An Introduction to Customer Relationship Management

Session Objectives:
To Discuss:

‡ The need of CRM/ Why CRM ‡ Concept and understanding of CRM ‡ What Motivates Companies to Adopt CRM Strategies ‡ Determinants of CRM ‡ Introducing CRM Strategy

What Motivates Companies to Adopt CRM Strategies: ‡ Competition ‡ Consumer Expectation ‡ Technology ‡ Diminishing impact of advertising .

it could also be a government or non-financial entity). it is a µcontact centre¶ for managing relationship with consumer through phone. . e-mal or web ‡Others view as relationship marketing and ‡ Some considers it as µpost sales¶ management of customers CRM is all this and more. CRM aims to look at all aspects that will enable an organization¶s capability to manage and nurture its 1:1 relationship with its consumers (an organization is not necessarily a company.What is Customer Relationship Management? Different things to different people: ‡ An IT capability for facilitating relationship management ‡ To some people.

Customer Relationship Management CRM is about creating a competitive advantage by being the best at understanding. communicating. delivering and developing existing customer relationships in addition to creating and keeping new customers. .

The resulting information is then used to create and automate a variety of processes that identify and describe the valuable customers. Most important. stay close to. modern CRM systems enable you to capture information surrounding customer interactions and integrate it with every customer-related function and data point.What is CRM? CRM is a comprehensive way to manage the relationship with your customers ² including potential customers ² for long-lasting and mutual benefit. . these processes help you personalize new and ongoing interactions to cost-effectively acquire. and retain these "good" customers. More specifically.

2000) CRM is ³an IT enhanced value process.What is Customer Relationship Management (CRM)? CRM is ³the development and maintenance of mutually beneficial long-term relationships with strategically significant customers´ (Buttle. which identifies. (Plakoyiannaki and Tzokas. 2001) . at a profit to well identified existing and potential customers´. develops. integrates and focuses the various competencies of the firm to the µvoice¶ of the customer in order to deliver long-term superior customer value.

Some Definitions of CRM: ‡ Definition by Gartner CRM as a business strategy designed to optimize CRM is a business strategy that applies to every organization. revenue and customer satisfaction. . ‡ Definition by Parvatiyar and Sheth CRM is a competitive strategy and process of acquiring . It means working with customers such that they receive great service and are motivated to return again and again to do more business with the company. ‡ Definition by Bob Thompson.CRM Guru. reacting and partnering with selective customers to create superior value for the company and the customer. ‡ Definition by PwC Consulting CRM is a business strategy that aims to understand / appreciate manage and personalize the needs of an organization¶s current and potential customers.

. 2000 Customer Relationship Management is the establishment. Common features in the above definitions: ‡ CRM is about strategy ‡ CRM.Some Definitions of CRM Cont« Definition by CRM (UK) Ltd. technology and business processes.The Customer Orientation . development maintenance and optimization of a long term mutually valuable relationship between consumer and organization. people. Successful CRM focuses on understanding the needs and desires of the consumer and is achieved by placing these at the heart of the business by integrating them with the organization¶s strategy.

Is CRM ? ‡ A Strategy ‡ A Process ‡ A Software. sales and customer service processes ‡ A Philosophy ‡ A Project ‡ Call Centre Support .implementing marketing.

CRM is Not: CRM is not: ‡ ‡ ‡ ‡ Piece of software solution Sales Tactics Call centre services Relationship building by softer attributes of a contact person ‡ Waiving (a portion or full) of the customers¶ bill .

. ‡Provide superior after sales support.Determinants of CRM ‡Understand customer needs and problems. ‡Make sure that the customer is always told the truth (must be honest). have long-term perspective). and ‡Have a passionate interest in establishing and retaining a longterm relationship (e.. ‡Meet their commitments.g.

.Some Issues Relating to Marketing and CRM ‡ Customer receives value not only from purchase but from each exchange between the customer and provider ‡ The second concept is customer value creation Competitive advantage is not based exclusively on price but also on the ability of the provider to help customers create value for themselves ‡ Third relates to the providers responsibility The company can build stronger relationships with its customers only if it takes the responsibility for developing these relationships.

