Customer Relationship Management

Customer as a Stakeholder
‡ Customers= Stakeholders. ‡ As per management definition, everyone in an organization has customers. Right from HR, Support staff, Managers, CEO etc. Without customers business cannot exist.

Job security. truthful reporting ‡ Employees: rates of pay. truthful communication ‡ Trade Unions: quality. environmental protection. low unemployment. involvement. truthful communication ‡ Customers: value. equitable business opportunities ‡ Creditors : credit score. Staff protection. VAT. jobs . customer care. compensation. ethical products ‡ Suppliers : providers of products and services used in the end product for the customer. quality.Examples of a company's stakeholders Stakeholders Examples of interests ‡ Government : taxation. respect. liquidity ‡ Community: jobs.

Types of Stakeholders .

Types of stakeholders ‡ Internal Stakeholders . Suppliers.Primary Stakeholders are those that engage in the business. Society. Government. Shareholders and creditors) . Managers and Owners) ‡ External Stakeholders Secondary Stakeholders are those who .although they do engage in direct economic transactions with the business -. (For example Customers. (For example employees.

It is the value of entire stream of purchase that a customer would make over a lifetime of support. .Customer Lifetime Value Customer Lifetime Value(CLV) describes the net present value of the stream of future profits expected over the customer s lifetime purchases.

10  Customer lifetime value: 5000*10/100=Rs. Annual customer revenue: Rs5000  Average number of loyal years:20  Company profit margin: 10%=0.10.Customer Lifetime Value (CLV) Now suppose the company estimates average customer lifetime value as follows.000 .500 Rs.500*20 years=Rs.

web pages. email. .Tools for Measuring Customer Satisfaction ‡ Complaint & Suggestion System: A Customer centered organization makes it easy for its customers to deliver suggestions and complaints. ‡ Customer Satisfaction Survey: Companies measure customer satisfaction directly by conducting periodic service. They sent questionnaires or make telephone calls to a random sample of recent customers. Studies show that less than 5% of dissatisfied customers will complaint and most of them customers switch to other companies. Ex: Through Toll free numbers.

customer loss rate. Ex: Exist interview for customers. . ‡ Lost Customer Analysis: Company should contact customers who have stopped buying or who have switched to another supplier to learn why this happened.Tools for Measuring Customer Satisfaction ‡ Ghost Shopping: Companies can hire persons to act as potential buyers to report on strong & weak points experienced in buying the company s and competitors products. These Mystery shoppers can even test whether the company s sales personnel handle various situations well.

4. . A 5 % reduction in the customer defection rate can increase the profit by 25% to 85% . Acquiring new customer can cost 5 times more than the cost involved in satisfying & retaining the current customers. The customer profit rate will be increased over the life of the retained customer. 3.Need for Customer Retention Importance of Customer Retention: 1. 2. The Average company loses 10% of its customers in each year.

Less sensitive to price. The highly satisfied customer :      Stays longer period Buys more company products Talks more favorably about the company product.Benefits of Customer Retention: The key to consumer Retention is customer satisfaction. Pays less attention to compete the products. .

Customer Development Process Suspects Prospects First time customers Repeat customers Clients Members supporters partners .

24 hr toll free hot line ‡ Contact the complaining customer as quickly as possible ‡ Accept responsibility for the customer complaint ‡ Train the customer service people properly ‡ Resolve the complaints swiftly & create customer satisfaction.How to handle customer complaints ‡ Set up 7 day. .

‡ Listen & understand the customer needs. ‡ The company needs to estimate how much profit it losses when it losses customers. . ‡ The company must distinguish the causes of customer attrition & mange them better.Reducing customer Defection ‡ The company must define and measure its retentions & rate. ‡ The company needs to figure out how much it would cost to reduce the defection rate.

.CRM Technology ‡ CRM technology mandates that all interactions between the customer and the company are recorded and stored in a central information database. which can be shared with anyone in the company who contributes to processing the customer's transaction.

& Everything Else! Field Service Web Self Service Email Service Service Partners Point of Sale TeleSales Direct Sales Partner Sales Web Sales Sales . Products.Customer Information in One Place Accounting Manufacturing Purchasing HR Marketing eMail Marketing Web Marketing TeleTeleMarketing Partner Marketing Direct Marketing Service Phone Service Customers.

processing.Types of CRM Technology ‡ Operational CRM: This is the ERP-like segment of CRM and sales force automation. It is the communication center. ‡ Collaborative CRM: The collaborative CRM reaches across customer touch points. and reporting of customer data to a user and include data ware houses. marketing automation. the coordination network that provides the neural paths to the customer and his suppliers. extraction. It could mean communication channels such as the Web or email. ‡ Analytical CRM: Analytical CRM is the capture. . storage. interpretation.

Customer Database ‡ It is an organized collection of comprehensive information about individual customers & prospects for the purpose of building strong relationship. .

‡ Data warehouse ± Customer databases are organized into data warehouse. ± Data mining involves the use of sophisticates statistical & mathematical techniques such as cluster analysis. trend. fashions would help the marketing decisions. ‡ Data Mining ± It is the process of abstracting useful information from data warehouse. suppliers. predictive modeling & neural networking . resellers for the purpose of contacting. automatic interaction detection. transacting & building customer relationship.Database Marketing ‡ It is the process of building. The informations like customer preference. maintaining & using customer databases& other database like products.

‡ To deepen customer loyalty ‡ To reactivate customer purchase ‡ To avoid serious customer mistakes .Uses of Database ‡ To identify prospects ‡ To decide which customer should receive a particular offer.

favorite food and hobbies and etc . birthday. income and family members Customer Mailing lists Business Database Name Addresses Customer past purchases Past volumes Psychographics like Telephone numbers activities. gender. age.Customer Database Past purchases Demographic factors like age. interests and opinions Media graphics like preferred media and other useful information Prices and profits Buyer team member name.

‡ Reactive Marketing: The sales person sells the product and encourages the customer to call if she has a question. ‡ Proactive Marketing: The sales person contacts the customer from time to time with suggestions about improved / new product. ‡ Accountable Marketing: Sales person phones the customer to check whether the product is meeting expectations. ‡ Partnership Marketing: The Company works continuously with its large customers to improve their performance. comments / complaints. .CRM Building ‡ Basic Marketing : The sales person simply sells the product.

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