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CRM

Evolution
Initially, there were Door-to-Door sales forces to approach the
customers.
Then, Mass marketing replaced the intimacy of a direct sales
force.
Later, Targeted marketing evolved. Use of direct mail and
telemarketing.
Latest is Customer Relationship Management (CRM), the next
step in Evolution. A concept supported by latest technologies.

EVOLUTION OF CRM
1980S
Focus on Data Mining and
Direct Marketing was the
outcome
1990S
Focus on loyalty programs
2000S+

DATABASE
MARKETING
RELATIONSHIP
MARKETING
CUSTOMER
RELATIONSHIP
MARKETING
Defining CRM
CRM is about how you attract, develop and retain
customer.

Customer Focus; Customer acquisition, Customer
research, Customer loyalty, Customer development,
Customer satisfaction, Customer value,

What is CRM all about..
CRM promises to help companies to get to know their
customers.

CRM helps an organization to understand which
customer to retain and which ones they should be willing
to lose- and why?

Overall helps in targeting, spending money wisely,
saving time & customer satisfaction.

CRM is how to differentiate customer treatment
according to individual preferences.
Why CRM..
Customers are fickle and becoming more cynical.

We no longer believe what we read and see.

Convergence of markets.

Competition- leader or follower?

Customer loyalty at any cost.
GOALS OF CRM
Provide better customer service
Cross sell products more effectively
Helps sales staff
Simplify marketing and sales processes
Discover new customers and new customer needs
Increase customer revenue
Defining CRM
Dr. Robert Shaw (as cited in Customer
Relationship Management, 2001) provides a
more thorough definition of CRM.

Customer relationship management is an
interactive process for achieving the optimum
balance between corporate investments and the
satisfaction of customer needs to generate the
maximum profit.

tsnethra@gmail.com
NIFT Bangalore
Defining CRM
Measuring both inputs across all functions
including marketing, sales and service costs
and outputs in terms of customer revenue,
profit and value.

Acquiring and continuously updating knowledge
and customer needs, motivation and behavior
over the lifetime of the relationship.

tsnethra@gmail.com
NIFT Bangalore
Defining CRM
Applying customer knowledge to continuously
improve performance through a process of
learning from successes and failures.

Integrating the activities of marketing, sales
and service to achieve a common goal.
tsnethra@gmail.com
NIFT Bangalore
CRM: A Customer-centric business strategy
A Customer-centric business strategy which
Focuses on Managing and optimizing entire
customer life cycle.
Demand re-engineering of work processes
with customer in focus.
It consists of 3 phases
Planning Phase
Assessment Phase
Execution Phase


In-depth analysis of
customer behavior and
attributes.

Applying of the achieved
knowledge in the
formulation of marketing
campaigns, strategies and
treatment plans.
More than just a set of
technologies it is a
process.
tsnethra@gmail.com
NIFT Bangalore
Benefits of CRM
Company existence quest for profit.

Three ways to increase the profitability of the customer base
Acquire more customers
Optimize the value of the existing customers
Retain the right customers longer

Acquiring new customer cost 5-10 times more that retaining the
existing one

Loyal customers will will buy more and are willing to pay premium
prices

20/80 rule 20% of the customers generate 80% of the revenue
Continued..
Service leaders enjoy the following advantage over their low-
service competitors:
They grow twice as fast.
They experience a 6% annual growth vs. a 1% share loss (they
take customers away from their competitors).
They can charge 10% more from their products and still take
customers away.
They enjoy 12% vs. 1% average return on sales.
Industry statistics show that 68% of customers walk away
because of poor customer service.
tsnethra@gmail.com
NIFT Bangalore
Evolution of CRM
Mass Marketing

Target Marketing

CRM
Mass Marketing
Replaced the intimacy of direct sales
One way communication
Wide geographic distribution
Lost is the personal touch with the
customer
Mass marketing was enabled trough the
technological improvements in TV, radio,
printed press
Target Marketing
Direct mail, telemarketing
Receiving customer response
Lack of specific data, average response rate
Islands of information

CRM
Next evolutionary step, back to intimacy
Customer loyalty build on:
Understanding of customers wants, needs and values
Interactivity with the customer in the way customer prefer
Evolution of Customer Relation
over time
Customer relationship management is an
attempt to modify customer behavior over
time and strengthen the bond between the
customer and the company.

