Monitoring procedures.2. .

3.RELATIONAL PERFORMANCE EVALUATION A balanced score card consisting of any. many or all of the below could be developed for assessment of effectiveness of relationship programme  distribution costs  time saved  sales .

profit  Market share  Brand equity  customer satisfaction  .

4. RELATIONSHIP ENHANCEMENT PROCESS Based on  Fresh criteria and evaluation of LTV.  New competition  New technology  New channels  New contact programmes  New process  New People & Capability .

3.STEPS IN CRM IMPLEMENTATION 1.Develop a customer friendly/oriented Customer Service Manual/standard. .Map the .back stage process see it is interactive.Map the front stage process -see it is interactive. 2.

.Establish criteria for selecting „relationship‟ customers.Decide on Customer category based on Life time Value (LTV) calculation. Decide on Value Proposition. 5. 6. Customer Portfolio Analysis. 7.Profile the present customers.4.

8. enquiries.Decide on data base mgmt Technology/systems. Data collection/receiving technology (formal data collection.  Data warehousing Data mining  Data analysis  .

10.9. . 13. 11. Decide on contact programmes and stages of contact. Relationship satisfaction study. Establish loyalty programmes. Decide channels to communicate to customers. 12. Establish Complaint handling system with the help of the above.

SAP. Some CRM Packages: My SAP. Saleslogix.Oracle.Customer data integration. . Goldmine. e-CRM etc. Onyx. People soft.Some CRM solutions providers : Siebel. Vantive. End. Data analysis. Sales force automation. Servicesoft. Clarify. Oracle. iSeva.