CRM

Customer Relationship

Management - ASSIGNMENT

Udayan Data

ASIGNMENTS

1. CRM – Prepare an infographic or a mindmap based on your understanding of CRM

2. Creating unique Customer Experience is a key component to effective CRM and Customer loyalty – Give an example of the ways good and bad Customer experiences are created across different retail channels like retail store, email, mobile phone, etc.

3. What are the key challenges in implementing CRM strategy

4. Briefly explain the various types of CRM

5. Briefly trace the evolution of marketing from mass marketing to relationship marketing

Prepare an infographic or a mindmap of CRM – Basic features

Prepare an infographic or a mindmap based on your understanding of CRM

¨ The Customer Relationship Management life cycle process illustrates that we need to know your customer and enable the various customer-centric processes of acquiring, identifying, nurturing, securing, and retaining clients in order to enable a company to increase revenue by preserving customer loyalty and retention.

Prepare an infographic or a mindmap of CRM

2. Creating unique Customer Experience

¨ Customer relationship management (CRM) is becoming a mainstream practice for retailers looking to increase sales and profitability. But many current initiatives don’t have the customer-centric focus that today’s market requires. In their rush to make the next sale, many retailers have lost touch with the first step to successful CRM: understanding what customers really want from retailers.

¨ We applied statistical analysis to the survey results and discovered five groups or “clusters” of satisfaction drivers. The clusters are comprised of individual drivers that are correlated with one another in terms of their impact on customer satisfaction:

Creating unique Customer Experience

¨ Person-to-person experience—The store has helpful, friendly, knowledgeable employees who anticipate customer needs and exceed customer expectations.

¨ • Store experience—The store is clean, well-designed, organized, adequately stocked with quality merchandise and provides “fun” experiences.

¨ • Price and value—The price that customers pay for goods is matched by the perceived value that they receive for making the purchase.

¨ • Marketing and communications—The store’s promotions are well-communicated, easy to redeem and valuable to customers.

¨ • Data integration and analytics—The store provides the same product selection and product information across all sales channels, and uses information from a consumer’s past purchases to provide better service.

What are the key challenges in implementing CRM strategy

¨ Defining Clear Objectives:The organization should have a clear set of objectives which it would like to achieve through the CRM. These objectives need to be listed and defined as measurable metrics. Without doing so, the company can’t assess the benefits or the ROI of the CRM system.

¨ Appointing a Core CRM Team:The CRM initiative is not an IT project. A core CRM team should be formed in addition to the participation from Top Management, Senior Executives, Customer Service, IT and end-users. Only after the requirements are clear should they be handed over to IT for implementation.


¨ Defining the Processes:It is important for the processes to be clearly defined and enforced in order to set up the CRM project for success. One good practice is to create a central repository, accessible to all, which stores all the process definitions. This allows the document to be available for referencing by anyone using the system. Key processes that need to be defined from the start are Change Management process, Feature Re-evaluation process,etc. Also, clear security measures with access management need to be in place to make sure that important data is not accessible by those who shouldn’t be accessing it.

¨ Managing the Application:Once the CRM has been rolled-out, it is important to re-align the work culture of the teams around it. The business operation should properly map with the CRM application. This also means that end users should perform day-to-day operations through the CRM application by default and not optionally.


¨ Finding the Right Partner:The rate of CRM success considerably goes up with the right solution partner. Ideally select a partner who can do both, strategy & implementation. It is important that your partner shares the risks of your implementation. Working with a vendor who understands local work culture, technology limitations and listens to the employees, are ideal

Briefly explain the various types of CRM

¨ Operational

This kind of CRM system focuses on using software applications which help incorporate the various sets of information available on each customer into one useful file. For example, it will bring together a client’s contact information, purchase history and any previous communication they have had with the company on one web page so that the employee can provide them with rapid service and response. This kind of CRM provides support to the sales, marketing and customer service departments. It can also be used to help the next type of CRM system, Sales Force Automation.

¨ Sales Force Automation

This CRM system will keep a record of every stage of the sales process, helping employees automate activities like making reports, scheduling calls and mailings


¨ Analytical

Analytical systems will look into customer data from an analytical angle to better come up with sales and marketing strategies that can be effective for future sales. They will look at data from all the different databases, and then by using techniques like data mining, will come up with patterns and trends. This allows the company to look at the data from the wider angle, allowing for better creation of long term strategies for sales and customer management.

¨ Collaborative

Collaborative systems focus on integrating external contacts – like vendors and distributors – and providing data to its customers through an extranet. This allows the customers to be proactive about improving the service they get from the company, by providing them with new tools and technologies like instant messaging.


¨ Campaign Management

This is a combination of Analytical and Operational systems as it can store, analyze and track the various campaigns the company has. It can also be effective in targeting specific types of customers by sending emails, calling them or sending them marketing emails with special offers.

¨ Sales Intelligence

This is similar to an Analytical system, but is used as a sales tool for employees who can look at trends and sales performance

Briefly trace the evolution of marketing from mass marketing to relationship marketing

¨ Mass marketing evolves in Relationship Marketing— Mass Marketing is a type of marketing(or attempting to sell

through persuasion) of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the medium used to reach this broad audience

— Relationship marketing prioritizes customer retention and satisfaction in any marketing strategy. These core objectives are key to achieving a mutually satisfying result for both the consumer and the vendor.

