CUSTOMER RELATIONSHIPMANAGEMENT

PRESENTED BYHarish K.

Lakshmaiah Shetty P.Mishaal Hamza

What is CRM?Customer Relationship Management is a comprehensive

strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.

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

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

CRM DefinitionCRM is a cross functional process for

achieving:A continuing dialogue with customersAcross all their contact and access points, withPersonalized treatment for the most valuable

customersTo increase customer retention and the

effectiveness of marketing initiatives

CRM ComponentsCRM’s can be broken down into three key components.

Operational

AnalyticalCollaborative

Enhance Company

Relationship with

Customer

Front Office

Operations (sales,

marketing, service

etc)

Interaction With

Customers (email, letters, phone,

meetings, fax etc)

Evolution Of CRM

The Customer RelationshipTargetFindUnderstandAttractQualifyCloseLearn fromDevelop

Need For CRM To meet the changing expectations of customer due to:

(a) social and demographic factors.

(b) economic situations.

(c) educational standards.

(d) competitors product

(e) experience.

Loyal customers are the source of most profits A relatively small percentage of customers may generate most of the profits. Marketing cost and efforts are less for existing customers. Dissatisfied customers tell others about their experiences. So do satisfied customers.

Slowing the rate of defection grows the customer base.

Reducing costs (e.g. through self-service).

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

Customer Life Cycle Management

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 2 : Not selecting the right service design standards

Gap 3 : Not delivering to Service Standards

Gap 4 : Not matching Performance to Promises

Gap 5 : Perceived Service and Expected Service

Service Quality Gaps

Gap Analysis Grid

Attributes that need attention - area where priorities should be focused

Low Priority

Current company strength

Unnecessary strengths - possible over skill

Low High

High

Low

IMPORTANCE

SATISFACTION

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

Electronic Customer Relationship Management

Latest paradigm in the world of CRM

NEED OF e-CRM

Due to the introduction of new technology

To satisfy the customers at global level. (Sometimes customer itself prefer to do online

purchasing.)

Basically e-CRM is concerned with attracting & keeping economically valuable customers & eliminating less profitable ones.

Difference Between CRM And e-CRM CRITERION CRM e-CRM

Customer Contacts Traditional Means-Retail Store, Telephone Or Fax

Through Internet, E- Mail, Wireless, Mobile And PDA Technologies

System Interface Works With Backend Application Through ERP System

Designed For Frontend As Well As backend Applications Through ERP, Data Mart And Data Warehouse

System IT Requires PC Clients To Download Various Applets And Applications.

Here, Browser Is The Customers Portal To e-CRM

Contd..

CRITERION CRM eCRM

Customization and Personalization

Different People Require Different Information But Personalized Views For Different Audience Are Not Possible Here

Personalized Views Based On Purchase Are Possible.

System Focus System Is Designed Around Product And Job Functions. Here, Applications Are designed Around One Department Or Business Unit.

System Is Designed Around The Customers Need. Enterprise Wide Portals Are Designed And Not Limited To A Single Department.

Systems Maintenance And Modifications

Implementation Is Longer And Costly.

System Implementation Require Less Time And Cost.

Process of e-CRM

Benefits Of e-CRM

Convenience

Improvement in overall quality of customer experience

Increased profitability

More effective marketing.

Improved customer service and support.

. Greater efficiency and cost reduction.

Increased customer loyalty. (time frame)

Pitfalls• Huge money is required to implement ECRM.

• Highly knowledge requiring process.

• Results are not according to expectations.

• Sales and Marketing are reluctant to adopt new automated CRM system.

e-CRM Implementation Steps

Categorizing Customers

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

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

* Focus on short term profitabilitySpend minimum energy to meet your objectives# Don’t pursueUse opportunity as it comesShort term acquisition should not affectLong term image

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

Low HighProfitability Potential

Low

High

St r

ateg

i c I

mpo

rtan

ce t o

you

r bu

sin

ess

Pla

n

* Existing Customer # Potential Customers

Economics Of Customer Retention

“Winning back a lost customer can cost up to 50-100 times as much as keeping a current one satisfied.”

Rob Yanker, Partner, McKinsey & Company

Understanding your customer is key to retention…..

Image Value

Product Value

Services Value

Monetary Price

Time cost

Energy cost

Psychic cost

Total

customer

value

Total

customer

cost

Customerdelivered value

Determinants Of Customer Added Value

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.”

CRM: Not A PanaceaNot feasible for every market and customers

customers don’t want to be committed to every brand/relationshipNot feasible for low-involvement, habitual purchasing in B2B or B2CSome markets/customers may have low “personalization potential”.

Shopping agents used by consumers undercut the idea of relp’s.

The organizational capability to produce a seamless/personalized experience is more difficult to master than a transactional approach.

Lower tier customers may become disaffected when they find out service is differentiated.

References

Websites:

- ephany.com

- google.com

- peoplesoft.com

- bwiwatch.com