Unit - 1Introduction to CRM

What is CRMoCRM stands for "Customer Relationship Management."

CRM is a business strategy directed to understand, anticipate and respond to the needs of an enterprise's current and potential customers in order to grow the relationship value.

oCustomer relationship management (CRM) consists of the processes a company uses to track and organize its contacts with its current and prospective customers.

oCRM are the concepts used by organizations to manage their relationships with customers. This includes :• Capturing Leads• Storage and analysis of the customers, vendors and partners• Internal information (organizational)

Meaning of CRMCRM is an enterprise-wide, on-going approach to seeking best answers to the following questions :- How can we identify profitable customers ? What types of differentiated services are required to satisfy

their needs ? How shall we enhance their loyalty and retain them as long

as possible ?

Basis CRM

Purpose Loyalty Maximization

Focus Lifecycle Management

Evaluation Mind Share (Loyalty)

Customer Info Behavioral Information based on Database

Communication 2 way, Interaction oriented

Definition of CRM

Layman Definition of CRM “ CRM is the process includes collecting customer data, analyzing this data to make decisions which helps to make new customers and satisfy the existing ones”.Buttle Definition of CRM“CRM is the development and maintenance of mutually beneficial long-term relationships with strategically significant customers” .

Evolution of CRM

Mass Marketing

Target Marketing

CRM

MASS MARKETING : Mass marketing (or undifferentiated marketing) aims to broadcast a message to the largest number of people possible.

TARGET MARKETING : Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. It can be the key to attracting new business and making your small business’s a success.

CRM :Customer Relationship Management (or CRM) is a phrase that describes how your business interacts with your customers. CRM is also about what you do with that information to better meet the needs of your existing customers and identify new customers, resulting in higher profits for you.

Customer Satisfaction Customer Satisfaction is a

measure of HOW products and services supplied by a company meet or surpass customer expectation.

Customer Expectation is the needs, wants, and preconceived ideas of a customer about a product or service.

If customer expectations are met, then customer satisfaction results.

Customer Satisfaction is…. Getting what you want by giving others what they want.

Customer Loyalty Customer Loyalty is likelihood ofprevious customers to continue to buy from a specific organization. Great attention is given to marketing and customer service to retain current customers by increasing their customer loyalty. Organizations employ loyalty programs which reward customers for repeat business. Customer Loyalty includes :o Attracting the right customero Encouraging customers to buy, buy often, buy in higher

quantities and bring you even more customerso Providing excellent customer service Customer loyalty, “describes the tendency of a

customer to choose one business or product over another for a particular need.”

Customer Experience Customer experience is an integral part of customer

relationship management (CRM), and it is important to businesses because customers who have a positive experience are more likely to become repeat customers and loyal customers of the business.

CUSTOMER EXPERIENCE is a Customer’s perception of their rational, physical, emotional, subconscious, and psychological interaction with any part of an organization. This perception affects Customer behaviors and builds memories, which drive Customer Loyalty and affects the economic value an organization generates.

Paradigm Shift in Marketing • In 1962, Thomas Kuhn Fathered, defined and

popularized the concept of “ Paradigm Shift”.• A “paradigm shift” reflects change from one

way of thinking to another. A paradigm shift takes place when a significant change happens -usually from one fundamental view to a different view.

Unfreeze

Change State

Refreeze

Steps in Paradigm Shift :

The new trends in Paradigm Shift in Marketing :o From make-and-sell marketing to sense-and-respond

marketingo From owning assets to owning brandso From vertical integration to virtual integration

(outsourcing)o From mass marketing to customized marketingo From pursuing market-share to pursuing customer

shareo From focusing on customer attraction to customer

retentiono From transaction marketing to relationship marketing

o From customer acquisition to customer retention and customer satisfaction

o From mediated marketing to direct marketingo From separated planning of communications to

Integrated marketing communicationso From product-centric marketing to customer-centric

marketingo From marketing department doing marketing to

everyone in the company doing marketingo From exploiting suppliers and distributors to partnering

with them

Relationship Marketing Relationship marketing is a facet of customer

relationship management (CRM) that focuses on customer loyalty and long-term customer engagement rather than shorter-term goals like customer acquisition and individual sales.

Relationship Marketing is a philosophy of doing business, a strategic orientation that focuses on keeping and improving current customers rather than on acquiring new customer.

RM marks a significant paradigm shift in marketing, a movement from thinking solely in terms of competition and conflict toward thinking in terms of mutual interdependence and cooperation.

Relationship Marketing is a strategy designed to foster customer loyalty, interaction and long-term engagement.

Four Steps in Relationship Marketing

Attract Build Develop Manage

Objectives:-

Activities :-

Idenify targetsInitate awareness

ConferencesSpeechesMailing

Build confidence Becomesparring partner

CementRelationship

Personal lettersMeeting to discuss issues

Identify problemsHypothesis solution

Broaden base of contactsBuild colleagues into relationship

10 Critical Players in RM1. Supplier2. Distributors3. End Users 4. Employees5. Financial Firms6. Government7. Media8. Allies9. Competitors10. General Public

E-CRM ( Electronic CRM ) ECRM is the customer focused management of the

whole eBusiness relationship with each customer, in order to measure, create and increase income and reduce costs for each customer & segment and thus to generate greater positive lifetime value.

Put simply, eCRM means CRM-database access via the Web. It means Intranet access for internal users, Extranet access for business partners and customers and of course, Internet access for the market at large.

ECRM is the process of maximizing sales to the existing customer, encouraging continuous relationships through the use of digital communications technologies such as operational databases, Personalized Web Messages, Customer Service, Email and Social Media Marketing.

Electronic CRM (eCRM)

E-CRM expands the traditional CRM techniques by integrating new electronic channels, such as WEB, Wireless, and Voice technologies and combines its with e-business applications into the overall enterprise CRM strategy.

Traditional CRM + Internet = E-CRM

Why eCRM ?

Due to the introduction of new technology

Due to globalization Changing customer attitudes and

expectations To gain competitive advantage To measure, create and increase income

for the business To reduce costs

Goals of eCRM• Reduce - Costs of marketing• Improve - Accuracy and relevancy of recommendations - Customer satisfaction• Increase - Conversion rate i.e. Turn browsers into buyers - Customer retention and frequency - Order size - Customer response - Profitability

Difference between CRM & eCRM CRM uses phone, Fax and Retail store for

contacting customers while eCRM uses Wireless, PDA technology, Internet and email.

The design of CRM system is related to job products and functions while the design of eCRM system is related to customer needs.

The maintenance of CRM is very expensive while the maintenance of eCRM is less expensive and requires only less time.

Significance of CRM

o Foresee customer needso Details of a customero Grouping customerso Acquiring new customerso Cost effective o Handy details o Customer Satisfaction o Customer Loyalty

Benefits of CRMo Reduces costs, because the right things are being done.o Increased customer satisfaction, because they are

getting exactly what they want.o Ensuring that the focus of the organization is external.o Growth in numbers of customers.o Maximization of opportunities.o Increased access to a source of market and competitor

information.o Highlighting poor operational processes.o Long term profitability and sustainability.o Loyal customers will buy more and are willing to pay

premium prices.

Thank You