INSTITUTE: University School of

Business
DEPARTMENT ..Management..
Masters of Business Administration
Subject Name: Customer Relationship Management
Code: BAB - 764

Introduction to Customer DISCOVER . LEARN .

Relationship Management EMPOWER 1
 Customer Relationship
Management

Course Outcome Will be covered in

CO Title Level this lecture
Number

CO1 To answer as to how customer relationship Remember

management works and the factors that influence its  
success
CO2 To understand customer needs, fulfill customer Understand
requirements, resolve customer complaints and retain  
customers
CO3 To understand the approaches to and guidelines used Understand
to analyze challenges in CRM and make strategies to
resolve the same.

2
 Definitions

 Concepts and context of relationship

management
 Evolution

 Transactional Vs relationship
approach
 CRM as a strategic marketing tool
 CRM significance to the stakeholders
• Customer relationship management can be defined as a
business philosophy and set of strategies, programs, and
systems that focuses on identifying and building loyalty
with a marketer’s profitable customers.
• The goal is to develop a base of loyal customers who
patronize the retailer frequently
 According to Gartner, “CRM is a business strategy designed to
optimize profitability, revenue and customer satisfaction”.
 According to 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”.
 CRM consists of three definitional components in
its architectural structure:

1. Customer

2. Relationship

3. Management
 Relationship management is a strategy employed by an
organization in which a continuous level of engagement is
maintained between the organization and its audience.
 Relationship management aims to create a partnership
between the organization and its audience rather than
consider relationship merely transactional.
 Concepts and context of
Relationship management

Promise Trust

Commitment Satisfaction

Shared goals and

Quality mutual benefits
 The concept of customer relationship management came into
vogue in the mid 1990’s, CRM has undergone a substantial
evolution.
1. First generation (Functional CRM approach)
- Sales force automation (SFA)
-Customer service and support (CSS)
2. Second generation (customer facing front end approach)
3. Third generation (strategic approach)
1. Strategic CRM: is a core customer centric business
strategy aims at winning and keeping profitable
customers

2. Operational CRM: focuses on the automation of

customer facing processes such as selling,
marketing and customer service
3.Analytical CRM: focuses on the intelligent
mining of customer related data for
strategical or tactical purposes

4.Collaborative CRM: applies technology

across organizational boundaries with a view
to optimizing company, partner and customer
value
 Product oriented
 Production oriented
 Sales oriented
 A customer / Market oriented
 2. Sale force

1. Marketing automation
Account Management
automation
Lead management
 Market segmentation Opportunity
management
 Campaign
Pipeline management
management Contract management

 Event based Quotation and

proposa
marketing
l
management
Product
3. Service Automation
 Case management
 Inbound communications management
 Queuing and routing
 Service level management
 Transactional marketing or mass marketing is
on individual transaction and does not
concern continuous relationship with
customers
 Relationship marketing focus on continuous
multiple transactions rather than isolated
individual transactions.
Customer
retention