— Relationship marketing brings customer centricity to the spotlight. This vision has implicit the fact that a customer does not buy a product, but instead buys a solution for a specific problem or need. By satisfying this need, a company has access to many other opportunities that the customer will have at some point. Thus, if the company can build a relationship with the customer - find out who he is, what these needs will be - , it will be able to gain a lot more than just a single sell.

http://en.wikipedia.org/wiki/Marketing

Mass Marketing

¨ Historically large-scale mass production and distribution methods adopted.

¨ Cost-efficiencies drove prices lower.

¨ However, products became standardized.

¨ Customers had to find the best option that fulfilled their needs.

¨ Customers grouped into mass markets and were communicated through mass media- TV, Print etc.

¨ Suited well for a supplier’s economy

Today’s Markets

¨ Foreign suppliers and competition from non traditional suppliers

has increased competition.

¨ This increases supply, and so the need for better service.

¨ Technology has made the reach of companies global.

¨ Technology has enabled large scale customized production :

called mass- customization.

Today’s Markets

¨ Stagnation of growth in customer base.

¨ Too much competition for customer’s free time.

¨ Customers are increasingly convenience shopping as opposed to

price driven shopping.

¨ Consumers now prefer suppliers that provide good quality at a

fair price.

¨ They find such a supplier and stay with them for a long time.

Customer retention+ Share of customer

¨ Basic premise:– Retain customers over a long term and satisfy the

largest portion of their needs with your products and services.

¨ The “leaky bucket” concept is out.

¨ Today’s consumers want companies to– Understand their needs and wants– Adapt their products and services to these needs

and wants

¨ The company takes partial responsibility for the customer’s choice of product.

Developing Relationship Marketing Capabilities

¨ Initial steps include:– Data collection– Data access and marketing tools– Product and service customization– Customer service procedures– Customer access channels

¨ Key measures:– Customer satisfaction– Share of Wallet– Stability of relationship


¨ If implemented properly customers are locked in due to satisfaction, ease of service, and value.

¨ This increases the cost on the customer’s part when they have to switch suppliers.

¨ Customer service should be interactive, personalized.

¨ Communication is through multiple channels.


¨ Use customer service opportunities to—Verify if needs and preferences have been

addressed—Measure levels of satisfaction—Find any other questions that need to be

answered—Additional customer information such as

change in status—Verify if presenting new products or options is

appropriate

Customer Information

¨ Requires more information than traditional direct marketing.

¨ Optimal types of customer information will vary by industry, company market positioning, and marketing programs.

¨ Building a customer information base is an iterative long term process.

Example: Cellular Phones

¨ Stage 1:— Preliminary information collected during the first purchase to

make recommendations

¨ Stage 2: — Based on the calling patterns and bills make refined

recommendations and offer better deals that the customer cannot refuse.

Customization and Added Value¨ Provide tangible benefits to customers

through customization.

¨ Example: Dell Computers

¨ Trend evident in service industries such as

– Insurance– Computer systems– Telephone– Financial Services

¨ Customer service is a better differentiating weapon than price or features.

Customization and Added Value¨ Competitive advantage gained through

— Implementing a corporate culture focusing

on the customer.

—Developing a suite of products and services

that can be customized.

—Training and empowering the customer

service staff.

—Developing infrastructure to collect and

maintain customer information

Customization and Added Value¨ Mass customization occurs when consumers become co-

creators in the content of their experiences

¨ Enablers of mass customization

- information technology

- process technology

- digitization of product

- new organizational thinking

Customization and Added Value¨ Issues in mass customization

- pricing of customized products

- compensation for customer input

- strategic relationship between producers and consumers in market for customized goods

Two Way Communication

¨ Focus is on customer’s choice of channels.

¨ In several new channels customers control the time of access

¨ Companies control only the content delivered.—Example: Internet, e-mail, Cellular phones.

¨ Key to success is to integrate information flows from multiple channels and co ordinate marketing activity.

Two Way Communication¨ Message Broker system could be implemented

- Customer service rep sends transaction downstream to operations system

- Message Broker intercepts transaction, creates mktg-oriented transaction and sends original to operations system

- Mktg-oriented transaction is sent to system that makes promotional decisions

- Once promotional decisions are made, message broker decides which should be delivered and in what order

Marketing Objectives

¨ Customer Awareness and Education

¨ Customer Acquisition

¨ Customer Acceleration

¨ Customer Retention

¨ Niche Marketing

¨ Lapsed Customer Reactivation

Building Customer Loyalty

¨ Key measurement for loyalty: Retention

¨ 5% increase in retention rate can increase lifetime value by 75% (F. Reichheld)

¨ The top 20% customers yield 80% of revenue

¨ So, treat the ‘Gold’ better than others

¨ What to do with ‘Losers’ ?


¨ Relationship effects of retaining non profitable customers

- Reference accounts

- Referral

- Learning

- Innovation


¨ Five customer loyalty promotions

- Develop catalog with premiums available with proof of purchase

- Establish an ‘insiders’ or ‘special privilege’ club

- Create a prestige society offering both practical benefits and self-image symbols

-Establish an apparently personal relationship

- Provide extra conveniences that have secondary purpose of increasing consumption

Marketing from mass marketing to relationship marketing

Thank you

CRM

Documents

Transcript of CRM