People. the strategic direction moves the two enablers: people and technology. In turn.Designing a CRM Strategy A successful CRM strategy will address 4 key areas of the business: Strategy. The interaction between these elements are the business processes that sit behind successful CRM. Technology and Processes And the combination of these elements the Cog Wheel Process The handle of the cogwheel is the corporate strategy that gives ³direction´ to the company. .


. in this case holding the handle.The D4 company analysis: the 4 step process ‡ Define the existing CRM Processes within the company ‡ Determine the perceptions of how the company manages their customers relationships ‡ Design the ideal CRM solutions relative to the company or industry ‡ Deliver the strategy for the implementations of the recommendations based on the findings The outcome of the D4 analysis is: ‡ The development of a tailored and specific strategy that build on the organization¶s existing CRM practices and position in the marketplace. ‡ Allows organization to prioritize the actions to be taken for placing CRM activities at the heart of the business. ‡ One significant outcome of D4 analysis is to reveal who or what is driving the organization¶s current strategy or .

‡ Personalization: is about customer becoming a co-creator of the content of their experience.The concept of Customization and Personalization ‡ Customization: Customization will assume that manufacturer will design a product to suit customer needs. .






Then Maximizing market share and revenue was the objective ‡ Quality standards were determined internally ‡ Product and service were separate entities ‡ Only marketing people were concerned with the customer ‡ Marketing management was an independent function The Old ‡ Products were developed to enter new market ‡ Delivery systems were used to make purchase easier ‡ Relationships were less important than sales Now Maximizing customers value is the primary objective ‡ Quality standards are determined by the customer ‡ Products are developed in service for customization ‡ Everyone in the company is concerned with the customer ‡ Marketing is managed by cross-functional teams The New ‡ Products are developed to meet customers need ‡ Delivery is used to reinforce the value proposition ‡ Relationships are built to offer lifetime customer value .

The Nine Truths of Relationship Marketing ‡ Customers are no longer loyal ‡ Customers do not really want a relationship but companies do ‡ Customers want information ‡ Customers not only want to be thanked for their patronage. they expect it ‡ Customers control the selling process ‡ The lifetime value of a customer is not relevant ‡ Do not overcomplicate the programme ‡ Keep reporting simple and focused on the customer ‡ What if? Ask it often experiment every chance you get and do not call it testing .

Customer touchpoints classification: ‡ Face to face touchpoints: Sales/service/channels/events/stores ‡ Database driven touchpoints: Telephone/e-mails/SMS/Fax ‡ Mass Media: Advertising/PR/Website . and involves the areas where direct customer contact occurs. Operational CRM enables and streamlines communication to and from the customer.Types of CRM ‡ Proactive versus Reactive: Companies attempting Proactive CRM are generally those which are increasing the level of personalization and are practicing one to one marketing Reactive CRM is where attempts to distinguish and describe the scope of operational. Collaborative and Analytical CRM: Operational CRM: Also known as front office CRM. These interactions are referred to as Customer touchpoints. collaborative and analytical CRM ‡ Operational.

agents. It involves understanding the customer activities that occurred in the front office. and retailers. The mandate of collaborative CRM is to manage various partners of the company be it business partners. 2002) Analytical CRM: Also known as back office or strategic CRM. (Dyche. It involves analyzing large amount of data through data mining and other methods and feeding the result (knowledge gained) back to operational CRM.Types of CRM cont« Collaborative CRM: Collaborative CRM as a specific functionality that enables a two way dialog between a company and its customers through a variety of channels to facilitate and improve the quality of customer interactions. brokers distributors. .



Linking Profitability and Loyalty
‡ High profitability and short term customers (butterflies) ‡ Low profitability and short-term customers (Strangers) ‡ Low profitability but long-term customers (Barnacles) ‡ High profitability and long-term customers (True friends)

Customer Value
‡ Customer¶s value is the customers perception of what outcome he expects in a specific use situation with the help of a product or service offering in order to accomplish a desired purpose / goal.

Five new approaches to customer value
‡ The total value of a customer¶s relationship with the company; ‡ The potential value of the relationship; ‡ The profitability of the relationship; ‡ The insights the customer can provide to the company; ‡ The influence a customer can exercise over other customers.

. and the environment. opaque ‡ Customers differ in who they are. ‡ Value is contextual and context has three dimensions: the end user.Few fundamental lessons on customer value: ‡ Value is customer defined. ‡ Value is relative: customer always evaluate value relative to available alternatives. ‡ Value is multidimensional ‡ Value is a trade-off: Trade-off between the total benefits that customers get against the total costs they pay. what outcomes (value in use) they seek and therefore what value they place on different benefits of an offering. the end-use situation.

