Ecrm

E-Customer Relationship Management
This book is a part of the course by Jaipur National University, Jaipur.

This book contains the course content for E-Customer Relationship Management.
JNU, Jaipur
First Edition 2013
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JNU makes reasonable endeavours to ensure content is current and accurate. JNU reserves the right to alter the
content whenever the need arises, and to vary it at any time without prior notice.
Index
I. Content..................................................................... II
II. List of Figures...................................................... VII
III. List of Tables.................................................... VIII
IV. Abbreviations........................................................IX
V. Case Study............................................................ 147
VI. Bibliography....................................................... 152
VII. Self Assessment Answers................................. 155
Book at a Glance
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Contents
Chapter I........................................................................................................................................................ 1
Introduction to CRM.................................................................................................................................... 1
Aim................................................................................................................................................................. 1
Objectives....................................................................................................................................................... 1
Learning outcome........................................................................................................................................... 1
1.1 Customer Relationship Management........................................................................................................ 2
1.2 The Evolution of CRM............................................................................................................................. 2
1.3 Goals of CRM........................................................................................................................................... 3
1.4 Aspects of Certification............................................................................................................................. 5
1.4.1 Operational CRM...................................................................................................................... 5
1.4.2 Collaborative CRM................................................................................................................... 5
1.4.3 Analytical CRM........................................................................................................................ 5
1.5 CRM Pyramid........................................................................................................................................... 5
1.6 CRM and its Components......................................................................................................................... 6
1.6.1 People Management.................................................................................................................. 6
1.6.2 Lead Management..................................................................................................................... 6
1.6.3 Sales Force Automation............................................................................................................ 7
1.6.4 Customer Service...................................................................................................................... 7
1.6.5 Marketing.................................................................................................................................. 7
1.6.6 Work Flow Automation............................................................................................................. 7
1.6.7 Business Reporting................................................................................................................... 7
1.6.8 Analytics................................................................................................................................... 7
1.7 CRM Drivers............................................................................................................................................. 7
1.8 The Changing Role of CRM: CRM and Telemarketing........................................................................... 8
1.9 Obstacles in CRM Success....................................................................................................................... 9
1.9.1 Beware of Trojan Horses.......................................................................................................... 9
1.9.2 Understand the True Costs of Customisation........................................................................... 9
1.9.3 CRM Software is not a Magic Wand...................................................................................... 10
1.9.4 Don’t Overreach..................................................................................................................... 10
1.10 Internet’s Influence on CRM................................................................................................................ 10
1.11 CRM and Globalisation.........................................................................................................................11
1.11.1 Relationship with Customer . ............................................................................................... 12
1.11.2 Globalisation and CMR........................................................................................................ 12
1.12 Major CRM Packages........................................................................................................................... 12
Summary...................................................................................................................................................... 14
References.................................................................................................................................................... 14
Recommended Reading.............................................................................................................................. 15
Self Assessment............................................................................................................................................ 16
Chapter II.................................................................................................................................................... 18
Customer and Customer Strategy............................................................................................................. 18
Aim............................................................................................................................................................... 18
Objectives..................................................................................................................................................... 18
Learning outcome......................................................................................................................................... 18
2.1 Who is a Customer?................................................................................................................................ 19
2.2 Customer as an Asset.............................................................................................................................. 20
2.3 Customer Service Concerns.................................................................................................................... 20
2.4 Customer Interaction Cycle.................................................................................................................... 21
2.5 Customer Interaction and CRM.............................................................................................................. 24
2.6 Customer Dimensions............................................................................................................................. 24
2.7 Customer Touch Points........................................................................................................................... 25
2.8 Customer Retention Strategy.................................................................................................................. 26
2.9 Total Customer Experience . .................................................................................................................. 27
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2.10 Customer Strategy Basics..................................................................................................................... 28
2.11 Customer Loyalty.................................................................................................................................. 28
2.12 Customer Satisfaction........................................................................................................................... 29
2.13 Customer Profiling and Modeling........................................................................................................ 30
2.14 Key Account Management Strategy..................................................................................................... 30
2.15 Customer Contact Technology Strategy (Call centres)......................................................................... 31
2.15.1 Computer Telephony Component......................................................................................... 32
2.15.2 IVR and ACD Integration..................................................................................................... 32
2.15.3 IVR and Voice Broadcasting................................................................................................. 32
2.15.4 Graphical Design Tool for IVR Applications....................................................................... 32
2.15.5 Workforce Management (WFM).......................................................................................... 32
2.15.6 Workforce Management and Job Assignment using Voice XML......................................... 33
2.15.7 Standalone Softphone........................................................................................................... 33
2.15.8 Softphone Embedded in PC Applications............................................................................. 33
2.15.9 Softphone Embedded in Web Application............................................................................ 33
2.15.10 Web Application Embedded in a Web Phone..................................................................... 33
2.16 Customer Satisfaction Research........................................................................................................... 33
2.17 Customer Strategy Levers..................................................................................................................... 34
2.18 Capturing Value through Customer Strategy........................................................................................ 34
Summary...................................................................................................................................................... 36
References.................................................................................................................................................... 36
Self Assessment............................................................................................................................................ 37
Chapter III................................................................................................................................................... 39
Customer Centric Enterprise (CCE)........................................................................................................ 39
Aim............................................................................................................................................................... 39
Objectives..................................................................................................................................................... 39
3.1 Introduction............................................................................................................................................. 40
3.2 Characteristics of Customer Centric Organisation................................................................................. 40
3.3 Evolution of Customer Centric Enterprise.............................................................................................. 41
3.4 The Importance of Customer Centricity in a Changing World............................................................... 42
3.5 Benefits of CCE...................................................................................................................................... 42
3.6 Building Blocks of Customer Centricity................................................................................................. 43
3.7 Customer Centricity: A Systematic Solution.......................................................................................... 43
3.8 Product Centricity................................................................................................................................... 44
3.9 Difference Between Product Centricity and Customer Centricity.......................................................... 44
3.10 Customer-Centric Strategy.................................................................................................................... 46
3.11 Specific Adaptations of CCE................................................................................................................ 47
3.12 Creating a Consistent Customer Experience......................................................................................... 48
3.13 Characteristics of a Successful CCE..................................................................................................... 50
Summary...................................................................................................................................................... 52
References.................................................................................................................................................... 52
Self Assessment............................................................................................................................................ 53
Chapter IV................................................................................................................................................... 55
Customer Lifecycle Management.............................................................................................................. 55
Aim............................................................................................................................................................... 55
Objectives..................................................................................................................................................... 55
4.1 Introduction............................................................................................................................................. 56
4.1.1 Prospective Customers: The First Phase of the Customer Life Cycle.................................... 57
4.1.2 New Customers or Users: The Second Phase of the Customer Life Cycle............................ 57
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4.1.3 Active Customers or Users: The Third Phase of the Customer Life Cycle............................ 58
4.1.4 Repeat or Loyal Customers or Users: The Fourth Phase of the Customer Life Cycle........... 58
4.1.5 Lapsed Customers or Users: The Fifth Phase of the Customer Life Cycle............................ 58
4.1.6 Inactive or Abandoned Customers or Users: The Sixth Phase of the Customer Life Cycle... 58
4.2 Customer Lifecycle Management........................................................................................................... 59
4.3 Telecom Lifecycle Management (TLC) Process.................................................................................... 59
4.4 Telecom Lifecycle Management Provider.............................................................................................. 60
4.5 Benefits of TLC...................................................................................................................................... 61
4.6 Five Stages of a Customer Development Cycle..................................................................................... 61
4.7 Managing Customer Lifecycle in Customer Centric Enterprise (CCE)................................................. 62
4.8 The Customer Life Cycle Defined.......................................................................................................... 62
4.8.1 The Customer’s Role.............................................................................................................. 63
4.8.2 The Enterprise’s Role.............................................................................................................. 64
4.9 Customer Lifetime Value........................................................................................................................ 64
4.10 Importance of CLV............................................................................................................................... 65
4.11 Uses of CLV Measure for Developing Customer Centric Strategies . ................................................. 65
4.12 Organisational Challenges in Implementing a CLV-based Framework . ............................................. 65
4.12.1 Transformation from Product Centric to Customer Centric Marketing . ............................. 65
4.12.2 Challenges in Data Collection and Management . ............................................................... 66
4.13 How to Make the Most of the CLV Framework? ................................................................................ 66
4.13.1 Maximise Customer Lifetime Value by Managing the Customer Lifecycle........................ 66
4.14 Introduction to Customer Value Management (CVM)......................................................................... 67
4.14.1 Uses of Customer Value Management.................................................................................. 67
4.14.2 Customer Value Management Measurement and Calculation.............................................. 67
4.14.3 A Good Customer Value Management Score....................................................................... 67
4.14.4 Changes in Customer Value Management Scores................................................................ 68
4.14.5 Drivers of the Change in the Customer Value Management Score...................................... 68
Summary...................................................................................................................................................... 69
References.................................................................................................................................................... 69
Self Assessment............................................................................................................................................ 71
Chapter V..................................................................................................................................................... 73
Types of CRM.............................................................................................................................................. 73
Aim............................................................................................................................................................... 73
Objectives..................................................................................................................................................... 73
5.1 Introduction............................................................................................................................................. 74
5.2 Operational CRM.................................................................................................................................... 74
5.3 Collaborative CRM................................................................................................................................. 76
5.4 Customer Centric.................................................................................................................................... 77
5.5 Multi-channel Strategy............................................................................................................................ 78
5.6 Evolution of Contact Centres.................................................................................................................. 79
5.7 Contact Centre........................................................................................................................................ 79
5.8 Changing Customer Preferences............................................................................................................. 80
5.9 Industry Trends....................................................................................................................................... 80
5.10 Technology Trends................................................................................................................................ 80
5.11 Business Drivers................................................................................................................................... 82
5.12 Analytical CRM.................................................................................................................................... 82
5.13 Analytics and Customer Life Cycle Management................................................................................ 84
5.14 CRM Data Warehouse.......................................................................................................................... 84
Summary...................................................................................................................................................... 87
References.................................................................................................................................................... 87
Self Assessment............................................................................................................................................ 89
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Chapter VI................................................................................................................................................... 91
CRM Project Management........................................................................................................................ 91
Aim............................................................................................................................................................... 91
Objectives..................................................................................................................................................... 91
6.1 Projects.................................................................................................................................................... 92
6.2 Project Attributes.................................................................................................................................... 92
6.3 Characteristics of a Project..................................................................................................................... 93
6.4 Factors Influencing a Project.................................................................................................................. 93
6.5 Project Management............................................................................................................................... 94
6.6 Need of Project Management.................................................................................................................. 95
6.7 Project Management Life Cycle............................................................................................................. 96
6.8 The Role of Project Manager.................................................................................................................. 98
6.9 Responsibilities of a Project Manager.................................................................................................... 99
6.10 Soft Skills Important for a Project Manager....................................................................................... 100
6.11 Elements of Project Management....................................................................................................... 101
6.12 Behavioral Aspects of Project Management....................................................................................... 102
6.12.1 Project Cost Management................................................................................................... 102
6.12.2 Project Risk Management................................................................................................... 103
6.13 Defining the CRM Vision................................................................................................................... 104
6.13.1 Building a CRM Vision...................................................................................................... 105
6.14 Establishing CRM Project Objectives................................................................................................ 106
Summary.................................................................................................................................................... 108
References.................................................................................................................................................. 108
Recommended Reading............................................................................................................................ 108
Self Assessment.......................................................................................................................................... 109
Chapter VII................................................................................................................................................111
E-CRM........................................................................................................................................................111
Aim..............................................................................................................................................................111
Objectives....................................................................................................................................................111
Learning outcome........................................................................................................................................111
7.1 Introduction............................................................................................................................................112
7.2 Need of E-CRM.....................................................................................................................................112
7.3 Benefits of E-CRM................................................................................................................................113
7.4 Framework of E-CRM...........................................................................................................................116
7.5 Key Features of E-CRM........................................................................................................................119
7.6 Achieving Customer Optimisation........................................................................................................ 120
7.7 Six ‘E’s in E-CRM................................................................................................................................ 120
7.8 E-CRM Applications............................................................................................................................. 121
7.9 Similarities Between CRM and E-CRM............................................................................................... 122
7.10 Differences Between CRM and E-CRM............................................................................................. 122
7.11 Components of E-CRM...................................................................................................................... 123
7.12 Major ECRM Pitfalls and ways to Avoid them.................................................................................. 124
7.13 Trends in ECRM................................................................................................................................. 125
Summary.................................................................................................................................................... 126
References.................................................................................................................................................. 126
Self Assessment.......................................................................................................................................... 128
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Chapter VIII.............................................................................................................................................. 130
Implementing CRM.................................................................................................................................. 130
Aim............................................................................................................................................................. 130
Objectives................................................................................................................................................... 130
Learning outcome....................................................................................................................................... 130
8.1 Introduction........................................................................................................................................... 131
8.2 Characteristics of a Good CRM Implementation.................................................................................. 131
8.3 Factors Affecting CRM Implementation.............................................................................................. 132
8.4 CRM Implementation Challenges......................................................................................................... 133
8.5 Key Challenges in CRM Implementation............................................................................................. 135
8.6 Steps to Implementing CRM................................................................................................................ 135
8.7 CRM Implementation Phases............................................................................................................... 136
8.8 Post Implementation Pitfalls................................................................................................................. 142
8.9 Implementation of E-CRM................................................................................................................... 142
Summary.................................................................................................................................................... 143
References.................................................................................................................................................. 143
Self Assessment.......................................................................................................................................... 145
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List of Figures
Fig. 2.1 Customer interaction cycle.............................................................................................................. 21
Fig. 2.2 Key account management strategy.................................................................................................. 31
Fig. 4.1 Customer life cycle.......................................................................................................................... 56
Fig. 4.2 Customer life cycle in customer centric enterprise......................................................................... 63
Fig. 5.1 Data warehouse architecture............................................................................................................ 85
Fig. 5.2 Analytic CRM.................................................................................................................................. 86
Fig. 6.1 Project management life cycle......................................................................................................... 96
Fig. 6.2 Project initiation.............................................................................................................................. 97
Fig. 6.3 Project planning............................................................................................................................... 97
Fig. 6.4 Project execution............................................................................................................................. 98
Fig. 6.5 Project closure................................................................................................................................. 98
Fig. 6.6 Role of a project manager................................................................................................................ 99
Fig. 6.7 Risk qualification........................................................................................................................... 104
Fig. 7.1 Framework of E-CRM....................................................................................................................117
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List of Tables
Table 7.1 Similarity between CRM and E-CRM........................................................................................ 122
Table 7.2 Difference between CRM and E-CRM....................................................................................... 123
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Abbreviations
ACD - Automatic Call Distributor
AI - Artificial Intelligence
AMR - Automatic Meter Reading
API - Application Programming Interfaces
B2B - Business-to-Business
B2C - Business-to-Consumer
BPI - Business Process Improvement
BPR - Business Process Re-engineering
CCE - Customer Centric Enterprise
CDR - Customer Data Repositories
CEA - Connected Enterprise Architecture
CEM - Customer Experience Management
CI - Customer Intelligence
CLC - Customer Life Cycle
CLV - Customer Lifetime Value
CRM - Customer Relationship Management
CRP - Conference Room Pilot
CSR - Customer Service Record
CTI - Computer Telephony Integration
CVA - Customer Value Added
CVM - Customer Value Management
DCF - Discounted Cash Flows
DNIS - Dialled Number Identification Service
DSC - Data Stream Compatibility / Direct Satellite Communications
ECRM - Electronic Customer Relationship Management
EDI - Electronic Data Interchange
ERMS - E-mail Response Management Software
ERP - Enterprise Resource Planning
GDP - Gross Domestic Product
HSBC - Hongkong Shanghai Banking Corporation
IRR - Internal Rate of Return
IT - Information Technology
ITC - Industrial Training Centre
IVR - Interactive Voice Response
KPI - Key Performance Indicators
MA - Marketing Automation
MLS - Multi Level Security
OLAP - Online Analytical Processing
PBX - Public/Private Branch Exchange
PC - Personal Computer
PMI - Project Management Institute
POS - Point of Sale
PPM - Project Portfolio Management
PRM - Partner Relationship Management
RFI - Request for Information
RFP - Request For Proposal
ROI - Rate of Income/ Return on Investment
SaaS - Software as a Service
SFA - Sales-Force Automation
SME - Subject Matter Expert
SOP - Standard Operating Procedure
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TLC - Telecom Lifecycle Management
UM - Unified Messaging
VoIP - Voice Over Internet Protocol
WACC - Weighted Average Cost of Capital
WBS - Work Breakdown Structures
WFM - Workforce Management
WH - Web House
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Chapter I
Introduction to CRM
Aim
The aim of this chapter is to:
• explicate importance of CRM
• explain the strategies of CRM
• elucidate the goals of CRM
Objectives
The objectives of this chapter are to:
• examine the aspects of certification
• analyse the obstacles in the success of CRM
• describe the true costs of customisation
Learning outcome
At the end of this chapter, you will be able to:
• define CRM
• understand the relationship between the customers and the CRM
• identify the major CRM packages
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1.1 Customer Relationship Management

CRM, or Customer Relationship Management, is a company-wide business strategy designed to reduce costs
and increase profitability by solidifying customer satisfaction, loyalty, and advocacy. True CRM brings together
information from all data sources within an organisation (and where appropriate, from outside the organisation) to
give one, holistic view of each customer in real time. This allows customer facing employees in such areas as sales,
customer support, and marketing to make quick yet informed decisions on everything from cross-selling and up
selling opportunities to target marketing strategies to competitive positioning tactics.
Once thought of as a type of software, CRM has evolved into a customer-centric philosophy that must permeate an
entire organisation. There are three key elements to a successful CRM initiative: people, process, and technology.
The people throughout a company-from the CEO to each and every customer service rep-need to buy in to and
support CRM. How can this process better serve the customer? Firms must select the right technology to drive these
improved processes, provide the best data to the employees, and be easy enough to operate that users won’t balk.
If one of these three foundations is not sound, the entire CRM structure will crumble.
It’s a strategy used to learn more about customers’ needs and behaviors in order to develop stronger relationships
with them. After all, good customer relationships are at the heart of business success. The more useful way to think
about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing
effectiveness, responsiveness and market trends. If customer relationships are the heart of business success, then
CRM is the valve of the heart that pumps a company’s life blood. As such, CRM is best suited to help businesses
use people, processes, and technology to gain insight into the behavior and value of customers.
This insight allows for:

• Improved customer service
• Increased call centre efficiency
• Added cross-sell and up sell opportunities
• Improved close rates
• Streamlined sales and marketing processes
• Improved customer profiling and targeting
• Reduced costs and
• Increased share of customer and overall profitability
This sounds like a panacea, but CRM is not without its challenges. For CRM to be truly effective, an organisation must
convince its staff that change is good and that CRM will benefit them. Then it must analyse its business processes to
decide which need to be reengineered and how best to go about it. Next is to decide what kind of customer information
is relevant and how it will be used. Finally, a team of carefully selected executives must choose the right technology
to automate what it is that needs to be automated. This process, depending upon the size of the company and the
breadth of data, can take anywhere from a few weeks to a year or more. And although some firms are using Web-
based CRM technologies for only hundreds of dollars per month per user, large companies may spends millions to
purchase, install, and customise the technology required to support its CRM initiative.
1.2 The Evolution of CRM

While times have been tough, and things are still far from easy, many businesses like yours have turned to customer
relationship management (CRM) to help maximise revenues and keep costs low. But if you use CRM primarily as
a contact management system you may be failing to capitalise on all the ways in which it can bring you closer to
your customers.
Used effectively CRM can help to connect all the different parts of your company, ensuring that everyone, in every
department and business area, works together to deliver an excellent customer experience. Done well, CRM can
go way beyond simply managing a particular sale, dealing with a specific service issue, or resolving a customer’s
complaint. Having evolved beyond its beginnings in contact management CRM solutions now encompass not only
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sales force, marketing and service automation, they also provide a platform for winning, keeping, and developing
customers. Such has been the change in perception that CRM is now sometimes referred to as customer experience
management, or CEM.
This more holistic approach to CRM, supported by a comprehensive and powerful CRM solution, is helping
organisations to focus their efforts on those customers and prospects that are most valuable to them. Providing a cost
effective way to drive revenues up and costs down, businesses moving to more sophisticated solutions typically see
a fast return on investment coupled with a low total cost of ownership. The advantages of web-based CRM are that
they are real-time systems and can be accessed and amended simultaneously by different departments in different
geographical locations. Some of the key functions typical to an effective CRM system are as follows:
Marketing
Customer data can be used to help target marketing drives, create different material to capture different leads and
assign the correct member of the sales team to follow up on that lead. Customer data usually begins with a record
of all of the organisations or individuals the business deals with, arranged by category, or role. Customer activity
such as emails, orders and invoices can all be linked to this.
Sales
CRM can provide a range of tools to a sales team, including Activity management, Opportunity tracking, Pricing and
Forecasting. Sales success can be fully analysed, allowing accurate sales forecasts and individual sales performances
can also be tracked.
Order fulfilment
A CRM system can create, record and effectively manage order fulfilment data such as transaction documents, sales
orders, invoices, purchase orders and credit notes.
Customer support
CRM can improve the quality of service delivered to customers, by managing all their queries, complaints, feedback
and testimonials in one place. In this respect, CRM can be extremely helpful in identifying issues with products
or services. Often, CRM includes a system to generate ‘cases’ – issues reported by the customer who require an
investigation to prevent reoccurrence. The use of web-based CRM avoids using separate applications for every
business function, each with their own bank of electronic records, folders and files.
Instead, they are brought together, joining up data from previously disparate areas like sales, marketing, technical
support and customer relations, allowing an accurate, consistent view of customers. As such, companies using an
effective CRM system could be seen as having a significant competitive edge over rival companies.
1.3 Goals of CRM

Companies that want to lock in customer loyalty and maximise profitability need to employ four CRM tactics:
• build a customer growth strategy upon a CRM foundation of strategic intent and cost management
• avoid the CRM whipsaw effect
• don’t buy into the technology silver bullet and
• measure satisfaction with CRM
These tactics will ensure that CRM programs can successfully adapt to the pending changes in the economy.
Build a customer growth strategy

Businesses must build top-line growth strategies upon the foundation of their CRM programs by ensuring that
strategic intent and cost management measures are institutionalised. Many companies have not determined
strategic intent or have not focused on developing clear metrics to measure performance. Yet many have done some
cost-cutting within customer-facing functions and lowered their cost-to-serve just to reduce the overall cost of sales.
These cost-structure changes should be modified to invest in these fields of CRM so that growth strategies gain
some early wins, no matter what state the economy is in.
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Avoid the whipsaw effect

Senior management commitment is critical to the success of any major corporate initiative. CRM is certainly no
exception. In fact, IT decision-makers ranked executive sponsorship as the most important factor for maximising
the return on their CRM investments. If CRM initiatives are not in the CEO’s agenda, then investments in these
initiatives have a much lower probability of success.
Additionally, because CRM is a fundamental shift in the way a company does business with its customers, rather
than just a one-time e-business initiative, it requires continuous leadership support over multiple years. This type
of long-term senior management support can only be achieved and maintained if a long-term strategic plan is
developed. The time frame also requires the strategic plan to have built-in contingencies for the ups and downs of
the business cycle. Without this type of flexible strategy, companies get caught in a CRM whipsaw: overinvesting
in one year and then cutting to the bone in the next. The result is unrealised investments, squandered opportunities,
and a loss of employment for the CRM champion. The whipsaw may affect users as well. Employees whose new
customer-centric behaviors enable CRM success can get caught in the whipsaw if communications about customer
strategy and CRM processes are not clear or consistent throughout changes in the business cycle.
Don’t buy in to the technology magic bullet

The CRM vendor landscape is changing rapidly. Placing all bets on a single vendor or technology can prove disastrous.
The unstable economy has caused a vendor shakeout. It has reduced the number of CRM vendors, but also has
enabled the strongest companies to survive with the best integrated offerings. Strong vendors, after acquiring or
merging with smaller niche vendors, still have to refine the resulting integrated offerings. Even so, research indicates
software functionality is not the prime factor in selecting a CRM vendor. Financial viability and ROI remain the
most important factors in selecting a vendor, and reflect the fact that the best-of-breed approach in recent years has
left a number of companies holding the bag of unsupported applications.
Measure satisfaction with CRM

Measuring CRM success has often been elusive, but it is possible to measure satisfaction with CRM. Companies
have often measured success either by ROI or by changes in customer satisfaction to justify CRM benefits. Although
capturing ROI and preventing CRM budget expansion is important, research indicates that 60 percent of companies
claim their CRM initiatives met or exceeded expectations. Of the rest, 25 percent did not set expectations. So for the
moment, there appears to be more satisfaction with CRM projects. Given the complexity and level of investment
in CRM, companies need to ensure they understand the drivers of value in their customer relationships before they
embark on major initiatives, as well as build robust business cases for internal measures of CRM success.
Plan for growth

Up to 44 percent of companies do not have a strategic plan in place, although many respondents are planning or
implementing CRM initiatives. Those that do not have one in place are likely to be out of position to reap benefits
from CRM. As benefits from CRM take longer on average than benefits from e-business, there will be a lag between
the companies that have a plan that can execute and those that will need to start a strategic plan. Developing a CRM
strategic plan takes one to two quarters, which is about the duration of catch-up that companies without a current
plan will face. While cost reductions will provide a sound CRM foundation, the real benefits come from top-line
growth and these gains should be pursued within a CRM program no matter which way the economic pendulum
is swinging.
Those companies that don’t have a sound CRM strategy should use the current economic downturn to begin
developing their strategy to include both short- and long-term scenarios with ranges of ROI for different CRM
initiatives. Then, depending on how and where the economy improves, their focus will be on executing against the
best scenario. Those with plans should prepare their customer-facing units for the economic recovery ahead and
ensure that the organisation is aligned with incentives for growth. Those companies with initiatives on hold should
have implementation plans drafted so they may ramp up quickly when CRM budgets are restored.
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1.4 Aspects of Certification
There are three main aspects of CRM; each of them can be implemented in isolation:
• Operational CRM: The automation or support of constituent processes involving sales or service
representatives.
• Collaborative CRM: Direct communication with constituents not involving sales or service representatives
(“self service”).
• Analytical CRM: The analysis of constituent data for a broad range of purposes.
1.4.1 Operational CRM

Operational CRM provides support to “front office” business processes, including sales, marketing and service. Each
interaction with a constituent is generally added to a constituents contact history, and staff can retrieve information
on constituents from the database if necessary. Focus on constituents’ value is the key to a successful CRM strategy.
Different constituents have to be treated differently. Variables like constituents’ ranking, actual value and potential
value are strategy drivers.
1.4.2 Collaborative CRM

Collaborative CRM covers the direct interaction with constituents. This can include a variety of channels, such as
internet, email, or automated phone answering system. It can generally be equated with “self service”.
The objectives of Collaborative CRM can be broad, including cost reduction and service improvements. Collaborative
CRM seems to be the new paradigm to succeed the leading efficient consumer response and category management
concept in the industry/trade relationship. Many organisations are searching for new ways to use constituent intimacy
to gain and retain a competitive advantage. Collaborative CRM provides a comprehensive view of the constituent, with
various departments pooling constituent data from different sales and communication channels. Collaborative CRM
also includes Partner Relationship Management (PRM) which enables organisations to manage their relationships
with partners (consultants, resellers and distributors), and potentially the constituents of those partners.
1.4.3 Analytical CRM

Analytical CRM analyses constituent data for a variety of purposes, including:
• design and execution of targeted marketing campaigns to optimise marketing effectiveness
• design and execution of specific constituent campaigns, including constituent acquisition, cross-selling,
up-selling, retention
• analysis of constituent behavior to aid product and service decision making (for example, pricing, new product
development, and many more)
• management decisions, for example, financial forecasting and constituent profitability analysis
• risk assessment and fraud detection for credit card transactions
• Analytical CRM generally makes heavy use of predictive analytics.
1.5 CRM Pyramid

The CRM pyramid consists of three layers as follows:
Technology
CRM always focus on 360 degree view of customers where the overall departments in the organisation are able to
have access to customers’ information which they are able to use in making decisions about what the customer wants
and how to meet those needs. Without technology, the benefits of CRM would have been elusive. Technology adds
voices to CRM as it allows organisation to dig out customers’ information and read meaning to those information.
With technology, coupled with adequate information at the disposal of the organisation, they can predict many things
including what the customers want and their reactions among others. After all, it is said that CRM is all about the
ability to predict the customers’ next move and meeting them at the right place with the right products and services.
If you want to satisfy your customers, never doubt what technology can do.
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Organisational structure
One of the things that always make a customer-centric enterprise to stand out is the presence of a flexible organisational
structure. In a customer-centric enterprise, every individual’s primary focus is on how to satisfy their customer’s
interest and retain them for life and that happens to be the driving force for the organisation. There are three main
departments that are much more concerned as far as the issue of customer-centric enterprise is concerned and the three
departments are often referred to as ‘customer facing ‘because of the level of the relationship with their customers.
They have the tendency to know more about the customers and get vital information from them. One reason then
why CRM organisational structure must be flexible is based on the fact that, they need to take decisions on time
and the need to collaborate in order to present a good corporate image to the customers.
A typical example of this is that, customer service can help identify profitable customers and they can also advice
marketing and sales on the best products to introduce to customers among others.
CRM strategy
When we talk about CRM strategy, we are talking about plans that you have on how to relate with your customers
and do business from their perspective. There are some vital things you have to consider under CRM strategy
which will go a long way in determining whether you will succeed or not .Such includes finance as we all know
that CRM is a very expensive project .How do we go about raising the required capital? Others include growth,
logistics, shareholder management and market. I mentioned shareholder management because in CRM, you don’t
expect profit overnight. It is something that you have to cast your bread upon waters and see it after many days. If
dividends are not coming forth, shareholders are bound to rebel, but with proper communication and support, you
will have their nod.
1.6 CRM and its Components

CRM comprises several components absolutely essential to the organisation. Each of them offers something different
yet its importance cannot be undermined. Recent trends have enabled users to combine two or more components
for better success.
The components of CRM are:

• People Management
• Lead Management
• Sales Force Automation
• Customer Service
• Marketing
• Workflow Automation
• Business Reporting
• Analytics
1.6.1 People Management

People Management is nothing but the effective use of people in the right place at the right time. It is imperative
to adopt the right measures to ensure that the people skills match their job profiles. This is every large corporate
requirement as well as small and medium industries. According to People Management an effective people strategy
is first adopted, then the workforce is studied, skills and development analysed and finally the required strategy
needed for development and change is set down and implemented.
1.6.2 Lead Management

Lead Management basically involves the tracking and distribution of sales leads. This benefits the sales, call centre
and marketing industries as well. The work involves managing market campaigns, making customised forms,
mailing lists and many more. All this is done with a view to capture as many sales lead as possible so that sales
benefits. This is achieved through a comprehensive study of customer purchase patterns and the identification of
potential sales leads.
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1.6.3 Sales Force Automation
Sales Force Automation is by far one of the most essential components of customer relationship management and
also one of the first. Used by almost all organisations it is nothing but a software solution that includes forecasting,
tracking potential interactions and processing of sales. The reason this is adopted as part of a CRM solution is
because of the need to identify revenue possibilities.
1.6.4 Customer Service

The customer service component in CRM is essential. This is because CRM focuses on collation of customer data,
gathering information about their purchase patterns and provides this information to every department that requires
it. Therefore vital departments like sales, marketing and personnel stand to gain in their knowledge of the customer.
This enables the organisation to provide suitable solutions to every customer and thus enhances customer retention
and loyalty.
1.6.5 Marketing
Marketing is nothing but the promotional activities that are involved in promoting a product either to a general
public or to a specific group. Marketing is different from sales and advertising in that one refers to act of selling
itself while the other refers to the strategy involved. Customer Relationship Management facilitates the marketing
function in that it increases the effectiveness of marketing by studying the potential targeted customers.
1.6.6 Work Flow Automation

Work flow processes include cutting costs and streamlining processes. It basically saves several people from doing
the same job again and again. It reduces work and relieves work force of unnecessary tasks. It also includes things
like routing out paperwork and filling out of forms that are essential. It also includes the integration of people and
processes so that they work together in harmony towards a common objective without any loss of time, money or
effort.
1.6.7 Business Reporting

This is nothing but being able to identify the exact position of your company at any given point of time. CRM plays
a pivotal role in that it provides reports on the business. The advantages of this component include the ability to
have this information at your instant access at any time. Accurate reports are also ensured .While forecasting is yet
another feature it is also possible to actually export these reports to other systems. Historical data can also be saved
to use for comparisons later on.
1.6.8 Analytics
Analytics involve the study of data so that information can be used to study market trends. A complete trend study
is made possible due to the ability to create charts, figures and diagrams using both historical and current data for
information like charts tables, logins and many more. Dashboards can also be used for increased visibility. This is
an essential and pivotal part of CRM as it enables a study of data that is needed to make an estimate of the business
condition at any given point.
1.7 CRM Drivers

The following drivers can reasonably be linked to achieving profitable growth while achieving an acceptable ROI
for the initiative:
• The customer: What are the value needs (opportunities), event triggers, and behavior characteristics of the
customer? Without a commitment to understanding and leveraging these characteristics, how can one cost
effectively manage the customer base and add more profitable customers?
• The processes: As was learned during the dot-com era, the customer’s perception of your company and brand
is based on their total experience. This experience is based on the processes associated with the customer’s
touch points plus the sub-processes that support them. CRM implies using these processes, transaction data,
syndicated, data, and dialogue to achieve the correct experience based on the nature of the customer and the
event circumstance.
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• Management: A focus on customer profitability and managing through processes requires organisational change
that must be led by senior management. Therefore senior management leadership is a key driver of success.
• The vendor: There are vendors that would have one believe that choice of their product is safe or somehow
will automatically lead to success. This is obviously a loose linkage. However, what the vendor provides needs
to make sense with what organisations are trying to achieve; otherwise, they are contributing to diluted ROIs.
Therefore it is accurate to say they are a driver, but the user organisation has the responsibility to effectively
choose and use the capabilities.
• Best practices: Here are basic principles that successful organisations adhere to either consciously or unconsciously
that are essential. Short cuts lead to diminished results and resistance. The convenient scapegoat is always
the system.
1.8 The Changing Role of CRM: CRM and Telemarketing

Customer Relationship Management is a common telemarketing solution to the clients’ customer retention problems.
Research of consumer spending patterns has shown that customers who feel loyal and satisfied are more likely to
become repeat customers. This will lower a business’s customer acquisition costs and build brand recognition, both
of which can translate into an improved bottom line. Telemarketing solutions emphasising Customer Relationship
Management help their clients build this kind of loyalty and reap the associated financial rewards.
Companies that manage their own customer service function often rely on a patchwork of communication channels,
developed haphazardly as their business grew. Although this network is often deeply embedded in the company’s
infrastructure, it is usually not very effective in meeting the needs of its customers. You know how frustrating it is to
call the phone company with a simple request and be transferred to multiple departments? This is a prime example
of the old style of haphazard customer service management. Contracting with a professional customer service
telemarketing can provide the solution to this problem. Of course, adequate scripting must be developed to ensure
that customer requests can be handled with ease by the telemarketing associates, but once the initial work is done
your consumers will benefit from a professionally, deliberately focused customer service effort.
A professionally designed Customer Relationship Management system will give your firm the information and tools
it needs to efficiently manage customer service interactions, collect information to design more efficient customer
systems and marketing efforts, and provide the consumer with consistent, satisfying experiences that will build
confidence and loyalty.
Data collected can be customised and analysed based on your business’s specific requirements, and reporting can be
done at the company’s request or at specific intervals. Not only does the CRM platform increase customer satisfaction
with their interactions with the telemarketing, it enables the associates to handle requests more quickly (and thus,
less expensively). Response times decline dramatically after the installation of a CRM initiative, pleasing customer
and client firm alike. However, many companies are dissatisfied with their Customer Relationship Management
initiatives and software. Unfortunately, once in place, the process must be monitored constantly in order to provide
successful results. Many business fall into the trap of “set it and forget it mentality” and don’t analyse and respond
to the collected information in a timely manner. Some don’t use the information at all, erroneously believing that
collecting it is enough to increase their customer satisfaction ratings.
Of course, there is no one CRM solution that is right for every business application. Make sure that the CRM software
you choose is adaptable to your needs and user friendly. Banks will by nature need to collect different information
than catalogue gift sales. Query other companies and note their positive and negative experiences. Make sure that
the telemarketing CRM solution that you choose can provide you with the information that you need to take you
customer service interactions, and your business, to the next level and beyond!
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1.9 Obstacles in CRM Success
For many companies, CRM equals sales force automation (SFA). Others use the term CRM to describe customer
support management, field service, contact centre, or marketing automation. Confusion or miscommunication on
this important question can result in companies making bad decisions that can cost tens or hundreds of thousands of
dollars and waste months, if not years, of time. Choosing the right system can dramatically improve the productivity
of your team and increase customer satisfaction. The wrong system can create chaos and frustration in addition
to burning through a lot of cash- only to put your organisation in a worse situation than where you started. The
following highlights some of the more common mistakes companies make when choosing a CRM system, and how
to avoid them.
1.9.1 Beware of Trojan Horses

