Crm | Customer Relationship Management | Strategic Management

Customer Relationship Management

K.L.Bhaskaran

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What is CRM?
Phone Banking: ordering a cheque book, complaint… Ordering a product on internet Receiving calls from various vendors for buying of their new product Loyalty points (airlines, restaurants, credit card…) Your local Baniya knowing the grocery list of your family at start of each month and addressing you on first name basis. In fact at times, he is knowledgeable of events in your family. He uses this to enhance your experience with his outlet / shop by giving the extra and much needed Personal Touch.

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CRM and the Need for It
• Marketing philosophy: putting customer first • Collection and analysis of customer data for sales and marketing decision support • Understand and support customer and prospect needs • Competitive survival strategy: Responding to change quickly is differentiator between winners and losers • Provide a product-service package

marketing. customer care • Design business contact points from customer perspective • Share insights about customers within SC network .Customer-Driven Organizations • Are easy to do business with • Add value to their products/services by integrating products and information • Educate customers during and after the decision-making process • Are innovative in design of services. delivery.

. Logistics and marketing strategy must focus on customer segments. Profitability is more important than sales volume. All products and services have more than one market segment.Customer-Driven Marketing Customer requirements must drive product and service design.

Scope and Elements of CRM Customer information dissemination Product Relationship building Multiple supply chains for different customer segments Place Analysis Customer Price segment Collaboration Promotion Sales operations .

Primary Cash Flow Primary Product Flow Supplier Orient Towards Customer Information Flow Reverse Logistics Flow Manufacturer Customer .

What is CRM? Gandhiji said ”Customer is God” The philosophy of putting Customer first And Aligning all processes and operations to add value to the customer Developing mutually beneficial long term relationship with 8 Strategic Customers .

Your customers…… Have more choices than ever Expect immediate. high quality. personalized 24-7 service .

Customer Relations Manager CRM is about… • finding customers • collecting info about them along the way At reduced cost and increased • using that info to enhance their experience and Profit margin foster long-term relationships • Nurturing and retaining existing customers and increasing business with them • Winning back lost customers 10 .

Focus on Customers What are their needs? Do you offer products in response to their needs? …or your organization’s convenience? 11 .

CRM • It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. sales. CRM is a process that will help bring together lots of pieces of information about customers. responsiveness and market trends. marketing effectiveness. • CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. 12 .

This relationship development process is designed to improve customer retention rates. thus reducing churn.CRM Vs. 13 . increasing profitability and reducing the need to focus so heavily on new business for revenue growth.CSM • Customer service is the provision of service to customers before. • CRM is the strategic process implemented to maintain and retain the customer long term. during and after a purchase.

Sales Marketing Customer Service CRM .

the mindset! . Companies need to have well laid customer-centric processes. before opting for implementation of CRM products And of course. a company will not become customer-centric.Beware!! CRM is not technology or some software By implementing a CRM product.

Is CRM a technology? CRM is a philosophy that is supported and enhanced by technology 16 .

Develop Customer Focus .In short.

Bill Gates 18 .Customer Relationship Management “ A manufacturer or a retailer that responds to changes in sales in hours instead of weeks is no longer at heart a product company. but a service company that has a product offering” .

If you do not listen to the customer. competition will .It is 5 times more expensive to get a new customer than to retain the existing one.

Reasons to Identify and Understand Market Segments Customer Segmentation Definition: The practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing #1 Reason To increase the organization’s profits (or its equivalent) over the long term .

branding. and advertising) Product + Financial goals . develop.Developing and Implementing CRM Strategy CRM strategy indicates how organization plans to initiate. or sustain relationships with customers. What markets will we serve? Business strategy Components of CRM strategy Price Placement (channel strategy) Segmentation Promotion (marketing.

Development Introduction Sales Growth Maturity Decline . • Introduction: Focus on promotion (advertising). promotions Time avoid deep discounting. • Growth: Manage production and inventory levels. identify strong vs. weak segments.Aligning CRM Strategy and Product or Service Life Cycle • Development: Use • Decline: Emphasize customer customer data to align to care (ensure parts availability/ what customers want. lifetime customers. • Maturity: Identify strongest sales by item and allocation of inventory. test migrate to new products) and against KPIs and metrics.

Promotion 23 .Product .Placement .CRM Strategy • 4 Ps of Traditional Marketing .Price .

