Masters in FMSCo-Taught By : Ms.Dimple,

Assistant Professor, FMS DepartmentNIFT-Delhi

What is CRM?

Customer Relationship Management is a Customer Relationship Management is a comprehensive strategy and process of comprehensive strategy and process of acquiring, retaining and partnering with acquiring, retaining and partnering with selective customers to create superior value selective customers to create superior value for the company and the customerfor the company and the customer.

CRM is a management approach a model that puts a CRM is a management approach a model that puts a customer at the core of a company processes and customer at the core of a company processes and practices. practices.

CRM leverages cutting edge technology integrated CRM leverages cutting edge technology integrated strategic planning up-close and personal marketing strategic planning up-close and personal marketing techniques and Organisation development tools to techniques and Organisation development tools to build internal external relationships that increase build internal external relationships that increase profit margins and productivity within a companyprofit margins and productivity within a company

CRM has helped today’s businesses by:

providing greater individual customer insight

allowing firms to effectively respond to individual requirements

integrating the business processes of the firm around individual customers

BI meets CRM Customer facing applications All By Itself Upcoming Technologies

Where are we?Loyalty Builder

Satisfaction focussed

Company “knows you”

Service Differentiation based on Economic Potential

Retention focussed

Event reminders

Pleasant TransactorEfficient Operations

Ease of doing Business

Lack of specific knowledge of customers

Undifferentiated offerings

Product based

Emphasis on Revenue

Minimal Segmentation

Customer CentricProactive in product / service development

Voice of customer

Active collaboration

Learning organisation

Decision making segment driven

Actively grow value of customer portfolio

World Class

Total experience management

Real time information management

Precision in investments

Co-ordinated front office and back-office

Customer investment focus

Systematically defined business rules

Customer Need Assessment and Acquisition

Customer development

Through Personalization and

Customization

Customer Equity Leverage through Cross Selling and

Up Selling

Customer Retention and

Referrals for new Customers CRM

Team Structure

Role Specification

Planning Process

Process Alignment

Monitoring Process

Employee Motivation

Employee Training

Purpose-increases effectiveness-improve efficiency

Programs-Account Mgmt-Retention Mktg.-Co-op Agreement-Strategic Partnership

Partners-Criteria-Process Evolution

-Enhancement-Improvement

Relationship Performance-Strategic-Financial-Marketing• Retention• Satisfaction • loyalty

Communication

Formation Management & GovernancePerformance

CRM Process Framework

Personal Needs

Expected Service

Perceived Service

Service Delivery

Word - of- Mouth Communications

Management perceptions of Customer Expectations

Service quality specifications

Past Experience

External Communications to Customers

Service Provider

Customer

SERVICE QUALITY MODEL

Gap 1 : Not knowing what customers expect Gap 1 : Not knowing what customers expect

Gap 2 : Not selecting the right service design standardsGap 2 : Not selecting the right service design standards

Gap 3 : Not delivering to Service StandardsGap 3 : Not delivering to Service Standards

Gap 4 : Not matching Performance to Promises Gap 4 : Not matching Performance to Promises

Gap 5 : Perceived Service and Expected ServiceGap 5 : Perceived Service and Expected Service

Service Quality GapsService Quality Gaps

The Key Stages of CRM

Satisfaction Based

State Culture

Re-active Meet customer needs

Respond to complaints

Minimal evaluation of customer service levels

Performance Based Pro-Active Evaluate customer perception

Identify customer retention factors

Stage

Commitment Based

Very Pro-Active

Evaluate multiple customer needs

Continuous inbound/outbound flow and feedback

Continuous improvement

Customer Relationship Management - A Framework

Traditional Approach to CRM

• Customer Contact by: Telephone, Mail, In Person

• Personal Selling

• After Sales Service

• Complaint Handling

• Account Management

• Customer care

• Customer Satisfaction

Web-enabled and Integration Approach

• Customer Information System

• Customer Database• Electronic Point of Sale

Sales force• Automation of

Customer Support Processes

• Call Centres• Systems Integration• Lifetime value of a

customer

Integration with Technology

Web & Internet

Categorising Customers….1

*You have no choice but to handle *You have no choice but to handle them very carefully.them very carefully.Will consume energy.Will consume energy.#Think of innovate ways of getting #Think of innovate ways of getting them on your side, but the cost of them on your side, but the cost of acquisition must be controlledacquisition must be controlled

*Cultivate relationship. *Cultivate relationship. Spend energySpend energyGo out of your wayGo out of your way# Think of strategies to move Think of strategies to move them away from competitionthem away from competitionWill consume disproportionately Will consume disproportionately high energyhigh energy