For companies that have deployed an ERP (enterprise resource planning) system, one of the biggest issues is deciding
whether to choose the CRM module bundled with their ERP software or to purchase an independent package. For
many companies, choosing the bundled CRM will be an excellent solution that enables them to save a significant
amount of money. For others, it will be a kind of Trojan horse that ends up costing them money for customisation,
integration and implementation costs. How can your company make the right choice?
The best and only way to determine whether a bundled CRM solution is a good fit is to measure features and
functionality against your CRM needs. Do you need a basic contact centre system that enables your team to open,
log and close calls? Do you need a system that can manage your field service business, and provide a complete sales
force automation solution, or one that offers extensive consumer support or marketing automation capabilities?
CRM is a big space, and it’s not the main focus of some ERP software developers. If the bundled CRM solution is
missing features that are important to your business, your company might be better off investing in a solution that
meets your needs out of the box.
A positive aspect of a bundled ERP CRM solution is that both packages share one common customer database, and
that integration can be valuable. Still, integration between independent CRM and ERP systems can be achieved as
well. A CRM system with well-designed application programming interfaces (APIs) is usually capable of sharing
data with any enterprise system.
1.9.2 Understand the True Costs of Customisation

No matter if your company chooses a bundled or independent CRM solution, it’s rare to find a product that meets
100 percent of your needs. Almost every product will require some customisation, but it’s important to determine
how much customisation you will need to meet your business needs. While one product may meet 80 percent
of your needs out of the box, another one that meets fewer needs initially might be more attractive because it is
customisable. The trick is to avoid falling into the trap of endless customisations; remember that you are buying a
solution, not a toolkit.
In general, there are four levels of customisation for any product, which are as follows:
• The first level involves developing simple rules such as report filters, escalation levels and other business rules
that enable the system to act the way you want, and provide the information you need.
• The second level is the ability to add or change the positioning and formatting of data elements on the screen,
such as adding or moving the position of a box that highlights the product type. These levels represent the types
of changes that CRM teams constantly make to their systems, and it’s important to choose a system that enables
you to perform these using internal staff. Paying a consultant every time you need to generate a new report or
change a screen view is an expensive, time-consuming and frustrating experience.
• The third level of customisation involves scripting to drive process flow. For example, if action A occurs, the
system should perform activity B. These types of activities occur less frequently than the first two levels, but
ideally can be managed by an internal team.
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• Finally, the last level requires managing the application programming interface to enable integration with other
systems. Again, a competent internal team should be allowed to manage this activity, but because it does not
happen that frequently, relying on the vendor for this step will not be too costly over time.
How much will all of these customisations cost? It is not uncommon for professional services such as customisation
and integration to cost up to ten times the initial product price, making what seems like an inexpensive package very
costly in the long run. Discover true costs by calling existing customers to find out what percent of their overall costs
was devoted to the product price, and what percent to other professional services. A one-to-one ratio is ideal.
Some packages and modules are designed to enable an internal IT team to do required modifications, but keep in
mind that some require external consultants. This is particularly true of many of the CRM modules bundled with ERP
systems, so it is important to gauge those costs upfront. Calculate the costs of professional services, customisation
and integration along with the product price to calculate the total cost of ownership.
1.9.3 CRM Software is not a Magic Wand

After reviewing packages that have the right balance of features and customisability, it’s easy to believe that the
software has magical powers that will solve all internal process problems. A robust software package can streamline
steps, eliminate redundancies and inefficiencies and turn a good CRM department into a great one- but, it can’t do
it on its own. It’s important for companies to honestly assess their department’s strengths and weaknesses and find
a product that enhances the former and minimises the latter.
Sometimes this decision is exacerbated when people outside of the CRM department make a product decision. In
many cases, the technology users are expected to accept the management decision. It’s important to communicate
the CRM department’s true needs to all stakeholders on the buying team. Everyone must know the potential benefits
of the software and its impact on the well being of the company. While everyone should be optimistic, it’s more
important to be realistic. Understand your existing processes and how you would like to improve them in the future
so you can choose a product that helps you get to where you want to be.
1.9.4 Don’t Overreach

In the product selection phase, it’s easy to get carried away. Every feature and option looks crucial, and rosy
deployment scenarios abound. CRM teams must work hard to keep their project grounded in reality. The first step
is to create a realistic wish list of features. Beware of outdated or isolated exception options that can turn a simple
process into a nightmare. The key to avoiding “scope creep” is to balance necessary business processes with desired
customisations.
The CRM group will not endear itself to management if it reports that it can deploy all aspects of the product across
the entire company right away. Instead, plan in advance to adopt a phased-in approach. This helps companies
troubleshoot deployment issues on a small scale without bringing the whole department down. Focus on segmented
components of the solution, discover which are most crucial, and roll them out one department at a time.
Beware of deployment schedules that sound too good to be true- they probably are. Again, the best plan is to speak
with existing customers to determine actual deployment schedules, things that worked well and, even more important,
things they would change if they could do it all over again. Learn from their experiences.
Many companies have spent hundreds of thousands of dollars and multiple years on CRM deployment projects, only
to find they made a bad choice and must start over. Don’t let this happen to you. Make sure you calculate the true
cost of the project, recognise the cost and time issues involved in ongoing customisation, be realistic about what the
product can do, and be practical when it’s time to deploy. Together, these steps can add up to CRM success.
1.10 Internet’s Influence on CRM

The relative and marked emergences of CRM as a business strategy has radically transformed the way organisations
operate. Consequently, there has been a shift in business focus from transactional to relationship marketing where
the customer is at the centre of all business activity with organisations now desperately trying to restructure their
processes around the needs of their strategically significant customers.
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The cost of making a new customer is nearly five times that of retaining an existing one. No wonder then, that in
today’s world of decreasing margins, increasing competition and ever changing business environment, corporate
success depends on an organisation’s ability to build and maintain loyal and valued customer relationships. But
that is easier said than done.
One of the greatest challenges to business is the flight of customers looking for more satisfying returns on their
consumer dollar. And, in today’s relentlessly competitive business environment, many companies aggressively
pursue their competitors’ best customers.
A majority of businesses are just beginning to recognise the fact that they are dealing with a customer base that is
more demanding, less satisfied, and less loyal than ever before, in spite of their targeted marketing efforts.
Consider:
• An estimated 58% of all new bank customers leave an institution within just two years.
• As many as 15% of credit card holders switch cards each year. The even bigger problem is the large percentage
of customers who just stop using their card.
• One automobile manufacturer found that 90% of its car owners were satisfied with their vehicle, but only 60%
would consider buying another from the same company and only 40% actually followed through on purchasing
another auto of the same make.
• A national mass retailer discovered that its customer attrition rate was costing it $1 billion a year in lost revenue
and marketing costs of acquiring replacement customers.
The Internet has forever changed the way we do business. The Web, as both a marketing and sales channel, has
redefined well-known customer shopping patterns and behaviours. As a conduit for business-to-business transactions,
emerging net markets and exchanges offer unprecedented economies of scale to organisations.
For all of the billions of dollars pouring into e-business, whether for business-to consumer (B2C) or business-to-
business (B2B) development, not all companies have established successful Internet strategies and reaped the rewards
of conducting business on the Internet.
Companies with a successful Internet presence have learnt that success in today’s Web enabled markets belongs to
those organisations that understand the following:
• How the Web has influenced the way in which we conduct business and how our companies must respond in
order to remain competitive?
• The changing role of the customer and how to survive in this demand-driven economy
• The need for continuous business process refinement and measurement
1.11 CRM and Globalisation

In the conditions that economy passes through its evolutionary stages of globalisation. The attitude of different job
areas about to provide services for customers has been basically and philosophically changed. Today, the economic
agencies seek out to provide a one by one communication between their valuable customers, in such a way a part
of the competitive forces of production and service corporations serves to adsorb, maintain and to be stable of the
relations with customers. For this purpose, they must obtain an advantage that their competitors haven’t it and also
the speed of its imitation is slow. Additionally, globalisation has provided many opportunities for trade corporations
to supply their products to the world, has provided many problems against their activities. The competition in the
global markets should be associated with recognition of these markets .And the most important of this recognition
is that of culture and subcultures in international societies. If we want to succeed in the global market, we must
obtain this recognition to have an efficient communication with our customers and approach to our goals, that
according to Peter Draker “there is only one valid definition about the goal of every organisation and trade and it
is the adsorption of one customer”.
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1.11.1 Relationship with Customer

In the present world the concept of relationship with customer is located in the centre of attention today, organisations
have placed their customers. In the centre of all actions and they analysis their marketing and selling strategies based
on this. Something that is changing nowadays is expansion of customer’s willing. All the process and technology
that are in use for knowing attracting, spreading, maintaining, and in every organisation and companies. The goal
of relationship with customer is to provide some advantages by two-edged exchanging and fulfilling the promises.
Management of relationship with customer is a business strategy that is being improved with technology and these
companies are paying attention to make useful relationship based on improving the receiving and comprehensible
values of customer.
1.11.2 Globalisation and CMR

In the conditions that economy passes through its evolutionary stages of globalisation. The attitude of different job
areas about to provide services for customers has been basically and philosophically changed.
Today, the economic agencies seek out to provide a one by one communication between their valuable customers,
in such a way a part of the competitive forces of production and service corporations serves to adsorb, maintain and
to be stable of the relations with customers. For this purpose, they must obtain an advantage that their competitors
haven’t it and also the speed of its imitation is slow. Additionally, globalisation has provided many opportunities for
trade corporations to supply their products to the world, has provided many problems against their activities. The
competition in the global markets should be associated with recognition of these markets .And the most important
of this recognition is that of culture and subcultures in international societies. If we want to succeed in the global
market, we must obtain this recognition to have an efficient communication with our customers and approach to
our goals, that according to Peter Draker “there is only one valid definition about the goal of every organisation and
trade and it is the adsorption of one customer “.
1.12 Major CRM Packages

Following are major CRM packages:
Oracle Siebel
Oracle’s CRM products include Oracle Siebel CRM, Oracle CRM on Demand, Oracle E-Business Suite (EBS),
Oracle PeopleSoft Enterprise and Oracle Contact Centre Anywhere (CCA). The company retains over 5,000 global
CRM customers, nearly 5 million users and approximately 130 million self service users. Siebel Systems was the
undisputed dominant CRM software vendor, peaking at 45% market share in 2002. Since being acquired by Oracle in
2005, the product has continued its assertive push however with stiff competition from arch rival SAP, and multiple
ways to measure market share, both Oracle and SAP claim top CRM software industry position. Most analysts give
Oracle a slight edge, however, it largely comes down to what variables are used and benchmarks are counted.
SAP
The SAP CRM solution is a fully integrated customer relationship management (CRM) software manufactured by
SAP AG that targets business software requirements of midsize and large organisations for nearly all industries and
sectors. SAP’s CRM application includes several integrated modules that support key customer facing functional
areas including: SAP CRM Sales (sales force automation), SAP CRM Marketing, SAP CRM Service, SAP CRM
Interaction Centre, SAP CRM Web Channel (which includes E-Commerce, E-Marketing and E-Service) and SAP
CRM Partner Channel Management.
Similar to competitor Oracle, SAP has more recently released a SaaS CRM product, called SAP Sales on Demand.
However, this online solution is far more designed to extend the on-premise products than transition SAPs install
base to the cloud. For customer seeking wholesale transition to the cloud, SAP offers their Business ByDesign SaaS
solution. Business ByDesign is a purpose built cloud solution covering both ERP (Enterprise Resource Planning)
and CRM—an enterprise-wide business suite hosted from Germany and completely in the cloud.
Salesforce
Salesforce.com is still the new guy, but no longer the small guy. The company is now the third largest CRM software
publisher. While not the size if its major competitors—such as Oracle, SAP or Microsoft—it has nonetheless acquired
over 2 million global customers.
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Salesforce.com has become a leading provider of customer management software applications delivered via the
software-as-a-service or cloud computing model. The company’s flagship solution is a customer relationship
management (CRM) system designed for businesses of all sizes and industries worldwide. Microsoft is the number
four CRM market share leader. As is often the case with Microsoft, it takes them four versions to get it right.
Microsoft Dynamics CRM

Microsoft Dynamics CRM 2011 is the 5th product version release for the customer relationship management software
solution. Some pundits point out that there was never a version number two and Microsoft accelerated their version
count as they skipped from version one to version three. However, with the most recent name change from CRM 5 to
Dynamics CRM 2011, Microsoft has moved away from the sequential version numbering scheme. Microsoft CRM is
unique in an increasingly crowded CRM software marketplace as the same code set can be implemented on-premise
or used in the software-as-a-service (SaaS) remote delivery model. Also, customers have the option to subscribe to
Dynamics CRM directly from Microsoft or may choose from a plethora of specialised Microsoft partners.
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Summary
• CRM, or Customer Relationship Management, is a company-wide business strategy designed to reduce costs
and increase profitability.
• Customer Relationship Management is a common telemarketing solution to the clients’ customer retention
problems.
• The key to avoiding “scope creep” is to balance necessary business processes with desired customisations.
• Done well, CRM can go way beyond simply managing a particular sale, dealing with a specific service issue,
or resolving a customer’s complaint.
• The advantages of web-based CRM are that they are real-time systems and can be accessed and amended
simultaneously by different departments in different geographical locations.
• A CRM system can create record and effectively manage order fulfilment data such as transaction documents,
sales orders, invoices, purchase orders and credit notes.
• Companies that want to lock in customer loyalty and maximise profitability need to employ four CRM
tactics.
• Employees whose new customer-centric behaviors enable CRM success can get caught in the whipsaw if
communications about customer strategy and CRM processes are not clear.
• Collaborative CRM provides a comprehensive view of the constituent, with various departments pooling
constituent data from different sales and communication channels.
• CRM always focus on 360 degree view of customers where the overall departments in the organisation are able
to have access to customers’ information.
• CRM comprises several components absolutely essential to the organisation. Each of them offers something
different yet its importance cannot be undermined.
• The relative and marked emergences of CRM as a business strategy has radically transformed the way
organisations operate.
• Management of relationship with customer is a business strategy that is being improved with technology and
these companies are paying attention to make useful relationship.
• In general, there are four levels of customisation for any product.
• There are four well known packages of CRM, viz., Oracle Seibel, SAP, Microsoft dynamic CRM and
Salesforce.
References
• Dyche, J., 2002. The CRM Handbook: A Business Guide to Customer Relationship Management, Addison-
Wesley Professional
• Finnegan, D. & Willcocks, L., 2007. Implementing CRM: From Technology to Knowledge, John Wiley &
Sons
• Evolution of CRM [Pdf] Available at: <http://www.sage.co.uk/documents/whitepapers/white-paper-sage-crm-
evolution-of-crm.pdf> [Accessed 7 December 2012].
• E-CRM [Pdf] Available at: <http://www.imscart.com/Reports/eCRM.pdf> [Accessed 7 December 2012].
• What is CRM? [Video online] Available at: < http://www.youtube.com/watch?v=Mxw-XGrrhb4> [Accessed
7 December 2012].
• Developing SAP CRM apps [Video online] Available at: <http://www.youtube.com/watch?v=QxpXK9_bC-o>
[Accessed 7 December 2012].
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Recommended Reading
• Nakkiran, S., 2004. Business Process Outsourcing (BPO): Concept, Current Trends, Management, Motilal UK
Books of India.
• Shanmugasundaram, S., 2010. Customer Relationship Management: Modern Trends And Perspectives, PHI
Learning.
• Payne, A., 2005. Handbook of CRM: Achieving Success through Customer Management, 1st ed.,Butterworth-
Heinemann.
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Self Assessment
1. The advantages of web-based CRM are that they are _____________ systems.
a. advanced
b. real-life
c. real-time
d. distributed
2. A positive aspect of a bundled __________ solution is that both packages share one common customer database,
and that integration can be valuable.
a. ERP CRM
b. CRM
c. ERP
d. DBMS
3. _____________ has become a leading provider of customer management software applications delivered via
the software-as-a-service.
a. Microsoft Dynamic CRM
b. Salesforce.com
c. SAP
d. Oracle Siebel
4. The cost of making a new customer is nearly ____ times that of retaining an existing one.
a. five
b. ten
c. eight
d. three
5. A CRM system with well-designed ____________________ is usually capable of sharing data with any
enterprise system.
a. database management
b. network computing
c. system
d. application programming interfaces (APIs)
6. Which of the following statements is true?

a. Salesforce is now the second largest CRM software publisher.
b. The goal of relationship with customer is to provide some advantages by two-edged exchanging and fulfilling
the promises.
c. Microsoft Dynamics CRM 2011 is the 4rth product version release for the customer relationship management
software solution.
d. Business ByDesign is a purpose built cloud solution covering only ERP (Enterprise Resource Planning).
7. The objectives of _____________ CRM are reduction and service improvements.

a. operational
b. collaborative
c. analytical
d. developmental
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8. Match the following
1. Third level of customisation A. Avoid the Whipsaw Effect
2. Microsoft Dynamic CRM B. Scripting to drive process flow
C. Used in the software-as-a-service (SaaS) remote
3. Salesforce.com
delivery model
4. Goal of CRM D. Leading provider of CRM via Cloud computing
a. 1-B, 2-C, 3-D, 4-A
b. 1-D, 2-A, 3-B, 4-C
c. 1-C, 2-B, 3-D, 4-A
d. 1-D, 2-C, 3-A, 4-B
9. One of the greatest challenges to business is the ___________ looking for more satisfying returns on their
consumer dollar.
a. customer satisfaction
b. joining of customers
c. flight of customers
d. loyalty of customers
10. The _________ level involves developing simple rules such as report filters, escalation levels and other business
rules that enable the system to act the way you want.
a. second
b. fourth
c. third
d. first
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Chapter II
Customer and Customer Strategy
Aim
• explore importance of customer strategies
• explain the customer interaction cycle
• elucidate the customer strategy basics
Objectives
• examine the customer interaction cycle
• analyse the customer touch points
• describe the customer retention strategies
Learning outcome
• define customer
• understand customer profiling and modeling
• identify customer contact technology strategy
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2.1 Who is a Customer?
A Customer is the most important person ever in this office, in person or by mail.
• A Customer is not dependent on us, we are dependent on him.
• A Customer is not an interruption of our work; he is the purpose of it.
• We are not doing him a favor by serving him instead he is doing us a favor by giving us the opportunity to do
so.
• A Customer is not someone to argue or match wits with.
• Nobody ever won an argument with a Customer.
• A Customer is a person who brings us his wants.
• It is our job to handle them profitably to him and to ourselves.
A customer is not necessarily someone who is currently purchasing from the marketer. In fact, customers may fall
into one of three customer groups:
Existing customers
This consists of customers who have purchased or otherwise used an organisation’s goods or services, typically
within a designated period. For some organisations the time frame may be short, for instance, a coffee shop may only
consider someone to be an existing customer if they have purchased within the last three months. Other organisations
may view someone as an existing customer even though they have not purchased in the last few years (for example,
television manufacturer). Existing customers are by far the most important of the three customer groups since they
have a current relationship with a company and, consequently, they give a company a reason to remain in contact
with them. Additionally, existing customers also represent the best market for future sales, especially if they are
satisfied with the relationship they presently have with the marketer. Getting these existing customers to purchase
more is significantly less expensive and time consuming than finding new customers mainly because they know and
hopefully trust the marketer and, if managed correctly, are easy to reach with promotional appeals (that is, emailing
a special discount for new product).
Former customer
This group consists of those who have formerly had relations with the marketing organisation typically through a
previous purchase. However, the marketer no longer feels the customer is an existing customer either because they
have not purchased from the marketer within a certain time frame or through other indications (f, a former customer
just purchased a similar product from the marketer’s competitor). The value of this group to a marketer will depend
on whether the customer’s previous relationship was considered satisfactory to the customer or the marketer. For
instance, a former customer who felt they were not treated well by the marketer will be more difficult to persuade
to buy again compared to a former customer who liked the marketer but decided to buy from someone else who
had a similar product that was priced lower.
Potential customers
The third category of customers includes those who have yet to purchase but possess what the marketer believes
are the requirements to eventually become existing customers. The requirements to become a customer include
such issues as having a need for a product, possessing the financial means to buy, and having the authority to make
a buying decision. Locating potential customers is an ongoing process for two reasons. First, existing customers
may become former customers (for example, decide to buy from a competitor) and, thus, must be replaced by new
customers. Second, existing customers are the best source for future sales; it is new customers that are needed in
order for a business to significantly expand. For example, a company that sells only in its own country may see
less room for sales growth if a high percentage of people in the country are already existing customers. In order to
realise stronger growth the company may seek to sell their products in other countries where potential customers
may be quite high.
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2.2 Customer as an Asset

One thing that separates assets on the balance sheet from customers is that the customers have a preference, while
our assets don’t. To put it simply, we own assets, but we can ever truly say that we own our customers. This is
particularly true in the B2B world. Generally the concept of loyalty to a supplier is driven by long term contractual
arrangements that tie the customer in for a certain period of time. What suppliers fail to realise in this scenario is
that they tend to manage these clients like assets, when they have a perfect opportunity to start treating them like
people who have preferences and choices.
It pays to understand your customers’ and prospects’ preferences, their wants and their needs. This goes way beyond
the normal demographics and psychographics. It is information that you can only really get through engaging in
conversations with your clients and prospects. To be able to get a good understanding of how they want to deal
with you as a supplier, the preferences that they have for the goods and services that you deliver and the overall
experience that they want from you. The customer is not and never will be your asset, but maybe you as a supplier
could be an asset to them!
2.3 Customer Service Concerns

A study of customer concerns asked for their opinions about what they felt was important. The study identified five
major factors that the customers especially valued.
• Reliability
Can I depend on you?
Will I get the service that I expect?
Will you do what I believe you promised?
• Assurance
Did I make the right choice?
Will you provide consistent helpful service?
Will the service meet my expectations?
• Tangibles
How do you look?
Is the restaurant clean and neat?
Are your signs and menus easily understood?
• Empathy
Do you understand me?
Will you give me individual attention?
Do you understand what I want?
• Responsiveness
Will you serve me promptly?
Do you respond swiftly to my requests?
Is the food fresh and at the proper temperature?
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2.4 Customer Interaction Cycle
The customer interaction cycle is a specific pattern of behavior that has been found to respond well to the customer
concerns. Customers expect to be treated well in each of the five stages:
• Greeting the customer
• Understanding or knowing the customer’s needs
• Agreeing on the customer’s requirements
• Helping the customer and
• Keeping a positive relationship with the customer
Using the five-step cycle offers a systematic approach to use in any service situation. Following all steps avoids
leaving out responses to important customer concerns.
Greet
know
continue
Customer
Challenge
agree
deliver
Fig. 2.1 Customer interaction cycle

(Source: http://www.lean.org/FuseTalk/Forum/Attachments/Customer%20Service.pdf)
Greet
In the first stage of the customer interaction cycle, the service provider begins the relationship with the customer.
It is often very brief but it is very important. It creates the first impression that will shape the customer’s judgment
about whether you care enough to provide the service and products that the customer wants. This stage includes
being ready and welcoming the customer.
Be ready- this means that you are prepared to serve your customer. It includes your ability to use equipment and
knowing about your products and services. It also means that you are prepared to observe your customers for clues
that will help you to respond to each individual as a person.
What to do?
• Stand straight and observe the customers as they approach
• Wait patiently for the customer
• Establish eye contact
• Smile
• Answer phone calls promptly
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‘Welcome’- this signals the customer that you are ready to provide service. You are communicating your interest
and readiness to help. Welcoming acknowledges the customer and includes both verbal and non-verbal messages
that you care about helping the customer.
What to say and do?

• Maintain eye contact when speaking
• Say “Good morning, good afternoon, or good evening.”
• Say “May I help you?” or “What is your request?”
• Be pleasant regardless of customer attitude
Know
The second stage of the customer interaction cycle focuses on understanding the needs of the customer. It involves
listening for facts, observing feelings, asking clarifying questions, and restating important information to assure
understanding. It is the most difficult stage of the interaction because you must concentrate on what the customer is
saying and avoid being distracted by other things around you. It may seem to be a dull routine to repeatedly ask or
answer the same questions all day long. For the customer, it is not repetition. It is a valuable personalised service.
Listen- This is the ability to observe the whole message, both the words, tone of voice, and the body language, and
to hear and remember the facts and feelings provided by the customer. It enables you to understand accurately what
your customer wants and expects from you and the business. Effective listening helps the customer to feel like he
or she has received personalised service.
What to do?
• Maintain eye contact
• Reassure with non-verbal communication – nod and smile
• Also confirm understanding by saying “yes” when the customer pauses
• Listen carefully for to the customer information and comments
• Observe tone of voice and body language for customer needs such as confusion about the products or the service
approach
• Avoid being distracted
Ask– Your purpose for asking questions is to gather information and to check on items that you may not have
understood. Use questions when you want to confirm specific choices, when you want to limit the choices, or when
the customer has not been specific about the request.
What to say and do?

• Respond to observed customer needs. Ask, “Have you contacted us before?”
• Do not rush the customer. Say, “Take your time” if they appear to be struggling with choices.
• Ask about the options of products or services.
• Ask whether the need is immediate or scheduled later.
• Ask about specific service preferences.
Offer Information- This includes describing the actions that the customer is expected to take in preparation for
receiving their product or service. It also tells the customer your interpretation of the customer’s needs. It is the
starting point for setting mutual expectations.
What to say and do?

• Provide suggestions for the most popular product or service items, special options or other recommendations
• Possibly suggest implementation options
• Tell the customer about the expected delivery time
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Agree
The third stage of the customer interaction cycle assures shared understanding and agreement on the desired response.
It states the expectations and obligations of customer and the service provider.
Restate- This confirms that you heard and understood the customer’s request. You may also respond to the personal
(non-request related) message that the customer provided.
What to say and do?

• Restate the product or service response that you have recorded
• Mention those requests that may require a special response
• Check to see if there are any additional items- “Is there anything else that you would like?”
Set expectations- This tells the customer what you can or cannot do. It includes what the customer is responsible
for and what the customer can expect of you. It is important to explain the limitations to the service in a positive
way. Setting expectations will make sure that the customer understands his or her responsibilities and knows what
will be delivered.
What to say and do?

• Tell the customer about the actions that they may be asked to take and the check to understand if they have the
skills or knowledge to complete the actions
• Tell the customer if there are products or services that will be delivered separately
• If there is a known response delay, tell the customer the estimated delay time
• Check for understanding. Say, “Is there anything else that I can do for you?”
Get Agreement- This is usually very brief but it is important. It makes sure that the customer understands and accepts
the details of the service arrangement. It confirms that the customer finds the response satisfactory. It also offers an
opportunity to adjust any errors in the response.
What to say and do?

• If appropriate, say the price of the response
• Provide information on payment
Deliver
The fourth stage of the customer interaction cycle delivers the product and service with information and other
assistance. It prepares the customer to enjoy a pleasant experience.
What to say and do?

• If there is a delay between the request and the delivery, greet the customer again and restate the requested
response briefly
• Ask for confirmation that the request is correctly understood. Say, “Is everything OK?”
• Ask, “Is there anything else?”
Continue
Keeping customers builds future business. It is the fifth stage of the customer interaction cycle. This concludes this
transaction with the customer and encourages future business. This stage offers an opportunity to build customer
loyalty and to get valuable feedback on the customers’ satisfaction with your business.
Check Satisfaction– This step confirms that the customer received the quality products and service that was expected.
It is important to check for satisfaction, even at the busiest times. It shows the customer that you care about them
and their business.
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What to say and do?

• When there is an opportunity after the response is delivered, ask the customers, “Is everything OK?”
• Ask if there is anything else that the customer wants.
• Respond to requests as appropriate.
• As the customers leave, ask, “Was our response satisfactory?”
Thank- This step tells the customer that you appreciate their business.
What to say and do?
• Say, “Thank you.”
Bridge- This step encourages the customer to return.

What to say and do?
• Say, “Please call again if you have any other requests for help. Have a great day.”
2.5 Customer Interaction and CRM

Every business works for its customers and to ensure success and growth, we need to focus on the needs of the
customers. CRM is the tool that helps you organise and analyse customer data and thereby helping you to understand
customer preferences. Understanding their likes and dislikes is the key to build lasting relationships and also to
gain new customers.
By storing all customer related data securely in a central location, CRM tools provide easy access of information
anywhere anytime. This kind of customer-centric method helps in building better customer relationships and thereby
maximises customer retention, which helps to improve business ROI.
It also helps in managing various business activities such as:
• Sales and Marketing
• Billing and Expense
• Project Management
• Human Resources
2.6 Customer Dimensions

One very simple and evident is customer profitability. Profitability is self-evident and one can say it in relative terms
or in absolute terms. It is however preferred that one see how profitable specific customer is; how much profit this
single individual customer brings to our company for this year. If one considers relationship profitability, within
customer’s lifetime. There are certainly more to relationship value dimensions but not as important.
Then we can think about reference value. Reference value is something that relates how known, how good a reference
or the customer is to us. Is customer for example making recommendations on behalf of us and can we refer to
customers as being our customers?
Then we have contact value, and this means that customers are gateways for us to potential customers. If customer
is part of a big concern it may be that this customer gives us an opportunity to go to some potential customers ithin
the group..
Then one can define learning value, learning value of a customer. This does not mean that customer has to be a
difficult customer. It can be a customer that is a top company in its field. We can learn about this company and
the industry. In many cases it is hard to be the top company in any industry so there must be something to learn.
Certainly these value dimensions are to some extent inter-related. Contact value and reference value for example,
learning value in a rapidly changing environment, it is very important.
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There might be some value dimensions to consider. It is not very good to have too many dimensions because it
makes the systems more complicated. These are probably the value dimensions that almost always come into value
system: profitability, reference value, contact value, and learning value.
2.7 Customer Touch Points

Good relationships depend on the little things, but it takes more than just first-call resolution or prompt follow-up
from a sales rep to fulfil CRM’s promise. Even businesses with sophisticated CRM strategies lose valuable customers
to the mismanaging of basic touch points- one too many reference requests, a botched service visit, a sloppy sales
quote, shoddy billing practices.
Touch Point 1: Reference management

Last year Steve Silver worried that his company’s reference program was wearing thin on his top customers. “We
were frequently returning to the same subset of customers and asking for references,” says Silver, Vice President,
sales operations, U.S./Canada, for data storage firm StorageTek”. The last thing you want to do is to turn happy
customers into frustrated customers as a result of too many reference requests.”
Finding a better way to manage references was also important because Silver and his team were planning to involve
references earlier in the company’s lengthy sales cycle to confirm StorageTek’s leadership credentials. (The company
has been offering data-storage products and services for more than 30 years, and positions itself as “The Storage
Experts.”)
The solution came from a company that offered something Silver could relate to: a system that stores references.
Point of Reference recorded detailed interviews with StorageTek’s customers, and then stored the interviews in
an audio file on the password-protected Web site Point of Reference hosts for its customers. The recordings are
organised into familiar topics, usually centred on common business challenges, such as the way in which a company
uses StorageTek to help balance the cost of storing and managing data with its changing value over time.
StorageTek prospects enter a password and listen to customers discuss the company’s storage expertise.
Touch Point 2: Field service intelligence

Managing the service operation using internal intelligence can improve the process to the point of both productivity and
sales gains. For instance, the use of scheduling automation is widespread, but basic automation may no longer suffice.
Some organisations boast scheduling capabilities that rival the sophistication of complex financial analysis.
Take, for example, the field service portion of Siemens Westinghouse Power’s Customers First initiative. Siemens
Westinghouse Power, a division of Siemens’ power generation organisation, provides onsite maintenance and repair
services to power-plant customers throughout the Western hemisphere. Each year roughly 600 internal engineers and
technicians from 50 district offices conduct maintenance during customers’ 1,300-plus scheduled power outages.
Stephen Darling, field service operations resource coordinator, can also call on more than 1,000 part-timers from
his Orlando, FL, office.
Touch Point 3: Workflow management

Workflow management describes the processes and cross-functional handoffs that occur in response to a specific
customer request within an organisation. Bailiwick Data Systems has drastically increased the workflow IQ of its
IT field service capabilities, many of which are delivered through an extensive network of partners.
Two years ago much of the systems integration and IT professional services firm’s workflow management consisted
of swelling manila folders, opened in response to work requests, and passed through ordering, vendor management,
invoicing, billing, and many more. A Bailiwick employee would print a customer’s email request, slide it into the
folder, look up the closest qualified contractor, and fax that contractor a work order, which the contractor would sign
and return. Subsequent communications also were stuffed into the folder, which was then handed off to a manager
who oversaw contractor relationships and addressed issues that arose during the work.
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Touch Point 4: Consistent quoting

Patrick Harris, Sealing Devices’ IT director, used to cringe when his salespeople “misquoted” each other while
dispensing different price estimates on the same item to the same customer. Before the manufacturing company
implemented Oracle Sales and Quoting in 2003, the inside and outside sales teams were doing just that. A clunky,
legacy-quoting application frequently short-circuited consistent communications between internal and external sales
forces, and drove salespeople to workaround mode. “Some would email word-processing documents, because it was
easier than dealing with the old quoting system,” Harris says. “Some would handwrite the quote and then fax it.”
Now when a customer calls, an inside salesperson creates an opportunity and then, when the customer gives the
nod, converts the opportunity to a detailed quote with a click. That single point-of-entry also replaces the previous
need to manually enter the same data separately into the quoting system, order management system, and the ERP
system. Price breaks associated with quantity discounts are automatically listed; they were not in the old system.
The new system also creates a quote in PDF format and emails that document to customers.
Touch Point 5: Customer segmentation

According to Saffron Rouge CEO Jeff Binder, there is a difference between meeting customers’ needs and meeting
one customer’s needs--especially online. When it comes to tailoring sales and marketing efforts to the individual
needs of online customers, Binder believes many CRM tools fall short, because everything on an analytical level
is essentially performed on an aggregate basis, as far as Web sites are concerned.
Touch Point 6: Billing

Companies routinely neglect the way in which an innovative new process or a snappy upgrade affects their customers’
actual experience. Karen Smith, Microsoft’s global CRM product manager, mentions a telecommunications company
that converted to unified billing: customers received one bill for all their lines and the company cut costs.
One of those customers requested a slightly modified version of unified billing, one that would meet his specific
needs. The frustrated customer devised a workaround by moving his two business lines to another provider. His
original phone company responded with a rate increase- he no longer qualified for a volume discount. So the customer
moved all of his business to provider number two.
2.8 Customer Retention Strategy

Following are some of the important strategies that should be implemented for increasing customer retention:
changing retention rates.There are two basic strategies for changing retention rates:
• Fixed response higher spending: Retention rates can be substantially increased by spending more on creating
new business strategies or remoulding existing strategies to increase retention rates
• Fixed spending higher response: The retention rates graph can also be hiked by implementing changes in business
processes without spending anything. However, it’s a tough task for organisations to achieve this because it’s
difficult to increase retention without incurring any cost. Though this approach is preferred but it’s not always
feasible
By taking an example of organisational customer service we can easily compare the above two strategies. The
organisation could endow their customer service executives and allow them to take quick actions with regards to
customer queries and problems. This may lead to increase retention rates without incurring any cost. But if the
organisation enhances retention spending by rather adding more customer service executives, queries and problems
could be more quickly materialised and hence increase retention rate vastly.
Short term loss and long term gain