Types of Customer Value ‡ Economic value ‡ Functional Value ‡ Psychological Value .




how they can pay for their purchases. how they want them shipped.Other types of Customer Value ‡ Choice based value: Choices created in how customers: deal with the company. and how they receive information. ‡ Employee based value ‡ Information value ‡ Association value ‡ Relationship value ‡ Customer unique value ‡ Product for price value ‡ Convenience value ‡ Experience Value .


‡ The firm¶s cost of acquiring.Dimensions of Customer Lifetime Value (CLTV) ‡ The duration of the µcustomer lifetime¶ ‡ The firms shares of wallet among its customers: what portions of the customer¶s purchases in the firm¶s offering categories are captured by the firm as opposed to its competitors ‡ The firm¶s success in terms of frequency of up and cross-selling to its customers so as to increase the levels and monetary value of their purchases over time. serving and retaining its customers. .

‡ Constant rate of retention and discount not feasible. . ‡ It should link with the loyalty programmes.What would make a successful CLTV Method ‡ Connect with overall strategy of the business. ‡ Truly customized CLTV for highly volatile sectors such as financial services and online companies. ‡ Dynamics of the different sectors must be incorporated. ‡ Risk rate should also be associated. ‡ Referrals must be part of the component of the CLTV. ‡ It should link with the loyalty that the company seeks to bring in.

CLTV Calculations (Simple calculation) ‡ Simply put the LTV of any given customer can be expressed as: LTV = Total Revenues ± (Fixed Costs + Variable Costs) Revenue is fairly straightforward to measure : one simply adds up the total of all of the orders placed with the organization .

Some important points regarding CLTV ‡ Identify those customers who are most profitable and focus retention efforts on them. ‡ Calculate which products or product combinations are contributing most to profit. . ‡ Find more customers who match the profile of the most profitable customers.

then the average customer lifetime will be 10 years. .Other Calculations of CLV ‡ CLV = Average transaction vale * Frequency of purchase * Customer life expectancy Link between the customer retention rate and the average customer lifetime. Average customer lifetime (years) = 1/ 1-retention rate Example: if the customer retention rate is 90 % per annum (meaning that the company lose 10 % of the existing customer base each year).

CLTV using Referrals ‡ CLTV = D [(Rt-Ct) + Rf (Ac-Acr)] / (1+r) ± Ac) Where t = Year Rf = number of referrals generated by customer each year n = length of customer relationship Ac = Full acquisition costs (for the new customer) D = customer retention rate Acr = reduced acquisition costs (for existing customers) Rt = Revenues earned from customer in year t r = discount rate Ct = Cost of serving customer in year t .

i = the interest rate AC = the acquisition cost .CLTV calculation without referrals ‡ CLV = { summation (Ma-Ca) r(a-1)/ (1+i)a} ±AC N/a-1 Where N = the number of years over which the relationship is calculated. Ma = the margin the customer generates. r(a-1) is the survival ratefor year a. r = the retention rate. Ca = the cost of marketing communications or promotions targeted to the customer in year a.

r = retention rate.The other approach of CLTV ‡ CLTV = m (r/1+i-r) Where m = margin or contribution for each customer in a given time period. i = discount rate. and Factor r/(1+i-r) is the margin multiple .

Using CLV to segment customers .

´ . and expense you can afford to invest to acquire that client in the first place.³Until you identify and understand exactly how much combined profit a client represents to your business. you can¶t begin to know how much time. for the life of the relationship. effort.

Graduated account management strategy ‡ Is based on the existing and future potential value of customers. medium sized businesses through telephone based account and small customers through a call centre. . ‡ Many B to B companies have implemented a graduated approach where important commercial customers are served by key account managers.

‡ This strategy may be driven by a new channel¶s potential to serve more lucrative (profitable) customer segments or the opportunities to reduce costs or increase customer value. For instance. . low cost Airline easy jet. sold tickets solely through a call centre but is now encouraging customers to purchase its tickets through the internet.Channel migrator strategy ‡ Concerned with the customers who migrate from one channel to another.

