CRM

“The customer is the most important part of the production line. Without someone to purchase our product we might as well shut down the whole plant.”

W . Edwards Deming

CRM Stands For…• Relationship marketing is a means for attracting,

developing and retaining customers to build strong customer loyalty.

• CRM- a strategic imperative – helps serve customer’s unspoken needs

B2C Space• CRM means keeping pace with a savvy and

increasingly impatient consumer base that is closer than ever to finding your main competitor and more willing than ever to share their bad experiences with your prospects

Principles of RM

INTENTION

INTERACTION INTEGRATION

INFORMATION INVESTMENTS INDIVIDUALITY

Key principles of CRMKey principles of CRM  

 Most of the customer relationship programs are developed on the basis of certain principles, which enunciate that it is necessary for organizations to maintain mutually beneficial relationships with their customers for the long-term benefits of both. The basic underlying principles are:

1.     Principle of ‘Customer life-time value’2.     Principle of 'Customer satisfaction'3.     Principle of 'Customer loyalty'4.     Principle of 'Share of customer'5.     Principle of 'Cross-selling and up-selling'6. Principle of 'Customer profitability' 

  

The 10 principles of CRM 1. Value segmentation:

Based on the customer needs, preferences, behaviors and economic potential, which provides the basis for resource allocation decision in marketing, sales and service.

2. Collaboration:The customer is involved in the specification, design and/or delivery of a descried result.

3. Institutional Memory:When a customer interacts with your company, everyone is the enterprise is aware of prior interactions, outstanding issues and pending opportunities.

4. Touch-point Alignment:Customers are able to do business with you through multiple channels which are aligned to customer need and value.

5. Real-time information management:Employees have real-time access to the right information in order to make customer based decisions and resolve issue immediately

Contd..6. Closed-loop processes:

Integrated front and back office systems, logical conclusions, closing the customer loop and enabling continuous knowledge capture.

7 Customer scorecard:Employee performance requirements and measures are designed drive specific customer behavior.

8. Listening posts:Forums to facilitate information sharing and learning about your customers that helps you to do business with them learn from each other and provide valuable customer input to your business.

9. One and done:Solving customer needs first time.

10. Total experience management:Mapping all of the touch-points between you and your customers and attempting to deliver a consistent quality experience as perceived by the customer.

Importance of CRM

• Lower cost of marketing:

As products manufactured with the help of CRM techniques, the customers will accep0t it and they will also be satisfied with the product. Also a good relationship will be maintained with the customers and thus more and more money will not be wasted in advertising and promotions.

• Decreased cost for customers:

As the marketing expenses of a firm will decrease in long run, firms can offer the same product at a big low cost, which will be in the benefit of the customers.

Contd..• Common growth for marketers & customers:

CRM will help customers to identify the right products that will suit them; also the marketers will know about their target audience and will not waste their time.

• Customized marketing efforts:customers are taking more individual initiative in determining what he had to buy. CRM helps customize marketing to be more effective.

• Improve customer satisfaction:Companies are trying to offer total customer satisfaction. As with the use of CRM firstly the customers will choose the right product offered and also if they face any problems those will be solved quickly. Thus the level of customer satisfaction can be raised with CRM.

Contd..• Improved employee and customer retention:

CRM can help in improving customer retention. As the old customers will be fully satisfied they will but the same company’s products. Thus CRM helps to retain new customers and old ones.

• Strong customer loyalty:The loyalty of customer is decreasing for any brand. So if with the help of CRM good relationship is developed, and then chances of customers not being loyal will be very less. Thus, CRM develops a strong customer loyalty and also a good company image.

RM Vs TM

•Interaction

•Evolutionary-dynamic

•Implementation-oriented

•Maintain

•Post-sales focus

•High contact

•Managing customer base

•Quality of interaction

•Concern of all

•Mass customization

•Action

•Static

•Decision-oriented

•Acquire

•Pre-sales

•Low contact

•Monitoring market – share

•Quality of output

•Production-concern

•Mass-production

CRM

Insulates Customers from Competitors

Reduces Failure Costs

Can create Sustainable Advantage

Lowers Costs of Attracting New Customers

Enhances/Promotes Positive WOM

Encourages Repeat Patronage and loyalty

CRM HELPS TOCRM HELPS TO…..…..