It is not desirable for organisation to retain all the customers. But high valued and profitable customers must be
retained. Loyal customers who are high valued and are in relationship with supplier for a longer period of time, tend
to produce higher profit. They normally require low service cost and are most likely ready to take premium services.
They also act like brand ambassadors for the supplier to advocate other prospects to become potential customers.
Hence it is essential for the organisation to nurture their customers to create a strong bonding with them in short
run and then focusing on higher profits in the long run over the whole life cycle of customers.
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Pricing best customers
Retention rate also depends on how the pricing of products are managed among the best valued customers. All the
customers are always cost sensitive and concentrate basically to buy products on cheap rates. However, cost sensitivity
of a customer substantially depends on condition of the market. For example if a product becomes extraordinarily
famous and demanding in market and every customer is tending towards capturing this product then it becomes
necessary to focus on technological aspects rather than focusing on the cost. If they do so then the cost sensitivity
of these customers is least. Similarly if a product becomes common in market due to emerging competitors coming
up with similar but more prominent products, then in this competition the value of the product decreases and the
companies become rarely bothered for them. In this scenario the customers have the right to become highly cost
sensitive as they know that they can negotiate with the suppliers to a greater extent.
Retention and acquisition link

Retention and acquisition are interdependent approaches. Take an example of a gym that provides a very low
introductory offer to all the customers to attract them. Many customers are very price sensitive and have the tendency
to defect if the gym increases future membership price. If the gym also provides the renewal cost to be as low as
introductory price then they have a better chance to retain these price sensitive customers. But by doing so they are
in risk of losing high valued customers who prefer best services and less surrounding crowd. In this case the gym
must implement the strategy to continue taking high membership renewal cost. This process may lead to most of
the low value customers to defect but the total profit in retaining the high value customers will be always more.
This also helps to uplift the image and status of the gym by providing best services to its customers which results
in acquiring and retaining more high valued customers and generate good profit.
2.9 Total Customer Experience

Serving the customer better does not necessarily mean serving him/her in a more expensive manner. The goal is to
ensure that you have aligned your service elements with each and every customer’s need. Identifying and eliminating
areas of over-serving can more than compensate for areas where your service or offering needs to be enhanced to
become more competitive. Where a more expensive form of serving the customer is required, it is critical to ensure
that it is done for a customer segment that the organisation can afford to serve better.
The main benefit of CRM technologies is an improved understanding of customers.
Unfortunately, many organisations have collected vast volumes of information that they do not understand how
to use effectively. This customer information is the enabler that allows a new business strategy to be developed. A
first step is to understand what the business strategy is. This will then allow you to determine what elements of the
varied customer information are most critical to rolling out the strategy successfully. It is commonly recognised
that 80 percent of the strategic value of customer information is in 20 percent of the data. However, the difficulty
is in identifying the 20 percent that has value.
When this customer data are not used effectively, CRM initiatives can depersonalise customer service and therefore
reduce loyalty. For example, one of the organisations that we have worked with is a manufacturer of industrial cable.
Approximately 80 percent of its profit came from 25 large industrial accounts. One of the big issues for its customers
was the length of time it took the manufacturer to generate quotes and confirmed delivery dates for non-standard
(customised) cable orders. Custom orders required a flurry of phone calls, faxes and time-consuming interaction
with subcontractors and component suppliers to produce an accurate price quotation and delivery commitment.
This quotation process typically required four to five days, while the entire manufacturing process was only three
days.
Customers define their loyalty to an organisation according to their total experience with it. For example, their loyalty
(or lack thereof) is typically with insurance company x, not with the home insurance division or auto insurance
division, if they happen to deal with both. Similarly, they define loyalty by the sum of their experiences with the
organisation, across all touch points and across all experiential elements: presales, order and delivery process,
product/service experience and post-sales support. This means that CRM initiatives whose goal is to improve
loyalty must view the Total Customer Experience from a holistic perspective. Interacting with customers over the
Web or a call centre in a customised manner, while doing nothing to improve their product or service experience,
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will have a limited impact on loyalty. Similarly, utilising the latest CRM technology in the home insurance division
while the auto insurance division lags in the Dark Ages, will have little impact on loyalty for customers that deal
with both divisions.
2.10 Customer Strategy Basics

The basics of customer strategy are as follows:
• Customer insights and segmentation: The clients must be made to understand customer needs and behaviors
and develop actionable segmentation from the resulting insights. The clients must be helped to define the target
customer or “sweet spot”- the area of distinct advantage over competitors- to inform business decisions and
investment allocation.
• Product and category management: The clients must be helped to improve ongoing customer-led product
development so their value proposition is differentiated and meets customer needs.
• Pricing: The pricing paradox must be resolved- pricing is almost always the number 1 profit lever, yet it remains
under-developed in most companies- by building long-term pricing capabilities and capitalising on in-year-
revenue opportunities.
• Sales and channel effectiveness: The clients must help companies identify quick, targeted, customised solutions
as well as strategic and operational improvements to boost underperforming sales organisations.
• Marketing and brand strategy: The companies must be helped to align marketing and brand strategy with
overarching business objectives; ensure marketing investments, generating highest returns and reinforcing the
brand positioning; and build a loyal customer base through branding that cultivates a strong, trusted image.
• Customer experience: The clients must work with companies to develop a series of positive interactions with
the customer to earn their advocacy and inform consistent delivery of experiences to drive top-line growth.
• Loyalty: The clients help companies nurture promoters- loyal customers who are more profitable, and who are
active proponents of your business in good times and bad.
2.11 Customer Loyalty

These five tips are a start to getting your company on the road to recovery from any CRM hangover that you may
be experiencing. The key to better customer retention and stronger customer relationships is to create a constant
focus on building a loyalty marketing discipline in your organisation, and then projecting that focus outward to
your customers.
Forget price, quality and service levels

The reason that we should forget price, quality and service is that neither CRM nor customer loyalty will solve
problems in these areas. Hopefully, you have teams of experts that are constantly focused on price, quality and
service levels. So, for now, we will assume that they are doing their jobs, and we will instead look to solve some
other key customer issues.
Satisfaction does not equal loyalty

Customer satisfaction research is valuable. It helps companies focus on and measure how customers feel about
products, services, brands, treatments, and many more. But, many executives continue to make the incorrect
assumption that customer satisfaction means customer loyalty. While it is true that un-satisfied customers are not
likely to be loyal customers, it cannot be inferred that satisfied customers are destined to be loyal. Loyalty involves
many different aspects of a customer’s relationship with a product or company. While it is true that satisfaction and
loyalty are related, don’t assume they are the same thing.
Know your best customers

For a CRM system to be worth its cost, it must deliver a clear view of who your best customers are today, and who
they will be in the future. This includes a system of scoring customers based on both current profitability and future
growth potential. While it is important to break these groups of valued customers into similar clusters (or segments),
it is critical that you can identify customer potential where it counts at the individual customer level.
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Treat different customers differently
Not all customers are created equal. Your airline knows this, hotels know this, car rental companies know this- but
many companies refuse to acknowledge this key fact of business. Now you want to retain those customers who
deliver the most profit today, and grow those with the greatest future potential. This is the core philosophy of loyalty
marketing. Different customer treatments may include the effective use of one-to-one communications, tangible
rewards or unique recognition, services or benefits. An effective loyalty marketing program uses different treatments
to create the “triggers” that drive the customer behaviors you desire.
Understand and use marketing ROI

Even as the economy hints at a rebound, companies continue to feel pressure to cut costs. Un-measurable mass
advertising or promotional campaigns are facing unprecedented scrutiny. As other traditional marketing techniques
and solutions are pared back or shut down, a new era of marketing is taking over. These programs focus on clear,
highly targeted and measurable solutions that clearly show the returns that they produce. Today’s executives rightly
demand measurable ROI. How can you drive this ROI approach in your marketing programs? Be sure that each of
your marketing programs includes the measurement and tracking of ROI as part of their overall design. Begin with
a clear understanding of what factors or actions impact ROI, and then measure and track them using the marketing
program’s core structure. Effective loyalty marketing programs begin with setting clear ROI-based metrics.
2.12 Customer Satisfaction

Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by
a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or
percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds
specified satisfaction goals".
Encourage face-to-face dealings

This is the most daunting and downright scary part of interacting with a customer. If you’re not used to this sort of
thing it can be a pretty nerve-wracking experience. Rest assured, though, it does get easier over time. It’s important
to meet your customers face to face at least once or even twice during the course of a project.
Respond to messages promptly and keep your clients informed

This goes without saying really. We all know how annoying it is to wait days for a response to an email or phone
call. It might not always be practical to deal with all customers’ queries within the space of a few hours, but at least
email or call them back and let them know you’ve received their message and you’ll contact them about it as soon
as possible. Even if you’re not able to solve a problem right away, let the customer know you’re working on it.
Be friendly and approachable

It is very important to be friendly, courteous and to make your clients feel like you are their friend and you are
there to help them out. There will be times when you want to beat your clients over the head repeatedly with a blunt
object- it happens to all of us. It’s vital that you keep a clear head, respond to your clients’ wishes as best you can,
and at all times remain polite and courteous.
Have a clearly-defined customer service policy

This may not be too important when you’re just starting out, but a clearly defined customer service policy is going
to save you a lot of time and effort in the long run. If a customer has a problem, what should they do? If the first
option doesn’t work, then what? Should they contact different people for billing and technical enquiries? If they’re
not satisfied with any aspect of your customer service, who should they tell?
There’s nothing more annoying for a client than being passed from person to person, or not knowing who to turn to.
Making sure they know exactly what to do at each stage of their enquiry should be of utmost importance. So make
sure your customer service policy is present on your site-and anywhere else it may be useful.
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Attention to detail (also known as ‘the little niceties’)

Have you ever received a Happy Birthday email or card from a company you were a client of? Have you ever had
a personalised sign-up confirmation email for a service that you could tell was typed from scratch? These little
niceties can be time consuming and aren’t always cost effective, but remember to do them.Even if it’s as small as
sending a Happy Holidays email to all your customers, it’s something. It shows you care; it shows there are real
people on the other end of that screen or telephone; and most importantly, it makes the customer feel welcomed,
wanted and valued. Anticipate your client’s needs & go out of your way to help them out. Sometimes this is easier
said than done! However, achieving this supreme level of understanding with your clients will do wonders for your
working relationship.
Honour your promises

The simple message: when you promise something, deliver. The most common example here is project delivery
dates. Clients don’t like to be disappointed. Sometimes, something may not get done, or you might miss a deadline
through no fault of your own. Projects can be late, technology can fail and sub-contractors don’t always deliver on
time. In this case a quick apology and assurance it’ll be ready as soon as possible, wouldn’t go amiss.
The importance of customer satisfaction

Sometimes companies are misguided by the notion that customers depend on them. The truth of the matter is that
we very much so depend on them. Many researchers have highlighted the importance of customers in today’s
market.
The level of satisfaction a customer has with a company has profound effects. Studies have found that the level of
customer’s satisfaction has a positive effect on profitability:
• A totally satisfied customer contributes 26 times as much revenue to a company as a somewhat satisfied
customer.
• A totally satisfied customer contributes 17 times as much revenue as a somewhat dissatisfied customer.
• A totally dissatisfied customer decreases revenue at a rate equal to 18 times what a totally satisfied customer
contributes to a company.
Research has shown that when a person is satisfied with a company or service they are likely to share their experience
with other people to the order of perhaps five or six people. However, dissatisfied customers are likely to tell another
ten people of their unfortunate experience.
2.13 Customer Profiling and Modeling

Customer Profiling and Modeling are techniques used to improve the operations and profitability of a business or
web site:
• Discover what kinds of advertising result in the most profitable customers
• Predict the likelihood of a customer to make another purchase
• Customise contact with customers according to their likes and dislikes
• Create discount offers which drive high response rates and maximise margin
• Reduce discount expenses while maintaining sales levels
• Set up customer retention and loyalty programs which pay for themselves with increased customer
profitability
• Predict the likelihood of a customer to defect or drop your service.
2.14 Key Account Management Strategy

The essence has to be simplicity. Account Managers have some chance of success if they have the right toolkit.
• Performance data at the touch of a button
• Account profiles which contribute to effective “customer wiring”
• Comprehensive checklists of ideas
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• Account plans which can be expressed on just 4- 5 pages
• A toolkit of promotional options that have worked
• Ability to model promotional options and financial outcomes quickly
• Powerful proformas for all presentations
Supplier roles
There are two types of supplier roles as follows:
Internal
• Align with and execute Sales Strategies
• Minimise inter account conflict
• Drive our investment dollar further
External
• Manage account perceptions: “the most efficient, professional, innovative supplier” and many more
• Be rewarded for our efforts: share of activity, minimal relationship conflict (for example, terms!)
Coverage and
Availability
Performance Leveraging
dashboard Market
Knowledge
Consumer
Goods
Sales Drivers
Return from Superior

Trade Customer
Investments Engagement
World Class
Sales Force
Fig. 2.2 Key account management strategy

(Source: http://www.jsasolutions.com/files/1_Best_Practices_in_Key_Account_Management.pdf)
2.15 Customer Contact Technology Strategy (Call centres)

Call centre technology encompasses a wide range of telecommunications hardware and software including automated
phone systems capable of answering incoming phone calls and performing outbound autodialing. A call centre is
a department within an organisation or a standalone company typically comprised of telephone agents (customer
service reps, salesmen, and many more) who either accept incoming calls or make outgoing calls. Call centres can
be completely automated, processing incoming and outgoing calls using automation with no human agents involved
in the process.
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Software applications typically associated with calls centres are CRM (Customer Relationship Management)
programs. The following technology is typically associated with a call centre phone system:
• IVR (Interactive Voice Response)
• WFM (Workforce Management)
• Softphone Software CTI enable phone applications
• Customer Satisfaction Research to monitor agent behavior and effectiveness
2.15.1 Computer Telephony Component

IVR is an automated computer telephony integration CTI system, which allows providers to create complex menus
which the caller can navigate by using touch-tone keypresses or via spoken commands. IVR systems can be used as
a Voice portal to access remote information such as bus scheduling where the caller can select the route for which
they require information, or for billing or customer service systems which allow the caller to enter information such
as their account number or credit card details without the need for operator assistance.
2.15.2 IVR and ACD Integration

IVR solutions are often integrated with an ACD, which routes incoming phone calls to agent work groups. This
integration can be both a front end and back operation.
• Most typically, an ACD system can route callers to an IVR program based upon DNIS or other parameters such
as time of day or day of the week.
• A smart IVR can transfer callers back to an ACD system to route the call to the next available agent within an
agent hunt group.
One important task of an integrated IVR and ACD is to display Screen Pop information from the caller on the agent’s
workstation so that the agent has caller information readily available without the need to prompt the caller again.
2.15.3 IVR and Voice Broadcasting

IVR applications are typically associated with inbound calling programs. However, IVR technology can be applied
to outbound calling campaigns and are most commonly used with Voice Broadcasting and touchphone responses.
Examples of the application of this technology include the option to speak with an operator, opt out of a calling
campaign, or taking an outbound survey.
2.15.4 Graphical Design Tool for IVR Applications

Recent IVR systems usually use high level scripting languages such as VoiceXML, an open standard for interactive
voice response systems. For most users who lack technical training, developing an IVR system using scripting
language, even high level language, are not feasible. The good news is there are design tools that are based on
graphical user interface for the techies and none-techies alike. By using a GUI tool, a user can simply drag-and-drop
components and create and deploy an IVR system in minutes. The whole design is a call flow diagram, much like
a voicemail system user manual.
2.15.5 Workforce Management (WFM)

Workforce Management or WFM has quickly become an essential responsibility for any efficient business. One of the
more common automated methods of Workforce Management is WFM software. Workforce Management Software
commonly revolves around the management of employees and their: payroll & benefits, HR administration, time
& attendance, career succession, talent management, training management, performance management, forecasting,
scheduling, and production oversight, but is not limited specifically to this.
WFM Software has recently entered the VoIP landscape, where vendors are utilising VoIP to increase the versatility
of contact centres workforce management. WFM with VoIP allows managers to oversee contact centre employees
regardless of their physical location, whether it is onshore, offshore, or at-home.WFM is more or less anything
and everything that promotes the management of employees in an attempt to foster a more efficient and productive
workplace.
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2.15.6 Workforce Management and Job Assignment using Voice XML
Workforce management and automatic job scheduling can be performed using call processing solutions. Managers
can call an 800 specifying the number and skill set of needed workers. Using VoiceXML messaging, this information
can be relayed to the company and the appropriate employees or contractors can be called using voice broadcasting
and IVR technology. Workers who are contacted in this manner can accept or decline the job and this process can
be repeated until the jobs have been filled.
800 numbers can also be provided to employees to check on employment opportunities and job openings. Workers
can select jobs from those listed by using phone keypad responses. A softphone can be customised to fit the look
and feel that is required for each application. Softphones can be standalone programs or can be embedded in a PC
or Web application.
2.15.7 Standalone Softphone

A standalone softphone is a PC program that includes our softphone API routines. This program can be developed in
C/C++, Visual Basic, Active X Control, .NET Control and other PC programming protocols. Database has developed
a number of softphone models that can be used as standalone applications on your agent desktops. We also can
customise your softphone for the look and feel that best suits your organisation. And with our extensive software
library, you can develop your own PC softphones.
2.15.8 Softphone Embedded in PC Applications

The DSC softphone library can be embedded in PC applications, effectively “CTI enabling” these applications.
Phone information can be passed to these PC applications which can be launched based upon a phone event such
as a received phone call. Applications can be written in C/C++, Visual Basic, Active X Control, .NET Control and
other protocols.
2.15.9 Softphone Embedded in Web Application

Softphone functions can be embedded in an existing Web application. Phone functions can be initiated from the
browser application.
2.15.10 Web Application Embedded in a Web Phone

Software Web Phone can control web applications within itself, offering complete navigational control of web
pages and applications based upon phone events. The web phone can control which web page appears based upon a
phone event such as the receipt of a call. Information from the call can be passed to each web page as it is invoked.
This feature provides the maximum phone control and allows the softphone to launch web pages, passing variable
information to each page as it is displayed.
2.16 Customer Satisfaction Research

In today’s competitive business world, many organisations have shifted focus from product-based organisations to
customer-based organisations. This customer focused orientation is due to the fact that happy and content customers
drive more revenue than their unhappy counterparts, both in B2B and consumer markets. Customer satisfaction
research has also been known to lower customer acquisition costs, and increase repeat sales, and because of this,
numerous forms of customer satisfaction research are currently in use by fortune 500 companies.
Successful Customer satisfaction research usually consists of a mix of qualitative and quantitative data, combined
to determine how your customers really feel about your company, product, or service, and how those feelings
ultimately affect your bottom line.
Components of satisfaction
There are 15 areas of activities that have been known to influence customer satisfaction, they are: customer service,
customer training, ease of installation, hardware repair services & software bug fixes, legacy product support, price,
product availability, product design, quality of products, and services, sales ordering process, sales staff knowledge
& attitude, software upgrades, technical support services, value of products and services, and Website usefulness.
Not all 15 areas have an equal amount of influence over customer satisfaction, with six areas standing out as key
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drivers: quality of products & services, product design, product availability, customer service, software upgrades,
and price. The percentage breakdown of “very satisfied” customers in the top six areas may surprise you. Quality of
products & services came in at 50.7%, product design came in at 40.7%, product availability was 36.4%, customer
service was 33.9%, software upgrades was 26.7%, and price came in at a low 22.9%. As you can see, customer
service, upgrades and price are the three drivers of satisfaction with the most room for improvement. With this logic
in mind, it is apparent that any company, who can increase consumer satisfaction in the areas of customer service,
upgrades, and price, can greatly increase their competitive advantage.
2.17 Customer Strategy Levers

The following are the customer strategy levers with their elements:
• Brand management
Stretchability of single brand across products and customer segments
Typical brand management capabilities, such as price, promotion, and marketing mix
• Customer knowledge management
Needs-based segmentation capability with understanding of customer profitability and lifetime value
Integrated customer data & information management, enabling single view of customer
• Distribution
Customer access to “best of breed” products, including those offered by competitors
Full array of channels enabling similar customer experience across touch points
• Service
Differentiated customer service levels based on customer value
Integrated front-to-back systems enabling customer service across products and touch points.
• Product innovation
Customised/one-off bundles created and priced for segments & individual customers
Predictive, interactive product development process (incorporating customers and functional experts)
• Customer culture
Compensation and rewards linked to customer metrics (for example, wallet share and customer
satisfaction)
Empowerment of customer-facing employees to make financial decisions
2.18 Capturing Value through Customer Strategy

To understand best how to capture value, it is helpful first to understand why companies have failed to extract the
full value from CRM in the past. Companies having difficulty achieving success with their CRM initiatives tend to
fall into several basic traps:
• Technology as proxy- Implementation of CRM technologies too often becomes the primary driver of customer
strategy and alignment.
• Aspirations in place of customer strategy- Vague aspirations to be customer-focused substitute for having a clear
road map for customer-segment alignment.
• Failure to align the business- Key organisational elements and business processes do not align fully to the
customer strategy.
Falling into any one of these traps can disrupt a company’s mission to become customer-focused. The traps
also provide insights into the key drivers of CRM success. As an example, a large consumer-products company
(which requested anonymity) had recently attempted an unsuccessful automation of its sales function. Based on a
desire to use the software essentially “out of the box”, the sales force was required to enter excessive amounts of
customer-profile data to provide information to senior management. This requirement placed significant burdens
on the sales force, and a lack of incentive for them to use the system correctly. The sales people quickly began to
game the system and often failed to enter data correctly. There was a basic failure to examine the organisation and
business processes surrounding this effort.
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After evaluating the overall business model and desired outcomes, the company moved the majority of data-entry
activities to a call centre, creating a push environment that drove leads to the salespeople, which, in turn, resulted
in a more valuable capability and created incremental sales. This company realised that proper alignment of the
business to a clearly articulated plan for building customer value was the key to maximising the effectiveness of
its CRM technology.
We believe companies can capture value from customer alignment if they focus on performing five basic things
well:
• Understand your situation
• Develop and articulate each customer-segment strategy
• Design and blueprint the business model and management system
• Decide upon and invest in the enablers of alignment
• Execute a value-capture plan
To be customer-aligned, all companies need to go through each of these steps to reliably capture the value from their
investments. Shortcutting any step is possible only to the degree that it has been previously examined.
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Summary
• In fact, customers may fall into one of three customer groups, namely, existing, former and potential
customers.
• One thing that separates assets on the balance sheet from customers is that the customers have a preference,
while our assets don’t.
• The customer is not and never will be your asset, but maybe you as a supplier could be an asset to them.
• The goal is to ensure that you have aligned your service elements with each and every customer’s need.
• Loyal customers who are high valued and are in relationship with supplier for a longer period of time, tend to
produce higher profit.
• Workflow management describes the processes and cross-functional handoffs that occur in response to a specific
customer request within an organisation.
• The main benefit of CRM technologies is an improved understanding of customers.
• It is commonly recognised that 80 percent of the strategic value of customer information is in 20 percent of
the data.
• Different customer treatments may include the effective use of one-to-one communications, tangible rewards
or unique recognition, services or benefits.
• Effective loyalty marketing programs begin with setting clear ROI-based metrics.
• IVR solutions are often integrated with an ACD, which routes incoming phone calls to agent work groups.
• IVR applications are typically associated with inbound calling programs.
References
• Finnegan, D. & Willcocks, L., 2007. Implementing CRM: From Technology to Knowledge, John Wiley &
Sons.
• Goodman, J., 2009. Strategic Customer Service, AMACOM Div American Mgmt Assn.
• Customer Relationship Management [Pdf] Available at: <http://jesr.journal.fatih.edu.tr/
CustomerRelationshipManagement.pdf> [Accessed 13 December 2012].
• Customer Retention Strategy [Online] Available at: <http://www.managementstudyguide.com/customer-
retention-strategy.htm> [Accessed 13 December 2012].
• Delivering your Customer Strategy [Video online] Available at: <http://www.youtube.com/watch?v=VjDsPSAbIsE>
• Customer and CRM [Video online] Available at: < http://www.youtube.com/watch?v=CBCXdstX9Ws>
Recommended Reading
• Kumar, V. & Reinartz, W., 2012. Customer Relationship Management: Concept, Strategy, and Tools, Springer
Publication.
• Kostojoh, S., Johnson, M. & Paulen, B., CRM Fundamentals, APress Publication.
• Peppers, D. & Rogers, M., 2011. Managing Customer Relationships: A Strategic Framework, 2nd ed.
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Self Assessment
1. The ____________ is a specific pattern of behavior that has been found to respond well to the customer
concerns.
a. customer relationship
b. customer interaction cycle
c. customer cycle
d. customer relationship cycle
2. __________ involves many different aspects of a customer’s relationship with a product or company.
a. Satisfaction
b. Customer relationship
c. Customer Knowledge Management
d. Loyalty
3. Which of the following statements is false?

a. Existing customers may become former customers.
b. Managing the service operation using internal intelligence cannot improve the process to the point of both
productivity and sales gains.
c. The main benefit of CRM technologies is an improved understanding of customers.
d. Workflow management describes the processes and cross-functional handoffs that occur in response to a
specific customer request within an organisation.
4. ____________ helps the customer to feel like he or she has received personalised service.
a. Effective listening
b. Helping
c. Knowing
d. Maintaining relations
5. The _______________ helps in building better customer relationships and thereby maximises customer
retention.
a. customer help
b. customer relationship
c. customer centric method
d. customer satisfaction
6. _______ is an automated computer telephony integration CTI system which allows providers to create complex
menus which the caller can navigate by using touch-tone keypresses or via spoken commands.
a. IVR
b. Graphical Design Tool
c. Customer culture
d. Softphones
7. The __________ stage offers an opportunity to build customer loyalty and to get valuable feedback on the
customers’ satisfaction with your business.
a. first
b. second
c. fifth
d. third
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1. Workforce Management A. Those who have yet to purchase but possess
Software what the marketer believes are the requirements
2. Potential Customers B. Voice portal
3. Customer Service Concerns C. HR administration
4. IVR systems D. Responsiveness

a. 1-B, 2-C, 3-D, 4-A
b. 1-A, 2-C, 3-B, 4-D
c. 1-C, 2-B, 3-D, 4-A
d. 1-C-, 2-A, 3-D, 4-B
9. IVR applications are typically associated with __________ calling programs.

a. IVR
b. inbound and outbound both
c. outbound
d. inbound
10. Which stage of the customer interaction cycle delivers the product and service with information and other
assistance?
a. Fourth
b. First
c. Third
d. Eight
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Chapter III
Customer Centric Enterprise (CCE)
Aim
• explore importance customer centric enterprise in organisations
• explain the customer centric organisations
• elucidate the characteristics of customer centric organisations
Objectives
• explain the evolution of customer centric enterprise
• analyse the importance of customer centric enterprise
• elucidate the building blocks of customer centric enterprise
Learning outcome
• identify the benefits of customer centric enterprise
• understand the difference between product centricity and customer centricity
• describe the benefits of CCE
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3.1 Introduction
Many organisations taut growing sales by introducing a new sales process in the hopes of closing more orders.
While this can be a viable approach, the addition of new customers without a complete understanding as to their
net present value to your company, can actually be a losing proposition. Customer Centric Concepts focuses on
better understanding who the “right customers” are for your business and improving the long term relationships
with these customers. Building a strong foundation of profitable customers will pay greater dividends than focusing
only on the short term sale.
Unless you are unhappy with your current sales method/process, we will not attempt to re-engineer how you sell.
Rather we focus on what needs to be done in addition to your current sales process to move your top customers
from just satisfied to loyal. We define your top customers as those 20% that represent 80% of your revenue. Raising
customer retention by 5% could increase customer value to your company by 25 – 100%. Further, retaining just 2%
of your customers is equivalent to the savings achieved from a 10% cost reduction effort.
We all know the cost to replace a key customer can be 7– 8 times the cost to keep and maintain an existing customer.
But companies don’t typically invest in customer retention and relationship improvement. Consequently, they miss
the opportunity to earn significant leverage with their existing customers, while improving customer satisfaction and
making it difficult for competitors to distract them from your high level of service. We also want to assure you that
the use of Customer Centric Concepts with new customers effectively accelerates the relationship and differentiates
you from their existing provider.
3.2 Characteristics of Customer Centric Organisation

• Intelligence generation
Meeting with customers to determine current/future needs
An in-house market research department
Ability to detect changes in customers’ product preferences
At least annual surveys of customer perceptions
• Intelligence dissemination
Regular interdepartmental meetings on market trends and developments
Important events in the market or with key customers are shared quickly with all affected departments
Regular dissemination of customer satisfaction data at all levels of the company
• Responsiveness
Recognition of changes in customers’ product or service needs
Alignment of product development efforts with customer needs
Regular, interdepartmental planning to respond to changes in the business environment
Responsiveness to customer complaints
Making concerted efforts to modify products or services to fit customer needs

Are these all the elements of a customer centric organisation? But these are some of the key differentiating
characteristics of customer focused companies - the characteristics most likely to produce the beneficial company
performance associated with high levels of market orientation. In other words, research has shown that companies
with the above characteristics have significantly better long-term performance.
A customer centric organisation:

• has a clear, customer-centred vision with top down support
• makes every business decision in alignment with this vision
• knows what customers expect because it asks them
• tailors its products and services to what customers want
• meets customer expectations with every interaction
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• regularly measures customer satisfaction and changes accordingly
• clearly communicates the importance of customer centric behaviour to every employee
• measures and rewards customer centric competencies and performance
• employs and promotes people who support customer centricity
• expects suppliers and partners to model customer centric behaviours
3.3 Evolution of Customer Centric Enterprise

Customer-centric information not only enables the comparison of actual customers to ideal accounts, but also
provides a framework for rapid customer response. This information drives additional revenues, improves the
customer experience, and streamlines costs associated with business process and data management operations.
Communications and media providers stand to benefit greatly from the lessons learned in the financial services
industry. Over the past 10 years, financial services firms evolved from bankers, insurers, and stockbrokers to wealth
managers selling advisory, banking, retirement, and lending services. This shift increased the complexity of their
business models, which in turn drove the need to develop a customer-centric operating model.Implementation of this
model has addressed major industry pain points, such as duplication of customer information, while streamlining
business-operating capabilities.
The communications industry is primed to leverage these efforts by adopting a customer-centric operating model as
well. Communications and media providers must present the most personalised information possible to the customer,
regardless of channel, device, or point of interaction. By introducing customer data management processes aligned
to the business operating model, the communications industry can achieve the highest levels of customer visibility,
flexibility, and personalised service across channels. The basic concept of customer centricity requires collapsing
instances of customer information across products, services, and channels.
The main drivers for customer centricity are:

• Relationship effectiveness: Providing a 360 degree view of the customer, multi-channel enablement, segmentation
support, predictive analytics, personalised client literature, and qualified target offerings.
• Operational efficiencies: Implementation of rules for data ownership and management across the OSS/BSS
landscape including SFA, CRM, Billing, Web Portals, Provisioning, and Fault Management, allowing for
intelligent processing of customer lifecycle activity.
• Risk mitigation: Monitors regulatory compliance, customer retention, and revenue assurance.
• Mergers and acquisitions: The customer centricity model provides an environment in which customer data can
be quickly migrated, producing an integrated customer model months or possibly years before systems are
consolidated.
• Customer presentment: As the customer centricity model contains an elaborate data management rules engine,
integration and presentment are simply configured using the consolidated customer data repository.
• Key trends in three areas, competitive pressure, product complexity, and consumer expectations, must be
understood in order to properly prepare for the future:
• Competitive pressure: There is an increase in competitive pressure from traditional wireless companies, new
entrants (MVNO, media companies), and M&A/consolidation activity to the secure “quad play” (wireless,
broadband, digital TV, and VOIP). This has resulted in the need to broaden a company’s strategic horizon for
products, services, and channel integration. In the wireless channel, enhanced media and messaging solutions are
continuing to drive revenues, exerting pressure to deliver more services within short development lifecycles.
• Product complexity: An increase in the complexity of products and channels as a result of the quad play
consolidation has led to knowledge of the customer by product/channel, which in turns leads to poor customer
satisfaction and reduced operational efficiency.
• Consumer expectations: An increase in both consumer expectations and the amount of choices available has
resulted in the need for higher levels of segmentation and personalisation across all products and channels.
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3.4 The Importance of Customer Centricity in a Changing World

In most industries, there are an increasing number of competitors constantly trying to expand their market share. With
the growth of globalisation, e-commerce and developing economies in Asia, South America and Africa, businesses
of all status must adapt to the needs and wants of their clientele.
This is not a difficult concept to understand. Although old-school marketing academics stress the importance of the
marketing mix (product, place, price, promotion), in a rapidly changing world, people who buy your products or
services should be the centre of your universe because the 4 P’s would not exist without the big C.It’s astonishing
how many businesses do not know who their customer-base is what they really want and what they want to be
improved.
Get to know your customers! A business that is not customer centric and market-orientated is on the path to failure,
but it’s not too late to change your ways!
• Carry out primary and secondary market research on your target customer group
• Organise focus groups; get involved in your community
• Get your staff onside – use internal comms to get your staff on your wave length (it must be remembered that
customers are the stakeholders who pay everyone’s wages!)
• Be flexible to your customer’s needs – or someone else will!
Increasingly so, globalisation is providing a new group of consumers, but also a new group of competitors eager
to steal your customers. In tough economic times with rising inflation and unemployment, it is quite simply a case
of evolve or die. Customer service is the key ingredient in the recipe of a successful business – happy customers
will come back!
3.5 Benefits of CCE

The benefits of customer centricity are immeasurable, but include:
• Customer insight: Imagine being able, with one simple query and by navigating with only a mouse, to filter
through your relationship with a customer and learn what services they subscribe to, how much revenue is being
generated, what the up- and cross-sell opportunities are, what campaigns should be targeted, and more.
• Cost efficiency: Having customer information at your fingertips will ultimately improve the customer service
experience, either through assistance or in a self-service model.
• Resource efficiency: Communications and media organisations rely heavily on manual processes in an attempt
to better understand and support their customers. The centricity program will standardise customer management
processes around an efficient operating model.
• Flexible architecture: Customer centricity architectures leverage open standards to produce a flexible platform
which enables:
Web services
Data migration and integration
Data warehousing
Implementation of a customer centricity process model and architecture together create a holistic, efficient framework
for managing and monitoring your customer content. Improvements in data quality by using automated, monitored
processes will be recognised by your customers and employees.
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3.6 Building Blocks of Customer Centricity
The six building blocks of customer centricity are as follows:
• Mass customisation: Finding the best possible proposition for a given customer
• Involvement of the consumer in the design process
• Structuring around the customer, and not the product
• Enablement of front line staff
• The democratisation of customer relationships and knowledge
• The capability to filter massive data sets to add value to product and service offers
Clearly not all elements are found in every customer centric organisation; and not all of these elements are as per
new ideas. Customer centric structures and the product centric structures are not mutually exclusive, as both types
will to an extent exist in any large organisation. Small organisations, and those at the high end of the luxury goods
market for example, (low volume/high complexity offerings) have been tailoring solutions to clients for generations.
Understanding customer’s needs and including these data in the design process for products (via focus groups,
market research surveys and the like) are, likewise, hardly new concepts.
3.7 Customer Centricity: A Systematic Solution

Customer-centric innovation isn’t just a strategy—it’s a mind-set founded on the belief that a win for customers
and employees is a win for the company. Unfortunately, most companies are unwilling to make the transformation
from being product, geography, or function centric to becoming truly customer centric. Below are six mind-sets
that block customer-centric innovation.
Spend without reward

Firms pour money into traditional product and technology R&D, but research shows that the market refuses to give
them credit for this in the form of even average P/E multiples. Leaders make all kinds of excuses for this state of
affairs—“We’re in a tough industry” or “All the Street cares about is short-term results”—but shareholders just
aren’t buying it.
Make R&D an entitlement

Senior managers who negotiate R&D funding typically make their decisions on the basis of the prior year’s budget
or the company’s general cost concerns. At the same time, R&D staff view the funds as an entitlement rather than
as a hard-nosed investment focused on exceeding the expectations of customers and investors. The result is that the
business is as usual, and the same boring customer offerings.
Assume people in the field know nothing

Most firms treat R&D as a centralised function run by people with technical backgrounds. “God forbid,” a CEO
might think, “we put people with real hands-on customer experience in charge of product development—they
would never understand the complexities of reverse engineering.” This mind-set almost guarantees that products
and services don’t connect with the customer.
Put marketing, finance, and R&D on different planets

These distinctly different functions are more or less autonomous. They rarely communicate, except to consider
cutting budgets when overall business performance lags. Such disunity ensures that no one pays attention to what
the customer needs and wants from the company as a whole.
Detach marketing from the customers

Marketing people can’t do much for customers beyond feeding them propaganda. When full-fare, first-class airline
customers often lack a decent meal or even a pillow, the poor folks in marketing can only report on customer
rage.
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Don’t rock the boat