Product
• Past - Same product to all customers. Product generated demand.
• Present - Products suited to customer needs - Designed to fulfill customer needs of different segments. - Distribution, sales methods, promotions are customized for different customer segments

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Price

• A strategic decision based on competition, perceived value, and brand identity • Commodity price based on competition • Differentiated market can base price on R&D, marketing costs, or value to customer • CRM can differentiate products/price by segment • CRM finds optimal balance of profit vs. attractive price to customers

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Placement

• How product/service gets to customer • Traditionally one-way communication; now back-forth flow • Contact channel strategy
– Means to increase profitability – Interactive contact channels (call centers, live dialogue Web sites, chat rooms) – Is itself a product; different segments get different options
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Evaluating channel strategy Customer perspective Accessible Fast Convenient Secure Control and Consistency Business Perspective Profitability Error-free Direct access Complete answers 27 Flexible .

Components of a CRM Strategy •4Ps—Promotion Segmentation of promotions Creation of brand image CRM Cost-effective • Loyalty from Traditional customization product to promotional of advertising provider activities materials • Trust they will be taken care of • Single failure can undo Research: study buyer motivation and behaviors .

Promotion • Segmentation Based • Cost effective advertisements • Brand Image.From producer to provider? 29 .

ecologically oriented products) ―Representative‖ groups .Ways to Segment Markets Historic segmentation Preconceptions of groups CRM segmentation Actual buying behaviors Finer segments (e..g.

Pareto Principle High Service Needs Customer Base 20% 80% Revenue or Profit Low Service Needs 31 .

Segmentation by Customer Needs Value for Money Convenience Product features Service Preferred Contact Channels Reliability Payment Terms Customer Value Profile 32 .

Segmentation by Customer Needs Preferred contact channels Reliability Best value ≠ price Convenience Product/ service features Value profile .

Developing CRM Strategies for Specific Customer Segments •Segmentation by preferred contact channel Expensive Retail sales associates Live call center help Live instant messaging help Automated phone system E-mail response Cheap Self-help Web sites and catalogs Must test customer receptiveness to each channel Refers to Web for faster service Encouraged and rewarded. not required 34 .

Paradigm Shift OLD Mass Customer Supply Driven Transaction Based Print/Other Media Separate Sales/service Time Consuming Obscure Pricing NEW Customized Demand Driven Relationship Based Web Based Bundled Offerings Short Duration Transparent Pricing 35 .

Pre-relationship The event that triggers a buyer to seek a new business partner Early Stage Experience is accumulated between the buyer and seller although a great degree of uncertainty and distance exists Development Increased levels of transactions lead to a higher degree of commitment and the distance is reduced to a social exchange. Long Term Characterised by the companies’ mutual importance to each other Life Long The interaction between the companies becomes institutionalized. .

CRM Strategy • Goal is to move from top to bottom • Success measured by conversion rate • Conversion rates higher through the funnel 37 .

CRM Phases • Customer Acquisition • Customer Retention • Customer Extension Contextual Phases .T 38 .Value Creation .Marketing Orientation .Innovative I.

Measure and Take corrective action Customer Segmentation Profitability 39 .Steps for Creating customer focused business Identify Customer Needs Create customer segment maps Align BP for Customer Needs Implement CRM Monitor .

convenience.Customer Purchase Experience AWARENESS INFO SEEKING SHOPPING PURCHASE What do they know about you? Will you be on their short list? Consider the 4 Cs Customer. cost. communication How difficult do you make it? 40 .

Is CRM new? • No! • Simply an extension of relationship marketing • Builds on customer service and satisfaction concepts • Just the latest buzzword for creating customer orientation • Bottom-line is still the same 41 .

Is CRM new? Yes! • A shift in corporate philosophy concerning the customer segmentation • Customer-centric approach to value chain • New and technology-enhanced processes • Focus is not just on bottom-line. but on topline • Goal is to have life long customers 42 .

43 . • For large customers. • Greater integration through sharing of Information. • Greater integration internally to meet customer needs. • Customer segmentation.Relationship. relationship managers. totally dedicated to these customers.Customer Side • Trend towards lifelong customers. • Products and delivery designed to the specific segmented customers. • Customer Involvement while developing new products.

CRM and the Lifetime Customer •Development of lifetime value 4 3 2 1 0 –1 –2 –3 –4 1 10 9 8 7 6 Revenue e.g. marketing –4 –5 2 3 4 5 6 Lifetime revenue +10 Lifetime profit +6 Lifetime expense –4 44 Year .. ―free‖ cell phone..g. monthly phone bill 5 4 Net profit 3 2 1 0 –1 –2 Expense –3 e.

CRM and the Lifetime Customer •Evolving relationship with lifetime customers High Strategic value Lifetime Value Retention Acquisition Low Low Med High Customer Satisfaction and Loyalty 45 Dependency (―win-win‖) Value for money Commodity (cost only) .