• Insulates Customers from Competitors 

• Reduces Failure Costs 

• Can create Sustainable Advantage 

• Lowers Costs of Attracting New Customers 

• Enhances/Promotes Positive WOM 

• Encourages Repeat Patronage and loyalty 

    

Stages in CRM (Kotler,2002Stages in CRM (Kotler,2002 )

• Customer database• Building a customer database

• Using the customer database

• Design the supply chain from the market backwards

• Build a employee wide customer orientation

• Integrating info' from all customer touch points

• Developing a loyalty scheme

• Personalized treatment of the most valuable customers

 

80-20 Rule80-20 Rule

• Top 20% of the customers produce as much as 150% of the overall profit while the bottom 20% of the customers drain about 50% of the bottom line and the revenues  from the rest just meeting the expenses

   

Customer Life Cycle

• Customer Acquisition

• Customer Development

• Leveraging Customer Equity

• Customer Retention MVC (Most valued customer) through LTV

(Life time value)

Customer Attrition Vs Retention

• The more customers leave– The greater loss of revenue– loss of initial acquisition investment– Loss of stable market base for selling new products

• Company stays profitable by:– Cash flow from 3 sources

• Understand customers• Can provide required products/services in a cost-effective fashion• Can do better than others

Recovered Customers Vs No Complaint Customers

• Service Mistakes as “blessing in disguise”

• One of the surest signs of a bad or declining relationship is the absence of complaints from the customer. Nobody is ever that satisfied, especially not over an extended period of time.

• “thank heavens for complaints, the ones I worry about are the ones I never hear from.”

• “do it right the fist time”

CRM Roadblocks

• Process

• Perception

• Privacy

• Politics

Critical Success Factors

• Single view of the customer needed

• Learning relationship

• True interactivity

• Prediction

• Creating new value

• Tactical approaches, targeted promos

• Integrated approach

Critical Success Factors• Classify – Best, Average and Worst

• Basis to organise the bank based on the value of the customer

• Address each customer segment effectively and efficiently

• Increase the scope of the services

• Identify customer touch points

• Customer enquiry, customer acquisition

• Customer service in the premises – Details in the forms, attention, time-effectiveness

• Field Service – Innovative packages

• Customer “word of mouth” publicity

CRM and Service excellence  Issues 

•  Developing a core service around which to develop a customer relationship

• Customizing the relationship to the individual customer

• Augmenting the core service with the extra benefits

• Pricing services to encourage customer loyalty, and

• Marketing to the employees so that they will perform well for the customers

Customer Relationship Management

• It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them.

• It is a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.

Key advantages of CRM

• Enables the companies to quantify their return.

• Helps retailers to understand the lifetime value of a customer.

• Ability to capture, use and manage customer information.

• Reducing costs.

• Improving efficiency

Advantages of CRMIncrease customer revenues

Discover new customers

Cross sell/Up Sell products effectively

Help sales staff close deals faster

Make call centers more efficient

Simplify marketing and sales processes

Provide better customer service

Advantages of CRM

• Improved customer retention– Greater retention results in a larger future customer base

• Purchase amount increases over time– Average of 8%/year in the insurance industry

• Reduction in costs– Order processing– Short-term acquisition costs– Customer referrals

• 2-way communications– Improves customer satisfaction

• Impact on the “grey markets”– Often harmful to profits– Frequently used to level inventories

Advantages of CRM

• Improved customer service• Effective and timely delivery• Value added services• Personalization and closeness• Variety of Products and Packages• Availability, Reliability and Affordability of

Products and Services• More satisfaction• A sensitive market with equally good choices

Key steps in CRM Initiative • Changing Metrics• Functional integration and internal service

level agreements• Agent empowerment• Multifunction contact centers• External and internal Customer surveys• From Cost center to Profit center• Self service as an option not as a hurdle• Move to multichannel interactions

Comprehensive CRM strategy

It should include Protection of investments in existing software. A flexible, tiered approach. Total integration of information systems. Leveraging the internet.