Customer
acquisition

Functionally
Cross- Functionally based
based
marketing
marketing
 Relationship marketing is the practice of using
marketing activities to establish, develop, and
maintain successful long term relationships.
 Relationship marketing has numerous
implications for market planning, employee
training, advertising, promotion, public
relations, direct marketing, package design and
more.
 Mass Marketing Relationship marketing
• Discrete transactions • Continuing transaction
• Short term emphasis • Long term emphasis
• One-way communication •Two-way
communication and
•Acquisition focus
collaboration
•Share of market • Retention focus
•Product differentiation • Share of mind
• Customer
differentiation
 Share of customer
 Lifetime value of customers
 Customer equity
 Greater focus on high value customers
 Use of technology
 Understand what motivates customers
 Treat customers individually
 Differentiate offerings
 Increase loyalty
 Providing efficient and consistent service
 Selecting ‘good’ customers instead of ‘bad’
customers based on lifetime value
 Manage customer as an asset
 Rate customers on the basis of their profit stream
– current and future potential
 Using information based decision making
capabilities
 Implement innovative ways and means to get close to
the customer – Hear the voice of customers
 To provide updated information
 To customize strategies
 To anticipate problems
 To prompt follow-up
 To establish problem solving mechanism
 To assess customer interest
 To integrate functional system
 Strategic CRM is a core customer centric business
strategy aims at winning and keeping profitable
customers
 CRM as a effective strategic marketing tool acts as a
competitive advantage
 CRM helps in strategic planning and reduces cost to serve
 Business owners
 VP of sales and sales manager
 Salespeople
 Customer service/ support manager
 Customer service representatives
 Business development/ marketing manager
 Financial perspective – CFO/Controller/Accounting
 IT department
 All other employees
 Increased sales revenue and reduced cost of sales
 Increased customer satisfaction
 Lower costs of recruiting customers
 Increased customer retention
 Evaluation of customer profitability
 Excellent customer service
 Customer knowledge
 Customization
 Positive referral creation
 Reduced cost through customer self-service
 Opportunity to Cross-sell and up-sell
 Decreased general sales and marketing administrative
costs
 Requires top management support
 Confusion in attributes
 Problem in implementation
 Building relationship
 Not functionally organized
 Customer dissatisfaction
 Front line staff
1. CRM is a database marketing

2. CRM is a marketing process

3. CRM is an IT issue

4. CRM is about loyalty scheme

5. CRM can be implemented by any company

 Reduced marketing costs
 Better customer insight
 Life time value
The goal of maintaining customer base must be to
retain existing customers and recruit new customers that
have future profit potential or are important for other
strategic purposes
1. Recognition

2. Personalization

3. Power

4. Risk reduction

5. Status

6. Affiliation
References
1.  Bardicchia, Marco (2020). Digital CRM: Strategies and Emerging Trends:
Building Customer Relationship in the Digital Era. p. 12.
2. "Management Tools - Customer Relationship Management - Bain & Compa
ny"
. www.bain.com. Retrieved 23 November 2015.
3. Shaw, Robert (1991). Computer Aided Marketing & Selling. Butterworth
Heinemann. ISBN 978-0-7506-1707-9.
4. "CRM History: The Evolution Of Better Customer Service"
. www.streetdirectory.com. Retrieved 24 May 2020.
5. "How Context Sits at Intersection of CRM, ACD". Retrieved 8 June2017.
6. "SAP R/3 SD Wiki". Retrieved 7 January 2019.
7. "Navision 3.0". Retrieved 7 January 2019.
8. Jump up to:a b c "History of CRM Software". comparecamp.com.
Retrieved 8 February 2017.
9. Lakshman Jha (2008). 
Customer Relationship Management: A Strategic Approach. ISBN 
9788190721127. Retrieved 8 June 2017.
10."Gartner Announces Customer Relationship Management Summit 2009".
gartner.com. 5 August 2009. Retrieved 8 February 2017. 31
References
1. "Industry Specific/Vertical Market CRM Solutions". smallbizcrm.com. Retrieved 8
February 2017.
2. The Forrester Wave: CRM Suites For Enterprise Organizations, Q4 2016, 
Forrester, 21 November 2016, retrieved 13 September 2017
3. Buttle, Francis; Maklan, Stan (11 February 2015). 
Customer Relationship Management: Concepts and Technologies. ISBN 
9781317654766.
4. Feiz, Ghotbabadi,Khalifah, (2016-01) Customer Lifetime Value in Organisations
5. Jump up to:a b c d "Types of CRM and Examples | CRM Software"
. www.crmsoftware.com. Retrieved 22 November 2015.
6. Jump up to:a b 
"What is sales force automation (SFA)? - Definition from WhatIs.com"
. WhatIs.com. Retrieved 26 November 2015.
7. Buttle, Francis (2003). Customer relationship management. London: Routledge. 
ISBN 9781136412578.
8. Jump up to:a b c d 
"What is customer relationship management (CRM) ? - Definition from WhatIs.com
"
. SearchCRM. Retrieved 22 November2015.
THANK YOU

For queries you can reach me on

Email: rajeev.e9245@cumail.in