‡ Maximize future purchase behavior by managing the predictors. distributors and end users.Customer Value Management Customer value management (By Khalid & Scott) is an approach to: ‡ Understand what causes customer purchase and repurchase behavior. It is the process that enables businesses to determine how well they address the expectations and needs of prospective and direct customers. . ‡ Predict the future purchase behavior of customers and potential customers. relative to the competition.


. Also used by call centres to help identify the caller¶s needs and prepare the live customer service representative by obtaining information from the caller. flight schedules. purchasing airline tickets. ‡ Is a software application that allows a telephone caller to select options (pre-recorded voice prompts) from a voice menu and are available 24 hours. ‡ IVR systems also enables users to retrieve information including bank balances. telephone banking obtaining balance enquiries.Contact Centre Technology ‡ Interactive voice response: Generally used by service organizations for order placement. placing simple orders and say. product details. ‡ A technology that automates interaction with telephone callers ‡ If the caller is just seeking basic information. buying tickets IVR system can quickly and effectively help the caller while eliminating long waits for a live customer service representative. order status and much more from any telephone.

. IVR applications can be developed by an enterprise or by a IVR development company. ‡ IVR Applications: IVR applications are the programmes that control and respond to calls on the IVR platform. and also transfer callers to other phones. IVR applications direct the IVR platform to prompt callers gather input.IVR Platforms ‡ IVR platforms: Are the server and operating system hardware and software platforms on which IVR solutions run.

. and call centre Automatic Call Distributors(ACDs) ‡ IVR Experts: IVR experts includes employees and consultants who know the IVR technology and its challenges. call switching equipments.IVR Platforms ‡ Back-end servers: Back end servers are existing enterprise servers on which the required customer or corporate data can be found. ‡ Telephony infrastructure: includes telephone lines.

Considerations for an organization when buying an IVR ‡ Hosted version versus installed version: There may be two choices.sometimes IVR can be installed on your own network and sometimes it may be hosted elsewhere by the IVR company. . how many menus and messages you can have. Hosted applications give the organization a cost benefit whereas the installed versions are more customized. ‡ Capacity:IVR capacity can be measured by how many phone lines it can handle simultaneously.

Considerations for an organization when buying an IVR ‡ Specialty: It helps to find an IVR that is specific to or has special experience in your industry/ business or particular need. and other software packages already running in your organization. ‡ Training and support ‡ Quality of Website . ‡ Demo ‡ Integration and implementation: an important consideration for any IVR is how well the IVR will integrate with your current network. operating systems.

.more commonly referred to as DTMF an industry standard for many IVR system. ‡ The second type is speech recognition technology and it allows callers to speak their choice rather than using the telephone keypad. a conversational IVR.Considerations for an organization when buying an IVR ‡ DTMF IVR and Speech Recognition IVR: DTMF system incorporates dual tone multi frequency technology. It allows callers to navigate system menus by pressing a key on a touchtone telephone. providing customers a user friendly and natural experience. DTMF is a signal to the IVR system that a caller generates when he presses a telephone's touch key.

Speech Recognition for Customer Service ‡ Speech recognition is often used in call centres to improve customer service operations and specially used for self-service environment. Speech recognition allows computers to recognize natural human voice and translate it into text or actions based on the flow of a call. ‡ Callers can make requests in their own voice and complete self-service transactions in an easier and user-friendly way. .

The benefits of voice recognition ‡ ‡ ‡ ‡ Customer satisfaction Cost savings Improved productivity Revenue generation .

‡ Whether the project utilizes in-house or out sourced resources should be a key consideration for deployment of solution. ‡ Select a vendor with a strong system of expert partners and proven leadership and experience.Key considerations for deploying speech recognition ‡ The organization should evaluate various available options to it and determine which application will deliver the greatest customer and business benefit. ‡ The organization should be clear about their customer communication policy. ‡ Decision regarding the various standards used in the voice recognition technology including various software. .

Computer telephony integration(CTI) ‡ By integrating the telephone and computer systems you can save the operating costs and improve companies efficiency. . ‡ Computer telephony integration enables integration of both the computer as well as telephone to enhance the customer experience by improving operational efficiency.

