Download - Nikita Anil CRM
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Presented by:Nikita (Roll no.24)
Anil Ashish Topno(Roll no.03)
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DefinitionsThe long-term success of the organization and improved
value for its shareholders lies to a very great extent in the
companys ability to develop and sustain genuine
relationships with its customer. -James G. Barnes
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What is CRM?CRM is a strategy by which companies optimise
profitability through enhanced
customer satisfaction
Its all about becoming customer-focused
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Targeting Acquisition Retention Expansion
Customer Relationship Management can be simply defined as everything involved with
managing the customer relationship.
Customer Relationship Management can be simply defined as everything involved with
managing the customer relationship.
TheVal
ueofthe
Relations
hip
Who Do we target What segments are most
profitable What segments match our Value
Proposition What is the best segmentation
strategy for us / our industry
What is the best channel for
each segment What is the acquisition cost for
a channel / segment Do certain channels deliver
certain types of customers
Cost effective acquisition
How can we improve
retention What is our average
customer relationship length How can we hold customer
for as long as possible
What is the most costeffective method of retention
How many products does our
average customer buy How can we induce our
current base to buy more
products Who are the prime targets for
expansion What is the cost of expansion
Duration of Customer Relationship
Valu
e
($
)
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Titan Watch Repair ServicesWhat did Titan Do?
The Titan Signet CRM initiative was undertaken in May 1995 to provide that extra touch to
its special customers at the exclusive World of Titan stores.
Its mission was to create a sense of belonging of the customer to the store and vice versa by: Building a special relationship with high life time value Titan customers
Recognising and rewarding his/her loyalty to Titan
Providing a platform for direct feedback from these valued customers to the company
Where?
It initially started in 6 showrooms in Bangalore. Today the Titan Signet has been extended to
102 World of Titan showrooms across 59 cities all over India
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Behind The ScenesWhile the program has taken customer bonding one step further in Titan,
there are many behind-the-scene activities that ensure that the program is
run efficiently, effectively and with the level of enthusiastic participation.
These are :
Showroom Personnel are trained not only in the operations of the programat the showroom but also in the finer details of CRM.
Enrolments in the program are tracked on a monthly basis for each
showroom, along with data on purchases made by Signet members who
have returned to the showroom to buy again.
Signet operations form a part of the quarterly appraisal for theirshowrooms, thereby ensuring that they earn more marks on their efficient
and effective performance.
A grievance redressal system is in place to ensure that our valued
customers are responded to within stipulated time frame.
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Capture Customer
Data and Measure
Results
The Customer
Capture Customer
Data and Measure
Results
Take Action toEnrich the Customer
Relationship Capture CustomerData and Measure
Results
Build and ManageCustomer Value
Capture Customer
Data and Measure
Results
Capture Customer
Data and Measure
Results
CaptureCustomer Dataand Measure
Results
Store Data, Mineand Make
InformationAccessible
The CRMThe CRMDynamicDynamic
Customer Relationship Management is a ongoing, dynamic learning process for an organizationCustomer Relationship Management is a ongoing, dynamic learning process for an organization
Customer Relationship Management Process
The building blocks of CRM allow an organization to manage this cycle and use the
knowledge on customers to enhance the Life Time value of the customer portfolio.
No organization has perfect information on its customers. Knowledge of customers is
continuously enhanced through the CRM dynamic.
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CRM Strategies
Customer Acquisition Gain the greatest number of new Best customers as early in their lifespan
as possible.
Customer Retention
Retain and expand your business and relationships with your customersthrough up-selling, cross-selling and servicing.
Customer Loyalty Offer programs to ensure that your customers happily buy what you offer only
from you.
Customer EvangelismEnable loyal customers to become a volunteer sales force.
Cost Reduction Reduce costs related to marketing, sales, customer service and support.
Improve Productivity
Enhance your e-business strategies.
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Four Tools
Complaint Resolution
Feedback
Guarantees
Corrective Action
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Complaint Resolution
Three types of complaints:Regulatory, Employee,
Customer
Compensation
Contrition
Ease of Resolution
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Feedback
Customer Data
Customer Behavior
Data-gathering
Analyzing Data
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Guarantees
Customer Rights
Guarantee Design:
Unconditional
Meaningful
Communicable
Painless to invoke
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Corrective Action
The way a firm reacts to a problem so that the
problem never reoccurs.
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Differentiating Customers/
Customer Identification All customers are not equal
Recognize and reward best customers disproportionately
Understanding each customer becomes particularlyimportant.
Same customers reaction to a cellular company operator
may be quite different as compared to a car dealer.
