Customer Relationship

Management

• Meaning

• CRM is a strategy and business process by means of which

firms acquire,manage and retain customers.It is a customer

centric business strategy with the goal of maximizing

profitability,revenue and customer loyalty.

Benefits of CRM to marketers

Improvemen-t in sales revenue

Increase in profits

Reduction in marketing

cost

Increase in customer retention

Helps in identifying

cross selling opportunities

Improveme-nt on

customer satisfaction

Proper contact with

target customer

Helps in identifying

add on selling

distribution

Better understandin

-g of customers

Benefits of CRM to customers

Decreased cost for customers

Increased customer

satisfaction

Timely delivery of products

Personalizat-ion and

closeness

Availability of wide variety of

products

Types of CRM

1.• Operational CRM

2.• Analytical CRM

3.• Collaborative CRM

Components of CRM

customer

relationship

management

COST GOALS

OF CRM

INCREASE REVENUE

REDUCE SALES &

DISTRIBUTION COSTS

REDUCE CUSTOMER SUPPORT

COSTS

A. INCREASE REVENUE GROWTH THROUGH CUSTOMER SATISFACTION

• To increase revenue, retailer must focus on cross selling and various related products should be kept in same area so that one may be picked with other.

• To increase revenue, a retailer should create a attractive atmosphere that customer should visit again and again.

B. REDUCE COST OF SALES & DISTRIBUTION

• Targets advertisement and promotional offers to regular customers rather than targeting new customers.

• To manage customer relationships rather than managing a product.

C. MINIMISE CUSTOMER SUPPORT COST

• Make necessary and relevant information available to answer any query of customer.

• Now-a-days, retailers keep data in customer database acting as a direct access to customer history so that cross selling of products can be done.

PRINCIPLES OF CRM

KNOW YOUR TARGET GROUP

PRINCIPAL OF PERSONALISATION

ACQUIRE AND RETAIN CUSTOMER

LOYALTY

DELIVERS HIGH QUALITY GOODS

AND SERVICES

OFFERS EXCELLENT SERVICES

REWARD THE LOYAL CUSTOMERS

FREQUENT CHANGE OF

DISPLAYED GOOD

UNDERSTAND THE ‘‘CUSTOMER FIRST,

PROFIT NEXT’’ CONCEPT

CUSTOMER RELATIONSHIP MANAGEMENT PROCESS

A. COLLECTING CUSTOMER DATA

• COLLECTION OF REQUIRED DATABASE OF CUSTOMERwhich includes following:

1.Personal details of customers.

2.Purchase pattern.

3.Mode of buying.

4.Response to marketing campaign.

• IDENTIFYING CUSTOMER INFORMATION

1.Ask for information personally from customer.

2.Frequent offering of gift vouchers or shopping cards.

• CONCEPT OF PRIVACY OF CUSTOMER’S INFORMATION

B. ANALYZING CUSTOMER DATA AND IDENTIFYING TARGET CUSTOMERS

TECHNIQUES OF ANALYSIS

DATA MININGMARKET

BASKET ANALYSIS

1.ANALYZING CUSTOMER DATA

2. IDENTIFYING TARGET CUSTOMERS

LIFETIME VALUE(LTV) CUSTOMER PYRAMID RFM analysis

b.CUSTOMER PYRAMID

MOST PROFITABLE CUSTOMERS

LEAST PROFITABLE CUSTOMERS

c. RFM(Recency, frequency, monetary) ANALYSIS

1.FIRST TIME CUSTOMERS

2.EARLY REPEAT CUSTOMERS

3.HIGH VALUE CUSTOMERS

C.DEVELOPING CRM PROGRAMS

RETAINING HIGH LTV CUSTOMERS

CONVERTING MEDIUM LTV CUSTOMERS TO HIGH LTV CUSTOMERS

KEEPING AWAY LOW LTV CUSTOMERS

D. IMPLEMENTING CRM PROGRAMS

PROCESS DATA

ANALYSIS

CRM PROCESS PRE

PLANNING

CUSTOMISATION OF EXISTING

SYSTEM AS PER CRM

PROPOTYPE TESTING

QUALITY ASSURANCE

TESTINGFINAL ACTION

CONTINUOUS SUPPORT