intro to crm

8/2/2019 Intro to CRM

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CUSTOMER RELATIONSHIP MANAGEMENT

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CONCEPTAND CONTEXTOF CRM

Introduction

Buyer/Seller relationship over the ages:

Barter Age

Customized Product Age

Mass Production Age

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SCOPEOF CRM

CRM aims to look at all aspects that will enablean organizations capability to manage andnurture its 1:1 relationship with its consumers.

True customer understanding requires a deepconsiderate of the context in which products andservices are used in the course of customers

day-to-day lives.

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CRM-DEFINED

Gartner A business strategy designed to optimizeprofitability, revenue and customer satisfaction.

PWC Consulting CRM is a business strategy thataims to understand/appreciate, manage andpersonalize the needs of an organizations currentand potential customers.

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CRM is the establishment, development,

maintenance and optimization of a long-termmutually valuable relationship between consumerand organization.

Successful CRM focuses on understanding theneeds and desires of the consumer and is achievedby placing these at the heart of the business by puttogether them with the organizations strategy,people, technology and business processes.

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UNDERSTANDINGTHE VARIOUS DEFINITIONS

Common theme in most of the definitions:

(a) CRM is about strategy It is a strategy of not onlydelivering a singular customer experience and value

but also creating of ongoing continuous improvementsin customers experience and value enhancement inthe relationship.

Strategic CRM

Designing a CRM strategy Companies motivation to adopt CRM strategies

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Strategic CRM- It means creating a competitiveadvantage by being the best at understanding,communicating, delivering and developing existingcustomer relationships, in additions to creating andkeeping new customers.

Strategic CRM focus more on how to delivercustomer satisfaction and organizations structurethemselves around customer segments not productlines.

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A good CRM strategy takes the business vision and appliesit to the customer base by asking the various questions-

What products and services are we offering now and in the

future?

In what market?

What customer groups will these products and servicesappeal to?

Which of these are of greatest value to the organization? Interm of expenditure? In term of reliability? In terms ofprofitability? In terms of growth potential?

What additional needs do the most valuable customer

groups have ? Additional products? Additional services? In what different ways can we do business to deliver to our

customers better?

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DESIGNING A CRM STRATEGY

ASUCCESSFULCUSTOMERRELATIONSHIPMANAGEMENTSTRATEGYWILLADDRESS

FOUR KEY AREAS OF THE BUSINESS: STRATEGY, PEOPLE, TECHNOLOGY AND

PROCESSES-THE COG WHEEL PROCESS- THEHANDLEOFTHE COGWHEELISTHECORPORATE

STRATEGYTHATGIVES DIRECTIONTOTHECOMPANY. INTURN, THESTRATEGIC

DIRECTION MOVES THE TWO ENABLES: PEOPLE AND TECHNOLOGY. THE

INTERACTIONBETWEENTHESEELEMENTSARETHEBUSINESSPROCESSESTHATSIT

BEHINDSUCCESSFULCUSTOMERRELATIONSHIPMANAGEMENT

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What motivates companies to adopt CRMStrategies?

Competition

Consumer Expectation

Technology

Diminishing impact of advertising

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THE NINE TRUTHSOF RELATIONSHIPMARKETING

1. Customers are no longer loyal.

2. Customers do not really want a relationship but

companies do.3. Customers want information.

4. Customers not only want to be thanked for theirsupport, they expect it.

5. Customers control the selling process.

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6. The Lifetime Value of a customer is not relevant.

7. Do not overcomplicate the program.

8. Keep reporting simple and focused on the

customer.9. WHAT IF? Ask it often. Experiment every chance

you get and dont call it testing.

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COMPANIES TRANSFORMATIONFROMMAKEANDSELL TOSENSEANDRESPOND

PHILOSOPHY

THEN NOW

Maximizing market share &revenue was the objective

Maximizing customers value is theprimary objective

* Quality standards weredetermined internally

* Quality standards are determinedby the customer

* Product and service wereseparate entities

* Products are developed inservice for customization

* Only marketing people wereconcerned with the customer

* Everyone in the company isconcerned with the customer

* Marketing management was anindependent function

* Marketing is managed by cross-functional teams

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THE OLD THE NEW

Products were developed to enter newmarkets

Products are developed to meetcustomer needs

Brands were built to have differentiatefamily status

Brands are positioned to offerdistinctive value

Communications were used to conveybrand associations

Communications are used to createexpectations of value

Delivery systems were used to makepurchases easier

Delivery is used to support the valuescheme

Relationships were less important thansales

Relationships are built to offer lifetimecustomer value

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The three dimensions(CRM, Relationship Marketing andMarketing) are very clearly included in a concept calledHolisticMarketing framework. The holistic marketing

framework allow management to answer the followingquestions:

How can a company identify new value opportunitiesfor renewing its marketing-(Marketing Dimension)

How can a company create more promising new valueoffering?-(Stakeholder Relationship Dimension)

How can a company use its capabilities andinfrastructure to deliver the new value offeringefficiently?-(CRM Dimension)

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HOLISTIC MARKETINGFRAMEWORK

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TRANSACTION V/S RELATIONSHIP MARKETING

TRANSACTION MARKETING RELATIONSHIP MARKETING

Functional marketing Cross-functional marketing

Focus on a single sale Focus on customer retention

Orientation on product features Orientation to customer values

Short time scale Long time scale

Little emphasis on customerservice

High emphasis on customerservice

Limited customer contact High customer contact

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HOW CRM ISDIFFERFROM MARKETING

AS compare to marketing, CRM views products as processes

- Customer receives value not only from purchase but from each

exchange between the customer and provider- -Thus managing relationship based processes is a core

competence

CRM is customer value creation or co-creation

-- According to this approach competitive advantage is not basedexclusively on price but also on the ability of the provider to helpcustomers create value for themselves

CRM related to providers responsibilities

-- A company can build stronger relationships with its customers only ifit takes the responsibility for developing these relationships andoffers its customers possibilities to create value for themselves.