Besides for the same product or the service not all
customers can be treated alike
CRM needs to differentiate between a high value customer
and a low value customer.
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What CRM needs to understand while
differentiating customers
Sensitivities, Tastes, Preferences and Personalities
Lifestyle and age Culture Background and education
Physical and psychological characteristics
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Differentiating Offerings-
Low value customer requiring high value customer
offerings
Low value customer with potential to become high
value in near future
High value customer requiring high value service
High value customer requiring low value service
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Expanding the size of Customer
Database -Barnes 4 Rs
Customer
Retention
Customer
Relationships
Customer Referrals Recovery
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Customer Retention
A low-cost way to increase revenue. Retention is
cheaper than acquisition.
Must be voluntary.
Must lead to long-term relationships.
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Relationships
Attempting to know the
customer.
Commitment and
CommunicationClients should call you only
once. After that, you should
proactively call them.
Richard Buckingham
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ReferralsPowerful tool that results from customer satisfaction or
dissatisfaction.
Referral clients are already sold, before they even call
you. Richard Buckingham
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RecoveryEmpower employees so that they may deal with
mistakes as they occur.
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Customer Lifetime Value
Customer Lifetime Value means the
economic value of customer relations
during the whole period of relation
between customer and company.
Krafft (2000) Kundenbindung und Kundenwert)
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MITES - Shrikant Kulkarni 24
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Models to calculate Customer
Lifetime ValueA few elements are part of all CLV models:
Period under consideration of analysis (e.g. month, quarter)
Discount rate of a company (cost of capital)
Planning horizon (how many periods)
Frequency of buying/turnover
Average turnover per buying
Estimated customer retention
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Current
Current
Every Companys Big
Unknown.Customer ValueFull Potential
CurrentCustomer
Value
Relatio
nshi
p
Profit
ability
Numbero
fRela
tionship
s
Relationship Duration
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Relationship management suggests that sellers identify their most
valuable customers and provide special products/services to them,
either immediately in an effort to build a sense of commitment to the
firm
Acquisition strategy
Retention strategy
While a monopolist profits most from an acquisition CRMstrategy, assuming costs are held constant, the main result of the
analytic model is that in a competitive marketplace one firm
pursues an acquisition strategy and its rival uses a retention
strategy.
A critical ingredient in this finding is exogenous and identical
customer churn rates.
While a monopolist should choose acquisition CRM, when there
is competition a first mover should choose retention CRM.
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Islands of Automation Need To Be BridgedOver time, channels & operational systems are added to cater to changing customer
demands. The resultseveral functional groups are interacting with customers
independently.
$
SalesForce
CustomerService
DirectMail
Web
Branches
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Why CRM?It costs six times more to sell to new customer than to
sell to an existing one.A typical dissatisfied customer will tell 8-10 people
By increasing the customer retention rate by 5%,profits could increase by 85%Odds of selling to new customers = 15%, as
compared to those for existing customers (50%)
70% of the complaining customers will remain loyalif problem is solved90% of companies do not have the sales and service
integration to support e-commerce
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Marketing Selling ServicingCustomer Management Process
Threads
BroadcastBroadcast
MailMail
Field PersonnelField Personnel
Agents/DistributorsAgents/Distributors
Call CenterCall Center
RetailRetail
InternetInternet
Back Office Process/Systems
Custom
erInteraction
Ch
annels Are we making the
right level and typeof marketing, sales,and serviceinvestments in eachof our customersegments?
Customer RelationshipCustomer Relationship
StrategiesStrategies
Are we taking aholistic approach toour customersacross processesand channels?
Customer RelationshipCustomer Relationship
StructureStructure
Have weimplemented bestpractices andtechnology inprocess/channel?
Customer RelationshipCustomer Relationship
PerformancePerformance
ScopeScope DepthDepthImportance of CRM
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The Benefits of Customer Relationship Management
RetentionRetention Lift/upsellLift/upsellAcquisitionAcquisitionLikelihood toRecommend
Total PerceivedValue
Impacto
nServic
eQuality
Courteous
Know. About Account
Available atConvenient Times
Ownership of Problems
Know. Product/Svcs.
Easy to Reach
Access toLive AgentsRight Tel. ## of Rings
Resolution Time
Current Performance
Low High
High
Low
The customer value analysis should be performed for each segment individually. The
perceived importance of price and service drivers can differ significantly by segment.
The customer value analysis should be performed for each segment individually. The
perceived importance of price and service drivers can differ significantly by segment.
In addition to LTV of the customer, likelihood torecommend is another important benefit of CRM.
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Thank You