Business leaders shy away from organising their businesses around customers, arguing that doing so is “too
complicated” or “too disruptive” for them. But given the lack of organic growth of the average business, shaking
up the silo leaders wouldn’t be such a bad thing for customers, employees, and shareholders.
3.8 Product Centricity

The primary objective of every company in every sector and every market place in the world is to make a profit and
to maximise those profits over as long a time period as possible. And broadly speaking, for the better part of the
past century, all companies have used the same general strategy to achieve that goal. That strategy can be termed
“product centricity.”
Ever since Henry Ford introduced the world to the wonders of the assembly line, companies of all kinds, even
service firms, have followed that same path to growth and profitability. Ford’s model, the product-centric model,
worked. And it worked because of the virtuous cycle that underpinned the entire thing. As Ford understood when
he unveiled the Model-T back in 1908, and as companies today still understand, the more products you sell, the
cheaper it becomes to manufacture those products, which means you can make more products, sell more of them,
and make even more money.
3.9 Difference Between Product Centricity and Customer Centricity

At their inception, most telecom operators started providing one range of service technology, such as mobile or fixed.
However, regulators have lowered barriers to increase competition on pure players. Deregulation has pushed the
telecom operators to offer more than one service technology, and convergent products and services, to be competitive.
This convergence is pushing the telecom operator to invest heavily in new network technologies, such as LTE, 4G,
WIMAX, and IP, in a more competitive market, which is putting significant pressures on the margin. To protect
the margin, which also affected by diminishing returns on traditional products, telecom operators are focusing on
customer wallet share by creating innovative products and promotion bundles. Innovation is now a critical part of
survival for the telecom operators, especially given the growing number of connected devices and the emergence
of new IT players such as Google, Apple, Skype, and Facebook.
All three components of growth are under heavy pressures:

• Average revenue per user - Price competition, cross-product bundling
• Market share - New entrants, new licenses, landline-to-mobile bleeding
• Customer base - Market saturation, more demanding users, less loyal customers, laws limiting contracts
Telecom operators most prevalently talk about customer centricity as a strategy, and its implied tactics:
• Aligning customer data to allow for deep segmentation and new market development
• Aligning marketing, sales, and service processes toward one customer experience
• Standardising offer delivery across product groups to maximise customer satisfaction and maximise days
billing
• Standardising offer design across product groups to get to market quickly and outpace competition
There are few markets in the world that are not facing the same pressures, and almost all are seeking a similar
customer-centric strategy. However, moving from a product-centric business model to a customer-centric one is an
overwhelming transformation for most, as it implies huge operational redesign, process re-engineering, political
risk, and extraordinary investment. Though almost everyone talks about it, most fail to make the transition — which
leaves plenty of room for those that do to gain a significant competitive advantage.
So, what distinguishes the winners from the losers? As in a business transformation, there is also a large gap in
outcomes between involvement and commitment. Suffice to say, however, that our analogy is helpful only to
demonstrate the gap, for it is the chickens that lose in a business transformation, while it is the pigs that win the
spoils. To demonstrate the point, we can look at a couple of scenarios:
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The Rubber Chicken Strategy
This is the most common business strategy. As the senior managers get into the details, it soon becomes clear that
their technology applications are the main inhibitors for a transformation. Without much hesitation, the vision
inevitably is categorised as a technical transformation. To avoid mounting cost and apparent risk, the transformation
gets chopped up into a three- to five-year roadmap focused on the replacement of applications. About 12 to 18
months into the roadmap, it is rarely referred to as a transformation anymore, as it looks more like independent
projects, each with its own politics and issues, that result in their independent, compromised roll-outs. Whatever
new applications did get migrated are running at 50 to 70 percent effectiveness, because they were customised to fit
into a legacy IT architecture and expected to support the existing handicapped processes. The “transformation” the
CEO once dreamed of is fundamentally lost, as the involved business leaders carefully distance themselves from
the vision with unspoken rationale of political suicide for being associated with such abysmal outcomes.
This example illustrates two main pitfalls that most companies fall into as they attempt to cross the road from
product focus to customer centricity:
• Business involvement: Technology is often a red herring. Simply because it can be the obvious bottleneck that
does not mean it is the fundamental issue. The real issue is likely to be organisational design and product-centric
profit and loss, which dictates siloed processes, which then cause the fragmented architecture. The catalyst of
change must come from a true commitment of the business to ensure resilience, and to drive the process change
required for success. This point is simple to remember: “IT transformations fail.”
• Application-focused commitment: Breaking up the roadmap by application implies a “rip and replace”
implementation strategy requiring a skill set far beyond the skills of the day-to-day IT team. Additionally, many
core processes reside across applications, so interdependencies are critical. However, as new applications roll
out alongside the legacy applications, it is difficult to adopt new processes, and the custom integrations often
multiply the risk of running over time and over budget. Finally, cost and feature-focused procurement processes
force managers into a best-of-breed, independent application approach, resulting in inoperability issues, thus
more silos and/or more custom integrations. The thing to remember about roadmaps is thus: “Customisation=
time and time kills everything.”
The flying pig scenario

The CEO realises the significance of the opportunity to surpass the competition and insists the transformation
be managed by business and IT working as one. The CEO stays closely engaged in the early stages to ensure
the organisation is committed to the same outcome. The CEO realigns any remaining product-centric lines of
business to customer segments. The business and IT’s efforts focus the transformation on processes more than IT
components, and due diligence teams across IT and business plan the transformation for each line of business. A
green field implementation strategy is chosen that implies building a pristine application stack completely separate
from the legacy stack. New processes are based on out-of-the-box, best-in-class practices that come prebuilt in the
applications; the term “customise” is deemed to be a swear word by the business and IT. Critical processes such as
data management, marketing, sales, service, order capture, order management, and offer management are dissected
and redefined. The lines of business then decide which customers are going to migrate into the new processes first,
depending on complexity and their respective value to the business. Call centre agents and other users are trained on
the new systems and remain separate from those dependent on the “old way.” From day one until the last customer
is migrated over to the new process and new technology stack, it is a business-led transformation that the IT team
was able to support with ease, having avoided all custom integrations, and completing on time and on budget.
Customer centricity is a strategy that goes beyond rhetoric and requires an unwavering commitment to the customer.
It is abandoning one’s self-centric perspective, and/or product-centric processes, and committing to a new way of
business. It requires large investment, but promises great rewards for the company that can be first in its market to
prepare for the new era of high competition, more demanding customers, high agility of rapid product introductions,
and a solution-oriented marketing, sales, and service front. After all, it was only a decade ago that people argued that
the day a Telco operator could sell on customer value, would be the day pigs could fly. Well that day has come, and
those that can, will survive and thrive, while the chickens meandering across the road will certainly get run over.
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3.10 Customer-Centric Strategy

Part of the appeal of customer-centricity is that it takes very little business acumen to grasp its core concept. Focus
intensely on customers, align your products or services with their interests, and voila: a customer-centric culture is
born. Becoming a truly customer-centric organisation is perhaps one of the most difficult transitions an organisation
can make, fraught with hidden obstacles and unanticipated challenges. Here are three potential roadblocks on the
path to a customer-centric strategy, and how to get around them.
Failing to understand your most valuable customer

A customer-centric strategy is only as good as its customers. “You can’t let the average customer dictate what you
do,” says Robert Duboff, CEO of Hawk Partners LLC and co-author of the book Market Research Matters. Generally
speaking, Duboff says, 20 percent of a company’s customer base generates 80 percent of its profits. Given that split,
it’s imperative to put your most valuable customers at the heart of your approach.
Customers are segmented into three categories: promoters, who actively champion a particular product to their
friends and colleagues; passives, who are lukewarm about the product; and detractors, the opposite of promoters. A
given company’s “score” is simply the difference between its number of promoters and its number of detractors.
NPS has proven to be a powerful tool for companies, which has used it not only to identify customers that are
already valuable promoters but to gain insights into how it can convert detractors. “For a business like GE Capital
Solutions, which serves more than 1 million very diverse customers in many different industries, NPS helps us
better understand what our customers are feeling and how we can improve their experience with us,” says Stephen
White, a spokesperson for GE Capital.
Failing to support your external customer-centric strategy with an internal customer-centric strategy
Speaking of valuable customers, what about that most priceless customer of all—your employee? While most
companies aren’t in the habit of regarding their employees as customers, those seeking to instil a customer-centric
culture should rethink their stance, argues Elaine Berke, president of Westport, MA–based EBI Consulting, which
specialises in helping organisations develop customer-centric strategies. “Customer-centricity needs to come from
the inside out,” says Berke. “Leadership must avoid a double standard that makes it okay for managers to argue
with or demean staff while still being courteous and considerate to external customers.”
Consider the case of the world-renowned Johns Hopkins University Hospital. In developing a comprehensive
Service Excellence initiative aimed at boosting its level of patient care, the hospital included employee satisfaction
as a core component of the program. The hospital conducted an extensive survey to gauge employee concerns that
turned up such simple, actionable insights as making it a point to compliment co-workers and instituting criticism-
free “no negativity days.” “Customer-centric organisations value and respect internal customers as much as external
customers,” says Berke. Like the old saying goes, “If you’re not serving a customer, you’re serving someone who
is.”
Failure to identify the “moment of truth”

Companies spend considerable time and resources developing metrics for processes, execution and other day-to-day
functions but often overlook defining their “moments of truth”—those points at which a customer interacts with a
company’s product or service and forms an impression. “Companies are usually very good at creating metrics around
[such procedures as] production deliverables but have a much harder time knowing how to create and measure
standards relating to the quality of service being delivered.
In defining a company’s moments of truth, it is suggested to be looked by at three different angles—quality of

product, quality of procedures and quality of relationships. Taking a hotel as an example, the quality of the product
would be the cleanliness and comfort of the rooms. The quality of procedures would be such factors as how it long it
takes to check in or how long customers wait for room service. The quality of relationship would be the friendliness
and helpfulness of the staff.
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Considering each angle separately allows a company to isolate the negative moments of truth within each and develop
a game plan for turning them into positive experiences. Procter & Gamble, for example, identified its moment of truth
as that instant when a shopper picks up one of its products and decides whether or not to purchase it—a decision the
customer makes in an average of six seconds. The company has overhauled its marketing with that insight in mind,
creating a global “First Moment of Truth” business team designed to win over the customer in that moment.
There are as many different customer-centric approaches as there are customers, and each has its own unique
challenges, but the road to a truly customer-centric strategy always begins with the same steps.
3.11 Specific Adaptations of CCE

Following are different segments of CCE:
First Segment:Product and service capabilities
Higher value products and services
Product and services rendered by a customer-centric organisation must be of higher quality. It must be such that it
will meet the taste of their customers. They must be able to produce according to specification. Here, market survey
must be carried to know exactly what the customers wants and act according to their dictates. If a customer-centric
organisation rendered services, it must be of quality. They dig out what their customer wants and serve them in a
unique way. There is also evidence of personalisation of services. Where each of their customers was served the
way they think best. This along the line will bring about segmentation and profiling in the organisation.
You have to know that customer-centric organisation produce ‘A’ grade products and service. They do excel at what
they do and this singled them out and attracts customers to them in an easy way. They do not need to spend fortune
or advertising as their products speaks for them. It should be stated that they do not reach their overnight, but it was
a product of cautions effort to put customer satisfaction on the front burner.
Do not compete on price

One main thing about customer-centric enterprise is that, they do not compete with product-centric enterprise on
price. This is due to the fact that the main purpose of a CCE is not to make profit but to satisfy customers. They
placed the satisfaction on customers over and above any other thing. If companies that want to increase productivity
are running after making profit and increasing sales margin, CCE personalised services and do their businesses
according to customer’s specification.
Second segment: Product quality capabilities

Higher quality rankings for all dimensions
Customer-Centric Enterprise should not settle for mediocrity. They produced according to customer’s specification.
As far as their customers will not settle for anything less, the fact also remains that they are sound to look in the
direction of the competitors if their service provider fails to meet up with their demands, all this will force a CRM
savvy organisation to go for higher quality in their dealings. This will invariably drive more customers to their
network.
Rate future importance of quality higher

Customer-Centric Enterprise believes that if they are producing high quality products and services now, it is of more
benefit as quality to them, speaks volume. They believe that the only way to ensure customer loyalty is through
continuous quality product offering. This to them will prevent attrition in the Customer Life Cycle. CCE believes
that if quality products offering are not yielding profit now, it will pay off on the long run.
Third Segment: Marketing and Sales Capabilities

Building strong brand awareness
CCE invest much of their network in creating strong brand awareness. Brands are symbols that industries are known
for. The quality of a brand is not in the diagram or symbol but in what the company stands for. Anywhere you see
MTN logo, etisalat, glo or GTB, you know what they stand and that is what CCEs intend to build an organisation
that satisfies customers and ensure all round customer satisfaction.
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Cross sell and up sell broad product lines

In CCEs, due to constant customer satisfaction, CCEs have opportunity for cross selling and up selling opportunity.
They tried to personalise their services. Build relationship with their customers and when there are marketing
opportunities, they normally took it customers’ doorstep. They visit customers’ in their home to discuss new business
opportunities. They do trace relationships either family or extended in order to sell their products.
Develop sale force with superior technical skills

In CCEs, the whole organisation focuses their attention on customers. They develop sales forces that do conduct
extensive research on sales opportunities. There always make adequate plains before the introduction of products
and services to customers and prospects. They tried as much as possible to gain more customers and raised the exit
barrier in the CLC.
Fourth segment: Customer service capabilities

Superior pre sale capabilities
CCEs have pre sales capabilities. They offer essential services that drive customers to their network. They are able
to anticipate what customers want and meet them at the right place with the right products. They are able to calculate
customer’s next move and beat them at their game.
Responsive after sales service

They provide after sales service to their customers. CCEs don’t sell their products and go to sleep over it. They
tried to find out how customers are faring with the products that they have acquired, and assist their customers to
adapt to their new products.
Rapidly handle customer orders

CCEs don’t joke with customer orders. The attention of the whole organisation is focused on the customer. If a
customer is complaining about a particular product, the whole organisation is listening, necessary steps are taken
in order to prevent future occurrence.
3.12 Creating a Consistent Customer Experience

Mature companies routinely perform a set of sound, standard practices that result in a high-quality outcome. It’s true
for manufacturers- they don’t get up in the morning and start pondering how they’ll produce high-quality widgets
that day. Similarly, retailers have practices for keeping their supply chains flowing and their shelves stocked, and
media companies have practices for getting the news online and into print. Companies that want to produce a high-
quality customer experience also need to routinely perform a set of sound, standard practices. These practices fall
under six high-level disciplines: strategy, customer understanding, design, measurement, governance, and culture.
Strategy
The strategy discipline is your game plan. It’s a set of practices for crafting a customer experience strategy, aligning
it with the company’s overall strategy and brand attributes, and then sharing that strategy with employees to guide
decision-making and prioritisation across the organisation.
The customer experience strategy defines the intended experience. For example, the experience at Costco--a
warehouse store in the United States where customers push giant carts through huge aisles stacked high with value-
priced products--is very different from the experience at an Apple store, where customers see a comparatively sparse
selection of pricey products and get expert assistance with picking the right one. Costco’s experience aligns with
its overall strategy as a cost leader; Apple’s aligns with its strategy of innovation.
The strategy discipline is critical because it provides the blueprint for the experience you design, deliver, manage,
and measure. Without it, you, your employees, and your partners won’t know whether to deliver an experience
like the one at Costco, at Apple, or somewhere else entirely. Worse, you could deliver a Frankenstein experience of
mismatched parts, like putting an Apple genius bar in the middle of a Costco store where customers wouldn’t care
about it but would worry that prices were going up to pay for it.
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Customer understanding
The customer understanding discipline is a set of practices that create a consistent shared understanding of who
customers are, what they want and need, and how they perceive the interactions they’re having with your company
today. In other words, it’s the thing that replaces everyone’s best guesses about customers with real, actionable
insights about customers.
The customer understanding discipline is bedrock. Without this level of insight, you’re liable to frustrate and annoy
your customers with your well-intentioned efforts to serve them. When Geek Squad, the U.S.-based computer services
company, interacts with its customers, it deals with them differently, depending on which customer archetype they
correspond to. A customer could be “Jill,” a suburban mom who uses her computer and other information technology
daily. To her, technology is like plumbing and Geek Squad is like a plumbing company that she calls when she
wants a leak fixed.
However, a Geek Squad customer could also be “Daryl,” who loves getting his hands dirty but sometimes gets
into trouble when one of his tech projects goes awry. Trying to engage a Jill in the same way as a Daryl would be
disastrous. When Geek Squad is at Daryl’s house he enjoys chatting about the gory details of the latest innovations,
a conversation that would bore Jill senseless.
Design
The practices in the design discipline help organisations envision and then implement customer interactions that
meet or exceed customer needs. It spans the complex systems of people, products, interfaces, services, and spaces
that your customers encounter in retail locations, over the phone, or through digital media like websites and mobile
apps.
Design weeds out bad ideas early and focuses your customer experience efforts on changes that really matter to
customers. By leveraging expertise and ideas from customers, employees, and partners, it encourages creative
solutions- and helps avoid missteps by grounding those solutions in reality.
To envision and define the store experience his customers want to have, Office Depot built a “planogram lab”- a
prototype store in a nondescript office complex near company headquarters in South Florida. That lets CEO Kevin
Peters bring in customers to help design the shopping experience that’s just right for them, and then test those designs
out on other customers. Everything from the amount of floor space to where products appear on shelves to where
employees stand when they stock those shelves was designed from the ground up.
Measurement
The measurement discipline is a set of practices that let organisations quantify customer experience quality in a
consistent manner across the enterprise and deliver actionable insights to employees and partners. This is how you
put customer-experience metrics on par with traditional-business metrics, such as sales and profitability.
The customer experience team at technology giant EMC has a sophisticated measurement framework. It first identifies
the aspects of the customer experience that drive the most loyalty, like ease of doing business. It then prioritises those
drivers based on customers’ satisfaction with each driver and the impact of each driver on the overall experience.
That tells EMC which things to fix immediately, which to improve over time, which to maintain at current levels,
and which to promote as strengths.
Governance
The customer experience governance discipline is a set of practices that help organisations manage customer
experience in a proactive and disciplined way. If your customer experience strategy is your game plan, then the
governance discipline supplies your referees and your rule book. It does this through a mix of assigning responsibilities
and changing business processes.
The governance practice is essential because it holds people accountable for their role in the customer experience
ecosystem and helps keep bad experiences from getting out the door. It also gives a boost to initiatives that improve
customer experience.
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Processes help force customer experience concerns into the mix when making day-to-day business decisions. For
example, Canada Post requires all funding requests from any department to answer 10 customer-focused questions
in the business case. This ensures that all leaders think not just about how their projects will affect the bottom line,
but also about how they’ll impact the customer experience.
Culture
The culture discipline consists of practices that create a system of shared values and behaviors that focus employees
on delivering a great customer experience. You might think of it as the way you shape what your employees do
when you’re not in the room.
The culture discipline is perhaps the most powerful of all the disciplines because it embeds practices from the other
five disciplines into employee DNA. Companies like Disney, Zappos, Southwest Airlines, Ritz-Carlton, and FedEx
all point to their customer-centric cultures as key to their success. That’s because this discipline turns customer
experience excellence into a habit and makes future change easier by creating an ecosystem that’s receptive to
customer experience improvement efforts.
3.13 Characteristics of a Successful CCE

Following are the characteristics of a successful CCE:
Store experience
After a customer visits your store, whether online or at a brick-and-mortar location, he/ she will be more likely to
come back if that previous experience was pleasant, enjoyable, and- most important- if it sparked within her an
emotional connection to your company, product, or service. Balboni reported that BarnesAndNoble.com ranked the
highest in this category, with what he called “amazing kinetics.” Among the compelling features to be found on the
bookseller’s site, Balboni spotlighted high-quality images and displays, interactivity, and media clips. The online
store even offers same-day delivery for orders delivered to Manhattan.
Convenience
Factors that fall under this category include store layout, design, merchandise placement, and checkout. Customers
want a shopping experience that makes it easy for them to get what they want, without turning it into a treasure
hunt. Unfortunately, no retail store really stood out in this category, Balboni said.
Range and assortment

Businesses have to reflect the needs of a disparate consumer base by providing a vast range of products. Customers
will come back if you have the right size and right fit for them, Balboni told the audience. As an example, he pointed
to the category leader, grocery chain Whole Foods Market, which manages to cater to the needs of many customers
by offering seven varieties of apples. Moreover, the national chain tailors each location’s products to the needs of
the respective local community.
Quality
It’s simple enough: Customers want high-quality products. Discount retailer Target topped this list, Balboni said,
thanks to a commitment to providing good quality at affordable prices. From hosting private-designer labels to
applying an understanding of retail to the sale of food, Target’s emphasis on quality has forged a loyalty so deep
that shoppers are now the company’s de facto salespeople.
Customer service
“Beyond being friendly, this is about empowering your sales force,” Balboni said. The highest advocacy score in
this category went to Publix Super Markets, a chain of groceries based in the south-eastern United States. Balboni
described how, instead of simply telling you a product is in Aisle X, Publix employees will actually take you to the
product. They even follow you to your car and help you load your groceries. Similarly, online shoe retailer Zappos
posts its customer service number at the top of every page.
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Multichannel
The market is fragmented in part because there are so many venues for a consumer to access. The key is bridging all
channels to create a symbiotic relationship between them that helps promote the activity of each channel individually.
Stores, for example, should drive customers online, and sites should in turn drive traffic to the stores. Despite its
high-value merchandise, jewellery store Tiffany’s achieved this level of multichannel sophistication with features
such as a Web-to-phone service where a customer could input his phone number online and would soon receive a
call from a diamond specialist.
Product availability
Customers are going to be happy if you have what they came looking for. Discount retailer Wal-Mart received an
overwhelming score of 91 percent advocacy in this category. With its sense-and-respond supply chain, Wal-Mart
knows what any store, at any location, needs at any time.
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Summary
• By introducing customer data management processes aligned to the business operating model, the communications
industry can achieve the highest levels of customer visibility, flexibility, and personalised service across
channels.
• The basic concept of customer centricity requires collapsing instances of customer information across products,
services, and channels.
• Implementation of a customer centricity process model and architecture together create a holistic, efficient
framework for managing and monitoring your customer content.
• Customer centric structures and the product centric structures are not mutually exclusive, as both types will to
an extent exist in any large organisation.
• The primary objective of every company in every sector and every market place in the world is to make a profit
and to maximise those profits over as long a time period as possible.
• The benefits of CCE are customer insight, cost efficiency, resource efficiency and flexible architecture.
• Moving from a product-centric business model to a customer-centric one is an overwhelming transformation.
• Part of the appeal of customer-centricity is that it takes very little business acumen to grasp its core concept.
• Companies spend considerable time and resources developing metrics for processes, execution and other day-
to-day functions but often overlook defining their “moments of truth”.
• Customer-Centric Enterprise believes that if they are producing high quality products and services now, it is of
more benefit as quality to them, speaks volume.
• In CCEs, due to constant customer satisfaction, CCEs have opportunity for cross selling and up selling
opportunity.
• In CCEs, the whole organisation focuses their attention on customers.
• The customer experience governance discipline is a set of practices that help organisations manage customer
experience in a proactive and disciplined way.
References
• Roman, I., 2010. Turnaround Strategies for Customer Centric Operations, 1st ed., Italics Publishing.
• Galbraith, J., 2005. Designing the Customer-Centric Organisation: A Guide to Strategy, Structure, and Process,
1st ed., Jossey-Bass.
• The Customer Centric Organisation [Pdf] Available at: <http://www.booz.com/media/file/141263.pdf> [Accessed
13 December 2012].
• Building the Customer-Centric Enterprise [Online] Available at: <http://www.information-management.com/
issues/20001101/-2813-1.html> [Accessed 13 December 2012].
• Creating a Customer-Centric Business [Video online] Available at: <http://www.youtube.com/
watch?v=W3tyEsTed4k> [Accessed 13 December 2012].
• Customer star: How to build a customer-centric organisation [Video online] Available at: <http://www.youtube.
com/watch?v=LRu36pTaeXk> [Accessed 13 December 2012].
Recommended Reading
• Tseng, M. M. & Piller, F., 2003. The Customer Centric Enterprise, 1st ed., Springer Publication.
• Al-Shammari, M., 2011. Customer-Centric Knowledge Management: Concepts and Applications, IGI Global,
1st ed.
• Payne, A., 2012. Handbook of CRM, 1st ed., Routledge Publication.
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Self Assessment
1. A ________________ employs and promotes people who support customer centricity.
a. CRM
b. E-CRM
c. NGO
d. customer centric organisation
2. __________________ provides a 360 degree view of the customer.

a. Risk mitigation
b. Relationship effectiveness
c. Consumer forums
d. Customer care
3. The cost to replace a key customer can be _______ times the cost to keep and maintain an existing customer.
a. 7-8
b. 3-4
c. 2
d. 9
4. A given company’s “score” is simply the difference between its number of promoters and it______________.
a. number of people
b. number of detractors
c. number of employees
d. number of CEO
5. One main thing about customer-centric enterprise is that, they do not compete with product-centric enterprise
on ______.
a. quality
b. quantity
c. price
d. products
6. The ___________ discipline consists of practices that create a system of shared values and behaviors that focus
employees on delivering a great customer experience.
a. governance
b. design
c. strategy
d. culture
7. Customer-Centric Enterprise believes that the only way to ensure customer __________ is through continuous
quality product offering.
a. loyalty
b. satisfaction
c. product delivery
d. content
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1. Relationship effectiveness A. Data warehousing
2. Risk mitigation B. Monitors regulatory compliance
3. Convenience C. Predictive analysis
4. Flexible architecture of CCE D. Merchandise placement

a. 1-C, 2-B, 3-D, 4-A
b. 1-D, 2-A, 3-B, 4-C
c. 1-C, 2-B, 3-D, 4-A
d. 1-D, 2-C, 3-A, 4-B

a. The cost to replace a key customer can be 7– 8 times the cost to keep and maintain an existing customer.
b. Raising customer retention by 5% could increase customer value to your company by 25 – 100%.
c. Customer-centric organisations value and respect only internal customers and not external customers.
d. Implementation of the CCE model has addressed major industry pain points, such as duplication of customer
information, while streamlining business-operating capabilities.
10. The customer experience ______________ discipline is a set of practices that help organisations manage
customer experience in a proactive and disciplined way.
a. measurement
b. design
c. customer understanding
d. governance
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Chapter IV
Customer Lifecycle Management
Aim
• explore importance of customer life cycle management
• explain the phases customer life cycle
• elucidate the telecom life cycle management
Objectives
• explain telecom requirements
• analyse the role of telecom provider
• enlist the benefits of TLC
Learning outcome
• define customer life cycle management
• understand customer value management
• identify the challenges in implementing a CLV-based framework
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4.1 Introduction
The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle (PLC). However, CLC focuses
upon the creation of and delivery of lifetime value to the customer that is looks at the products or services that
customers need throughout their lives. It is marketing orientated rather than product orientated, and embodies the
marketing concept. Essentially, CLC is a summary of the key stages in a customer’s relationship with an organisation.
The problem here is that every organisation’s product offering is different, which makes it impossible to draw out
a single Life Cycle that is the same for every organisation.
Livecash
Pension Right track
Retirement plans Student Loan
The Customer Life Cycle (CLC),
Life Insurance Graduate A/C
Savings Car Loan,
Mortgage
Fig. 4.1 Customer life cycle

(Source: http://www.marketingteacher.com/lesson-store/lesson-customer-life-cycle.html#)
Let us consider an example from the Banking sector. HSBC has a number of products that it aims at its customers
throughout their lifetime relationship with the company. Here we apply a CLC. You can start young when you want
to save money. 11-15 year olds are targeted with the Livecash Account, and 16-17 year olds with the Right Track
Account. Then when (or if) you begin College or University there are Student Loans, and when you qualify there
are Recent Graduate Accounts.
When you begin work there are many types of current and savings account, and you may wish to buy property,
and so take out a mortgage. You could take out a car loan, to buy a vehicle to get you to work. It would also be
advisable to take out a pension. As you progress through your career you begin your own family, and save for your
own children’s education. You embark upon a number of savings plans and schemes, and ultimately HSBC offer you
pension planning (you may want to insure yourself for funeral expenses - although HSBC may not offer this!).
This is how an organisation such as HSBC, which is marketing orientated, can recruit and retain customers, and then
extend additional products and services to them- throughout the individual’s life. This is an example of a Customer
Life Cycle (CLC).
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Another important point is that a lifetime CLC is made up many shorter CLC’s. So, for example, Volkswagen Cars
retains a customer for many years and one can predict the products that meet customer’s needs throughout his or
her family lifetime. However the purchase of each car will in itself be a CLC with many Customer Touch Points.
The consumer may need a bigger vehicle as his or her family expands, so they visit VW’s website and register.
The customer reviews models and books a test drive with her or his local dealer. He or she decides to buy the car
and arranges finance. The car is then delivered from the factory, and returns every year for its annual service. Then
after three years, the customer decides to trade in his or her car, and the cycle begins again. The longer-term life
cycle is simply the shorter-term life cycles viewed consecutively.
CRM is a term that is often referred to in marketing. However, there is no complete agreement upon a single definition.
This is because CRM can be considered from a number of perspectives. In summary, the three perspectives are:
• Information Technology (IT) perspective
• The Customer Life Cycle (CLC) perspective
• Business Strategy perspective
A customer life cycle can also be thought of as the length, arc and nature of a customer’s relationship with your brand
or company. Much like a “human life cycle” or a relationship between two people, this customer life cycle is marked
by ups and downs, different phases and different periods of activity. Also like a human life cycle or a relationship
between two people, you want your customer’s life cycle to be as long and as fruitful as possible. How do you
accomplish that? While the quality and value of your company and brand goes a long way to building long customer
life cycles, not unlike in real life communication plays a key role as well. Because you won’t experience real-life,
real-time, one-on-one communication with the majority of your customers very frequently (if at all), your corporate
communications, particularly your email communications, can fulfil the relationship building need here.
In this section, we’ll talk you through various phases in the customer life cycle. In the sections following, we’ll
discuss how to integrate email marketing efforts into the various points in the customer life cycle.
4.1.1 Prospective Customers: The First Phase of the Customer Life Cycle
Before your customers are actually your customers, they are simply prospects who may or may not be aware of your
product, brand, or company. Your job, as a marketer, is to first make them aware of your product, brand, or company
and then peak their interest enough that they will convert to an active customer or user. Once you have their interest
peaked, of course, your next job is to provide the trust, security, and incentive that they need to overcome any barriers
or obstacles and become a registered or paying user or customer. This phase of the customer life cycle – the process
of converting a prospect into a customer or user - is often the most challenging. It involves a marketing acquisition
budget as well as an awareness of what will transition prospects from “just interested” into fully engaged. Many
marketing books have been written about the techniques and challenges of acquiring new customers. While it is an
important part of the mix, email marketing is only a portion of the many marketing activities you’ll need to master
in order to effectively convert prospects to customers.
Another common term you’ll hear used referring to this part of the customer life cycle is “leads”. Leads are the names
and contact information (typically in the form of an email address) of people who have shown an interest in your
product, service, or brand. Often, they have done so by signing up for a special offer or even a piece of free content.
Leads may also be purchased from data companies. However, if you are purchasing a lead list, we recommend that
you be extremely careful and research that the data you are buying is from a reputable company and won’t put you
at risk of violating any privacy or Can-Spam laws.
4.1.2 New Customers or Users: The Second Phase of the Customer Life Cycle
So, now you’ve converted a prospective customer or lead into a paying or registered customer. That’s great and
shows that you have some real marketing skills. However, ideally you want your new customer or user to be a
customer or user who has a long term relationship with you, not just one who purchases one time and then never
returns. Think of this phase of the customer life cycles though it’s like the early phases of dating. Your new customer
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has been “sold” enough on you to go out on one date or make one purchase, but they’re not sure if you’re a
long-term commitment yet! It’s your job to build a relationship with them so that they continue to return, interact,
and purchase from you for a long time to come. Again, the quality of your product or service will certainly matter
here, but so will the way in which you communicate with your customer and show them that you respect their
privacy, time, and, most importantly, business.
4.1.3 Active Customers or Users: The Third Phase of the Customer Life Cycle
Now you’ve converted a prospective customer into a paying or registered customer. This is the stage at which you
need to not only impress the customer with the quality of your product, but also follow-up with them to build a
relationship, make them feel important to you, and ensure that, when they think of you, those active customers think
of returning to you. If we’re still using the dating analogy, think of this as the time when you make sure that you’re
always being polite and wearing your best clothing when you communicate with the customer!
4.1.4 Repeat or Loyal Customers or Users: The Fourth Phase of the Customer Life Cycle
If you’ve managed to get a customer over the first two hurdles, converting them from a prospective customer or
lead to an active customer and then from an active customer to a repeat customer, you should be congratulated!
Earning loyal customers who will make repeat purchases or visits to your website or service is quite a marketing
accomplishment. Once your customers become repeat customers, the aggressiveness and frequency with which
you want to communicate with them will diminish, but it certainly won’t disappear. You’ll want to make sure that
customers are being reminded that they are important to you, as well as being given reasons and incentives to remain
loyal. There’s always a competitor out there ready to move in on your user or customer base. Your best tool to retain
customers who have become repeat or loyal customers is to keep an ongoing dialogue with them through all of your
marketing communications channels, including email.
4.1.5 Lapsed Customers or Users: The Fifth Phase of the Customer Life Cycle
Unfortunately, even a loyal or repeat customer may eventually lose interest or contact. When a customer has gone
a significant amount of time without interacting with your brand or company or purchasing a product, they are
referred to as a “lapsed” customer. In most cases, you will break your lapsed customers down into two to three
groups. It’s common to consider short-term lapsed, long-term lapsed and seasonally lapsed customers differently.
However, how you define what those groups are (and perhaps how you develop your own segmentation for lapsed
customers) will depend greatly on your product, industry segment, or customer base. If, for example, you sell shoes,
a customer who didn’t purchase from you once a quarter would easily be considered lapsed as shoes are a constant
and ongoing need. If, however, you only sell snow boots, you wouldn’t expect customers to purchase from you
over the summer, so the time between purchases to define a lapsed customer and the point in the year when you
would want to contact lapsed customers would be different. Essentially, a lapsed customer is a customer who has
not made a repeat purchase within a time frame that you have defined as the time between which active customers
typically makes purchases.
4.1.6 Inactive or Abandoned Customers or Users: The Sixth Phase of the Customer Life Cycle
Of course, some lapsed customers may eventually turn into inactive or abandoned customers who no longer purchase
or interact with your company. Some of these inactive customers will have reasons for no longer having a relationship
with your company that you cannot control, such as a bad experience with customer service or a change in their
financial situation. However, many inactive customers may simply have forgotten about you, been lured away by
competition, or simply need an incentive to re-purchase for you. Customers in this phase of the customer life cycle
should be divided into two groups – customers who should not be communicated with at all anymore and customers
that you hope to win back via a customer communication or marketing campaign.
Of course, within this customer life cycle, different customers will have different values (some will spend more
and be worth more to acquire, retain or win-back). However, no matter how big or small the value of the customer,
their customer life cycle and relationship with your company, product, or brand will most likely follow the cycle or
path outlined above. Fortunately, if you know the likely life cycle or pattern of a customer, you can make changes
to your customer communications or marketing strategy to try to optimise the length of time and the value that a
customer brings to your business. No matter what email marketing or bulk email strategy you are taking, the first
step to ensure a successful email campaign is to choose a reliable bulk email sender.
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4.2 Customer Lifecycle Management
Today, real estate organisations are constantly required to reduce costs, increase efficiencies and “do more with less”.
An area that is rarely looked at for cost-savings and improved efficiencies, but one that offers tremendous returns,
is telecommunications costs. Telecom today is a whole lot more than phone bills. Large organisations are buying a
variety of telecom services including data, voice over IP phone systems, call centers, and wireless services. In fact,
telecom costs are usually one of the top three expenses for most MLS’s, associations and real estate companies,
particularly those with their own data centers. It is not uncommon for telecom costs to account for as much as 20%
of total annual operating costs, yet the bills receive very little scrutiny. Telecom represents a significant cost savings
opportunity for large MLS’s and real estate firms, yet few have taken advantage of this opportunity.
4.3 Telecom Lifecycle Management (TLC) Process

