Customer Relationship

Management

From:
Dr. Harjit Singh

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About CRM

 CRM is basically for developing long lasting

relationship with a customer.
 This maximizes profits, since it is cheaper to
retain a current customer than it is to find a
new one.
 It also consists of the processes a company
uses to track and organize its contacts with
its current and prospective customers…..

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Why CRM?
 It typically costs 5-10 times as much to acquire a
new customer as it does to retain an existing one.
 “Some companies can boost profits by almost
100% by retaining just 5% more of their
customers.” Harvard Business Review (Reicheld & Sasser)
 Most companies lose 50% of their customers in
5 years (Harvard University)
 70% of repeat purchases are made out of
indifference to the seller, NOT loyalty….

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Determinants of CRM

1. Trust and
2. Value it offers…

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Determinants of CRM
 In addition to trust and value, salespeople must:

 Understand customer needs and problems;

 Meet their commitments;
 Provide superior after sales support;
 Make sure that the customer is always told the truth;
and
 Have a passionate interest in establishing and
retaining a long- term relationship…….

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CRM Objectives

1. To simplify marketing and sales process

2. To make call centers more efficient
3. To provide better customer service
4. To discover new customers and increase
customer revenue
5. To cross sell products more effectively…

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CRM Benefits

1. Develop better communication channels

2. Collect customer related data
3. Create detailed profiles of individual customers
4. Increased customer satisfaction
5. Access to customer account history, order
information, and customer information at all touch
points
6. Identify new selling opportunities
7. Increased market share and profit margin
8. Increased revenues Contd.

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CRM Benefits Contd..

9. More effective reach and marketing

10. Improved customer service and support
11. Improved response time to customer requests for
information
12. Enhanced customer loyalty
13. Improved ability to meet customer requirements
14. Improved quality communication and networking
15. Reduced costs of buying and using product and
services
16. Better stand against global competition…….

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 Role of salespeople in relationship
building
In identifying potential customers and their needs;
By presenting true image of the company
By offering what customers need ; not what company wants to sell
By handling customers’ complaints
By informing company about customers’ new demands, liking etc

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Types of CRM

When it comes to application of CRM, three

broad classifications are possible. They are:
1. Operational CRM

2. Analytical CRM

3. Collaborative CRM….

4. http://www.tutorial-
reports.com/software/crm/operational.php

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 CRM Strategies
1. Customer Acquisition
2. Customer Retention
 Retain and expand your business and relationships with your
customers through up-selling, cross-selling and servicing.
3. Customer Loyalty
 Offer programs to ensure that your customers happily buy what you
offer only from you.
4. Customer Evangelism
Enable loyal customers to become a volunteer sales force.
5. Cost Reduction
 Reduce costs related to marketing, sales, customer service and
support.
6. Improve Productivity
7. Enhance your e-business strategies…...

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 CRM Goals, Benefits and
Value
CRM Increases
 Internal: Revenue, Margins, Profitability, Results, ROI,
ROA, Conversion Rates, Knowledge, Strategy, Efficiency,
Effectiveness, Creativity, Products, Innovation, Morale,
Customer Focus…
 External: Customer Acquisition, Up-selling, Cross-selling,
Personalization, Interaction, Feedback, Service,
Satisfaction, Loyalty, Evangelism, Relationships, Value,
Understanding…
CRM Decreases
 Internal: Costs, Time, Errors, Employee Defection,
Frustration, Fear, Uncertainty, Doubt…
 External: Customer Issues, Complaints, Attrition,
Dissatisfaction…

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 Implementation of CRM
 To implement CRM, following factors need to be given due
consideration:
1. Easy interaction between customers and company,
2. Easy access to information about company like content of
customization, advantages of the company, benefits doled
out to the customers.
3. Abundant supply of customer information
4. Customers' information should be updated always
5. Have cordial relationship with other companies targeting the
same customer segment…..

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CRM for Whom?
 Companies that do not have repeat business
from customers will not gain much from CRM.
 Companies having walk-in customers not
providing multiple sales and service channels
will not benefit much from CRM.
 Again if maintaining long term relationship
with customer is not a priority for the
company, it will be wise not to invest in
CRM…..

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CRM for Whom?

 Then who benefits? The more the channels

to access customers and more the number of
touch points with customers, greater is the
need for CRM installation. Companies in
 banking
 finance
 insurance
 airlines and hotels
 telecommunications and health care ….

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Technical Functionalities
 Multiple communication channel - This is one
major factor of CRM, which enables business to be
responsive to the needs and desires of its
customers. The various communication channels
are:
1. Web channel - This supports a number of customer service
and customer account management activities. Customers can
verify and browse product descriptions and also report problems
through this channel.
2. Fax channel - Company can use this channel to generate
fax that is sent directly to customers, while customers use this to
submit requests for information and contact.
3. Interactive TV channel - Cable TV companies interact with
customers through this channel.

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CRM Failure Reasons
 Absence of a clear transitional process i.e.. a step by step awareness, a clear
funding strategy, and attainable goals is a must rather than introducing
sweeping changes all at once.
 The main focus of business is on products' sale and geographical segmentation
of market but not on customer segments.
 Key performance measurements are not tracked. Data integration,
interdepartmental communication, and good supervision of these processes are
critical to success.
 Weak functional organization of a company can cause customer and employees'
confusion.
 Short term interests are often given importance. Ethics must be given priority
over financial gains. A customer focussed company must be prepared to make
recommendations in favor of customers even at the cost of short term interests
of the company.
 The financial measures of success are often inadequate. In a customer centric
model the branding, research, and development must align with development,
compensation, budgeting, and incentive policies.
 Other new technology and solutions are introduced without implementing the
necessary framework.

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Future of CRM

 In short, the future of CRM is bright indeed.

CRM will become deeply embedded as a
business strategy for most companies.
 Technology will evolve while technical and
organizational challenges are overcome.
 Much will change in the years ahead, but one
thing is certain: CRM is a journey, not a
destination, and customers have their hands
on the road map and the steering wheel.
 The rest is up to you. Are you ready?
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