‡ Manage voice or video conferences. also called hot transfer. . ‡ Intelligent transfer of data to another agent with the caller¶s detail on desktop .CTI applications can enhance the agent¶s efficiency by: ‡ Screen pops in which caller information and associated files can be given to the agent along with the telephone call. ‡ Receive fax messages and route them to appropriate fax machine. This also helps in the authentication of the caller. Here Automatic call distribution helps. ‡ Intelligent routing which helps the caller by routing the call to an agent as per pre-defined routing logic like skill based . ‡ Use in for outbound calling such as tele -marketing. language based or product based.

Administering telephone system using CTI ‡ ‡ ‡ ‡ ‡ Make/ answer calls Hold and transfer calls Setup conference calls Pickup calls from another extension Initiate calls by name from a personal directory ‡ Identify the caller on ±screen .

. E-mail. whether by telephone. your company¶s contacts and all communications with them. with unified messaging you can setup an electronic messaging system for a company creating a single interface with one directory and one storage location for all message types. fax or direct e-mail are integrated into one record which is readily available. such as Fax .Unified messaging ‡ With CTI. and voice mail to manage them from a single point. Hence. one can also bring together other office communication tools.

Benefits of CTI ‡ Improved customer service ‡ Greater efficiency ‡ Flexibility CTI Solution: Basic Solutions Advanced Soultions .

certain solutions will also work with other devices.Key considerations while selecting a CTI solution for organization ‡ Interactive voice recognition ‡ Integrated Fax Server: allows user to fax to and from every PC giving a separate fax number but requiring no additional line. internet can be used for all incoming and outgoing calls and save significantly call charges. ‡ Back-office integration: the organization must choose a solution which matches up with its existing software. ‡ Versatility: if appropriate for business. ‡ Cost . ‡ Use of standard phones: ‡ Scalable and convergence: make sure that the CTI solution has the capacity to grow with the future demands of your business. ‡ VOIP/IP: by using voice over internet protocol.

Automatic Call Distribution ‡ These are call routing utilities for incoming calls and can route the calls to the available agent. first served basis. The system answers each call immediately and if necessary. Basic ACD distributes the telephone calls on a first come . . holds it in a queue until it can be directed to the next available call centre agent.

Supervisors can access current status display as well as historical information collected by the system in the day to day management of call centre operations. handling high volumes of incoming calls. ‡ Supervisor features: enable administrative staff to monitor agents¶ work and provide them with the support they need. ‡ Agent features: are designed to ensure that customers receive quality service by providing agents with a comprehensive and quickly accessible set of functions that serve the current requirement best. and finally distributing them to agents or devices.Major components of an ACD System ‡ Call Processing Features: help customize ACD systems configurations to meet an organization¶s unique requirements. .

Key call handling features of an ACD ‡ Call hold ‡ Call Transfer ‡ Call Forward: redirect all incoming calls to another number. . This is a form of three party conferencing. known as hunt group . ‡ Station Hunting: Hunting (Rollover Lines) is placed on individual telephone lines that makeup a group . ‡ Three way calling: allows to include a third party on an outgoing call. Hunt groups are a series of lines organized in such a way that if the first line is busy the next line is hunted and so on until a free line is found.

it leaves plenty of scope for most organizations to capture. whether considered justified or not. ‡ Hence.. a customer complaint is a feedback and this feedback is freely available. ‡ The technology for complaint management system is generally divided into two parts: Front end and Back end . however small.Customer complaint management technology ‡ Defined by BSI as ³any expression of dissatisfaction by a customer with a product or service.´. manage and benefit from the feedback freely offered by complaints.

Front End & Back End Front end: ‡ Customer Profile Page ‡ Customer Interaction Page Back end: ‡ Complaint resolution page ‡ MIS Page .

Benefits of complaint management system ‡ ‡ ‡ ‡ ‡ Enhanced productivity of employees Speedy and error free resolution of complaints Monitoring and tracking mechanism Singular database and customer history Wide angle view of customer Complaint Management System Technology: ‡ Web Based ‡ LAN Based .

. ‡ Ideal for customer related concerns where waiting forms an essential part of the service.Frontdesk Management Technology ‡ Electronic queue: helps the service providers to manage the complete customer service effectively the rush hours. Hospitals. such as: ‡ Airlines . Post offices and other services«.