TLC is a process that involves developing a plan to effectively manage all telecom-related efforts and expenses. It
requires the organisation to embrace a holistic telecom lifecycle management approach. Such a plan must include
all the processes required to manage each telecom contract and service from the beginning to the end of its
term. A company must be able to systematically audit all its telecom invoices and be able to dispute and recover
overpayments. It must also be able to manage telecom expenses and choose and effectively manage the appropriate
telecom vendors.
Most internal staff is already stretched who will accomplish this task. They are focused on being expert in the real
estate industry, not the telecom industry. Fortunately, Telecom Lifecycle Management companies exist and they can
do this work for you. The most successful approach is to identify one of these TLC companies to partner with you,
and to share the goal of reducing and managing telecom expenses. Turning to a TLC provider will eliminate the
need for additional internal staffing expertise in the ever-increasing complexities of telecommunications and will
allow your firm to “pay for performance”, not fixed salaries.
Real estate telecom requirements

A typical MLS or real estate firm has diverse telecom needs with ever-increasing complexities. Without support
from telecom experts it can be extremely difficult to stay current. Many organisations are looking for looking for
alternative approaches for managing their current telecom infrastructure. They would like to achieve a greater
return on its telecom infrastructure and technology investment while improving internal business processes and
data security. Many are also looking for ways to reduce telecom spend while migrating their data to a more robust
and secure environment.
Voice and data convergence

Many large MLSs and real estate firms are looking to transition to a telecom system which will integrate delivery
of voice mail, email and data over the Internet using a centralised integrated communications system. This type
of system is most appropriate where employees or members spend at least 30% of their time communicating with
each other. It is ideal for real estate companies and real estate associations because much of the communication in
the real estate process is with fellow Realtors and office personnel. A TLC partner can help you evaluate whether
a move to internet-based telecom makes sense for your organisation.
Telecom vendor consolidation/cost reduction

Managing multiple telecom vendors can be a daunting task and may create inefficiencies. Companies would like to
review all of the existing vendors providing data, and wireless to see if there may be some efficiencies and reduced
costs to be realised by consolidating service providers. A Telecom Lifecycle Management partner can make this
process a lot less labor intensive and more effective because they know how to look for the “loopholes” in telecom
contracts
Data transmission speeds

Transmission speeds for MLS systems, websites, and internal systems are critical since there is an ever-increasing
amount of data being transmitted. Telecom Lifecycle Management companies review all of the MLS’s telecom
hardware and software to see if technology upgrades might allow for faster data transmission speeds to better serve
the needs of their members.
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Improved system reliability and security

System security is critical. According to the 2006 MLS Technology Survey from the National Association of Realtors,
data and information security is one of the most important concerns facing the industry today. Many MLSs want
to evaluate their entire data delivery process to ensure that it had the highest level of security available. Telecom
Lifecycle Companies are not only skilled in telecom expense management. They have expertise in building secure
networks and infrastructure as well.
Data backup system

It is critical for every organisation to have effective back-up systems. During peak times, servers can be maxed
out which can slow down transmission speeds and make for unhappy customers. Effective Telecom Lifecycle
Management builds redundant system to maintain transmission speeds even during heavy traffic times. Also, in the
event of a natural disaster, such as a hurricane or a catastrophic equipment failure, TLC companies will provide a
redundant system that will begin working shortly after the primary network goes down.
Call centre efficiencies

Many real estate organisations have large volume call centres which are used to serve members and home buyers
and seller. The Telecom Lifecycle Management process will examine the call centre systems and telecom contracts
to be sure they maximise customer service, while minimising costs.
Wireless
Mobile phone service providers are notorious for providing a series of very confusing call plans. Many companies
allow their employees to contract with their own mobile service provider. TLC companies can help negotiate
companywide programs which make it easier to deploy wireless MLS data and real estate applications, while saving
money.
4.4 Telecom Lifecycle Management Provider

A TLC outsource provider will partner with you and your staff to build a plan to more effectively manage the total
telecom lifecycle. They will provide an integrated approach to maximise your return on investment of telecom
services. They will help you layout system requirements, control expenses, and provide automated methods for
auditing costs and network efficiencies while helping you continually source the right vendors for your ever-changing
telecom needs. Telecommunication Lifecycle Management can take many forms, but four components relate closely
to a company’s goals. These components are Audit and Recovery, Expense and Inventory Management, Service
Renegotiation and Optimisation, and Vendor Management.
Step one: Audit and recovery

The first phase of a telecom lifecycle management program identifies and remedies specific billing errors, providing
both recovery of past overpayments and ongoing cost savings. Part of this effort is the completion of a detailed
review of your organisation’s entire telecom environment. The audit will look at all of your telecom hardware like
telephone systems, routers, switches as well as cell phones, PDA’s, call centre equipment and many more. Next
the firm will review all of your contracts and service plans with telecom vendors. They will then review a series of
your past invoices to check for errors where the telecom provider overcharged you for services. During the audit,
they will also look to see if additional services that you did not order are on your bill. They also have a thorough
working knowledge of tariffs and taxes and they will check to be sure you are paying the right amount. Once this
process is complete the TLC provider company will work with your telecom vendors and collect overpayments on
your behalf. This windfall can be used to reinvest in technology upgrades, more efficient telecom programs or drop
right to your bottom line.
Step two: Expense and inventory management

The second phase of the process builds on the information produced by the audit. Using the knowledge gathered by
the full system review, the TLC provider will help you build a framework for ongoing, cost-effective administration
of telecom services. This management allows your organisation to manage your vendors more effectively and utilise
the appropriate telecom providers to support your changing needs.
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Step three: Service renegotiation and optimisation
The third phase will optimise your contracts and vendor relationships. Your TLC partner works with you to renegotiate
and optimise your contracts. They may suggest consolidating vendors to give you more negotiating leverage. They
will also help you negotiate performance clauses that will help you measure on-going service levels against the
contract and reduce overpayments.
Step four: Service ordering management

While it is essential to negotiate the right contract with the best telecom carriers to match your needs, it can all fall
apart when individual phone lines or wireless services are being ordered. Many real estate enterprises add, change,
and disconnect service, open new offices, and support virtual agents working from their home. If somebody is not
closely managing all of these changes, the firm may not be taking advantage of buying efficiencies or available
rebates, and worse, it may be buying more telecom services than it actually needs. It also takes a great deal of time
to set up new telecom services. By using a TLC provider, an MLS can save up to 1.5 hours for each phone line they
may add or disconnect and save up to 40 hours when setting up an entire office.
4.5 Benefits of TLC

There are several benefits that have been identified from companies who are actively involved in Telecom Lifecycle
Management initiatives:
Effective cost-reduction
Telecom Lifecycle management helps senior management get a better handle on one of the most significant costs.
Partnering with a Telecom Lifecycle Management firm brings a depth of telecom experience that is very difficult
to maintain internally. Participants in the process say they have realised significant on-going savings they would
never have been able to achieve without a TLC partner. It resolves a huge problem in terms of managing telecom
for both voice and data while saving a considerable amount of money that can be used to reinvest in upgrading
technology.
Centralised decision-making
Telecom decisions are usually being made all over the organisation and thus companies do not realise the efficiencies
they could. By employing the services of a telecom lifecycle management expert, companies can rely on a partner
who can help them more critically evaluate their true telecom spending. By consolidating this information companies
can renegotiate contracts with more purchasing power and leverage.
Allows focus on more strategic issues

When the telecom lifecycle management solution is owned in-house, often someone becomes a “data entry”
person. Outsourcing the management of the telecom lifecycle frees up key internal resources. It’s almost impossible
to quantify the amount of time savings companies realise with their internal staff, but do recognise it has helped
free up some time focus on more strategic issues. TLC participants say that they can now spend more time thinking
about ways to improve the quality of service we deliver to our customers through technology.”
4.6 Five Stages of a Customer Development Cycle

There are five stages in a customer development cycle. Let us see these in detail:
Awareness
This is the first stage. Here the customer gets information about the product from various sources. These includes from
media, websites, medical product from various sources. These includes from media, websites, medical representatives,
references, magazines, newspapers representatives, references, magazines, newspapers and many more.
Comparison
In this stage, the customer compares the new product with the – In this stage, the customer compares the new product with
the product of competitor. By giving what the customer expects, benefits over competitors and credibility are the key to
success at the comparison stage. Competitors and credibility is the key to success at the comparison stage. Essentially,
the more information you provide, the higher the likelihood that you will make the sale.
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Transaction
This stage is the beginning of the relationship. Price becomes a critical aspect for the customer. Unless you are
giving products away for little or no profit, the transaction stage will only take place if you have played your cards,
no profit; the transaction stage will only take place if you have played your cards right during the awareness and
comparison stages. The transaction stage should be right during the awareness and comparison stages. The transaction
stage should be viewed as the beginning, not the end, of the relationship.
Reinforcement
The reinforcement stage is where you add value to your customers’ purchases by showing them how to maximise
the value and pleasure their purchases can provide. The reinforcement stage presents you with an opportunity to
position yourself apart from your competition by thanking your customers for their purchase and paving the way
for future purchases It is where you begin the process of creating word-of-mouth ambassadors for your firm out of
ambassadors for your firm out of satisfied customers.
Advocacy
This is the final stage of customer development cycle. This is the stage where the customer becomes the company’s
promoter and gives stage where the customer becomes the company’s promoter and gives recommendations to the
aspirers of the product. It is considered to be the most effective form of advertising ever devised.
4.7 Managing Customer Lifecycle in Customer Centric Enterprise (CCE)

The customer life cycle is a means of defining and communicating the way in which an enterprise interacts with its
customers and prospects.
Have you ever experienced a high- pressure sales pitch? Buying a car can be like that. You may not have chosen the
make and model, much less the dealer, but an aggressive sales representative may have you seated in the manager’s
office talking financing and payment options before you know it. Many who have experienced these selling situations
understand the permanent animosity that can result. When a rep moves in for the close too forcefully or suggests a
solution prematurely, it can do more than kill the sale. It can kill the relationship.
Perhaps the most unfortunate part of the high-pressure sales situation is that the product or service being offered
could very well have been the right solution for the customer. The sales rep may have simply misunderstood the
customer’s environment or may have misread the customer’s position in the buying cycle.
Customer relationship management requires leveraging your knowledge about each of your customers to make each
touch or interaction with him or her satisfactory to the customer and profitable to you in the long run. Although CRM
technology, a cross-functional business strategy and the appropriate organisation structure and culture can help you
do this, there is another key to managing customer interactions – understanding the customer life cycle.
4.8 The Customer Life Cycle Defined

The purpose of the customer life cycle is to define and communicate the stages through which a customer progresses
when considering, purchasing and using products, and the associated business processes a company uses to move
the customer through the customer life cycle. The map of CRM technology to the customer life cycle provides a
mechanism for prioritising systems projects and for understanding the information required by specific customer
interactions.
The customer life cycle is depicted in the given figure. This customer life cycle is generic; the stages shown represent
thought processes for typical customers and companies. While these stages may or may not change, it is likely that
the business processes that map to these stages will differ from company to company. Differences will also exist
based on the product under consideration – the cycle for buying soap is different from the cycle for buying a car.
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Intrude a Global Marketplace
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Fig. 4.2 Customer life cycle in customer centric enterprise

(Source: http://www.information-management.com/issues/20001101/-2813-1.html)
4.8.1 The Customer’s Role

The customer life cycle is depicted as a circle or ellipse to represent that it is truly a cycle, one that you want your
best customers to move through again and again. When a customer is considering the purchase of a product or service
(a “prospect” in the early stages of the customer life cycle), he or she goes through a predictable series of thought
processes. These processes, shown just inside the circle on the customer life cycle in the Fig. 4.2 are as follows:
• Identify needs that may be filled by a product or service available for purchase.
• Develop awareness that your organisation exists and may be able to fulfil the identified need.
• Learn more about your organisation and the products and services that may fill the need.
• Consider how the products and services offered by your organisation do or don’t satisfy the identified need.
• Evaluate the suitability of your products and services against others (the competition) to fill the identified
need.
• Decide to purchase your product or service, go to a competitor or not fill the need. We refer to this stage as the
“customer moment.”
Once the prospect reaches the customer moment and decides to purchase the product or service, he or she becomes
an actual customer. At this point, the stages in the customer life cycle transition from a focus on the customer’s
purchase decisions to a focus on customer satisfaction and relationship nurturing as the customer uses the product
or service he or she acquired.
As the customer moves through these product or service use stages, your organisation has an increasing ability to
influence customer satisfaction – either positively or negatively. Inaccurate or untimely fulfilment and poor service
can result in a decision by the customer not to purchase additional products or services from you. On the other hand,
satisfied customers can become customers for life – owning many products and services and generating much profit.
After the customer moment, the customer life cycle stages include the following:
• Acquisition of the product or service (taking delivery of the product or service by the customer) is typically the
first interaction the customer has with your organisation after the purchase decision.
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• Use by the customer of the products and services is typically for the life of product ownership and sometimes
beyond.
• Re- entry by the customer into the customer life cycle represents a positive decision to do additional business
with your organisation.
4.8.2 The Enterprise’s Role

The outermost circle (dotted lines) in the Fig.4.2 represents the flip side of the customer stages described earlier.
These are the processes that your organisation undertakes to move a customer through the customer life cycle. Once
you determine the mind-set, and thus the possible behaviors, of your customers as they move through the customer
life cycle, you can identify the interactions or business processes your organisation has with these customers. The
business processes conducted by your organisation fall into the following general categories:
• Intrude and engage: This includes the efforts of your organisation to get a prospect’s attention, have that prospect
become aware of your company and engages the prospect in a dialog designed to move him or her into the
customer life cycle.
• Acquire: Simply because prospects are aware of your organisation does not guarantee that they will purchase
products or services. You must work to educate the prospects about your company, and you must maintain
the prospects’ attention and interest as they continue with their buying decision in order to acquire them as
customers.
• Retain and expand: After a prospect buys your products or services and becomes a customer, the real work
begins. Many of the cross-functional business strategies designed to increase customer satisfaction and foster
customer loyalty are conducted in this segment of the customer life cycle.
In a properly defined customer life cycle, the organisation’s processes map clearly to the customer stages and a
relationship that complements both the customer and the organisation can be established. Now that we have introduced
the customer life cycle, let’s take a closer look at the interaction between your products and services, the competitive
environment and the various stages described earlier.
The products and services that we offer provide the foundation for our customer relationships. Successful CRM
organisations are those that make the transition from a product focus to a customer focus. This does not mean that
products become unimportant; it simply means that we build our products to satisfy our customers. More and more,
companies are tailoring products to meet the needs of individual customers. As the Fig. 4.2 illustrates, the customer
life cycle sits upon the foundation provided by the products and services offered to your customers.
4.9 Customer Lifetime Value

In the past two decades, the firms tended to focus on either cost management or revenue growth. When a firm adopts
one of these approaches it loses out on the other. For instance, if a firm focuses only on revenue growth without
emphasis on cost management, it fails to maximise the profitability. Similarly, cost management without revenue
growth affects the market performance of the firm.
What is needed is an approach which balances the two, creating market-based growth while carefully evaluating
the profitability and return on investment (ROI) of marketing investments. Optimal allocation of resources and
efforts across profitable customers and cost effective and customer specific communication channels (marketing
contacts) is the key to the success of such an approach. This calls for assessing the value of individual customers
and employing customer level strategies based on customers’ worth to the firm.
The assessment of the value of a firm’s customers is the key to this customer centric approach. But what is the
value of a customer? Can customers be evaluated based only on their past contribution to the firm? Which metric
is better in identifying the future worth of the customer? These are some of the questions for which a firm needs
answers before assessing the value of its customers. Many customer oriented firms realise that the customers are
valued more than the profit they bring in every transaction. Customers’ value has to be based on their contribution
to the firm across the duration of their relationship with the firm. In simple terms, the value of a customer is the
value the customer brings to the firm over his/her lifetime. Some recent studies have shown that past contributions
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from a customer may not always reflect his or her future worth to the firm. Hence, there is a need for a metric which
will be an objective measure of future profitability of the customer to the firm. Customer lifetime value takes into
account the total financial contribution—that is, revenues minus costs—of a customer over his or her entire lifetime
with the company and therefore reflects the future profitability of the customer. Customer lifetime value (CLV) is
defined as the sum of cumulated cash flows—discounted using the Weighted Average Cost of Capital (WACC) — of
a customer over his or her entire lifetime with the company.
4.10 Importance of CLV

CLV is a measure of the worth of a customer to the firm. Calculation of CLV for all the customers helps the firms to
rank order the customers on the basis of their contribution to the firm’s profits. This can be the basis for formulating
and implementing customer specific strategies for maximising their lifetime profits and increasing their lifetime
duration. In other words, CLV helps the firm to treat each customer differently based on their contribution rather
than treating all the customers same.
Calculating CLV helps the firm to know how much it can invest in retaining the customer so as to achieve positive
return on investment. A firm has limited resources and ideally wants to invest in those customers who bring
maximum return to the firm. This is possible only by knowing the cumulated cash flow of a customer over his or
her entire lifetime with the company or the lifetime value of the customers. Once the firm has calculated CLV of
their customers, it can optimally allocate its limited resources to achieve maximum return. CLV framework is also
the basis for purchase sequence analysis and customer specific communication strategies. CLV can be considered
as the metric which guides the allocation of resources for ongoing marketing activities in a firm adopting customer-
centric approach.
4.11 Uses of CLV Measure for Developing Customer Centric Strategies

Calculation of CLV for all its customers is only the first step firms can take to implement customer level strategies.
CLV is a metric, which can be a basis for firm’s investments in infrastructure and ongoing marketing activities.
Firms can use CLV framework to identify which customers are most likely to bring maximum profit to the firm in the
future, what are the factors leading to higher CLV, and the optimal level of resource allocations to various channels
of communication. Dynamic customer management based on CLV can improve the shareholder value. Customer
management from the perspective of CLV can be defined as “the process for achieving a continuing dialogue
with customers, across all available touch points, through differentially tailored treatment, based on the expected
response from each customer to available marketing initiatives, such that the contribution from each customer to
overall profitability is maximised”. The success of a firm in exploiting a CLV framework lies in firm’s ability in
identifying and implementing the most effective customer level marketing decisions based on CLV metric so that
the future profit from the customer is maximised. These strategies will have a strategic impact of increasing the
customer lifetime duration and the lifetime value.
4.12 Organisational Challenges in Implementing a CLV-based Framework

Firms can no doubt benefit from a CLV-based framework in terms of acquiring and retaining the profitable customers,
developing the right communication and marketing strategies, and allocating resources optimally so that the profits
are maximised. However, the firms face many organisational challenges in implementing such a framework. CLV
based approach calls for classification of customers as high and low value and differential treatment to customers
based on their value to the firm. Customer differentiation can potentially lead to consumer backlash unless the
process is carefully managed by the firm. The important challenges faced while implementing a customer-centric
approach are discussed in this section.
4.12.1 Transformation from Product Centric to Customer Centric Marketing

Traditionally, firms followed a brand or product centric marketing approach. When firms adopt brand or product
management structure, the emphasis is on new product development, brand building, and brand equity. Each
product or brand is managed by different brand managers and the marketing and sales activities planned by one
group are independent of those by other product groups. Often the same customer is contacted by different groups
with possibly different messages. In customer centric approach, the customer is the focus and the organisational
activities are centered on them.
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For the successful implementation of CLV framework, firms need to move from a product centric to customer
centric approach. Firms have to consider customers as sources of value rather than only brands/products as sources
of value. Building customer equity rather than brand equity should be the central goal of resource allocation and
strategic marketing expenditures. However, transformation from a product centric to customer centric marketing
may not be always easy. It requires concerted effort by the top management to change the organisational level
philosophy of doing business. It may also involve realignment of organisational roles and integration of different
functions. Firms effectively managing this transition have laid down the foundation for implementing CLV based
customer management.
4.12.2 Challenges in Data Collection and Management

Firms need to collect individual level data about all its customers on a large number of variables in order to compute
CLV. Some key informational needs are demographic/ firmographic information, the amount of purchase, products
purchased in each occasion, the number, time, and type of the marketing contacts. Though the cost of data collection
and storage has decreased over the years, many firms face challenges in identifying the right informational needs,
integrating the data and making use of the available information.Before starting the collection of information, firms
should ask the relevant questions as follows:
• What should be the outcome of implementation of CLV framework specific to the firm?
• In the context of your organisation what are the possible drivers of CLV on which you need to collect
information?
Answers to these questions help the firms to manage the data more effectively.Another area in which firms face
challenge is in gathering information about prospects and competitor’s customers. This information is important for
the acquisition process. One way to obtain this information is to cooperate with the competition like the catalogue
retailers and global airline industry. But the firm should evaluate the benefits of gaining information about prospects
via the disadvantage of losing the private customer information.
4.13 How to Make the Most of the CLV Framework?

Firms often get in to the trap of calculating CLV for its customers once and not using it to maximise the firm’s
profitability. They limit the use of CLV scores only to segment the customers but not to implement customer specific
communication and marketing strategies which maximises the customer equity of the firm. Organisations have to
understand CLV as a dynamic measure which changes as a result of customer-specific marketing actions. As discussed
earlier, CLV can be used to optimally allocate resources, predicting future purchase of customers, and reaching the
right customers with right message through the most apt channels. Unless an organisation is effectively using CLV
to achieve these results and maximising the profitability, it is not making the most of the CLV framework.
4.13.1 Maximise Customer Lifetime Value by Managing the Customer Lifecycle

The ability to seamlessly manage customers across the entire lifecycle and thereby maximise customer value remains
an elusive goal for most organisations. There are many reasons for this: companies have established artificial customer
service boundaries and silos that require multiple departments to service a single customer; different customer
specialists are required to receive then fulfil a given service request; or they simply don’t have the right software
technology and business processes to match customer need and service ability at the moment of interaction.
As a result, organisations are only realising a fraction of potential customer wallet share, experiencing high rates of
churn and spending far too much time and money delivering repetitive information that only frustrates the customer.
From the customer’s perspective, they experience doing business with disparate individuals and companies, rather
than a single cohesive organisation. When customers interact with the company, too often they are starting from
scratch with every interaction, unable to benefit from the context provided during prior interactions.
With social media’s ubiquity and pervasiveness, customers are empowered to communicate their every experience,
and unfortunately, negative experiences are more frequently broadcast, so it’s more critical than ever to manage the
customer across the lifecycle. Savvy companies are breaking down the artificial and historic boundaries between
marketing, sales and service so that in any conversation with the customer, they can make an offer, sell new or
additional services, fix an outstanding issue, or proactively address a potential future issue- without the machinations
required when these functions operate across organisational silos.
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Consider a typical customer who walks into a mobile phone store. They may have an expiring contract on their
existing phone and have received an offer for a new phone and renewed service. When they interact with store
personnel, the conversation encompasses selling (find the right device that best matches that customer’s usage),
setup (configure/update the account and all the critical information for that customer), and servicing (show the key
features and functions of the device so they are ready use it right away).
In reality, many phases of the customer lifecycle do not happen within such a compressed time frame- they occur
over time and across different channels, but the impact is the same. A customer calling for service represents an
opportunity to sell additional value-added products. The on-boarding or set up process is the right time to align
customer needs with best-suited products and to educate customers on recommended product usage, which in turn
can deflect future calls to the call centre and lower the cost of servicing the customer.
To fully manage customers across the customer life cycle, companies need:
• a commitment to customer-centricity- to rise above competing business goals and focus on the bigger goal of
overall customer value and profitability
• the ability for business stakeholders to visualise, create and execute their vision in a collaborative manner and
align operational ability to customer needs
• access to a common repository where policies, procedures, processes and content can be reused across the
lifecycle but may also be specialised for by customer types or categories
• the ability for content to be automatically applied in context for the specific role and usage- such as a marketing,
selling or servicing interaction
• the ability to not only have a conversation with a customer, but also put work in motion and fulfil the promises
made- regardless of the systems that need to be accessed or boundaries that need to be crossed.
By aligning organisational capability to customer need and seamlessly managing the customer across the entire
lifecycle, companies can improve operational efficiency, enhance brand loyalty, increase customer retention, create
net promoters and, most importantly, build customer lifetime value. To achieve this level of customer centricity
requires a new model of organisational collaboration and the right level of operational agility to both serve and fulfil
the customer need, and in so doing, maximise customer value in every interaction.
4.14 Introduction to Customer Value Management (CVM)

CVM is a measure of a company’s customers’ view of the perceived value for money delivered relative to that of
their competitors’ customers. It is sometimes known as a Customer Value Added (CVA) approach.
4.14.1 Uses of Customer Value Management

CVM is a powerful business tool as it links customers to KPIs by directly measuring the drivers of purchasing
behaviour and the impact these have upon delivering KPIs such as market share, profit and loss, recommendation,
share of wallet, ROI and many more. The following two graphs are based upon Customer Champions’ clients’
data and illustrate the strong relationship between Customer Value Management and the customer’s willingness to
recommend, and the positive impact on increasing the share of wallet of that customer.
4.14.2 Customer Value Management Measurement and Calculation

The perception of a product or service’s value in the market place can be measured through surveys which ask
customers a series of predefined questions. These questions are also asked of the competitors’ customers to establish
the equivalent value for competitors’ offers. A simple calculation gives a ratio score based around a parity score of 1
when comparing your business with the competition. The higher the score above 1 the greater the relative competitive
advantage for that company, and as the score falls below 1 the greater the level of competitive weakness.
4.14.3 A Good Customer Value Management Score

Although a score of 1.00 is direct parity with the competition, analysis of companies implementing this approach
has shown that scores in the range 0.98-1.02 should also be considered parity. In this range neither the competitive
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advantage nor weakness is substantial enough to significantly impact on customer choice. However scores below
0.98 indicate competitive weakness and scores in the range 1.03 to 1.10 indicate competitive advantage. Greater
than 1.10 is considered world class performance. We have seen businesses and business units struggling to survive
at a score of 0.70 or below. The length of time at a particular score, and the direction and rate of change in CVM
are also factors that should be considered when linking customers to KPIs in this way.
4.14.4 Changes in Customer Value Management Scores

Market changes and the value of a company’s offer relative to its competitors will be reflected in a change in the CVM
score. There is a time-lag, unique to each market place, between a change in the CVM score and a corresponding
shift in KPIs. A shift in a CVM score can therefore provide a good prediction of an impending change in a company’s
fortunes.
4.14.5 Drivers of the Change in the Customer Value Management Score

To drive change, a business must manage the elements which drive the market place’s perception of value, namely
quality received for price paid. Value can be improved by increasing relative perceived quality, reducing relative
perceived price, or using combinations of both. Overall quality is a function of the perceived quality of individual
product and service attributes which affect purchase and repurchase decisions. Factors that drive the perception of
overall price include initial and life cycle costs, as well as aspects such as ease of understanding that price.
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Summary
• The customer life cycle is a means of defining and communicating the way in which an enterprise interacts
with its customers and prospects.
• CLC focuses upon the creation of and delivery of lifetime value to the customer that is looks at the products or
services that customers need throughout their lives.
• CLC is a summary of the key stages in a customer’s relationship with an organisation.
• Earning loyal customers who will make repeat purchases or visits to your website or service is quite a marketing
accomplishment.
• Your best tool to retain customers who have become repeat or loyal customers is to keep an ongoing dialogue
with them through all of your marketing communications channels, including email.
• When a customer has gone a significant amount of time without interacting with your brand or company or
purchasing a product, they are referred to as a “lapsed” customer.
• Some lapsed customers may eventually turn into inactive or abandoned customers who no longer purchase or
interact with your company.
• The first step to ensure a successful email campaign is to choose a reliable bulk email sender.
• TLC is a process that involves developing a plan to effectively manage all telecom-related efforts and
expenses.
• Transmission speeds for MLS systems, websites, and internal systems are critical since there is an ever-increasing
amount of data being transmitted.
• It is critical for every organisation to have effective back-up systems.
• TLC companies can help negotiate companywide programs which make it easier to deploy wireless MLS data
and real estate applications, while saving money.
• By using a TLC provider, an MLS can save up to 1.5 hours for each phone line they may add or disconnect and
save up to 40 hours when setting up an entire office.
• The reinforcement stage presents you with an opportunity to position yourself apart from your competition by
thanking your customers for their purchase and paving the way for future purchases.
References
• Seth, J., 2001. Customer Relationship Management: Emerging Concepts, Tools, and Applications, Tata McGraw-
Hill Education.
• Hunkeler, D., 2004. Life-cycle Management, SETAC Press.
• CLV [Pdf] Available at: <http://www.terry.uga.edu/~rgrover/chapter_29.pdf> [Accessed 19 December 2012].
• CRM Explained: A Life Cycle Review of CRM Success Factors [Online] Available at: <http://www.crmsearch.
com/crm-explained.php#customer-centric> [Accessed 19 December 2012].
• The Customer Life-Cycle [Video online] Available at: <http://www.youtube.com/watch?v=065QI-SZNH8>
• Customer Lifetime Value [Video online] Available at: <http://www.youtube.com/watch?v=9EN9aHQsqBA>
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Recommended Reading
• Kincaid, W. J., 2003. Customer Relationship Management: Getting It Right!, Prentice Hall Professional
• Rai, A., 2010. Customer Relationship Management: Concepts and Cases, PHI Learning Pvt. Ltd.
• Rajola, F., 2003. Customer Relationship Management: Organisational and Technological Perspectives, Springer
Publication.
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Self Assessment
1. Customer Life Cycle is _________orientated rather than product orientated.
a. marketing
b. product
c. customer
d. consumer
2. When a customer has gone a significant amount of time without interacting with your brand or company or
purchasing a product, they are referred to as a _________ customer.
a. old
b. new
c. followed
d. lapsed
3. The __________ phase of the CLC involves a marketing acquisition budget as well as an awareness of what
will transition prospects from “just interested” into fully engaged.
a. sixth
b. first
c. third
d. fifth
4. ______ is a measure of a company’s customers’ view of the perceived value for money delivered relative to
that of their competitors’ customers.
a. Cost
b. CLC
c. CVM
d. TLC
5. _________ are the names and contact information of people who have shown an interest in your product,
service, or brand.
a. User Info
b. Database
c. Follow-up
d. Leads
6. Successful CRM organisations are those that make the transition from a product focus to a _________ focus.
a. customer
b. marketing
c. product
d. CCE

a. Traditionally, firms followed a brand or customer centric marketing approach.
b. Customer lifetime value improves the shareholder value.
c. Customers in the sixth phase of the customer life cycle should be divided into two groups – customers who
should not be communicated with at all anymore and customers that you hope to win back via a customer
communication or marketing campaign.
d. Effective Telecom Lifecycle Management does not build redundant systems to maintain transmission speeds
even during heavy traffic times.
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A. Provide automated methods for auditing
1. Dynamic customer management
costs and network efficiencies
B. Optimise your contracts and vendor

2. Audit and Recovery
relationships
3. Telecom Life Cycle Management C. Improve the shareholder value
4. Service Renegotiation and Optimisation D. Remedies specific billing errors
a. 1-C, 2-D, 3-B, 4-A

b. 1-B, 2-A, 3-D, 4-C
c. 1-C, 2-D, 3-A, 4-B
d. 1-A, 2-C, 3-D, 4-B
9. _______ requires the organisation to embrace a holistic telecom lifecycle management approach.
a. CLC
b. TLC
c. Lead generation
d. CVM
10. CRM is considered from which of the following perspective?

a. Success perspective
b. Customer perspective
c. Product perspective
d. Information Technology perspective
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Chapter V
Types of CRM
Aim
• explain collaborative CRM
• explain the customer centric approach
• elucidate analytical CRM
Objectives
• enlist the types of CRM
• explain the concept of operational CRM
• elucidate data warehouse architecture
Learning outcome
• identify five steps in multi-channel customer strategy
• understand the CRM data warehouse
• describe analytics and customer life cycle management
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5.1 Introduction
There are mainly three types of CRM:
• Operational
• Collaborative and
• Analytical
5.2 Operational CRM

Operational CRM generally refers to products and services that allow an organisation to take care of their customers.
It provides support for various business processes, which can include sales, marketing and service. Contact centres,
data aggregation systems and web sites are a few examples. Operational CRM is mainly focused on automation,
improvement and enhancement of business processes which are based on customer-facing or customer supporting. The
main importance of a CRM system lies on how the selling, marketing and service oriented processes are automated,
and for which operational CRM systems are embedded with following major automation applications:
Marketing automation
As the name implies, marketing automation is basically focused on automating marketing processes. In marketing,
campaign management involves marketers to use customer specific information to determine, evaluate and
develop communications that are targeted to customers in individual as well as multilevel or multichannel
environment. Campaigns developed to communicate customers individually are easy and involves unique and
direct communications. For multichannel environment the implementation of marketing strategies and campaign
management is quite difficult and challenging.
For example, some retailers have multichannel transactions like shops or stores, wholesale stores, websites, home
shopping and even television shopping. Here integration and implementation of communication strategy is difficult
and evaluation of performance and quality of campaigns needs to be automated and should be technologically sound
across each of the channels. For handling this, a CRM marketing strategy called event-based marketing is inherited.
Using event based marketing communication and offers are presented to customers as and when they are required.
For example, credit card customer calls the call centre for inquiring the current interest rates, this indicates that
customer is specific about the interest rates and is trying to compare the interest rates and may switch to different
competitor to find specific deals which suits him. Without wasting time the automated CRM system pops up an
event of offer which is best suited for that customer and helps to retain him back.
Marketing automation (MA) applies technology to marketing processes. Campaign management modules allow
marketers to use customer-related data in order to develop, execute and evaluate targeted communications and
offers. Customer targeting for campaigning purposes is, in some cases, possible at the level of the individual
customer, enabling unique communications to be designed. In multichannel environments, campaign management
is particularly challenging. Some fashion retailers, for example, have multiple transactional channels including
free-standing stores, department store concessions, e-tail websites, home shopping catalogues, catalogue stores and
perhaps even a television shopping channel. Some customers may be unique to a single channel, but most will be
multichannel prospects, if they are not already customers of several channels.
Integration of communication and offer strategies and evaluation of performance requires a substantial amount of
technology-aided coordination across these channels. Event-based, or trigger, marketing is the term used to describe
messaging and offer presentation to customers at particular points in time. An event triggers the communication
and offer. Event-based campaigns can be initiated by customer behaviours or contextual conditions. A call to a
contact centre is an example of a customer-initiated event. When a credit-card customer calls a contact centre to
enquire about the current rate of interest, this can be taken as indication that the customer is comparing alternatives
and may switch to a different provider. This event may trigger an offer designed to retain the customer. Examples
of contextual events are the birth of a child or a public holiday. Both of these indicate potential changes in buyer
behaviour, initiating a marketing response. Event-based marketing also occurs in the business-to-business context.
The event may be a change of personnel on the customer-side, the approaching expiry of a contract or a request for
information (RFI).
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Sales-force automation
A CRM system is not only used to deal with the existing customers but is also useful in acquiring new customers.
The process first starts with identifying a customer and maintaining all the corresponding details into the CRM
system. This process can be distributed into many stages which includes generation of lead and then qualifying
those leads as prospects. The Sales and Field representatives then try getting business out of these customers by
sophistically following up with them and converting them into a winning deal. Automation of selling process is
efficiently handled by sales-force automation which automates all the methodologies or sales cycle and above
described process sophisticatedly. Sales-force automation (SFA) was the original form of operational CRM. SFA
systems are now widely adopted in business-to-business environments and are seen as ‘a competitive imperative’
that offers ‘competitive parity’.
SFA applies technology to the management of a company’s selling activities. The selling process can be decomposed
into a number of stages, such as lead generation, lead qualification needs identification, development of specifications,
proposal generation, proposal presentation, handling objections and closing the sale. SFA software can be configured
so that it is modelled on the selling process of any industry or organisation. Automation of selling activities is
often linked to efforts to improve and standardise the selling process. This involves the implementation of a sales
methodology. Sales methodologies allow sales team members and management to adopt a standardised view of the
sales cycle and a common language for discussion of sales issues.
Sales-force automation software enables companies automatically to assign leads and track opportunities as they
progress through the sales pipeline towards closure. Opportunity management lets users identify and progress
opportunities to sell from lead status through to closure and beyond, into after-sales support. Opportunity management
software usually contains lead management and sales forecasting applications. Lead management applications enable
users to qualify leads and assign them to the appropriate salesperson. Sales forecasting functionality generally use
transactional histories and salesperson estimates to produce estimates of future sales.
Contact management lets users manage their communications programme with customers. Computerised customer
records contain customer contact histories. Contact management applications often have features such as automatic
customer dialling, the salesperson’s personal calendar and e-mail functionality. Quotation and proposal generation
allow the salesperson to automate the production of prices and proposals for customers. The salesperson enters
details such as product codes, volumes, customer name and delivery requirements, and the software automatically
generates a priced quotation. Product configuration applications enable salespeople, or the customers themselves,
automatically to design and price customised products, services or solutions to problems. Configurators are useful
when the product is particularly complex, such as in IT solutions.
Configurators are typically based on an ‘if … then’ rules structure. The general case of this rule is ‘If X is chosen,
and then Y is required or prohibited or legitimised or unaffected’. For example, if the customer chooses a particular
feature (say, a particular hard drive for a computer), then this rules out certain other choices or related features that
are technologically incompatible, too costly or too complex to manufacture.
Service automation
Service automation deals with managing organisation’s service. The actual interactions with customers such as
contact, direct sales, direct mail, call centres, data aggregation systems, web sites and blogs and many more are
examples of operational CRM. Each interaction with a customer can be collected to the client database generally
known as ‘customer’s history’ and the information can later be used wherever necessary. Anyone in the organisation
can have access to this information about customer which gives a clear view of customer’s needs and important
information on the customer such as products owned, prior support calls and many more. It naturally eliminates
the need to obtain this information individually from the customer. On the basis of the information, if required, the
customer can easily be contacted at right time at the right place.
Service automation allows companies to manage their service operations, whether delivered through call centre,
contact centre, web or face-to-face. CRM software enables companies to handle and coordinate their service related
inbound and outbound communications across all channels. Software vendors claim that this enables users to become
more efficient and effective by reducing service costs, improving service quality, lifting productivity and increasing
customer satisfaction.
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Service automation differs significantly depending on the product being serviced. Consumer products are normally
serviced through retail outlets, the web or a call centre as the point of first contact. These contact channels are
often supported by online scripting tools to help diagnose a problem on first contact. A number of technologies are
common in service automation. Call routing software can be used to direct inbound calls to the most appropriate
handler. Technologies such as interactive voice response (IVR) enable customers to interact with company computers.
Customers can input to an IVR system after listening to menu instructions either by telephone keypad (key 1 for
option A, key 2 for option B) or by voice. If first contact problem resolution is not possible, the service process may
then involve authorising a return of goods, and a repair cycle involving a third party service provider. This process
is used to service mobile phones and cameras.
Service automation for large capital equipment is quite different. This normally involves diagnostic and corrective
action to be taken in the field, at the location of the equipment. Examples of this type of service include industrial
air conditioning and refrigeration. In these cases, service automation may involve providing the service technician
with diagnostics, repair manuals, inventory management and job information on a laptop. This information is then
synchronised at regular intervals to update the central CRM system.
Many companies use a combination of direct and indirect channels especially for sales and service functions. When
indirect channels are employed, operational CRM supports this function through partner relationship management
(PRM). This technology allows partners to communicate with the supplier through a portal, to manage leads, sales
orders, product information and incentives.
Operational CRM refers to services that provide support for various ‘front office’ business processes in helping
organisation to take care of their customers. Focus on customers’ value is important for a successful operational
CRM strategy. Different customers have to be treated differently so information on variables like customers’ ranking,
actual value and potential value is of strategic value.
5.3 Collaborative CRM