The key to CRM is identifying what creates
value for the customer and then delivering it
(Newell, 2000).
Evolution of customer relation over time
V
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Evolution of customer relation over time
Customer
Acquisition
Acquire the right
customers with
high potential
value
Customer
Development
Cross- and up-sell
by offering the
right products at
the right time
Customer
Retention
Retain profitable
customers and
increase their
long-term value
CRM Cycle
Assess
Who are the customers demographics and lifestyle?
Where do they live?
What are they worth? What is their lifetime value potential?
What and how do they buy?
How can they be reached? How have they responded to
promotions in the past and trough which channels they
prefer to be reached?
Plan
Execute
Execution and management of the marketing campaigns and
customer treatment plans.
Data gathering.
CRM Critical Success Factors
Architecture
Data warehouse
Data structure and architecture 80% of the
service cost


Analysis,
Profiling
Customer Interaction
Sales force automation system.
Call center
The Internet

Analysis,
Profiling
Customer Interaction
Sales force automation system.
Call center
The Internet

Planning Phase
Plan to approach the customers
Plan for making new campaigns
This phase includes
Marketing tools
Various Softwares
Marketing & Sales personnel are involved in this
phase


Assessment Phase
Select customer base for analysis
Analyze customer requirements
This phase includes technologies like
Data warehousing
Data Mining
Online analytical processing (OLAP)
A certified personnel sets up the CRM package
while a business analyst analyzes the data


Execution Phase
Customer interaction
Executes campaigns
Track customer feedback
This phase uses
Internet
Call centers
Direct mails etc.



Technology behind Assessment Phase
Data
Mining
Data
Warehouse
OLAP
Server
Warehouse
containing
Customer data.
Multidimensional Structures
to facilitate better and fast
analysis of data.
Integrates with Data Warehouse &
OLAP to implement intelligent
algorithms to discover patterns.
User analyzes these
patterns to take decisions
suitable for his business.
DATA WAREHOUSING
A data warehouse is a copy of transactional data.
Data is specifically structured for querying and reporting
A data warehouse can be a relational, multidimensional
hierarchical database or a flat file.
DISTINGUISHABLE FEATURES
Contains historical data
No frequent updates
Data stored is subject oriented
TERMINOLOGY
Data Mart- Contains data about a specific subject.
Metadata- Describes the data stored in data warehouse.
Data Cleansing- The process of ensuring that all values in a dataset
are consistent and correctly recorded
ETL- Extraction, Transformation and Loading of Data.

A Typical Data Warehouse
Data Warehouse
Detailed Data
Data
Mart
Data
Mart
Data
Mart
Summarized Data
Meta Data
Data about data.
Facilitates in firing
queries on
detailed data.
Data marts contain
data specific to a
subject.
customer campaign sales
tsnethra@gmail.com
NIFT Bangalore
OLAP
Online analytical processing is the name given to database and
user interface tools that allow to quickly navigate within data.

Provides a mechanism to store the data in multidimensional
cubes.
DISTINGUISHABLE FEATURES
Multidimensional Cubes- To store data which are multidimensional in
nature.

Calculation Intensive- Allows complex calculations on database.

tsnethra@gmail.com
NIFT Bangalore
CRM-Related Terms
eCRM
CRM that is Web-based
ECRM
Enterprise CRM
PRM
Partner relationship management
cCRM
Collaborative CRM
SRM
Supplier relationship management

tsnethra@gmail.com
NIFT Bangalore
Reference books
CRM, Seth, Parvatiyar & Shainesh
CRM Briefcase book; Kristen Anderson & Carol Kerr
CRM; Paul Greenberg
CRM; J.N.Seth

Thank you