Ticket is issued serially. ‡ Teller station unit: This unit comes with a LCD Display is generally used by counter staff.Electronic queue management modules ‡ Ticket dispenser unit : Customer obtain a ticket through the ticket dispenser unit . ‡ Status dispenser unit (SDU): Placed in the customer¶s waiting area. states the time at which it was issued. along-with the approximate waiting time. The counter clerk punches the ticket number to be served and enables the staff to call up the next number. the SDU displays the ticket number alongwith the number of the counter to where the customer has to proceed. generally installed at the entrance of an office simply by pressing a button. .

‡ Counter Display Unit (CDU): The CDU placed on the top of the counter displays the ticket number of the customer being served. . Each CDU has a digital display and can be customized from the software to meet the service provider¶s requirement.Electronic queue management modules «.

Key Consideration for queue management system ‡ Make use of standard computer equipment. with paper with no costly proprietary hardware. ‡ Should be fully equipped with fully customizable tickets. . displays and voice annoucements. ‡ Would be good if it can be managed on a single server at a central location and can support a network of branch offices and receptions. ticket printers. displays. ‡ Should be managed via standard internet browsers with no local installation required.

. Also have the scanner to read the check amount to read the amount paid by the customer. These kiosks allow users to make cash payments and obtain receipts instead of waiting in lines for check cashing and bill payment centres. One can find these machines in heavily. bill and coin acceptors security cameras for customers for accepting payments. ‡ Bill payment kiosks generally include a computer inside a durable enclosure and these kiosks can be customized to suit the organizational needs. convenience stores and even banks.trafficked areas such as super market. Kiosks provide the facilities like credit card readers.Payment Technology ‡ Bill Payment kiosks: bill payment kiosks provide a convenient option for service providers to avoid the customers queues and thereby waiting time.

The machines are equipped with specially designed software for kiosk applications. This software responds to human touch and allows a customer to view information or make a purchase. .Touch Screen Kiosks ‡ A touch screen kiosk functions similar to a standard PC and requires command from the user to move from page to page.

.Internet kiosk ‡ The internet kiosk provides a public web access for a fee to people that need to get online when they are away from home or office. ‡ Internet kiosks have a computer with a hard-wired wireless high speed connections. and airports offer these machines to the public to check e-mail and websites. Business like shopping malls highway rest stops. it may include a standard keyboard. In addition. mouse or a touch screen display that can be activated with a finger. A bill accepter or credit card reader allows the user to prepay for their access and provides secure access to the web for a specific length of time.

offer bonds and certificates of deposit and also allow to trade stock. ‡ Other than simple money withdrawal. ‡ ATM kiosk may be with a standard keyboard to enter your account information or a touch screen for this purpose. the ATM Kiosk also provide other type of services like take loan applications.³Any time money´ Kiosk ‡ The ATM kiosk is probably the most sophisticated and fully interactive kiosk. . These are used to offer customers 24X7 access to their accounts even when they are closed.

‡ Self service applications help the customers in the following ways: ± Empowering the customer ± Improve supply chain efficiency ± Reduce cost of service .Customer Self-Service Portals ‡ The self service portals provide an opportunity to the customer to access his account and get lots of information as and when he wants and from where ever he wants.

‡ With the self service modules.Customer Self-Service Portals ‡ Organizations can empower their customers by providing them timely and accurate information about their order. the customer can access their account and get all kind of information on real time basis. outstanding payments and also make payments. The customer can see their bills. . shipment or account at their convenience ± without their having to wait for a response from a customer service agent.

. reviewing and tracking those orders and changing orders if necessary. The self-service modules provide the customer an option to get the service online and without any human intervention during the transaction. Customers can also update their address book information.Forms of self-service modules ‡ Fulfillment self-service: enables customer to accelerate supply-chain fulfillment by directly placing their own product orders with their product providers.

a complete account management can be made possible online through well designed sales force management self service module.Forms of self-service modules« ‡ Sales force management self-service: Enables field and sales personal to manage their clients¶ business transactions more closely with the ability to directly enter and track sales orders. check product availability. and verify and update customer information. . Hence.

Criteria for CRM Product Selection ‡ Organization imperative ‡ Integration with existing IT application landscape ‡ Product adaptability ‡ Scalability/ upgradation ‡ Implementation experience ‡ Post roll out support structure (after sale services) .

Customer data management ‡ Data Warehousing ‡ Data Mining .