Collaborative CRM is communication with customers and covers direct interaction with customers including feedback
and issue reporting. Interaction can take place through web pages, email, Automated Voice Response. Collaborative
CRM greatly improves on services offered. Collaborative CRM deals with synchronisation and integration of
customer interaction and channels of communications like phone, email, fax, web and many more with the intent
of referencing the customers a consistent and systematic way. The idea is not only enhancing the interactions but
also to increase and improve customer retention and liberty.
Collaborative CRM entangles various departments of organisation like sales, marketing, finance and service and shares
the customer information among them to highlight better understanding of customers. For example, the information
of preferred products could be shared with marketing department so that analysis can be performed in this aspect to
provide preferred products to customers. The information regarding varied cost or price of a particular product in
market defined by customers can be delivered to finance department so that strategies could be created to match the
product cost with similar products in market and after analysis bring an affordable and efficient product in market.
The information regarding a specific service which is not installed in the company’s environment and intimated
by the customers can be transferred to service department to improve or install that particular service in-house. All
this is done efficaciously within the range of channels so that the process automates the needs and minimal time is
required for fulfilling these needs.
Collaborative CRM can be broadly identified by two aspects:

• Interaction management: This management process deals with designing the communication or interaction
channel process within an organisation which is specific to customer interaction and finally enhancing the extent
of communication between both the parties. The communication channel depends on the customers’ preference
on how they require the interaction to be dealt with. Some customers prefer to be contacted via phone and email
because of more comfort ability or non availability of manual interaction due to no time or unavailability of
resources. Some of them prefer to have live online meeting or web meeting to reduce the travel time and lack
of time or maybe they prefer more clarified real time environment by sitting at desk and transact. Some of the
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customers insist for agent conducted services which is often face-to-face interaction as they believe that this way
is more efficient and conclusive. Depending on these channels of interaction it is very important for organisation
to fulfil these needs of customers and gather information from them and implementing it into the CRM before
interacting to enhance the interaction power.
• Channel management: After analysing and implementing the interaction medium, it is important to enhance
the power of channels through which the customers are interacted. By using latest technological aspects for
improving channel interaction could help to contact customers in an efficient way and gather information from
them to help organisation to understand the customers. Hence it is important for an organisation to clearly
arrange the channel responsibilities and duties.
Below are advantages of Collaborative CRM:

• Enables valued customer interaction across the channels
• Entangles web or online collaboration to cut down service cost of customers
• Integrates customer interaction with call centres to enable multi-channel interaction with customers and helps
them make understand the overall process vales
• Describes a view of integrated customer’s details during interaction to server them in a better way
This CRM solution brings customers, process and strategies and data together so that organisations could serve and
retain customers more efficiently.
Collaborative CRM is the term used to describe the strategic and tactical alignment of normally separate enterprises
in the supply chain for the more profitable identification, attraction, retention and development of customers.
For example, manufacturers of consumer goods and retailers can align their people, processes and technologies to
serve shoppers more efficiently and effectively. They employ practices such as co-marketing, category management,
collaborative forecasting, joint new product development and joint market research. Collaborative CRM uses CRM
technologies to communicate and transact across organisational boundaries. Although traditional technologies such as
surface mail, air mail, telephone and fax enable this to happen, the term is usually applied to more recent technologies
such as electronic data interchange (EDI), portals, e-business, voice over internet protocol (VoIP), conferencing,
chat rooms, web forums and e-mail. These technologies allow data and voice communication between companies
and their business partners or customers. Collaborative CRM enables separate organisations to align their efforts to
service customers more effectively. It allows valuable information to be shared along the supply chain.
Some CRM technology vendors have developed partner relationship management (PRM) applications that enable
companies to manage complex partner or channel ecosystems and reduce the costs of partner or channel management.
PRM applications are often used to manage partner promotions. A manufacturer of consumer goods might have
a dozen or more different cooperative advertising programmes running simultaneously. PRM allows companies
to manage the distribution of funds, plan and control promotions and measure outcomes. Sometimes the term
collaborative CRM is used to describe the application of these same technologies to internal communications, for
example across sales, marketing and service functions.
5.4 Customer Centric

The lack of customer-centricity is both a problem and an opportunity. It is a problem because it fails to leverage
the customer-equity available to companies that become customer-centric. But it is also an opportunity because
most companies are content with just saying that they are customer-centric in their annual reports, without ever
actually becoming customer-centric. And today they can talk to pretty much everyone about their customer service
catastrophes. Any company that starts to become customer-centric benefits from their competitors’ sloth.
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The move from product to customer-centricity has been widely discussed. It typically goes through a number of
steps including:
Step 1: Internal social networks
Customer-centricity typically starts with offering support to internal social networks of staff who already work together
to deliver a customer-centric value proposition. No matter how product-centric a company is, there are always a few
networked individuals who believe in going the extra mile for customers. Companies starting out on the journey
towards customer-centricity should start by finding out that these people are and supporting their efforts.
Step 2: Cross-functional teams

The next step is cross-functional teams that formalise the collaboration of the internal networks. Once an informal
network establishes itself, the company should allow the network to formalise the relationships by forming a cross-
functional team and giving them the resources to drive more effective collaboration around delivers the customer-
centric value proposition.
Step 3: Customer-centricity coordinator

The next step involves appointing a Customer-Centricity Coordinator who takes on formal responsibility for driving
customer-centric collaboration across different teams. Things start to get serious now. Collaboration isn’t just about
organising meetings, but about establishing a common view of the customer, crafting a shared customer strategy
and developing a coherent customer experience that pulls all the customer-centricity levers.
Step 4: Matrix reporting organisation

The next step develops a matrix organisation with nascent customer segment teams reporting to both product and
customer management. This is often where things go badly wrong. Matrix organisations are notoriously difficult
to manage effectively. However, if companies have carefully followed the step-by-step development path outlined
in the first three stages, developing their customer-centricity along the way, the chances are that they will already
have learned how to avoid death by matrix management.
Step 5: Customer segment manager

The final step creates bonafide Customer Segment Managers responsible for all aspects of customer experience
delivery. Far from it, it is a hard-nosed approach to creating a reliable delivery system that provides value to those
customers that are economically profitable. Customer Segment Managers give profitable customer segments to
someone who will organise the whole company to deliver the right products on their behalf. The ones that help them
get important customer jobs done better.
5.5 Multi-channel Strategy

There are five steps to a multi-channel customer strategy as follows:
Never let the customer tell you the same thing twice
That’s the mantra of multichannel integration. The entire enterprise should be so focused around customer data that
if a customer buys a computer online on in the morning and has a question about it that afternoon, the contact centre
should have all data available. And if that customer has a problem that needs in-store attention, the data should be
accessible there as well.
Customer identification is a must across channels

This is the foundation of multichannel integration. Customers must be identified and maintained on a common
platform of data for all interactions. This information allows the company to learn incrementally about the customer
across all touch points.
Ask the right questions at the right time

Effective multichannel synchronisation is a complex process. Many organisations fail here because they lack the
right information to make decisions on prioritisation and implementation. In fact, in a recent report AMR Research
claims that adoption of more efficient inventory controls has been slowed by bad data. Questions that companies
might want to ask include: What multichannel customer experience satisfies the needs, wants, and desires of our
target customers? Is it the Internet experience? Is it personal contact with a sales rep? Is it more ordering capacity
through the contact centre? How do we create momentum across the organisation to drive a customer-centric focus?
What business processes must be different for different channels?
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All channels are not created equal
Consider the unique characteristics of each channel and how each influences the customer. Retail stores are at the
forefront of channel prioritisation. For many companies, the in-store channel reflects many key attributes of the
brand. But, according to DoubleClick, channels are shifting. Catalogue order sizes have dropped. Online orders
have gone from 10 % of total average retail revenue in 2000 to 32% last year. That’s a positive development, if
the retailer has the proper strategy for the proper channel. Cross-channel shoppers (across all product categories)
purchase products 48% more frequently than single-channel shoppers, according to a Forrester Research study, and
65% of all the shoppers it surveyed researched a product online then purchased it offline.
Integrate store systems

Since the advent of the point of sale (POS) system and the integrated store system, sales transaction support is
only one function of retail systems technology. These systems support sales transactions, inventory management
transactions, and customer management. These functions may include profiling, cross-selling, and special ordering.
With the advent of online purchasing, one challenge for many companies has been to integrate the Web with the
stores and POS systems. Each touch point should have a common understanding of the organisation’s customer
experience management strategy and access to a common base of knowledge. The goal is for all touch points to
interact in an integrated and positive way throughout the customer life cycle.
5.6 Evolution of Contact Centres

Until recent years, customers have been limited in the ways they could reach a company: in person or via
telephone for urgent matters, and through written correspondence if they needed to document the interaction
and could afford a few days wait. Today, customers expect to be able to work with your company through any
medium, be it phone, e-mail, fax, or your Web site. New electronic communication channels are becoming
increasingly popular and present an opportunity for you to better serve existing customers and work with more new
customers than ever before at a lower cost.
However, these benefits carry a cost. The need to coordinate the disparate interactions between a company and
its customers becomes critical to the company’s success in delivering world-class service. Without the necessary
processes, information, and technology to provide the extra service and value today’s customers demand, the
organisation always struggles to provide the expected levels of service. A customer contact centre is a promise to your
customers to use the right tools to meet or exceed their expectations and win their trust with every interaction.
Evolving to a fully integrated Contact Centre lets you improve the quality, consistency, and reliability of the customer
experience in every interaction. Combining the power of the Internet with conventional call centre functionality
makes customer relationships extremely manageable and provides rich, new means of interaction that can be used
to turn each relationship into a long-term, profitable, and strategic asset. A well-implemented Customer Contact
Centre can evolve from merely being a first level of defence to becoming a company’s strategic differentiator and
a critical business driver.
5.7 Contact Centre

A contact centre is a unified communication system that tracks and services customer needs, regardless of which
media is used to contact the organisation: telephone, IVR, Web forms, self-service, chat, co-browsing, e-mail, or
fax. The goal is to provide consistent, efficient, and cost-effective service across all media and functions.
Modern contact centres are typically implemented by combining Internet technologies with traditional call centre
approaches. In a contact centre, e-mail, chat, Web collaboration, fax, voice and other forms of communication are
accepted, analysed, processed, recorded, and distributed to customer service representatives in a disciplined manner.
Any discipline or structure that applied should streamline processes and practices in the contact centre. This ensures
a consistently high level of service to the customer, while minimising the overall cost of running the contact centre.
Thus, a contact centre allows a business to improve its efficiency and boost performance while reducing costs and
earning higher revenue for equivalent expenditures. One example of how this might be done is by transferring
expensive and inefficiently repetitive telephone-based transactions and operations to various Web-based media
reduces operating expenses and offers other types of instant service, such as Web self help, to the customer. Moving
a phone call to a Web self-help transaction can result in saving up to 90 percent.
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Traditional call centres perform work distribution based solely on a call-based model. Changes in customer preferences
and advances in technology make it imperative that in a successful contact centre, the Web be fully integrated with
the call centre infrastructure. Without integrating the call centre with Internet technologies, valuable customer
information is lost and CSRs work with drastically inadequate customer knowledge, and the result is the contact
centre operating at sub-optimal resource utilisation.
5.8 Changing Customer Preferences

According to a research conducted by Modalis Research Technologies, more and more customers are using online
media and finding it more convenient to solve their queries.
• The most satisfying media of communication for customers is online CSR chat. Data shows that its satisfaction
rating is higher than even phone and in-person service (62 percent vs. 46 percent and 49 percent). Though
only 12 percent of the customers polled use it (mainly because very few organisations today are offering this
service), we cannot over emphasise the importance of this media for providing effective customer service and
hence a competitive advantage.
• 50 percent of the customers interviewed prefer using web over phone. If they can obtain answers in the same
amount of time. The customer preference is clearly shifting to Web for inquiries.
• 45 percent of customers go to the web site as the first place to get quick help hence organisations need to equip
their web site with tools such as self-help and chat.
• 72 percent of the survey respondents say that they stop doing business with companies that provide poor service.
It far outscores price as a factor (only eight percent say that they switch because of lower prices). Clearly, superior
customer service is a vital differentiator for businesses.
The above observations clearly indicate that Web media (chat, e-mail, Web self help) have become customers’
preferred means for interacting with companies. Companies pursuing early adoption of the Web as a media for
providing customer service tend to gain strategic advantage. Well-documented examples include Tupperware and
Lowes Companies, Inc.
5.9 Industry Trends

The contact centre market is witnessing an increased shift of customer contacts being shifted to the Web. The number
of voice-based interactions is decreasing and is projected to continue to decrease over the next period. According to
a 2003 Customer Centre/ Customer Relationship Survey, more than 15 percent of the inbound and outbound voice
based contacts have shifted to Web technologies (chat, e-mail, Web self help) over the past 2 years.
5.10 Technology Trends

Business decisions drive technology and advances in technology open avenues for new business initiatives. The
last few years have witnessed unprecedented advances in technology and some of the emerging technologies have
significant impact on contact centres. Owing to these advances, the needs of the customer contact centre market
have evolved dramatically. A simple PBX system handling voice calls evolved to an integrated system capable of
managing not only multiple media, such as voice, e-mail, chat, and so on but also helps in managing contact centre
operations ranging from streamlining the processes to complete data intelligence on the contact centre.
Internet Integration
There is a steady migration towards integrating web applications with traditional operations. Web integration allows
customers to interact with call centre agents through Web call-back, Web chat, and collaborative browsing. This allows
companies to provide live contact to online customers, which is essential for providing non-standard information.
Unified Messaging
While voice, e-mail, chat and fax are still the dominant electronic message media today; the manner in which these
messages are retrieved is changing. UM provides multimedia consolidation in the evolving Customer Contact
Centres. The key feature offered by UM in the customer contact centre is access to voice, e-mail, chat and fax via
a single application. UM is getting any message at any time from a convenient and easy to use point(s) of access
and typically encompasses voice, e-mail, chat and fax message media.
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Computer Telephony Integration (CTI)
CTI has emerged as a promising technology that uses computers to manage telephone calls. CTI applications provide
the ability to do one or more of the following:
• Authenticate callers
• Route a call to the most appropriate handler
• Provide interactive voice response (IVR) to callers
• Match the number of a caller with a customer record and display it for reference when talking to the caller
(Screen Pop)
• Manage the phone system through computer (conferencing, transfer, hold, and so on)
• Enable CSRs to make outbound calls for telemarketing
• Provide scripting application to assist the CSR handling calls
E-mail response management system

E-mail management has evolved from simply using an application such as Outlook or Lotus Notes to specialised
E-mail Response Management Software (ERMS) applications that allow agents to work on a common pool of
e-mail, route e-mail to the appropriate agent, thread all related messages in a single audit-trail, provide for escalations
and reviews, monitor state of an e-mail query (pending, resolved, and so forth) and send automatic reminders and
notifications about delays in response or resolution.
Internet chat
Text based chat brings the immediacy of live conversation to a web site. Chat has emerged as an invaluable
communication tool since it offers the immediacy of a phone call and interactivity of the web on the same platform.
If the only support available to a visitor is through e-mail, chances are that the visitor may not wait for your response,
and click away to another site. Alternatively, you can expose your phone number. However, this medium, apart
from being expensive, also lacks the ability to share documents, co-browse, and so on. Chat being internet-based,
is a very economical and effective channel. It gives your site visitor a tool for ready communication right there on
the web page.
There are two principal ways to implement text based chat:

• Reactive chat: Here a customer can click on a chat button prominently displayed on web pages and initiate a
conversation with your net-representative (user).
• Proactive chat: A set of rules to monitor activity on your Web site can trigger a notification to users to proactively
engage the visitor in a conversation.
Web self help

Web self help is an intelligent self-help tool consisting of a collection of question-answer pairs in which the answers
to the questions are returned using keyword search, statistical models, or Bayesian Networks or Expert Networks
(AI). This can bring major benefits to your customer service function including reduction in the number of e-mail
messages, chat requests, and telephone calls. This gives users more time to handle complex, non-repetitive questions.
Customers like web self help because it gives instant feedback to their questions and encourages them to stay on
your site longer. Furthermore, you can use a self-help tool to create a knowledge base. This allows every department
in your organisation to provide consistent replies to inquiries.
Fax/Faxback integration
Instead of traditional fax machines, customer contact centres can now use fax servers. Instead of printing out individual
documents and manually feeding them into a fax machine, CSRs can send faxes directly from the desktop using
the “Print” command to send documents to a fax printer device that routes them to a fax server, which then places
the outgoing fax phone call. This results in tremendous time savings by eliminating the need to print documents
and manually feed them into a machine. On the fax receiving side, fax servers enable fax documents to be routed
directly into a user’s e-mail client on their desktop (or, in most cases, into “group” mailboxes). The obvious time
savings here are eliminating the need to retrieve and distribute incoming fax documents manually or worry about
the maintenance and expense of a separate high-volume fax machine.
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Collaborative browsing
With the customers spending more quality time on the web searching for, evaluating and ordering products, they
often need assistance to fill out forms and navigate through the web site. Collaborative browsing technology helps
one achieve this objective most efficiently.
VoIP integration
Through VoIP technology, customers can use their internet connection to speak directly to CSRs over high quality
voice connections. Full duplex communication allows users to converse naturally and even interrupt each other.
VoIP also supports conference calls so many users may participate to resolve a customer problem.
OLAP/Data Mining/Data Warehousing

OLAP: Online Analytical Processing or OLAP gives a multi-dimensional and highly visual way to analyse high
volumes of data. It allows slicing and dicing of data on any of those multiple dimensions and supports the ability to
mix and match these dimensions to dynamically show relationships between data along the selected dimensions.
Data mining
This powerful capability enables the analysis (mining) of data to discover facts that were previously not known or
apparent. Data mining uncovers quality data and connections that equip you to make predictions based on existing
information (using decision tree analysis) and see unforeseen associations in the existing data (using clustering).
Data warehousing
This large database is built for archiving historical data within an enterprise. A warehouse enables an organisation
to maintain an enterprise-wide data warehouse that archives all information of interest to the business. A smaller
version of a warehouse is called a Data Mart. A data warehouse or a data mart can be used for analytic efforts that
include reporting, OLAP, and data mining. These technological advances make it possible to redefine call centres
to a degree that results in superior customer service and, at the same time, results in cost-savings and opening new
avenues for revenue expansion.
5.11 Business Drivers

So far we have seen how technology advances can help a contact centre evolve from a simple voice-based call
centre ‘handling’ only calls to a multi-media contact centre ‘managing’ customer relationships. However, the mere
existence of technology does not justify its usage in a business. Technology has to pass the acid test of business
investment by providing tangible ROI. In this section, we critically evaluate the business justification of moving
towards an interaction-centric CRM solution with blended media.
From a business perspective, there are three primary drivers for justifying a contact centre investment decision.
These are:
• Customer satisfaction
• Cost savings
• Revenue expansion
A successful customer contact centre solution should maximise the value of every customer interaction and enhance
the profitability of the customer contact centre. It must enable companies to improve ROI by more effectively
attracting and retaining customers and reducing operating costs.
5.12 Analytical CRM

It addresses the analysis of customer data for a host of different purposes. In general it is used to design and execute
targeted marketing campaigns that optimise marketing effectiveness. Analytical CRM takes into account product
and service decision making, pricing and new product development.
Analytical CRM supports organisational back-office operations and analysis. It deals with all the operations and
processes that do not directly deal with customers. Hence, there is a key difference between operational CRM and
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Analytical CRM. Unlike from operational CRM, where automation of marketing, sales-force and services are done
by direct interaction with customers and determining customer’s needs, analytical CRM is designed to analyse deeply
the customer’s information and data and unwrap or disclose the essential convention and intension of behavior of
customers on which capitalisation can be done by the organisation.
Primary goal of analytical CRM is to develop, support and enhance the work and decision making capability of an
organisation by determining strong patterns and predictions in customer data and information which are gathered
from different operational CRM systems.
The following are the key features of analytical CRM:

• Seizing all the relevant and essential information of customers from various channels and sources and
collaboratively integrating and inheriting all this data into a central repository knowledge base with an overall
organisation view.
• Determining, developing and analysing inclusive set of rules and analytical methods to scale and optimise
relationship with customers by analysing and resolving all the questions which are suitable for business.
• Implementing or deploying the results to enhance the efficiency of CRM system and processes, improve
relationship and interaction with customers and the actual business planning with customers.
• Combine and integrate the values of customers with strategic business management of organisation and value
of stakeholders.
Analytical CRM is a solid and consistent platform which provides analytical applications to help predict, scale and
optimise customer relations. Advantages of implementing and using an analytical CRM are described below:
• Leads in making more profitable customer base by providing high value services
• Helps in retaining profitable customers through sophisticated analysis and making new customers that are clones
of best of the customers
• Helps in addressing individual customer’s needs and efficiently improving the relationships with new and
existing customers
• Improves customer satisfaction and loyalty
The power of CRM provides a lot of managerial opportunities to the organisation. It implements the customer
information in an intelligent way and creates views on customer values, spending, affinity and segmentation. Analysis
is done in every aspect of business as described below:
• Customer analytics: This is the base analytic used to analyse customer knowledge base. It provides a better
view of customer behavior and by modeling, assessing customer values and assessing customer’s portfolio or
profiles and creates an exact understanding of all the customers.
• Marketing analytics: This helps discovering new market opportunities and seeks their potential values. It also
helps in managing marketing strategies and scale and plan marketing performance at district, regional and
national levels. Marketing analytics also focus on campaign management and planning, product analysis and
branding.
• Sales analytics: Sales analytic provides essential environment to plan, simulate and predict sales volumes and
profits by constantly analysing organisational sales behavior. It helps in pipelining all the selling opportunities
in an efficient way by indulging and improving the sales cycle.
• Service analytics: Analytical CRM has major role in enhancing the services which answer all the questions
regarding customer satisfaction, quality and cost of products, complaint management and many more. It even
helps in improving and optimising the services by sophistically analysing the service revenue and cost.
• Channel analytics: This type of analysis helps to determine the customer behavior on channel preferences, like
web channel, personal interaction, telephone channel and many more. This information is efficiently integrated
in customers’ knowledge base so that they can be contacted accordingly.
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The essential results produced by Analytical CRM system could diversely help the organisation to tackle customers’
based on values. It also helps in determining which customer is best to invest in, which can be treated at an average
level and which should not be invested in.
5.13 Analytics and Customer Life Cycle Management

Introducing Analytics 2.0 Operators continue to enhance their sophistication in how they apply analytic fire power
in two primary ways:
• First, they use analytics beyond the regular focus on churn prediction.
• Second, they incorporate more sophisticated derived and external data sources into their analytical modeling.
The move beyond churn to helps operators deal with new customer developments. The increasing prevalence of
consumers with multiple Sim accounts and the subsequent rotational SIM churn are two particular emerging market
problems that some operators are beginning to manage with analytics. Operators attempt to identify multi-Sim users
based on their on-net versus off-net calling behavior and then launch campaigns to capture a larger “share of wallet”
from them. They also employ analytics to “fingerprint” subscribers based on their calling patterns and network use
to identify the same subscriber regardless of Sim. The new data sources used in analytics include social network
information culled from both call detail records and external social networks. Social network information improves
traditional churn prediction models, better identifies high-value subscribers, and allows for more precise campaign
targeting. Other new sources of data are the campaign responses themselves, helping indicate a subscriber’s propensity
to respond to different types of campaigns or messages.
5.14 CRM Data Warehouse

Customer relationship management (CRM) means generating high levels of profitable customer satisfaction through
the use of knowledge generated from CRM applications using corporate and external data. CRM is based on the simple
notion that the better one knows one’s customers, the better one can maintain long-lasting, valuable relationships
with them. The goal of CRM is to maximise relationships with customers over time, focusing on all aspects of the
business, from marketing, sales, operations and service, to establishing and sustaining mutually beneficial customer
relations. In order to accomplish that, the organisation must develop a single, integrated view of each customer.
The mission of a data warehouse is to provide consistent and reconciled business intelligence, which is based on
operational data, decision support data, and external data to all business units in the organisation. In order to do that,
corporate data must be analysed, understood, transformed and delivered. Therefore, the data warehouse administration
must coordinate and oversee the development, delivery, management and maintenance of the entire data warehouse
environment. However, many of today’s data warehouses are not ready for the challenges of CRM, and steps must
be taken to make it possible. This involves additional or expanded subject areas, external data and high volume
accessible data. The biggest challenge in data warehousing today is supporting data warehouse expansion to provide
a foundation for CRM. Data warehouses that meet the needs of CRM are aptly named customer data repositories
(CDR) due to the need for low-level, granular customer transaction data. This need has many implications for the
data warehouses that need to support CRM.
Building a data warehouse is a key stepping stone in getting started with analytical CRM. Data sources for the
warehouse are often the operational systems, providing the lowest level of data. Data sources are designed for
operational use, not for decision support, and the data reflect this fact. Multiple data sources are often from different
systems, running on a wide range of hardware, and much of this software is built in house or highly customised.
This causes data from multiple sources to be mismatched. It is important to clean warehouse data since critical CRM
decisions will be based on it. The three classes of data extraction tools commonly used are- data migration which
allows simple data transformation, data scrubbing which uses domain-specific knowledge to scrub data, and data
auditing which discovers rules and relationships by scanning data and detects outliers.
Loading the warehouse includes some other processing tasks, such as checking integrity constraints, sorting,
summarising, and build indexes, and many more. Refreshing a warehouse requires propagating updates on source
data to the data stored in the warehouse. The time and frequency to refresh a warehouse is determined by usage,
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types of data source, and many more. The ways to refresh the warehouse includes data shipping, which uses triggers
to update snapshot log table and propagate the updated data to the warehouse, and transaction shipping, which ships
the updates in the transaction log. The key entities required for CRM include Customer, Product, Channel and many
more. Usually information about each of these is scattered across multiple operational databases. In the warehouse
these are consolidated into complete entities. For example, the Customer entity in the warehouse provides a full
picture of who a customer is from the entire organisation is perspective, including all possible interactions, as well
as their histories. For smaller organisations the analysis may be done directly on the warehouse, while for larger
organisations separate data marts may be created for various CRM functions like customer segmentation, customer
communication, customer retention, and many more.
Operational Other data

databases sources
Data
Analysis
Extract
transform
load (ETL),
OLAP
Data marts
Data
warehouse
Data mining
Fig. 5.1 Data warehouse architecture

(Source: http://www.mis.nsysu.edu.tw/~syhwang/Accepted-Paper/Conference-PDFs/PAKDD02.pdf)
Processing customer information using data warehousing

CRM addresses both operational and analytic requirements. Effective CRM relies on the collection of data at every
interaction with the customer and then the leveraging of this data through analysis. CRM’s objective is to integrate
all customer activities, from the initial prospect contact, purchase transaction, fulfilment, payment transaction
and ongoing customer service. The data warehouse serves as the repository to collect and integrate the breadth of
customer information found in operation systems as well as in external ones. The data warehouse supports a complete
view of the customers, including customer data from typical sources such as: transactional data, interaction data
(solicitations, call centres), demographic and behavioural data and self-provided profile data.
Analytic CRM is enabled through accurate, integrated and accessible data in the warehouse. Customer data can
be leveraged to better identify selling opportunities, point inefficiencies, generate demand and improve retention.
Historical data could also be leveraged to generate models for the operational side.
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Integrate
(Data staging),
Collect
(Operational Store
source system) (Data presentation),
Analyse and report

Model (data access tools),
Fig. 5.2 Analytic CRM

(Source: http://ecet.ecs.ru.acad.bg/cst04/Docs/sII/216.pdf)
As the organisation becomes more centred on the customer, so should the data warehouse. The data warehouse
will grow as more information about customers is collected. The process becomes more complicated as data from
multiple sources is being integrated and a new customer dimension is needed. The customer dimension is the
most challenging dimension for any data warehouse. In a large organisation, the customer dimension is very deep
(millions of rows), very wide (dozens of attributes) and subject to various changes and represents a mixture of data
from multiple internal and external sources.
In transaction systems, Changing Customer Circumstances, Data and Derived Customer Segment Data usually
are modelled as dimension attributes of the entity type Customer. This is being done for performance reasons, and
it is a practical approach. But for the purpose of customer analysis over time periods, an enterprise also needs to
track how the values of these data categories develop over time. This leads to a conceptual customer model which
explodes the former single entity type Customer into four sub-entity types. The three data categories are in an n:
1 relationship with the original Customer entity type.
With “validity periods” as unique identifiers, it is possible to reconstruct the state of a customer attribute for any
time period. This approach considers the above-mentioned requirements for customer analysis over time periods. A
disadvantage is that queries on this data structure become very complex, due to the necessity to historise dimensional
data.
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Summary
• There are mainly three types of CRM: operational, collaborative and analytical.
• Marketing automation is basically focused on automating marketing processes.
• Sales-force automation (SFA) was the original form of operational CRM.
• SFA systems are now widely adopted in business-to-business environments and are seen as ‘a competitive
imperative’ that offers ‘competitive parity’.
• Service automation deals with managing organisation’s service.
• Technologies such as interactive voice response (IVR) enable customers to interact with company computers.
• Collaborative CRM deals with synchronisation and integration of customer interaction and channels of
communications like phone, email, fax, web and many more.
• After analysing and implementing the interaction medium, it is important to enhance the power of channels
through which the customers are interacted.
• Collaborative CRM is the term used to describe the strategic and tactical alignment of normally separate
enterprises in the supply chain for the more profitable identification, attraction, retention and development of
customers.
• With the advent of online purchasing, one challenge for many companies has been to integrate the Web with
the stores and POS systems.
• A contact centre is a unified communication system that tracks and services customer needs, regardless of
which media is used to contact the organisation: telephone, IVR, Web forms, self-service, chat, co-browsing,
e-mail, or fax.
• The contact centre market is witnessing an increased shift of customer contacts being shifted to the Web.
• CSRs can send faxes directly from the desktop using the “Print” command to send documents to a fax printer
device that routes them to a fax server.
• Through VoIP technology, customers can use their internet connection to speak directly to CSRs over high
quality voice connections.
• A warehouse enables an organisation to maintain an enterprise-wide data warehouse that archives all information
of interest to the business.
• Analytical CRM takes into account product and service decision making, pricing and new product
development.
References
• Kumar, A., Sinha, C. & Sharma R., 2007. Customer Relationship Management: Concepts & Application, John
Wiley & Sons
• Shanmugasundaram, S., Customer Relationship Management: Modern Trends and Perspectives, PHI Learning
Pvt. Ltd.
• CRM [Pdf] Available at: <http://buttleassociates.com/doc/Chapter1CRMbook2e.pdf> [Accessed 20 December
2012].
• A Case for Analytical Customer Relationship Management [Pdf] Available at: <http://www.mis.nsysu.edu.
tw/~syhwang/Accepted-Paper/Conference-PDFs/PAKDD02.pdf> [Accessed 20 December 2012].
• Microsoft Dynamics CRM 2011 - Marketing Lists [Video online] Available at: <http://www.youtube.com/
watch?v=X7q9vgWDs8E> [Accessed 20 December 2012].
• Short Tutorial - Data-warehousing Overview [Video online] Available at: <http://www.youtube.com/
watch?v=OM1q3pjE_Mw> [Accessed 20 December 2012].
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Recommended Reading
Wesley Professional
• Kostojohn, S., Johnson, M. & Paulen, B., 2011. CRM Fundamentals, Kindle Edition
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Self Assessment
1. _______________ for the warehouse are often the operational systems, providing the lowest level of data for
a data warehouse.
a. Analytical CRM
b. Database
c. Data marts
d. Data sources
2. Contact centres, data aggregation systems and web sites are a few examples of ____________ CRM.
a. analytical
b. operational
c. collaborative
d. advanced
3. _________ supports conference calls so many users may participate to resolve a customer problem.
a. VoIP
b. UM
c. Chat
d. OLAP
4. The ___________ process can be decomposed into a number of stages, such as lead generation, lead qualification
needs identification, development of specifications, proposal generation, proposal presentation, handling
objections and closing the sale.
a. management
b. operation
c. purchase
d. selling
5. Traditional call centres perform work distribution based solely on a _________ model.
a. customer-based
b. call-based
c. working
d. call-centre
6. ____________ management process deals with designing the communication or interaction channel process
within an organisation which is specific to customer interaction and finally enhancing the extent of communication
between both the parties.
a. Channel
b. Change
c. Event-based
d. Interaction
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a. Marketing automation (MA) was the original form of operational CRM.
b. Today, customers expect to be able to work with your company through any medium, be it phone, e-mail,
fax, or your Web site.
c. UM is getting any message at any time from a convenient and easy to use point(s) of access and typically
encompasses voice, e-mail, chat and fax message media.
d. A contact centre is a unified communication system that tracks and services customer needs, regardless of
which media is used to contact the organisation: telephone, IVR, Web forms, self-service, chat, co-browsing,
e-mail, or fax.