* Focus on short term profitabilityFocus on short term profitabilitySpend minimum energy to meet Spend minimum energy to meet your objectivesyour objectives# # Don’t pursueDon’t pursueUse opportunity as it comesUse opportunity as it comesShort term acquisition should not Short term acquisition should not affectaffectLong term imageLong term image

* Very cautious decision needed* Very cautious decision neededRe-examine business plan & Re-examine business plan & strategy. Evaluate that your loss strategy. Evaluate that your loss does not become nightmare for does not become nightmare for youyou# Needs in-depth strategic review # Needs in-depth strategic review as acquisition alone and as acquisition alone and dissatisfaction later could be more dissatisfaction later could be more harmfulharmful

Low HighProfitability PotentialProfitability Potential

Low

High

St r

ateg

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rta n

ce t o

yo u

r bu

sin

ess

Pla

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t rat

egi c

Im

port

ance

t o y

our

busi

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s P

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* Existing Customer* Existing Customer # Potential Customers# Potential Customers

Image ValueImage Value

Product ValueProduct Value

Services ValueServices Value

Monetary PriceMonetary Price

Time costTime cost

Energy costEnergy cost

Psychic costPsychic cost

TotalTotal

customer customer

valuevalue

TotalTotal

customercustomer

costcost

CustomerCustomerdelivered valuedelivered value

DETERMINANTS OF CUSTOMER ADDED VALUEDETERMINANTS OF CUSTOMER ADDED VALUE

Gap Analysis Grid

Attributes that need attention - area where priorities should be focused

Low Priority

Current company strength

Unnecessary strengths - possible overskill

Low High

High

Low

IMPORTANCE

SATISFACTION

CRM Programmes

CRM Programs -1

Program Type: Continuity MarketingProgram Type: Continuity Marketing

Customer Types :

Mass MarketsMass Markets

• Loyalty ProgramsLoyalty Programs

• Cross-sellingCross-selling

DistributorDistributorss

• Continuous Continuous ReplinshmeReplinshmentnt

• ECR ECR ProgramsPrograms

Business to Business to Business Business MarketsMarkets

• Special Sourcing Special Sourcing ArrangementsArrangements

CRM Programs -2

Program Type: One-to-One MarketingProgram Type: One-to-One Marketing

Customer Types :

Mass Mass MarketsMarkets

• Permission Permission MarketingMarketing

• PersonalisatioPersonalisationn

DistributorsDistributors

• Customer Customer Business Business DevelopmentDevelopment

Business to Business to Business Business MarketsMarkets

• Key AccountKey Account

• Global Global Account Account ProgramsPrograms

CRM Programs -3

Program Type: Partnering / Co-marketing

Mass Mass MarketsMarkets

•Affinity Affinity PartneringPartnering•Co-BrandingCo-Branding

DistributorsDistributors

•Logistics Logistics PartneringPartnering•Joint MarketingJoint Marketing

Business to Business to Business Business MarketsMarkets•Strategic Strategic PartneringPartnering•Co-DesignCo-Design•Co-Co-DevelopmentDevelopment

Customer Types

Sample measurements for the balanced Sample measurements for the balanced scorecardscorecard

Financial MeasuresFinancial MeasuresPrice PremiumPrice PremiumVolume increasesVolume increasesValue of customer Value of customer referralsreferralsValue of Cross salesValue of Cross salesLong-term Value of Long-term Value of CustomerCustomer

Customer PerspectiveCustomer Perspective

Service PerceptionsService PerceptionsService ExpectationsService ExpectationsPerceived ValuePerceived ValueBehavioral intentionsBehavioral intentions% Loyalty% Loyalty% intent to switch % intent to switch # Customer referrals# Customer referrals# Cross sales# Cross sales# of Defections# of Defections

Operational PerspectiveOperational Perspective

Right First Time (% hits)Right First Time (% hits)

Right on Time (% hits)Right on Time (% hits)

Responsiveness (% on Responsiveness (% on time)time)

Transaction Time ( hours, Transaction Time ( hours, days)days)

Innovation and

Learning Perspective

Goals MeasuresGoals Measures

Myths of CRM

• CRM is Primarily about Technology

• Successful CRM projects are managed by IT

• “Executive buy-in is the key”

• “We need to roll this out across the enterprise ASAP”

• “CRM systems are intuitive…. Users will only need some initial hand holding.”

Kindly Remember

Customer Satisfactionis

A Moving Target