Consumer Research ‡ Service managers need information from their consumers regarding: ± Target market ± Product and service ± Price ± Distribution ± Promotion .

Consumer behavior in the context of relationship management ‡ ‡ ‡ ‡ ‡ Need recognition Information search Evaluation of alternatives Service purchase and consumption Post purchase evaluation .


Marketing Research to understand consumer expectations ‡ Objectives of service marketing research: ± To determine a customer¶s expectation ± To identify a dissatisfied customer so that service recovery can be attempted ± To monitor the service performance and customer satisfaction level ± To identify the gaps in service expectations and customer perception ± To understand the effectiveness of the service delivery ± To understand the level of service delivery. appreciate the team performance and reward the efforts of various teams for their customer focus and deliveries ± To understand the customers¶ changing expectations ± To monitors the customer¶s changing requirements in the industry. .

Research as management support tool ‡ The issues and concerns regarding research as a management support tool .

Service Research Programme ‡ A service research programme is the summation of various initiatives adopted by an organization to find the customer¶s voice and feelings about the organization¶s products and services. ‡ The service research programme may include: ± Complaint solicitation ± Requirement research ± Critical incident research ± Trailer calls ± Mystery shopping ± Customer panel ± Lost customer research ± Satisfaction survey .

‡ Consumer research versus marketing research ‡ Quantitative versus Qualitative Research .

Techniques of qualitative research ‡ ‡ ‡ ‡ ‡ E-focus groups E-surveys Depth interview Industrial interview Structured versus unstructured interview .

Consumer Research Process ‡ ‡ ‡ ‡ ‡ ‡ ‡ Define the research objectives List the information needed Design data collection project Select the sample type Determine the sample size Carry out the field work Analyze data and prepare report .

Managing Customer Relationship ‡ Pre-Industrial Stage: Relationship between producer and consumer: relationship between craftsman and consumer. ‡ Industrial stage: Mass production/ desegregation/integration/merging between producer and consumer ‡ Service economy age: Production combined with intangibles to deliver solution to consumers .

Managing Customer Relationship« ‡ Knowledge economy age: information combined with products and services to deliver personalized customized solutions Industrial Age Relational Economy Functional Orientation Process Orientation Customer as a Recipient Customer as driver Transactional management Collaboration Batch mentality Real time mentality .

Managing Customer Relationship« ‡ Relationship management from customer or from company? ‡ Relationship implies willingness of all parties involved to engage with each other for mutual benefits ‡ Relationship needs arise out of four goals: ± Need fulfillment goal ± Economic goal ± Security goal ± Esteem goal .

.using information based decision making capabilities ‡ Implement innovative ways and means to get close to the customer to hear the µvoice of the customer¶.Key principles of relationship management ‡ Manage customer as an asset ‡ Rate customers on the basis of their profit stream: current and future potential ‡ Customize relationship to individual customer.

people. process.To succeed in the relationship economy companies must: Create capabilities to service the new customer ‡ Driven by voice of the customer ‡ Listening and learning process ‡ Customers experience mapping ‡ Appropriate level of segmentation Connect the business to the customer ‡ Align mindset and connectivity ‡ Invest in enough knowledge to get the job done ‡ Balance elements of model business(strategy. knowledge and technology) ‡ Develop efficient and effective fulfillment solutions .

Techniques and applications to manage relationship ‡ Acquisition stage: From the time a company decides to target a prospective customer to the time a customer makes the final purchase. quality and cost are: ± Well understood by consumers through correct advertising and promotional efforts ± Provide consumers avenues to raise any relationship disconnects and issues during the acquisition process ± Have product / service return guarantee. .relationship management needs to focused on ensuring that the product features.

Techniques and applications to manage relationship« ‡ Post Acquisition stage: ‡ Single product/ service user: ± Education ± Complaint request and query management support ± Relationship Recognition Multiple product/ service relationship ± Recognition of µtotal share of wallet¶ instead of discrete spends ± Catering to individualized/ personalized needs More favorable terms for additional business .

web support. showroom. front-desk. Relationship cost ‡ Post purchase transaction handling: cost incurred on the contact centre. ‡ Loyalty programmes: continuity marketing programmesdesigned for: (a) retaining customers and (b) increasing loyalty ‡ Partnering programmes: co-branding and affinity partnering ‡ Personalized services: one to one marketing . collection.Acquisition cost vs.