A. Contains lead management and sales
1. Operational CRM
forecasting applications
B. Improvement and enhancement of
2. Cross-functional teams
business processes
3. Event-based marketing C. Marketing Automation
4. Opportunity management software D. Collaboration of the internal networks.
a. 1-D, 2-A, 3-B, 4-C

b. 1-C, 2-A, 3-D, 4-B
c. 1-B, 2-D, 3-C, 4-A
d. 1-C, 2-B, 3-D, 4-A
9. Web ____________ allows customers to interact with call centre agents through Web call-back, Web chat, and
collaborative browsing.
a. self-help
b. unified messaging
c. integration
d. chat session
10. _______________ helps in improving and optimising the services by sophistically analysing the service revenue
and cost.
a. Channel analytics
b. Service analytics
c. Marketing analytics
d. Sales analytics
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Chapter VI
CRM Project Management
Aim
• explicate importance project management with CRM
• explain the factors influencing a project
• elucidate the importance of project management
Objectives
• enlist the characteristics of a project
• analyse the difference between project and operation
• explain the project attributes
Learning outcome
• describe the roles of a project manager
• understand the elements of project management
• identify the project and cost management processes
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6.1 Projects
You can think of a project as a “container” that holds tasks, contacts, documents, and many more -everything you
need to reach a particular goal. The fundamental nature of a project is that it is a “temporary endeavour undertaken
to create a unique product, service, or result.” Projects are distinguished from operations and from programs.
A project versus an operation

The operations of an organisation are continuing and repetitive activities that are executed to achieve its mission
and sustain the business, but without a definable end to their performance and without a unique output- that is, it is
not produced or provided only once.
A project versus a program

A project differs from a program in that “a program is a group of related projects managed in a coordinated way
to obtain benefits and control not available from managing them individually. Programs may include elements or
related work outside the scope of discrete projects in the program.”
Furthermore, programs often involve a series of repetitive or cyclical undertakings. In Reclamation, a program is
typically a group of projects administered by Reclamation. Reclamation programs do not have to be specifically
authorised, and a program’s schedule may continue past any individual project.
6.2 Project Attributes

Projects come in all shapes and sizes. The following attributes help to define a project further:
A project has a unique purpose
Every project should have a well-defined objective. For example, Anne Roberts, the Director of the Project
Management Office in the opening case, might sponsor an information technology collaboration project to develop a
list and initial analysis of potential information technology projects that might improve operations for the company.
The unique purpose of this project would be to create a collaborative report with ideas from people throughout the
company. The results would provide the basis for further discussions and projects. As in this example, projects result
in a unique product, service, or result.
A project is temporary
A project has a definite beginning and a definite end. In the information technology collaboration project, Anne might
form a team of people to work immediately on the project, and then expect a report and an executive presentation
of the results in one month.
A project is developed using progressive elaboration

Projects are often defined broadly when they begin, and as time passes, the specific details of the project become
clearer. Therefore, projects should be developed in increments. A project team should develop initial plans and then
update them with more detail based on new information. For example, suppose a few people submitted ideas for
the information technology collaboration project, but they did not clearly address how the ideas would support the
business strategy of improving operations. The project team might decide to prepare a questionnaire for people to
fill in as they submit their ideas to improve the quality of the inputs.
A project requires resources, often from various areas

Resources include people, hardware, software, or other assets. Many projects cross departmental or other boundaries
to achieve their unique purposes. For the information technology collaboration project, people from information
technology, marketing, sales, distribution, and other areas of the company would need to work together to develop
ideas. The company might also hire outside consultants to provide input. Once the project team has selected key
projects for implementation, they will probably require additional hardware, software, and network resources.
People from other companies- product suppliers and consulting companies—will become resources for meeting
new project objectives. Resources, however, are limited. They must be used effectively to meet project and other
corporate goals.
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A project should have a primary customer or sponsor
Most projects have many interested parties or stakeholders, but someone must take the primary role of sponsorship.
The project sponsor usually provides the direction and funding for the project. In this case, Anne Roberts would
be the sponsor for the information technology collaboration project. Once further information technology projects
are selected, however, the sponsors for those projects would be senior managers in charge of the main parts of the
company affected by the projects. For example, if the vice president of sales initiates a project to improve direct
product sales using the Internet, he or she might be the project sponsor.
A project involves uncertainty

Because every project is unique, it is sometimes difficult to define its objectives clearly, estimate how long it will
take to complete, or determine how much it will cost. External factors also cause uncertainty, such as a supplier
going out of business or a project team member needing unplanned time off. This uncertainty is one of the main
reasons project management is so challenging, especially on projects involving new technologies. An effective
project manager is crucial to a project’s success. Project managers work with the project sponsors, the project team,
and the other people involved in a project to meet project goals.
6.3 Characteristics of a Project

When considering whether or not you have a project on your hands, there are some things to keep in mind as
follows:
• Is it a project or ongoing operation?
• If it is a project, who are the stakeholders?
• What characteristics distinguish this endeavour as a project?
A project has several characteristics:

• A positive relationship with an active, intelligent client
• Strong project management
• Clear requirements, well managed
• Ruthless change management
• Pervasive process focus
• Effective controls and communication.
• Technical leadership and excellence
6.4 Factors Influencing a Project

The three key factors that influence a project are as follows:
• Time (sometimes known as timeframe or schedule):This refers to how long the project will take, and generally
involves using past experience to predicate the likely time that parts of a project will take. The scheduling
involved in a project shows what should happen when and there are usually parts that can’t occur until preceding
parts are complete.
• Scope:This refers to what is included within the project and what is excluded. This is where you will establish
if re-plumbing the kitchen is in scope, if installing new white ware such as a fridge or dishwasher is in scope,
or if replacing the kitchen floor is in scope if we talk about the kitchen renovation project, for example. The
clearer the scope, the easier for ambiguity to be reduced and risks minimised.
• Cost (also known as budget):The budget or cost of the project sets out your expectation as to how much the
project will cost. With CRM systems, the vendor will provide a quote based on the number of hours it will take
to develop a given feature. With the kitchen example, it might be a couple of figures composed of the physical
cost of the kitchen alongside the labour cost of the install.
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6.5 Project Management

Project management is the science (and art) of organising the components of a project, whether the project is
development of a new product, the launch of a new service, a marketing campaign, or a wedding. A project isn’t
something that’s part of normal business operations. It’s typically created once, it’s temporary, and it’s specific. As
one expert notes, “It has a beginning and an end.” A project consumes resources (whether people, cash, materials,
or time), and it has funding limits.
Project management basics

No matter what the type of project, project management typically follows the same pattern:
• Definition
• Planning
• Execution
• Control
• Closure
Defining the project

In this stage the project manager defines what the project is and what the users hope to achieve by undertaking
the project. This phase also includes a list of project deliverables, the outcome of a specific set of activities. The
project manager works with the business sponsor or manager who wants to have the project implemented and other
stakeholders those who have a vested interest in the outcome of the project.
Planning the project

• Define all project activities:In this stage, the project manager lists all activities or tasks, how the tasks are
related, how long each task will take, and how each tasks is tied to a specific deadline. This phase also allows
the project manager to define relationships between tasks, so that, for example, if one task is x number of days
late, the project tasks related to it will also reflect a comparable delay. Likewise, the project manager can set
milestones, dates by which important aspects of the project need to be met.
• Define requirements for completing the project:In this stage, the project manager identifies how many people
(often referred to as “resources”) and how much expense (“cost”) is involved in the project, as well as any
other requirements that are necessary for completing the project. The project manager will also need to manage
assumptions and risks related to the project. The project manager will also want to identify project constraints.
Constraints typically relate to schedule, resources, budget, and scope. A change in one constraint will typically
affect the other constraints. For example, a budget constraint may affect the number of people who can work on
the project, thereby imposing a resource constraint. Likewise, if additional features are added as part of project
scope, that could affect scheduling, resources, and budget.
Executing the project

Build the project team. In this phase, the project manager knows how many resources and how much budget, he
or she has to work with for the project. The project manager then assigns those resources and allocates budget to
various tasks in the project. Now the work of the project begins.
Controlling the project

The project manager is in charge of updating the project plans to reflect actual time elapsed for each task. By keeping
up with the details of progress, the project manager is able to understand how well the project is progressing overall.
A product such as Microsoft Project facilitates the administrative aspects of project management.
Closure of the project

In this stage, the project manager and business owner pull together the project team and those who have an interest
in the outcome of the project (stakeholders) to analyse the final outcome of the project.
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Time, money, scope
Frequently, people refer to project management as having three components: time, money, and scope. Reducing or
increasing any one of the three will probably have an impact on the other two. If a company reduces the amount
of time it can spend on a project, that will affect the scope (what can be included in the project) as well as the cost
(since additional people or resources may be required to meet the abbreviated schedule).
Project portfolio management

Recent trends in project management include project portfolio management (PPM). PPM is a move by organisations
to get control over numerous projects by evaluating how well each project aligns with strategic goals and quantifying
its value. An organisation will typically be working on multiple projects, each resulting in potentially differing
amounts of return or value. The company or agency may decide to eliminate those projects with a lower return in
order to dedicate greater resources to the remaining projects or in order to preserve the projects with the highest
return or value.
6.6 Need of Project Management

A disciplined project management process is important to any project. Project managers are expected to deliver
results, on time (if not sooner) and on budget. Solid project planning reduces the risks associated with any project
you take on. Here are ten reasons why you need project management:
• Control scope creep and manage change:Small changes in demands occur on every project. They come from
management, the customer, your project team, suppliers, or other stakeholders. Individually, they may appear
acceptable, but collectively these project demands can add up to a significant project expansion (referred to as
“scope creep”) that can overrun your budget. As a project manager, if you effectively manage the scope of your
project, you have a better than even chance of effectively managing project resource- time, money, and many
more- and managing change.
• Deliver project results on time and on budget:Project planning starts with a well thought out business case
justification that usually includes some type of cost calculation associated with Return On Investment (ROI).
Once these measures are established, it is up to the project manager to ensure that on-time, on-budget performance
is maintained; otherwise, and the project will never produce the expected results. That’s what good project
management is all about.
• Focus the project team on the solution:The project team can easily drift off topic and spend too much time on
the wrong tasks. A good project manager keeps the project team focused by using a clear and concise project
charter, resolving barriers, or shielding the team from unnecessary interference.
• Obtain project buy-in from disparate groups:As President Lincoln once said, “Public sentiment is everything.
With it, nothing can fail; without it, nothing can succeed”. A good project manager uses the tools in the initiation
phase of project management to collect user requirements, project constraints, and a feasibility study to build
a strong business case justification. Using input from various sources, the project manager overcomes dissent
and obtains buy-in by communicating the project benefits as the different stakeholder groups see them.
• Define the critical path to optimally complete your project:Every project is made up of a series of connected
activities, each of which has its own constraints. The project manager identifies the critical path of activities- the
optimal sequence of actions that best ensure the project’s successful completion.
• Provide a process for estimating project resources, time, and costs:Using project management software, previous
project experiences, and a solid project initiation phase can provide the discipline needed to reduce project
estimating errors, increasing the likelihood that the project will finish on time and on budget.
• Communicate project progress, risks, and changes:As a project progresses, stakeholders must be kept informed
of the outcomes, changes, stumbling blocks, or successes that the project experiences. Project management
creates a project communication plan to address these communication issues, provide a format, and lay out a
process for execution.
• Surface and explore project assumptions:All projects are based on assumptions to some extent. A good project
manager delves into user requirements, project constraints, and management expectations to understand what
is said and what is not said. Relying on too many unconfirmed assumptions can invalidate a project schedule
or, worse, sink the project.
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• Prepare for unexpected project issues:Every project runs into unforeseen issues, such as changes in market
conditions, and is hit with random cause variability. Experienced project managers plan for the unexpected by
lining up alternative courses of action.
• Document, transfer, and apply lessons learned from your projects:The last phase of project management focuses
on “closing out” the project. The project manager reviews how well each prior phase- project initiation, project
planning, project execution, and project monitoring and control- was performed. As part of good knowledge
management, all project review notes should be dissected and analysed for patterns, trends, and opportunities
for improvement. These “lessons learned” should be documented and communicated to other project managers
before starting the next project.
6.7 Project Management Life Cycle

The Project Management Life Cycle comprises four phases:
• Initiation involves starting up the project, by documenting a business case, feasibility study, and terms of
reference, appointing the team and setting up a Project Office.
• Planning involves setting out the roadmap for the project by creating the following plans: project plan, resource
plan, financial plan, quality plan, acceptance plan and communications plan.
• Execution involves building the deliverables and controlling the project delivery, scope, costs, quality, risks
and issues.
• Closure involves winding-down the project by releasing staff, handing over deliverables to the customer and
completing a post implementation review.
1
Project
Initiation
Post Project
Implementation Definition
review
MPMM
4
Project
Closure
Project
Lifecycle
2
Project
Planning
Monitoring Detailed
& Control Planning
3
Project
Execution
Fig. 6.1 Project management life cycle

(Source: http://www.mpmm.com/project-management-methodology.php)
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A more detailed description of the Project management life cycle follows:
Project initiation
Project Initiation is the first phase in the Project Life Cycle and essentially involves starting up the project. You initiate
a project by defining its purpose and scope, the justification for initiating it and the solution to be implemented. You
will also need to recruit a suitably skilled project team, set up a Project Office and perform an end of Phase Review.
The Project Initiation phase involves the six key steps:
Develop a Establish Setup a Project

business case the Terms of Office
Reference
Undertake a Appoint a Perform

Feasibility Study Project Team, Phase Review
Fig. 6.2 Project initiation

Project planning
After defining the project and appointing the project team, you’re ready to enter the detailed Project Planning phase.
This involves creating a suite of planning documents to help guide the team throughout the project delivery. The
Planning Phase involves completing the 10 key steps mentioned in the figure below.
Create a Create a Create a Create a Create a

project plan resource plan financial plan quality plan Risk Plan
Perform phase Contract the Create a Create a Create an

review suppliers procurement communications acceptance
plan plan plan
Fig. 6.3 Project planning

Project execution
With a clear definition of the project and a suite of detailed project plans, you are now ready to enter the Execution
phase of the project. This is the phase in which the deliverables are physically built and presented to the customer
for acceptance. While each deliverable is being constructed, a suite of management processes are undertaken to
monitor and control the deliverables being output by the project.These processes include managing time, cost, quality,
change, risks, issues, suppliers, customers and communication. Once all the deliverables have been produced and
the customer has accepted the final solution, the project is ready for closure.
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Build
Deliverables
Perform
Phase Review
Monitor &
Control
Perform Perform
Time Risk
Management Management
Perform Perform
Cost Issue
Perform Perform
Quality Procurement
Perform Perform
Change Acceptance
Perform
Communications
management
Fig. 6.4 Project execution

Project closure
Project Closure involves releasing the final deliverables to the customer, handing over project documentation to
the business, terminating supplier contracts, releasing project resources and communicating project closure to all
stakeholders. The last remaining step is to undertake a Post Implementation Review to identify the level of project
success and note any lessons learned for future projects.
Perform Review
Project Project
Closure Completion
Fig. 6.5 Project closure

6.8 The Role of Project Manager

You have already read that project managers must work closely with the other stakeholders on a project, especially
the sponsor and project team. They also are more effective if they are familiar with the nine project management
knowledge areas and the various tools and techniques related to project management. Experienced project manager’s
help projects succeed. But what do project managers do, exactly? What skills do they really need to do a good job?
The following section provides brief answers to these questions. Even if you never become a project manager, you
will probably be part of a project team, and it is important for team members to help their project managers.
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Develop Plan Phase
Measurement and Iterations
Plan
Project
Manager
Develop Schedule
Iteration and Assign
Plan Work
Encloses
Project Software Work

Measurements Development Order
Plan
Main Artifacts
Measurement
Plan
Iteration Risk
Plan List
Fig. 6.6 Role of a project manager

(Source: http://www.upedu.org/process/workers/wk_projm.htm)
Project managers are the point people responsible for coordinating activities of project team members to achieve
project objectives. Whereas project team members tend to have narrowly focused skills and expertise, and are primarily
concerned with day-to-day functions, project managers focus equal attention on near- and long-term activities.
Historically the role of project manager focused on the larger, more technical projects. However, in recent years it is
being applied to a variety of smaller, less technical projects as well. The project management function has received
a lot of attention over the last 10 years and has become a highly desired competency in most organisations.
6.9 Responsibilities of a Project Manager

A true project manager is responsible for the following:
• Defining the scope of projects
• Developing project schedules
• Estimating project costs
• Gaining stakeholders’ approvals
• Measuring project progress
• Controlling project changes
• Closing out projects
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6.10 Soft Skills Important for a Project Manager

The common thread running through all the essential skills needed to be a great project manager is working with
people. Whether it’s defining the scope of a project, exercising change control or closing a project out, the more
comfortable project managers are with interacting with people the more successful they will be in their role.
• The project management body of knowledge
• Application area knowledge, standards, and regulations
• Project environment knowledge
• General management knowledge and skills
• Soft skills or human relations skills.
The following section focuses on the IT application area, including skills required in the project environment,
general management, and soft skills.
The project environment differs from organisation to organisation and project to project, but some skills will help in
almost all project environments. These skills include understanding change, and understanding how organisations
work within their social, political, and physical environments. Project managers must be comfortable leading
and handling change, since most projects introduce changes in organisations and involve changes within the
projects themselves. Project managers need to understand the organisation in which they’re working, and how that
organisation develops products and provides services. They must also understand the social, physical, and political
environment.
Project managers should also possess general management knowledge and skills. They should understand important
topics related to financial management, accounting, procurement, sales, marketing, contracts, manufacturing,
distribution, logistics, the supply chain, strategic planning, tactical planning, operations management, organisational
structures and behavior, personnel administration, compensation, benefits, career paths, and health and safety practices.
On some projects, it will be critical for the project manager to have a lot of experience in one or several of these
general management areas. On other projects, the project manager can delegate detailed responsibility for some of
these areas to a team member, support staff, or even a supplier. Even so, the project manager must be intelligent
and experienced enough to know which of these areas are most important and who is qualified to do the work. He
or she must also make and/or take responsibility for all key project decisions.
Achieving high performance on projects requires soft skills, otherwise called human relations skills. Some of these
soft skills include effective communication, influencing the organisation to get things done, leadership, motivation,
negotiation, conflict management, and problem solving. Why do project managers need good soft skills? One
reason is that to understand, navigate, and meet stakeholders’ needs and expectations, project managers need to
lead, communicate, negotiate, solve problems, and influence the organisation at large. They need to be able to listen
actively to what others are saying, help develop new approaches for solving problems, and then persuade others to
work toward achieving project goals. Project managers must lead their project teams by providing vision, delegating
work, creating an energetic and positive environment, and setting an example of appropriate and effective behavior.
Project managers must focus on teamwork skills to employ people effectively. They need to be able to motivate
different types of people and develop esprit decorps within the project team and with other project stakeholders.
Since most projects involve changes and trade-offs between competing goals, it is important for project managers
to have strong coping skills as well. It helps project managers maintain their sanity and reduce their stress levels if
they cope with criticism and constant change. Project managers must be flexible, creative, and sometimes patient
in working toward project goals; they must also be persistent in making project needs known.
Lastly, project managers must be able to make effective use of technology as it relates to the specific project. Making
effective use of technology often includes special product knowledge or experience with a particular industry. Project
managers must make many decisions and deal with people in a wide variety of disciplines, so it helps tremendously
to have a project manager who is confident in using the special tools or technologies that are the most effective
in particular settings. They do not normally have to be experts on any specific technology, but they have to know
enough to build a strong team and ask the right questions to keep things on track. For example, project managers for
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large information technology projects do not have to be experts in the field of information technology, but they must
have working knowledge of various technologies and understand how the project would enhance the business. Many
companies have found that a good business manager can be a very good information technology project manager
because they focus on meeting business needs and rely on key project members to handle the technical details.
All project managers should continue to develop their knowledge and experience in project management, general
management, soft skills, and the industries they support. Non-IT business people are now very savvy with information
technology, but few information technology professionals have spent the time developing their business savvy. IT
project managers must be willing to develop more than their technical skills to be productive team members and
successful project managers. Everyone, no matter how technical they are, should develop business and soft skills.
6.11 Elements of Project Management

Accomplishing any task, particularly one involving multiple volunteers scattered around the country or world,
is always easier when standards are in place. There are five steps necessary for the successful completion of any
project: initiate, plan, execute, monitor and control, and close explained as follows:
Initiate
The initiation process authorises the overall project or the next phase of a project. In this phase, project objectives
are established, scope is defined, and responsible parties and deliverables are identified.
Plan
The planning processes are precisely that- the defining and refining of the best courses of action to take to attain the
project objectives. Planning falls into two categories: core planning processes and facilitating processes.
Core processes are those that have clear dependencies that require them to be performed in essentially the same
order on most projects. Examples include scope planning, schedule development, resource planning, and cost
budgeting.
Facilitating processes are entirely dependent on the nature of the project and are performed intermittently and as
needed- though they are not optional. Some of the facilitating planning processes include quality planning, staff
acquisition, and risk identification.
Execute
Planning paves the way for executing, which involves coordinating resources, human and otherwise, to carry out
the overall project plan. Because of the ongoing role execution plays in project management, its processes are also
divided into core and facilitating subgroups. The central core process, project plan execution, oversees facilitating
processes such as team development, information distribution, and solicitation.
Monitor and control

Controlling processes have a strong presence in all but one of the project management stages. These processes
ensure not only that project objectives are met, but also that corrective action can be taken should a problem arise.
In this phase, performance reporting and risk monitoring and control are core. These watchdog processes work
with facilitating processes such as cost control, quality control, and schedule control to ensure the project stays on
track.
Close
The watchful eyes of the controlling processes eventually lead to closing, where the project is accepted and brought
to an orderly end. The two main components of closing are contract closeout, in which any remaining open items
are resolved and the contract is settled, and administrative closure, the gathering of information to formalise project
completion, including compiling lessons learned for use in future projects.
It is important to note that the individual processes are not one-time events. Rather, they are overlapping activities
that occur at varying levels of intensity throughout the course of the project. Using these standardised project
management practices can help organise any project, and make said project a smoother, less stressful endeavour.
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6.12 Behavioral Aspects of Project Management

Organisations are looking for ways to improve processes and products. To be successful in accomplishing quality
improvement initiatives the organisation must invest in skilled project manger that understand the influence of
organisational behavior and culture. Organisational culture can influence the overall success of a project. Sometime
a project manager might find it very difficult to align himself into the culture of the organisation. Some organisations
can take years to adapt to new culture and this can be disadvantageous to the organisations’ project development
process.
In some organisational cultures (culture rather than structure), sharing of resources is not permitted which can
impede the growth of the organisation. Organisational culture can definitely impair one’s ability to deliver projects.
For instance, if marketing is in the middle of a project and regulatory needs a resources from marketing, it might
be very difficult to get the marketing employee to render his/her expertise if the culture does not support sharing
of information. Such a culture would cause a delay in the progress of the project. The culture of an organisation
or lack of support from key functional areas can inhibit the ability of the project managers from been successful.
Culture of an organisation plays a key role in the success of a project manager, the actual project, and ultimately
organisational performance.
Influence of organisational culture

The culture of an organisation is made up of the beliefs, values, attitudes, and assumptions of the collective employees
and leadership of the organisation. These beliefs and attitudes are then translated into the day-to-day actions that
govern the way business is conducted. The corporate actions become the behavioural norms that govern the way
decisions are made, resources are allocated, and people work together.
Gerry Johnson describes some of the different components that make up a corporate culture. These include the
purpose and direction of the company as expressed through the organisational mission, vision, and value statements.
Statements of expected ethical standards also shape culture not only because of what they say, but more strongly
by whether they are adhered to or not. The culture is also influenced by the power or decision-making structure, the
hierarchy and lines of reporting as well as the symbols and icons, the routines and rituals, and the organisational
‘stories’.Ideally, projects are selected because of a compelling linkage with the strategic direction of an organisation.
This direction is determined by the purpose, goals and outcomes set for the company. For instance, even though
financial stability may be an organisational goal for a hospital, the mission of providing care regardless of ability
to pay.
6.12.1 Project Cost Management

Project Cost Management includes the processes required to ensure that the project is completed within the approved
budget.
• Resource planning- Determining what resources (people, equipment, materials) and what quantities of each
should be used to perform project activities.
• Cost estimating- Developing an approximation (estimate) of the costs of the resources needed to complete
project activities.
• Cost budgeting- Allocating the overall cost estimate to individual work items.
• Cost control- Controlling changes to the project budget.
These processes interact with each other and with the processes in the other knowledge areas as well. Each process
may involve effort from one or more individuals or groups of individuals based on the needs of the project. Each
process generally occurs at least once in every project phase.
Although the processes are presented here as discrete elements with well-defined interfaces, in practice they may
overlap and interact in certain ways. Project cost management is primarily concerned with the cost of the resources
needed to complete project activities. However, project cost management should also consider the effect of project
decisions on the cost of using the project product. For example, limiting the number of design reviews may reduce
the cost of the project at the expense of an increase in the customer’s operating costs. This broader view of project
cost management is often called life-cycle costing.
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In many application areas predicting and analysing the prospective financial performance of the project product is
done outside the project. In others (for example, capital facilities projects), project cost management also includes this
work. When such predictions and analysis are included, project cost management will include additional processes
and numerous general management techniques such as return on investment, discounted cash flow, payback analysis,
and others.
Project cost management should consider the information needs of the project stakeholders- different stakeholders
may measure project costs in different ways and at different times. For example, the cost of a procurement item
may be measured when committed, ordered, delivered, incurred, or recorded for accounting purposes.When project
costs are used as a component of a reward and recognition system, controllable and uncontrollable costs should be
estimated and budgeted separately to ensure that rewards reflect actual performance.
6.12.2 Project Risk Management

A risk is something that may happen and if it does, will have a positive or negative impact on the project. “That may
happen” implies a probability of less than 100%. If it has a probability of 100% - in other words it will happen- it is
an issue. An issue is managed differently to a risk. A risk must also have a probability something above 0%. It must
be a chance to happen or it is not a risk. The second thing to consider from the definition is “will have a positive or
negative impact”. Most people dive into the negative risks but what if something goes right?
Risk Management Plan

There are four stages to risk management planning. They are:
• Risk Identification
• Risks Quantification
• Risk Response
• Risk Monitoring and Control
Risk identification
In this stage, we identify and name the risks. The best approach is a workshop with business and IT people to carry
out the identification. Use a combination of brainstorming and reviewing of standard risk lists. There are different
sorts of risks and we need to decide on a project by project basis what to do about each type.
Business risks are ongoing risks that are best handled by the business. An example is that if the project cannot meet
end of financial year deadline, the business area may need to retain their existing accounting system for another
year. The response is likely to be a contingency plan developed by the business, to use the existing system for
another year.Generic risks are risks to all projects. For example the risk that business user might not be available
and requirements may be incomplete. Each organisation will develop standard responses to generic risks.
Risks should be defined in two parts. The first is the cause of the situation (Vendor not meeting deadline, Business
users not available, and many more.). The second part is the impact (Budget will be exceeded, Milestones not
achieved, and many more.). Hence a risk might be defined as “The vendor not meeting deadline will mean that
budget will be exceeded”. If this format is used, it is easy to remove duplicates, and understand the risk.
Risk quantification
Risk need to be quantified in two dimensions. The impact of the risk needs to be assessed. The probability of the
risk occurrence needs to be assessed. For simplicity, rate each on a 1 to 4 scale. The larger the number, the larger
the impact or probability. By using a matrix, a priority can be established.
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4 Medium Critical
3
Probability
2
Low High
1
1 2 3 4
Impact
Fig. 6.7 Risk qualification

(Source: http://www.projectperfect.com.au/info_risk_mgmt.php)
Note that if probability is high, and impact is low, it is a medium risk. On the other hand if impact is high, and
probability low, it is high priority. A remote chance of a catastrophe warrants more attention than a high chance of
a hiccup.
Risk response
There are four things you can do about a risk. The strategies are:
• Avoid the risk: Do something to remove it. Use another supplier for example.
• Transfer the risk: Make someone else responsible. Perhaps a Vendor can be made responsible for a particularly
risky part of the project.
• Mitigate the risk:Take actions to lessen the impact or chance of the risk occurring. If the risk relates to availability
of resources, draw up an agreement and get sign-off for the resource to be available.
• Accept the risk: The risk might be so small the effort to do anything is not worthwhile.
A risk response plan should include the strategy and action items to address the strategy. The actions should include
what needs to be done, who is doing it, and when it should be completed.
Risk control
The final step is to continually monitor risks to identify any change in the status, or if they turn into an issue. It is
best to hold regular risk reviews to identify actions outstanding, risk probability and impact, remove risks that have
passed, and identify new risks.
6.13 Defining the CRM Vision

The vision should include some basic components:
• A vision statement about the future of the business (you may have a five-year vision, but you will also want
a subcomponent that directs the organisation to what it can accomplish within a realistic time frame, say 18
months)
• A mission statement explaining how the organisation expects to do business
• A core values statement (or sometimes called guiding principles) explaining what is essential to the accomplishment
of the mission and the fulfilment of the vision
• A description of standards against which it dares to be measured
More than any other document, this vision statement is a reference point for those within the organisation (the
internal customers) as well as those outside (your external customers) and is something around which the whole
organisation can rally. Without a strong commitment to it, starting at the top, the organisation will wander without
purpose. Departmental silos will appear, isolating areas from one another, corporate investment may be misdirected
and employees will become unfocused. And if this happens, the result might be staff turnover and suboptimal
customer service and acceptable revenue and earnings growth. These are outlined in the chart below, but notice the
focus on the customer (both internal and external) and the need for focus and direction.
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6.13.1 Building a CRM Vision
In building a CRM vision, there are four key phases that must be considered:
Assess current business context
One of the first steps in the process is to examine both the external market and competitive environment. Within
that context, the organisation’s current business strategies and competencies must be assessed. Is the organisation
capable of addressing customer needs, and if not, how large is the gap? This will help with the early definition of
the current customer segments, relationships and profitability set against the external CRM landscape.
Create the strawman vision

This phase establishes a shared vision of the future of performance driven CRM in the organisation among the
organisation’s senior stakeholders and starts the process of communicating that vision to those who will be impacted
by the change. This CRM vision should help the organisation to understand the following:
• Which customers should they target?
All customers do not have the same current and potential value
Not all customers value a complex relationship
• How should they deal with rapidly increasing channel fragmentation and media complexity to converse with
their customers?
Rapid changes in delivery channels and new media (for example, E-Commerce) are dramatically increasing
the challenges facing both the enterprise and the customer
• How should they balance quality of experience, cost-to-serve and profitability of the customer?
Maintaining highly personalised relationships with all customers is expensive and the 80:20 rule applies
(80 percent of profits are derived from 20 percent of customers)
Profitability depends on achieving a level of personalisation that is both effective and cost effective. What
is the appropriate level of CRM integration for their business?
It will vary with the transactions and types of relationships that they will have with their clients
Integration across channels, media, front and back office systems, functions or business units is
expensive
Justifiable integration should be the goal
• What is customer “insight,” and how can the organisation get and use it? Which information do they need, and
where do they get it in order to continuously update the segments, perceptions, needs, delivery/access channels
desired by customer and the company’s channels to deliver?
• What should they do with unprofitable customers?
Who are they, how should they be dealt with and, should they deal with them at all?
The CRM vision should contain a specific time horizon and an articulation of the following questions:
• Why do we need to change (strategic and market justification for the vision)?
• Who will our customers be?
• How will we serve them?
• What will be the benefit for us and them?
• What will the future customer experience look and feel like from their perspective?
Build the business case

This phase provides a structured, repeatable process that aids in achieving and measuring value of the CRM
transformation and to build a business case to provide justification for the transformation of the organisation. This
phase is important because it allows the organisation to understand the value of the transformation to itself and its
customers, and it builds momentum for change at all levels in the organisation. Here are the key components of the
business case:
• Business rationale- Why must the project be done?
• Cost to get to benefits- What are the costs of the change program?
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• Determining and Aligning the CRM Vision

• Payback case (ROI) - What is the overall financial impact measured in payback period, discounted cash flows
or internal rate of return?
• Risk analysis- What are the areas of risk and the possible impact of failure, and how are the risks to be
managed?
Traditional return on investment (ROI) valuation methods, such as discounted cash flows (DCF) or internal rate
of return (IRR), should be used to value the individual projects in the overall CRM program. In order to gain a
mandate to proceed, it is critical that all the significant elements of benefit have a business owner, someone who is
watching over them.
Prioritise, plan and transform

This phase creates a program of change that consists of a series of prioritised projects and initiatives that will enable
the organisation to deliver its CRM vision. Each project will have defined scope, staffing requirements and a distinct
approach.
Tight coordination with the third phase above of the CRM vision is required since justification for prioritisation is
based on the relative importance of each activity to help achieve the business case. Therefore it is important to do
the following:
• Identify, validate and prioritise projects that will deliver organisational transformation to support the CRM
vision
• Mobilise quick wins (activities that can be accomplished within three months) and implementation of interim
solutions (those that may be replaced or discarded when the long-term solution is in place)
• Define and mobilise a program to deliver the projects as a single, integrated entity, including:
timing/staging of projects
Structure, governance and reporting
Sponsorship and stakeholder management
Implementation road map
Benefits tracking
Overall costing
• Lastly, it is important that you create a CRM transformation program definition document including:
Prioritised list of defined crm projects
Future crm governance
Implementation road map
Project and program plans (milestone plans with activity level plans to first milestone)
Resource requirements
Estimated cost
Estimated time frame for execution
Expected benefits
Fit into overall crm program and crm vision
Alignment to business objectives
6.14 Establishing CRM Project Objectives

The objectives of a CRM project are multiple and refer to: the improvement of the sales efficiency, the augmentation
of customers’ loyalty rate, real time information delivering, the improvement of the services’ quality, the increase
of revenues, the support of sales team, the improvement of the communication, marketing efficiency and sales
management, the growth of sales margin and the decrease of the costs associated to sales. The main objectives of a
CRM project from marketing department point of view are the following:
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A high loyalty rate
Every marketing manager is aware by the fact that customers’ migration towards the competitors generates
significant losses of potential revenues and the return on investment becomes impossible. Actually, the companies
use sophisticated predictive technologies that emphasise the customers disposed to migrate towards the competition;
the decrease of this risk can be obtained by the means of personalised marketing actions oriented to the motivation
of this customer category.
Customer’s behaviour foresight

In the actual conditions in which marketing managers pursue the customers’ needs anticipation, their behavior
foresight becomes a major responsibility. The customers’ behaviour modelling is based on the following aspects:
web shopping cart analysis and customer consumption tendency, the observation of recurring acquisitions, the
analysis and the evaluation of the marketing mix practiced in different periods of time.
Customers value modelling and the determination of their profitability

The processing of a great volume of data concerning the previous acquisitions and the high cost of the CRM software
applications don’t represent obstacles that prevent from building customer value management programs, on every
stage of their lifetime cycle: the acquisition of the new customers, the development of loyalty programs and the
development in time of the relationships with profitable customers.
The optimisation of customer communication channels

The evolution of the customers’ preferences has an effect on the choice of the most efficient communication channel.
The accomplishment of a marketing communication by the means of multiple channels (off-line and online) generates
an augmentation of the relationships interactivity between a company and its customers.
The high personalisation level of marketing messages