Customer Focus Quality No more differentiator PriceBrand Image? Value Niche Product Lifelong Customer 46 .

or risk exposure are major concerns 47 . quality.CRM and the Lifetime Customer • Not single transactions but sustained relationship • Lower total marketing costs • Increasingly easier to satisfy lifetime customers • Increased revenue and profit opportunities • Rely on established relationships when time.

Developing CRM Strategies for Specific Customer Types •Specific customer types Key points Prospective customers Vulnerable customers Win-back customers Loyal customers Market research Audience segmentation Right promotional message and contact channel Predictive churn model Early and accurate identification Target most valuable customers Rapid communication internally and with customer Increase sales: cross-selling and up-selling opportunities Courtesy-APICS 48 .

Developing CRM Strategy for Customer Types • • • • Market research Pricing Segmentation Promotional message and contact channel Prospective customers Vulnerable customers • Early and accurate identification • Predictive churn model • Increase sales • Cross-selling • Up-selling Loyal customers Win-back customers • Target most valuable customers • Rapid communication internally with customer .

detailed information to help identify the most valuable customers. • Define what product features/services mean the most to the best customers. Courtesy-APICS 50 .Developing CRM Strategies for Specific Customer Segments •Customer value and CRM strategies • Define “valuable” customers. • Measure impact. • Deliver timely.

etc. • Customers talk freely: what firm won’t normally hear • Know customers intimately. anticipate desires .Understanding the Wants and Needs of Each Segment Sources of customer information in CRM Voice of the customer (VOC) • Transaction records • Sales and service representatives • Distribution points • Purchased data • Research and measurement tool • Innovative and proactive to constantly capture customers’ changing requirements/feedback with time • Scripted: why leaving. how satisfied.

convenience.Using Technology to Improve CRM CRM technologies • Business systems – Transaction maintenance – Information (pricing. customer service reps. inventory) – Financial details • Customer care (Web-enhanced) – Solutions for response. service call wait choices – Can reduce product returns Courtesy-APICS 52 . product customization. returns processing – Online FAQ. chat rooms. detailed product data. order visibility.

and support Account Management • Customer inquiries • Problem solving • Call Centre CRM Commitment to be customer-centric and customer-driven Marketing Automation Sales Force Automation • Sales force management • Channel partner management • Lead tracking • Pipeline management Business Intelligence • Tools to analyze • Direct mail customer sales • Promotions information to uncover patterns.g. • Catalogs preferences (e.Using Technology to Improve CRM •CRM technologies support marketing and sales Complete customer view shared by marketing. sales. data warehousing) 53 Courtesy-APICS ..

Performance Measurement Low Cost. Low Accuracy Customer Complaints Transaction Questionnaires Monthly. High Accuracy Voice of Customer 54 . Quarterly Questionnaires High Cost.

Measurement approaches • Voice of the customer (VOC) • Transaction customer feedback questionnaires • Monthly/quarterly customer feedback questionnaires • Participation in performance reviews • Collecting and responding to negative comments on the Internet and social networking sites Quality of channel’s service • Trustworthiness of channel • Treated fairly.Measuring Customer Satisfaction Traditional metrics issues • Metrics measure the absence of issues. with respect. friendly manner • Effectiveness of problem resolution . not satisfaction. and only small number are reported. in competent. • Customer complaints measure customer dissatisfaction.

Performance Measurement Performance Measurement Who assesses? Internal?? External?? .

Wrong configurations will not be accepted Once configuration is finalised. the system gives lead time and price. Place orders using username and password 57 .Cisco B-2-B     Configure the network on the web site of Cisco.

escalate through predefined channels Once shipment is handed over to freight forwarder.Cisco B-2-B Site      Order acknowledgement takes 10 minutes. 24 hours to give shipment schedule Cisco system decides from where the item will be shipped If not happy with delivery plan.the AWB no appears on the screen 58 .

flag is raised automatically to stop shipment.Cisco B-2-B Site  Invoice and pick slip can be downloaded from the site Payment status on the net If payment is not made on time.   59 .

60 .Cisco-product and Technology Details   Tells what are the products introduced What are the courses offered.

Cisco-service And Support      Technical support on the site Technical documents on the net Service contact center Service and support solutions S/W centre 61 .

Cisco-Training  Training and certification  Seminars and events e-Learning  62 .

Cisco-solutions for Network        Overview of internet business solutions Large corporations Internet communications Small.medium businesses Service providers Home networking Government education 63 .

Cisco-Partners and Resellers Current partners and resellers Find a partner and reseller     Become a partner and reseller Partner in e-learning solution  Strategic solutions 64 .

Replacements are made within 48 hours Can be traced on the site.Cisco-Rejections  Dead on arrival and field returns are also on the net.   65 .

Questions? 66 .

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