Service economy ‡ Product or service ‡ Good stuff (material/things) ‡ It works ‡ I am glad I bought it ‡ Satisfied customer ‡ Repeat customer ‡ You get what you pay for ‡ Agrees with your wallet ‡ Deals with one of your needs Experience economy ‡ Experience ‡ It¶s a kick. a hoot ‡ It leaves an indelible/permanent memory ‡ I want more ‡ Member of a club ‡ Word of mouth-viral marketing agent ‡ You are surprised and delighted at every turn ‡ Agrees with your psyche/mind/ consciousness ‡ Helps define who you are .


or reading for pleasure. chat rooms etc. individuals immerse themselves but remain passive when they view museum exhibits. and arts. a person absorbs the events unfolding before him while also creatively participating like: while learning Yoga. the person actively participates in an immersive (involve yourself) environment such as casino¶s . .Experience realms ‡ Entertainment: while being entertained people passively absorb the experiences through their senses. art galleries etc. ‡ Educational: in an educational experience. ‡ Escapist: during an escapist experience. ‡ Esthetic: in an esthetic experience.such as while viewing a performance. listening to music.

they do not remember every single moment of it. For example: instead of stating precise duration like 2 hours or 4 hours for a service fulfillment it is now stated µbefore lunch time¶ or µbefore close of working hours¶ Rationalization effects: People desperately want things to make sense. not movies.Customer Experience Management Psychological and behavioral principles: ‡ Sequence effects: when people recall an experience. . people overestimate the time elapsed (go away). They remember snapshots. instead they recall a few significant moments vividly(bright) and gloss over the others. ‡ Duration effects: how people process time: ± ± ± People who are mentally engaged in a task do not notice how long it has taken them to do the task When prompted to pay attention to the passage of time. Increasing the number of segments in an encounter lengthens its perceived duration like(10 minutes dance sequence in 4 segments seems longer than an identical one split in 2 segments.if there is no handy explanation for an unexpected event they will concoct (think-up/fabricate) one. ‡ ‡ Some organizations have evolved methodologies to manage customer expectations by giving indicative time reference.

combine the pain ‡ Build commitment through choice ‡ Give people and stick to them .Five operating principles ‡ Finish strong ‡ Get the bad experience out of the way early ‡ Segment the pleasure.

Difficulties in interactions with customers faced by frontline contact employees ‡ Unrealistic customer expectations: ‡ Unreasonable demands ‡ Demands against policies ‡ Unacceptable treatment of employees ‡ Drunkenness ‡ Breaking of societal /community/ communal norms ‡ Special need customers ‡ Unavailable service ‡ Slow performance ‡ Unacceptable service .




Critical success factors for People in CRM ‡ Motivate and educate personnel ‡ Train users about how to use the product and service ‡ Secure user ownership ‡ Foster employee¶s creativity and innovation .


Hiring and training for right skills / attitude ‡ Hiring and selection process: some of the desired personality attributes for a customer contact executive: ‡ Flexibility ‡ Tolerance for ambiguity ‡ Ability to monitor and change behavior on the basis of situational cues ‡ Empathy for customers ‡ Willingness to help others ‡ Ready smile .

Hiring and training for right skills / attitude «
Selection process: ‡ Interviewing techniques: ± Abstract questioning ± Situational case study discussion ± Role playing ± Multiple, Structured Interviews ‡ Personality test: psychometric test can be conducted to evaluate attributes like: ± Willingness to treat customer/ colleagues with courtesy/good manners ± Consideration /thoughtfulness / tact ± Perceptiveness/ insightfulness of customer needs

Hiring and training for right skills / attitude «
‡ Assessment center: creating standardized situations / tests to observe a candidate for his behavior and reactions. Assessment center helps to compare candidates and calibrate (adjust/ regulate)them against standards defined by the company.

‡ Training: service employees need to learn the following:
± Organizational culture, purpose and strategy ± Interpersonal and technical skills ± Product / service knowledge






point of sale and blog sites.Methodologies to understand/ capture µvoice of customer¶ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Strategic use of complaints Focus group interviews Management-frontline contact forums Customer panels Customer contact programmes Customer satisfaction and perception gap analysis Call barge in Other sources of gathering µcustomer expectations: trade associations. .

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