DEFINITIONS OF CRMEvery time a customer approaches your business they arrive with an expectation, It may be a service need or a new product interest but in every case they have an expectation that accompanies their interest in your business, What happens next will from an experience that shapes their behavior a good experience may increase their loyalty and tendency to purchase again a poor experience may transfer their business to your competitorThe availability to recognize this process and to actively manage it forms the basis for customer relationship management. Craig Conway, President and CEO, Peoplesoft Inc : Customer Relationship Management at the Speed of Light by Paul Greenberg, edition 2001, Tata Mc-Graw publisher, page5-6.

Customer Relationship Management is a process of

Acquiring, retaining, and growing profitable customers, Lawrence Hayden, putting CRM to work, the rise of relationship, CRM a strategic Imperative in world of E-business John Wiley and sons,2000, Page 10-11.

The Infrastructure that enables the delineation of and

increase in customer value and the correct means by which to motivate valuable customers to remain loyal-indeed to buy again. Jill Dyche, the CRM hand book: business guide to customer relationship management, Pearson education, asia,2002,page 4.

An enterprise approach to understanding and

influencing customer behavior through meaningful communications in order to improve customer Acquisition, customer retention, customer loyalty and customer profitability. Roger S Swift, Accelerating Customer Relationships, Prentice Hall PTR, 2001 page 7.

The role of Customer Relationship Management is to identify, establish, maintain and enhance relationships with customers and other stakeholders, at a profit, so that the objectives of all other parties involved are met, and that this is done by a mutual exchange and fulfillment of promises. Gronroos, Marketing redefined, Management Decision, Vol. 28, No 8, 1990, pp 7.

EVOLUTION OF CRM Stage I : Mass marketing : According to (Borden, NH,1965) The age of Mass marketing

replaced the intimacy of a direct sales force in many organizations.

Centralized large scale production, wide geographic distribution and one way communication on a grand scale created a tremendous variety of easily available affordable goods

this gave away inefficient corner store and door to door models and in place supermarkets, malls and mega stores are established

Customers have benefited from this cost efficiencies but something was lost in this bargain, that loss was the sense of connection customers has with the local storekeeper personalized service

Stage II : Direct marketing: Direct marketing followed the mass marketing strategies but closely

monitored the responses. Direct marketers created different versions of the communications and promotion material, catering for different parts of the country.

normally the response to direct marketing was very less. However direct marketing proved to effective in marketing

certain products and also served as an important purpose. It established that the consumers had preferences and that

marketing campaigns and messages could be tailored to meet customer preferences. This lead to Target Marketing.

Stage III : Target marketing: According to (Phillip Kotler, 1984) with the advancement of

technology and refinement in direct mail and telemarketing, the use of information systems technology allowed the selection of specific ( targeted ) customers via mail or telephone

target marketing had advantage of potentially receiving a direct response from a customer

target marketing recognized the need to interact more with customers but at very superficial level

lack of specific data as it relates to responses from the targeting means resorting to averages for response rates customer purchases and other data.

Stage IV ; CRM (Customer Relationship Management) : According to (Peppers. D and Rogers. M, 1993) CRM is

The first variable is information and analysis ( knowledge) one

has to know what the customer wants, needs, and values. CRM is to Segment the Customer by developing a number of homogeneous subgroups form the heterogeneous markets.

The second variable is the need for interactivity and personal

contact and the way in which the customer wants to be contacted.

1.3 AN OVERVIEW OF CRM CONCEPT DEVELOPMENT:

A Model of CRM: According to Gartner group 1999, the CRM marketing process can be broadly classified into four

processes.

Fig 1.3.1 A model of CRM given by Gartner group Customer Value based Optimization Simulation Value analysis Segmentation models and test plans

Campaign CRM Planning Content development Channel Management off to channels Customer Rule driven Action Hands Management Interaction Triggers selection

Marketer

Data marts

Data warehouse

Channel feedback

Business Customer Value mea- surement

Campaign Manage- ment

Informat- ion colle- ction

Customer Interaction Manage- ment

Customer Centric Organisation

Customer Life cycle Management :

Customer Need Assessment and Acquisition

Customer Retention and referrals for new customers

Customer Development through personalization

and customization

Customer Equity Leverage through cross selling and Up selling

CRM

MigrateMigrate

MigrateMigrate

Customer Life time value :

Past year’s average sales + expected (forecasted) average sales during remaining life + Referrals + Cross selling - Average past year’s cost (service) consumption - expected (forecasted) average cost (service)consumption during remaining

life - Customer back-outs for Bad WOM

CustomerProduct

Perceptions Purchase Experiences

Learning Process Cognitive Process

Pricing Cost

Competition Organisation Objective

Customer – Product Profitability

Customer – Base Portfolio Analysis

Customer segment 1

Customer segment 2

Customer segment 3

Customer segment 4

Product 1

Product 2

Product 3

Product 4