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FOLLOWINGARETHEAREASINWHICHCRMISAPPLICABLE

Identify new customers

Acceptance of orders, conditions

Order Entry

Increase Order status

Post Entry review

Adjustments, Invoices

Change orders

Communication with customers

Complaints and adjustments

Credit

Customer Inquiries

Damage claims

Delivery of goods

Selection of Quotations

Sales Force Training

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CRM AS A TOOL FOR MANAGING COMPLAINTS AND


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CRMASATOOLFORMANAGINGCOMPLAINTSANDADJUSTMENTSFORPROFIT

Pricing : In case of too high pricing, incorrect discount, etc

Communications and Instructions: When customer cannotunderstand printed materials from company or attempts to followinstructions and fails to obtain appropriate results

Insufficient support: Not enough trained personnel to answer

questions about technical applications or software problems

Mis-billing Performance: Product allocated but not transport orservice charged for- but not performed

Mis-billing Account: Service or product has been billed to thewrong account, division or department

Misdirection: Product transported to wrong location

Quality: Product or service doesnt meet specifications21


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Features: Product or service not as represented, product orservice fails to perform

Availability: customer is unable to obtain product/service

Delays: Customer was delayed unreasonably in accessingdepartment or placing order for product or service

Physical damage: Product arrived in damaged condition

Allowances: Vendor failed to provide top advertising/promotional

allowances Personnel: Customer received poor service or was insulted by

perceived poor attitude of service givers

Incorrect Information: Customer received incorrect informationabout policies or procedures may give rise to a complaint

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FOLLOWINGARETHEDIFFERENTINSTRUCTIONSWHICHNEEDDIFFERENTCUSTOMERRELATIONSHIPMANAGEMENT

In the Retail Business: A customer-oriented retails organizations has a widevariety of products, convenient hours, parking, reasonable policies on returnsand exchange and ready availability of trained and polite sales and servicepersonnel.

In consumer Direct Marketing: The nature of the business required a highdegree of trust on the part of customers and centers on ready availability ofadvertised products, prompt delivery and a liberal exchange and return policy.

Direct marketing is also a highly competitive business in upscale.

In the Manufacturing Business: A truly customer-oriented customer serviceorganization recognizes that its primary obligation is to help customers. Themain areas which are emphasized are delivery, stock availability specific skills

on the part of customer service personnel, uniformity with quality standards,etc.

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In Banking and Financial Services: of all services, retail banking has shownthe greatest advances in customer service, ATMS, effective and interactivephone systems for handling account queries, increased availability and higherskill levels of customer service personnel, faster turnaround on loans andquick resolution problems. All are signs of a customer-oriented retail banking

organization.

In the Transportation Industry: The industry has two main sectors-passenger and freight. Its already been noted that the airline industry hasdemonstrated customer oriented service. Airlines tend to emphasize facilitiesand personnel, along with special discount fares aimed primarily at spare time

travelers, regular business travelers, selection of carriers in terms ofcombination of routes and schedules, since travelers come into contact withso many different categories of service givers. In the course of a typical trip,telephone personnel, ticket agents and ground crews at the airport and highlytrained flight crews and interpersonally sensitive personnel are essential tocustomer oriented service.

In the Hospitality Industry: Customer service is the main element. Thevariety of the hospitality industry makes it difficult to simplify about customerservice quality, but certainly good logistics and highly trained personnel areessential.

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In the Public Utility Industry: Although public

utilities have historically been monopolies, in recentyears, consumerism and regulatory bodies haveforced them to become more responsive to theircustomers. Although the most visible improvementhas been in the area of billing practices, general

customer relations utilities have also had a goodresponse to the consumers to pay their bills andhandle other transactions. They have also investedheavily in training contact personnel, recognizing

that they have a direct influence on a regulatoryprocess.

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TYPES OF CRM


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TYPESOF CRM

Proactive versus Reactive CRM (Proactive CRM includescompanies with progressive outlook, those who not only understandand translate their customer value proposition through their entireoffering but also attempt to accommodate the future needs of their

customers. Proactive CRM focus on customer Data Analytics as wellas Reactive CRM focus on customer interaction management)

Operational CRM( The consumer approaches the business in far toomany ways than in the past. Its also known as front office CRM, itinvolves the areas where direct customer contact occurs. Theseinteractions are referred to as customer touch points .The customertouch points are classified into:

Face-to-Face touch Points(Sales/Service/Channel/Events/Stores/Promotion)

Database driven touch points

(Telephones/Emails/Mails/SMS/Fax/ATMs) Mass Media

(Advertising/PR/Websites)

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At any of these touch points, any number of thefollowing transactions can take place

Financial transaction Sale

Payment

Return of sale

Information transaction Request for information

Complaint

Suggestion

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Collaborative CRM( The collaborative CRM is tomanage various partners of the company be it businesspartners, agents, brokers, intermediaries like

distributors, dealers, resellers and retailers). Bymanaging all these partners, it tries to in turn facilitatethe addition of various activities like Marketing, sale,service/support and quality.

Analytical CRM( Also known as back-office or strategicCRM, it involves understanding the customer activitiesthat occurred in the front office. It involves analyzinglarge amounts of cross-functional data using datamining and other methods and feeding the result back to

operational CRM. It also studies consumer behaviorpatterns that helps t know what products to position forcross-selling/up-selling and the level and kind of serviceto deliver to meet customer demand.

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TYPESOFCRMASDEPENDENTONLEVELOF

PERSONALIZATION

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intro to crm

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