The personalisation represents the capability of a company to adapt its marketing communication to the individual
preferences of the customers. The personalisation technologies applicable to the databases and websites access the
information obtained with the agreement of customers, respecting the principle of the permission marketing and
use them in view to create offers tailored to each customer segment.
Up-selling achievement
One of the most important goals followed by the marketing managers consists in the turning to account of the up-
selling opportunities, which offer a clear image on the products or services that succeed to determine the growth
of customers’ profitability. The understanding of the way in which customers react to the promotions concerning
up-selling represent one of the CRM project evaluation conditions.
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Summary
• The fundamental nature of a project is that it is a “temporary endeavour undertaken to create a unique product,
service, or result”.
• Every project should have a well-defined objective.
• The project sponsor usually provides the direction and funding for the project.
• The scheduling involved in a project shows what should happen when and there are usually parts that can’t
occur until preceding parts are complete.
• Project management is the science (and art) of organising the components of a project, whether the project is
development of a new product, the launch of a new service, a marketing campaign, or a wedding.
• PPM is a move by organisations to get control over numerous projects by evaluating how well each project
aligns with strategic goals and quantifying its value.
• Project managers are expected to deliver results, on time (if not sooner) and on budget.
• While each deliverable is being constructed, a suite of management processes are undertaken to monitor and
control the deliverables being output by the project.
• Project managers are the point people responsible for coordinating activities of project team members to achieve
project objectives.
• The project environment differs from organisation to organisation and project to project, but some skills will
help in almost all project environments.
• Project managers must lead their project teams by providing vision, delegating work, creating an energetic and
positive environment, and setting an example of appropriate and effective behaviour.
• Planning falls into two categories: core planning processes and facilitating processes.
• The central core process, project plan execution, oversees facilitating processes such as team development,
information distribution, and solicitation.
• The objectives of a CRM project are multiple and refer to: the improvement of the sales efficiency, the
augmentation of customers’ loyalty rate, real time information delivering and many more.
References
• Gentle, M., 2005. The CRM Project Management Handbook: Building Realistic Expectations and Managing
Risk, 2 nd ed., Kogan Page Publishers.
• Finnegan, D. & Willcocks, P. L., 2007. Implementing CRM: From Technology to Knowledge, John Wiley and
Sons
• An Introduction to Project Management [Pdf] Available at: <http://www.usbr.gov/excellence/Finals/FinalIntroPM.
pdf> [Accessed 21 December 2012].
• Project Cost Management [Pdf] Available at: <http://www.softwareresearch.net/fileadmin/src/docs/teaching/
SS05/PM/PMBOK7.PDF> [Accessed 21 December 2012].
• Rule CRM Tutorial: Online Customer Relationship Management [Video online] Available at: < http://www.
youtube.com/watch?v=g-wPsAO-r_M> [Accessed 21 December 2012].
• What is Project Cost Management? [Video online] Available at: <http://www.youtube.com/watch?v=5FC3i7UrRxA>
Recommended Reading
• Kostojohn, S., Paulen, B. & Johnson, M., 2011. CRM Fundamentals, Apress
• Dyche, J., 2002. The CRM Handbook: A Business Guide to Customer Relationship Management, 1st ed.,
Addison-Wesley Professional.
• Bamford, J., 2005. CRM Project Management: Managing OTS Enterprise Wide Application Implementations,
1st ed., Custom Publishing.
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Self Assessment
1. A _________ is a group of related projects managed in a coordinated way to obtain benefits and control not
available from managing them individually.
a. project management
b. team
c. operation
d. program
2. ______ is a move by organisations to get control over numerous projects by evaluating how well each project
aligns with strategic goals and quantifying its value.
a. CRM
b. PRP
c. PPM
d. PRM
3. Once the project team has selected key projects for implementation, which of the following would be required
for further work?
a. Customer
b. Additional hardware and software
c. Product
d. Quality check
4. If the probability of the risk is high, and its impact is low, then it is a ________ risk.
a. high
b. small
c. medium
d. large
5. The _________ of the project sets out your expectation as to how much the project will cost.
a. budget
b. scope
c. time
d. project management team

a. Project planning starts with a well thought out business case justification that usually does not include any
cost calculation.
b. After defining the project and appointing the project team, you’re ready to enter the Project Closure
phase.
c. A project manager is responsible for gaining the stakeholder’s approvals.
d. Once all the deliverables have been produced and the customer has accepted the final solution, the project
is ready for initiation.
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7. _____________________ creates a project communication plan to address these communication issues, provide
a format, and lay out a process for execution.
a. The head of the project
b. Project team
c. Project manager
d. Project management

1. Defining the project A. Ruthless change management
B. Completing a post implementation
2. Project
review
3. Initiation of the Project Management

C. A list of project deliverables
Cycle
4. Closure D. Feasibility study

a. 1-C, 2-A, 3-D, 4-B
b. 1-B, 2-C, 3-D, 4-A
c. 1-A, 2-D, 3-B, 4-C
d. 1-D, 2-A, 3-C, 4-B
9. Solid project ________ reduces the risks associated with any project you take on.
a. development
b. planning
c. implementation
d. report
10. Risk identification is an example of _______________ type of plan.

a. facilitating process
b. core process
c. initiation phase
d. closure phase
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Chapter VII
E-CRM
Aim
• explicate importance of E-CRM
• explain the need of E-CRM
• elucidate the E-CRM framework
Objectives
• explain the benefits of E-CRM
• enlist the key features of E-CRM
• elucidate the applications of E-CRM
Learning outcome
• define E-CRM
• understand the trends in E-CRM
• identify the pitfalls of E-CRM
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7.1 Introduction
In today’s world a company can survive only if they can manage to keep its customers happy:
• Promising latest and top class success to customers
• Building a customer environment and using other means to maintain customer attention have now become the
top priorities for any company that wants to make it big in the market.
• As technology changes, more people all over the world have started buying and selling activities over the
Internet.
• As a consequence companies also have to give customers a good in easy online environment.
• The result is nothing but E-CRM.
All organisations involved in on-line business to business and/or business to consumer selling need to educate
themselves about the new phenomenon of electronic customer relationship management (E-CRM). ECRM is
concerned with attracting and keeping economically valuable customers and eliminating less profitable ones.
E-CRM will continue to develop as an important area of study in MIS and such relevant referent disciplines as
Computer Science, Marketing and Psychology. What, then, is the relationship between customer behaviors and
corporate opportunities to implement E-CRM? Each day, business and consumer purchasing over the Internet
increases. Customers purchase on-line for a number of different reasons. A research study of 70 retailers found
that convenience was the number one ranked reason (84%) for purchasing on-line versus off-line. The fact that
customer service ranks near the bottom of the list of reasons to purchase on-line suggests that customers are willing
to trade off better levels of “off-line” service for the convenience afforded by on-line purchasing. Looked at another
way, on-line customers are not coming to companies’ web sites with very high expectations for the service levels.
However, on-line retailers need to acknowledge that first-time purchasers at their sites will not necessarily, or even
likely, become repeat customers.
E-CRM provides companies with a means to conduct interactive, personalised and relevant communications with
customers across both electronic and traditional channels. It utilises a complete view of the customer to make
decisions about the following:
• Messaging
• Promotional offers, and
• Channel delivery
It synchronises communications across otherwise disjointed customer facing systems. It asks for the permission of
the potential customer before talking to him about product or services.It focuses on understanding how the economics
of customer relationships affect the business CRM strategy along with its electronic component constitutes E-CRM.
The trust of E-CRM is not what an organisation is doing on the web but how fully an organisation ties its online
channel back to its traditional channel or customer touch points.
7.2 Need of E-CRM

E-CRM is needed for following reasons:
The CRM offerings remain channel centric not customer centric
The CRM offerings remain channel centric rather customer centric. Host CRM offerings focus in improving the
effectiveness of the individual channel that their systems support. While this is a necessary step, it does not address
the fundamental question of which customers should be targeted in the channel and how much should be invoked
in them. At a typical bank, the majority of customers are unprofitable. Regardless of how efficient customer
communications may be through any channel, these customers will remain unprofitable.
Contemporary customers facing traditional systems

Customer centric metrics do not exist. Most CRM offerings have weak metrics and measurement capabilities.
Generally those with customer profitability return on investment of customer interaction and lifetime value of a
customer because data needed for this falls outside the reach and design of channel centric system. Instead they
focus
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on operational metrics such as wait time on calls, the number of annoyed callers. While these metrics are important
to run various channels operationally, they fail to address the question. Are we investing the right amount of resource
on customers with the most value? Answering the question requires a holistic view of customer experience.
Customer centric metrics is non-existence

Customer facing systems create new islands of non-integrated information. Contemporary customers facing
traditional systems such as sales force automation and customer care often have their own data models and data
stores that manage only the information that their application requires and generates. These systems rarely interact
with others, as they remain isolated.
Example:A customer, who has ordered a product and has a question about the status of that order, rather than calling
a customer service number, the customer is able to return to the web site and inquire about the order through self
service, which queries the company’s order processing system automatically to return the status of the order. The
customer can do this whenever it is convenient, and the company saves thousands of dollars in customer service
costs.
7.3 Benefits of E-CRM

The following objectives can be achieved with a proper ECRM implementation (increased customer loyalty, more
effective marketing, improved customer service and support and greater efficiency and cost reduction):
Increased customer loyalty
An effective ECRM system lets a company communicate with its customers using a single and consistent voice,
regardless of the communication channel. This is because, with ECRM software, everyone in an organisation has
access to the same transaction history and information about the customer. Information captured by an E-CRM
system helps a company to identify the actual costs of winning and retaining individual customers. Having this data
allows the firm to focus its time and resources on its most profitable customers. Classifying one’s “best” customers
in this way allows an organisation to manage them more efficiently as a premium group, with the understanding
that it is neither necessary nor advisable to treat every customer in the exact same way.
One tool that a company can implement in pursuit of customer loyalty is personalisation. Personalisation software
tools generate real-time profiles for each customer using data from many sources including customer databases,
click stream data and transaction systems. The tool selects the best offer each time a particular customer shops
the company’s web site based on what it “knows” about that customer. As an individual accepts or declines an
offer, the personalisation engine builds this knowledge of the customer into his/her profile, making it available
for better-informed future offer. Personalisation is equally effective on business-to-business sites. Many consider
its greatest value as a navigational aide within sites that offer wide arrays of products, services and content. The
personalisation concept is a time saving mechanism that drives the advertising and content displayed on a web site
based on customer interest. Within the realm of personalisation, there are two types of software: rules-based and
collaborative filtering software:
Rules-based personalisation software

This software allows direct control of the type of sites shown to users. Companies structure the rules to reduce
the volume of available information down to digestible levels. Unfortunately, rules-based software is hard to scale
because rules require manual updating. On large web sites, this updating becomes unwieldy.
Collaborative filtering personalisation software

This software inspires browsing of sites and choices based on personal taste. For example, Amazon.com shows
purchasers of particular items sets of related items that other shoppers with similar shopping patterns have purchased.
This encourages increased sales activity and adds value for the customer by presenting items that they may not have
known would interest them. In business-to-business applications, personalisation software can show customers
pricing that reflect their own firm’s specifically negotiated rates and can prevent customers from being shown the
same advertisement over and over. In the first case, personalisation software overcomes the generic feel that many
web sites still have. In the second case, it eliminates the chance that a customer will feel harassed by unwanted
“spam”.
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More effective marketing

Having detailed customer information from an E-CRM system allows a company to predict the kind of products that
a customer is likely to buy as well as the timing of purchases. In the short to medium term, this information helps an
organisation create more effective and focused marketing/sales campaigns designed to attract the desired customer
audience. E-CRM allows for more targeted campaigns and tracking of campaign effectiveness. Customer data can
be analysed from multiple perspectives to discover which elements of a marketing campaign had the greatest impact
on sales and profitability. In addition, customer segmentation can improve marketing efforts. Grouping customers
according to their need similarities allows a company to effectively market specific products to members of the
targeted groups.
Improved customer service and support

An E-CRM system provides a single repository of customer information. This enables a company to serve customer
needs quickly and efficiently at all potential contact points, eliminating the customer’s frustrating and time-consuming
“hunt” for help. E-CRM-enabling technologies include search engines, live help, e-mail management, and news
feeds/content management and multi-language support. With an E-CRM system in place, a company can:
• more accurately receive, update and close orders remotely
• log materials, expenses and time associated with service orders
• view customer service agreements
• search for proven solutions and best practices
• subscribe to product-related information and software patches
• access knowledge tools useful in completing service orders
All of these expanded capabilities work together to keep the customer right where s/he belongs: at the center of the
company’s attention. Two key ways to improve customer service and support are through e-mail and direct mail
campaigns. A robust bulk e-mail management tool can help get offers to a wide range of prospective customers and
can customise how that offer is presented. However, highly targeted e-mail and direct mail approaches have much
better results. The right tools facilitate sending the right offers to the right customers at the right time. An additional
way to assist customers is through improved call center interaction. When customers dial in to a call center, they
expect superior service and timely results. ECRM call center technology helps manage call routing and tracking.
Service representatives are quickly provided with the information they need to troubleshoot and solve problems. In
addition, call center representatives generate orders that are immediately routed to fulfilment, providing an integrated
Greater efficiency and cost reduction

Data mining, which is the analysis of data for exploring possible relationships between sets of data, can save valuable
human resources. Integrating customer data into a single database allows marketing teams, sales forces, and other
departments within a company to share information and work toward common corporate objectives using the same
underlying statistics. Examples of this are identifying unproductive/underutilised resources, closer tracking of
costs, better forecasting for the pipeline and setting realistic project metrics and measurements to quantify return
on investment.
Pre-implementation considerations
Once a company has identified the need for E-CRM, it can begin to plan for implementation. The following focal
points should be considered at the pre-implementation phase. The basic framework for pre-implementation consisting
of business strategies, retooling business functions, process re-engineering, technology and training.
Developing customer focused business strategies

The objective of this step is not to try to mould the customer to the company’s goals but to listen to the customer and
try to create opportunities beneficial to each. It is important to offer customers what they are currently demanding and
anticipate what they are likely to demand in the future. This can be achieved by providing a variety of existing
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access channels for customers, such as e-mail, telephone and fax, and by preparing to provide for future access
channels such as wireless communication. Offering solutions rather than obstacles is possible when a company
empowers its customer service agents to “make it right, right away” and when customers have access to the latest
sales and promotions via their own communication channel of choice.
Retooling business functions

Starting to do business via E-CRM will require disruptive organisational change in order to determine which
departments/functions are truly servicing the customer and which ones are only adding to overhead. After identifying
and trimming redundant head-count, administrative time and cost should drop. A major factor here is that the changes
required during an E-CRM implementation will only be possible with buy-in from the top levels of management and
with company-wide accountability of all stakeholders. Positive organisational change will not simply materialise
on its own. It is the responsibility of senior management to ensure that all employees understand the necessity of
the changes, how the new structure will benefit them, and how it will enhance their ability to serve their customers.
Senior management must stress that E-CRM itself is only a tool. Armed with this tool, employees are the ones who
now have the power to build better customer relationships and even achieve higher levels of job satisfaction.
Work process re-engineering

The departmental role and responsibility changes from retooling business functions will necessitate adopting new
work processes. The choices here are to take the traditional step-wise approach or an integrated one toward improving
work efficiency. Under the step-wise approach, departments are treated as separate efficiency entities. This rarely
produces good results because the goals of each department can become too parochial, and departments tend to
compete internally for their own benefit at the expense of what’s best for the company. The integrated approach is
usually recommended. It tends to produce superior results because it recognises the interdependencies among the
company’s multiple functions/departments and how these create the larger perspective of the entire organisation. With
an integrated framework, hidden waste as well as opportunities for enhanced efficiency should reveal themselves.
Technology choices
The focus here is to consider the company’s industry, the company’s position within its industry, and which E-CRM
implementations are good candidates for the company in particular. Criteria for technology selections include:
• Scalability of software
• Tool set flexibility for customisation
• Stability of the existing e-crm application code
• Compatibility of e-crm application with legacy and internet systems
• Level of technical support available during and after implementation
• Upgradable support
• Availability of additional modules
• Security
We cannot stress enough that an in-depth analysis of the compatibility of the proposed E-CRM system with a
company’s existing ERP system is absolutely essential. Customer-facing applications must be coherently linked to
the transactions that they generate behind the scenes. Without integration of ERP and E-CRM systems, organisations
risk redundancy of data, increased response times and loss of customers due to delays and botched transactions. With
such integration, however, improved business intelligence is possible by capturing data at every point of customer
contact, from order-entry to fulfilment, via multiple media channels.
Training and preparation

This focal point is arguably the most important one in E-CRM implementation. Depending on the number of users,
training times will vary from company to company. Training of employees should occur before the new E-CRM
system has been implemented to ensure a seamless transition for customers. Examples of training include sending
users to training facilities at considerable cost or bringing in an on-site consultant. Anyone who requires access to
the system should receive full, appropriate and timely training. Training should be an ongoing, managed activity as
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systems must continuously change and evolves. All training and tools used should be thoroughly documented for
current, new and future employees. Without a documentation management scheme, the value of the E-CRM system
will degrade rapidly. A firm should plan to spend about 5%- 7% of its total E-CRM implementation on training.
7.4 Framework of E-CRM

Companies need to take firm initiatives on the E-CRM frontier to:
• Optimise the value of interactive relationship
• Enable the business to extend its personalised reach
• Coordinate marketing initiatives across are the customer channels
• Leverage customer information for more effective e-marketing and e-business
E-CRM must address customer optimisation along three dimensions. The three dimensions are:
• Acquisition: Increasing the number of customers
• Expansion: Increasing probability by encouraging customer to purchase more product and services
• Retention: Increasing the amount of time that customer stays
Today, although CRM is on top of firms priorities, there are many unclear points about its definition and role. In
order to fully understand these ambiguities, we should view CRM from a strategic and systematic approach, and
recognise the components of customer value. A conceptual framework with a strategic approach for E-CRM covers
definitions and functions of every part and also includes adaptation of the model to different firms which helps to
use E-CRM as a managerial strategic approach.
This framework is similar to porter value chain in shape and in having value adding activities. In porter value chain
two types of activities:
• Primary Activities (including inbound logistics, Operations, Outbound logistics, Marketing and sales, and after
sales service) and
• Supportive or Secondary Activities (including firm infrastructures, human resource management, R&D, and
procurement) run through a value chain that at last result in firm goal achievements and gaining of competitive
advantage.
Customising the framework for a customer centric approach we mention that the only thing that determines final
profitability of a firm is customer and its satisfaction and loyalty to the firm. So, all activities which help to this would
be value adding and vital to the firm success and position in the market. However, these CRM related activities could
not be effective without some supportive activities helping primary ones running parallel to them. In this framework,
similar to porter value chain, we have two types of activities: Primary and Supportive ones with the difference of
being customer centric and CRM related. As the company runs its primary activities of Customer Acquisition,
Retention and Expansion, it needs some supportive activities such as channel integration and information management.
Information management activities deal with customer database including three types of information: information of
the customer, information for the customer and information by the customer. An important point in the framework
is the initial phase which is Strategy Formation that should be considered before any CRM implementation.
Strategy formation
Before speaking about CRM technological issues, managers should consider CRM in the context of their overall
business strategies. This task needs a two dimensional emphasis:
• on business strategy and
• on customer strategy of the firm
The more these two dimensions are interrelated with each other, the more successful CRM strategy would be.
Through developing and reviewing business strategies, organisations identify their key capabilities and the way
they could transfer them as value to their customers.
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One important thing, while moving toward E-CRM, is existence of some deficient CRM processes. If these processes
become electronic and automated, firm won’t be successful in its CRM strategy. So before implementing technology
and having E-CRM, top managers should decide whether they should have BPR in their organisation or not. In
customer strategies, customer types and their categories would be identified. In this categorisation, customers may
be classified contradictory to their expectations and preferences, and be put to a category which is not correct from
their point of view. E-CRM provides the ability to have one-to-one relationship between firms and customers, satisfy
their expectations and solve this problem.
Multiple channel integration activity

One of key and strategic components for moving toward E-CRM is to develop a consolidated and relationship-based
strategy for existing channels (old ones) and web-based technologies (new and modern ones), that is designed to
enhance the relationships with customers (not only reducing costs). So, it can be mentioned that E-CRM is multiple
channels which get consolidated. If the goal of channels strategy is only cost reduction, undesirable effects will
appear. It should be considered that a scattered channel strategy leads to customers’ dissatisfaction, which eventually
abolishes the whole business. So channel strategy should:
• provide integration for all channels
• get integrated to use one customer-base
• answer this question: what kind of interaction, customers prefers to have with the firm.
• consider which channel is appropriate for what kind of customers and for what type of transactions
Strategy
Multiple Channel Integration Activity
Formation Direct Telephone, Wireless Web
Phase Mail Fax Technology Technology
Business
Supportive
Activities
Strategy Information Management activity(using analytical tools) Performance

Integrated web house
-vision Transaction, External Relationship and Feedback and Customer
- Competitive and Internal Data Reduce Data monitoring data
Satisfaction
characteristics
- Change
Information Information Information
management, of the for the by the
- EPR customer customer customer Customer
Loyalty
Customer Financial
strategy Performance
-C
ustomer
choice
-C
ustomer
characteristics
Competitive
-C
ustomer ID Customer Customer Customer Advantage
generation Acquisition Retention Expansion
-C
ustomer
expectation
Primary Activities
Fig. 7.1 Framework of E-CRM

(Source: http://www.irma-international.org/viewtitle/32888/)
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Generally, channel integration in E-CRM is in order to create a single view of customers. In traditional CRM, one
customer with two interaction channels is viewed as two different customers and so firms have a weaker interaction
with that customer. So, it could be concluded that the most important goal of channel strategy is to create a single
view of customers even if they use different channels to interact with the firm.
Information management activity

This process includes customer data collection from all touch points and omission of redundancies and using them
to create an up-to-date and complete profile of customers in order to enhance quality of interaction between firms
and customers. In this process some tools are very useful and should be used appropriately and in coordination with
each other. These are listed as below:
• Customers’ database: Customers’ information would be saved and maintained in an integrated and consolidated
Web House (which is a web based Data Warehouse) that could be accessed from all parts of a firm. Before
entering the web house, transformation process would be done on information to save the integration of WH
and to prevent the entrance of redundant information.
• Analytical tools: In order to use web house efficiently, several types of analytical applications like data mining,
Web Mining and OLAP would be implemented on these WHs. So, meaningful patterns and relations could be
extracted from customers’ interactions and behaviors.
• Customer acquisition:From a strategic point of view, all the primary activities for attracting customers like
advertising strategies and marketing efforts are for new customer acquisition and creating an image of firm brand
name. Now, if these activities are run through web, firms should do different sort of tasks to recognise customer
interests. Site visitor tracking and click stream data bases are some of activities which help to recognise customer
interests and then to offer better products or services to them. During customer acquisition, companies try to
convert Web site visitors and browsers into (hopefully repeat) buyers. Visualisation tools can play a key role
in product evaluation and selection at this stage. It’s very straightforward to say that companies must acquire
customers to make business. Even firms with high retention rates lose customers and thus must continuously
acquire new customers to stay in business.Because customer acquisition is a very expensive affair and because
the relationship developed during the acquisition phase strongly influences retention and add-on selling, it must
be carefully managed and evaluated.
• Customer retention:Even by ignoring the fact that the cost of a new customer acquisition is 5 times of retention
of an old one, yet retention and expansion is more important due to lack of sufficient information about new
customers. The goal of customer retention is to leverage customer acquisition investments. Because customer
acquisition is normally more expensive than retention, it makes sense to find ways and mechanisms to extend
the duration of the relationship between firm and customer. Of course the focus must be set mainly on the most
profitable customers.
• Customer expansion:In CRM, businesses invest their money on those customers which will bring the most value
for the firm. Customer expansion with focus on retention of the most value adding customers needs precise
strategies to do. In the expansion phase, core customers (the most valuable ones for the firms) actively participate
in the two-way interactions with the CRM and expand the CRM’s customer base by word-of-mouth marketing.
Feedback or suggestion from these core customers (by-the-customer information) may prove to be crucial for
the CRM to introduce new products, improve business processes, and satisfy customer needs.
Performance measurement and evaluation activity

In order to evaluate the performance, some criteria would be determined through e-CRM system design stage. These
criteria depend on different goals of serving customers and should be aligned with overall operational business criteria.
Here the focus is on two elements of performance: customer satisfaction and operational performance. In traditional
models, customers’ satisfaction is examined through survey and complaint system. Today, web technologies enable
e-CRM to get feedback from customers, immediately after interaction and in minimum time, even feedback could
be a part of interaction process. It is hoped that, customer satisfaction lead to customer loyalty which is another
criterion for measurement of performance.
In financial performance evaluation, the most important criterion is cost reduction, but it should not bother
customers’ value. Increasing revenues and value of stock are other criteria for financial performance. At last, all
these achievements besides increased market share and possession of windows of opportunities, cause firms to have
a competitive position in the market and gain competitive advantage.
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7.5 Key Features of E-CRM
There are several features of E-CRM listed below:
Driven by a data warehouse
In an E-CRM solution, the data warehouse or customer data mart contains a consolidated and comprehensive view of
the customer. The warehouse provides the broadest possible profile of the customer, needed to determine an appropriate
course of action, the most effective offer to make, and the best channel to deliver your pertinent message.
Focused on a multi-channel view of customer behavior

Organisations today have different methods for interacting with their customers. For example, a bank might use one
application to support its Web site, another to support its call center, another to support email, another to support
sales, another to support ATMs, and yet another to support direct mail and telemarketing. These applications, rarely,
if ever, talk to each other, precluding the sharing of information between channels and preventing meaningful
cross-channel dialogue with customers. For example, a call center agent may not be oblivious to a complaint that
a customer registered that day through email, nor would the agent be aware of customer behavior on the Web site.
To further complicate the problem, each touch-point application has its own terminology or ID numbers assigned
to offers available to customers. While it is a desirable goal to synchronise customer communications across
channels, disparate applications and the lack of standard identifiers for offers and messages makes it difficult to
track “who received what and when” and how they responded. In the end, companies have created an environment
with conflicting business processes for customer communications.
An E-CRM solution must have applications that coordinate or synchronise customer communications across channels
and do so in real time. These applications must be able to capture customer transactions across disparate touch
points and store that information in a temporary data store for immediate assessment and response. In addition,
these applications must also feed information captured from touch points into the data warehouse, to broaden the
customer profile obtained from back-end transactional systems and external sources.
Based on consistent metrics to assess customer actions across channels

Today, many companies spend millions of dollars communicating with customers, but spend little time and effort
determining the effectiveness of those campaigns. E-CRM provides the means to measure customer communications
efforts. E-CRM is a continuous and iterative process. It employs customer analytic tools to: project outcomes
of customer communications initiatives; capture results; attribute changes in customer behavior to a particular
communication; and assess those results to improve subsequent customer interactions and return on investment. The
disparities between customer touch-point systems can make the establishment of consistent metrics difficult. Thus,
cross-channel coordination becomes important for establishing a metrics baseline. Effective measurement enables
companies to target their customer investments in an optimal fashion across all channels.
• Built to accommodate the new market dynamics that place the customer in control.
• Structured to identify a customer’s profitability or profit potential, and to determine effective investment
allocation decisions accordingly
While a company can encourage customers to communicate through particular channels, the consumer ultimately
decides how and when he or she will contact the company and grants explicit permission about how the company
can communicate with him or her. Thus, an E-CRM strategy must deliver timely, pertinent messaging that a customer
or prospect will gladly accept. By adhering to opt-in, permission marketing, an E-CRM solution makes marketers
sensitive to when and how to communicate– i.e., email, wireless phones and many more. A customer may decide
to opt in or opt out of dialogue across a particular channel– particularly email. Therefore, an E-CRM strategy must
contain permission-based rules to avoid irritating customers. For example, a company must respect a customer’s
desire not to receive phone calls and determine other avenues to reach that individual. Even if a customer opts in to
receive, for instance, your weekly electronic newsletter, each outbound communication must possess an easy and
prominently displayed means that allows a customer to sever further communications.
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Scalable to meet growth and performance needs

E-CRM systems tend to quickly accumulate data, which is continuously manipulated by analytical tools to refine
marketing processes, messages and strategies. The difference between a “test environment” and real-world application
is often measured by scale and adaptability to dynamically changing situations. “Off-the-shelf” solutions may
implement quickly, but will crumble from rigid and proprietary limitations that preclude the integration of additional
functions and the ability to scale to meet future growth and dynamic business demands.
7.6 Achieving Customer Optimisation

Customer optimisation lies at the heart of E-CRM. It is obtained through a value exchange, in which a company
makes an investment in a customer interaction in exchange for some desired behavior. If a business wants a customer
to behave in a certain manner (buy more, stay longer, pay a higher price, transact through a different channel), that
business must make the appropriate investment in the relationship. Measurement determines the value of the exchange
and the degree of optimisation achieved. An E-CRM solution provides the methodology and software to acquire the
maximum value from customer relationships across every channel, over the life time of the relationship.
7.7 Six ‘E’s in E-CRM

The business types must address the six Es in E-CRM to optimise the value of relationship between companies and
their customers. They are:
• Electronic
• Enterprise
• Empowerment
• Economics
• Evaluation
• External Information
Electronic
New electronic channels such as the web and personalised e-messaging have become the medium for fast, interactive
and economic customer communications, challenging companies to keep pace with this increased velocity.
Enterprise
Through E-CRM, a company gains the means to touch and shape a customer’s experience across the entire
organisation, reaching beyond just the bounds of marketing to sales, services and corner offices whose occupants
need to understand and assess customer behaviour. It relies heavily on the construction and maintenance of a data
warehouse that provides consolidated, detailed views of individual customers, cross channel customer behaviour
and communications history.
Empowerment
E-CRM strategies must be structured to accommodate consumers, who now have the power to decide when and how
to communicate with the company and through which channel. With the ability to opt in and opt out; consumers decide
which firms earn the privilege. In light of this new consumer empowerment, an E-CRM solution must be structured
to deliver timely, pertinent, valuable information that a consumer accepts in exchange for his or her attention.
Economics
Too many companies execute customer communication strategies with little effort or ability to understand the
economics of customer relationships and channel delivery choices. Yet, customer economics drives smart asset
allocation decisions, directing dollars and efforts as individuals are likely to provide the greatest return on customer
communication initiatives.
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Evaluation
Understanding customer economics relies on a company’s ability to attribute customer behavior to marketing
programs, evaluate customer interactions along various customer touch point channels, and compare anticipated ROI
(Rate of Investment) against actual returns through customer analytic reporting. Evaluation of results allows companies
to continuously refine and improve efforts to optimise relationships between companies and their customers.
Eternal Information
The use of consumer sanctioned external information can be employed to further understand customer needs. This
information can be gained from such sources as third party information networks and web page profiler applications,
under the condition that companies adhere to strict consumer opt in rules and privacy concerns.
7.8 E-CRM Applications

The following is a set of E-CRM capabilities that collectively comprise a full E- CRM solution:
Customer analytic software predicts, measures, and interprets customer behaviors, allowing companies to understand
the effectiveness of E-CRM efforts across both inbound and out-bound channels. Analytics provide a set of E-CRM
metrics that describe the state of your customers across the enterprise. Customer analytic software, and its reports,
can be used by virtually anyone across the organisation, from marketers and salespeople to corner-office executives.
Ideally, analytics should be delivered as a packaged, but extensible application that uses a set of industry-specific
data models and reports. This packaging will help companies implement solutions quickly and limit risk. Most
importantly, customer analytics should integrate with customer-communications software to enable companies to
transform customer findings into ROI-producing initiatives.
Data mining software builds predictive models to identify customers most likely to perform a particular behavior
such as purchase an upgrade or churn from the company. Modeling must be tightly integrated with campaign
management software to keep pace with multiple campaigns running daily or weekly. For example, a marketer might
select a propensity model from an existing library to dynamically “score” individuals within an already defined
customer segment. He or she might then select individuals with scores above a certain threshold to include in an
up-sell campaign. This segment-selection process improves response rates and campaign effectiveness and lowers
campaign costs by reducing the size of the original target segment.
Campaign management software leverages the data warehouse to plan and execute multiple, highly targeted campaigns
over time, using triggers that respond to timed events and customer behavior. For example, a retail campaign may
present a high-profit customer with a gift on her birthday or send an email promoting various specials if the customer
has been silent for three months. Campaign management software tests various offers against control groups, captures
promotion history for each customer and prospect, and produces output for virtually any online or offline customer
touch-point channel, such as personalised e-messaging, call centers, branch offices, direct-mail houses and ATMs.
Business simulation, used in conjunction with campaign management software, optimises offers, messaging and
channel delivery prior to the execution of campaigns, and compares planned costs and ROI projections with actual
results.
A personalised e-messaging system should deliver either text or HTML pages, scale to support very high volumes,
have an automated mechanism to answer responses, and drive recipients to Web pages through traceable URLs
embedded within messages. For example, a company might include three traceable URLs within a particular email
and be able to monitor success at driving an individual customer or prospect to one, two, or all three sites, and in
which order.
A real-time decisioning engine coordinates and synchronises communications across disparate customer touch-point
systems. It contains business intelligence to determine and communicate the most appropriate message, offer, and
channel delivery in real time, and support two-way dialogue with the customer. Its decisioning powers assess both
a customer’s activity at the touch points (that is, Web, email or customer care) in conjunction with the profile of
that customer stored in a data warehouse. With this information, it responds to an inbound message, selecting from
any number of staged offers or messages. For example, the decisioning engine might inform a Web personalisation
product of the best offer to present to a Web visitor in real time. Business rules determine responses. For example, if
a visitor searches a Web site for its mutual funds, a rule might require a sales representative to wait one day before
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contacting that individual. Finally, companies must look to software devices that capture customer behavior at any
touch point for assessment of customer communications.
7.9 Similarities Between CRM and E-CRM

As the customer relationship revolution moves on, companies are willing to find better ways in dealing with customers.
CRM and E-CRM offer these opportunities to provide value added relationships. The tables below identify some of
the CRM and E-CRM similarities. It is important for a company to review their business model and then choose the
direction of traditional CRM or the E-CRM. Following table shows the similarites between CRM and E-CRM.
Characteristics CRM and E-CRM

Objective They make the companies closer to the customers.
Level of They provide the best interaction between marketing, sales,

interaction service and support.
They eliminate and reduce the disconnections between

Usage
customer and company relationships.
They both improve upon reality and perception of

Focus
personalisation.
Mail, telephone or in person or the common customer touch

Media
points.
Table 7.1 Similarities between CRM and E-CRM

(Source: http://mu.ac.in/myweb_test/MCA%20study%20material/CRM%20-%20PDF.pdf)
7.10 Differences Between CRM and E-CRM

The differences between CRM and E-CRM is discussed in the following table:
Characteristics CRM E-CRM

It is a business strategy for It is an extension, which includes
Strategy acquiring and maintaining the the electronic channel also along
right customer. with the traditional channel of CRM.
Customer touch points or Includes web enabled touch points
Customer Touch Points contacts are through mail, and fully integrates with the other
telephone or in person. traditional touch points.
This is the manual process where This is the menu based interaction
the human beings will handle the where the customers will interact
Process
customers and the interaction will through the applications. This
be direct. communication is indirect.
This is company centric This is customer centric mechanism
mechanism where the company where the customers and their
Priority of Goals
objectives and the growth will satisfaction will have highest
have highest priority. priority.
Emotional dealings will be
Emotional dealings will be less.
more because the human beings
Because the machines and the
handle the customers. The human
Emotional Dealings applications cannot express their
frustrations or the multiple
emotions. The relationship will be
dealings at the same time can
stable.
affect the customer. relationship.
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Single transaction at a time.
Because the human being can
Multiple transactions at the same
interact with only one customer
time. Many customers can log on
at a time. Due to this reason the
Nature of Transaction at the same time and can enter into
company may lose the customers
the dealings with the organisation
because of the time delay or the
without any confusion.
frustrations or may create errors
in the dealings.
Multi mode communication. All the
touch points are accessed and the
Mode of Communication Single mode communication
information will go to the same data
repository.
Data Repository Multiple data repository Single data repository
Manpower requirement is very
Manpower requirement is more
less and the technical browsers,
Man Power and the technical requirement is
applications, DBMS requirements
less.
will be more.
Customer data is used for review
purpose. The data will be analysed
Customer data is maintained only and the further sales pattern will
Data Pooling as a history, which is not utilised be based on the existing data. The
as a customer intelligence base. algorithms will analyse the data and
the sales models will be prepared
automatically.
The transaction is limited by The transaction can happen at any
Constraints
time, geographical factors time from anywhere in any way.
Emphasis on customer care and Emphasis on integration and better
Emphasis
customer satisfaction customer integration.
Helps in calculating Return on
Return on Investment is generally
Return on Investment Investment using customer lifetime
difficult to calculate.
value
Less number of campaigns More number of campaigns
Number of Campaigns
possible possible.
Table 7.2 Difference between CRM and E-CRM

(Source: http://mu.ac.in/myweb_test/MCA%20study%2C0material/CRM%20-%20PDF.pdf)
7.11 Components of E-CRM

Following are the components of E-CRM:
E-CRM assessment
It is very important to devise numerical measures of how a company measures up in the eyes of the customers with
respect to its competitors. An E-CRM capability index is devised which provides a benchmark for cross company
comparison. Based on these results, a company identifies quick hits, which can be immediately implemented to
improve business processes; impact the bottom line and future enhance its understanding of its customer’s view of
the company.
E-CRM strategy alignment

Each company must identify measures and align to the gaps that exist between customer expectation already measured
in the E-CRM assessment stage and the internal capabilities that serve these customer expectations.
E-CRM architecture
During this stage, the company will try and develop a CEA (Connected Enterprise Architecture) within the contest
of the company’s own customer relationship management strategy.
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The following is a set of technical E-CRM capabilities and applications that collectively and ideally comprise a
full E-CRM solution.
• Customer analytic software: It should integrate with customer communications software to enable companies
to transform customer findings into ROI (Return on Investment) producing initiatives.
• Data mining software: The predictive modeling it does must be tightly integrated with campaign management
software to keep pace with multiple campaigns running daily or weekly.
• Campaign management software: This software tests various offers against control groups, capture promotion
history for each customer and prospect and produces output for virtually any online or offline customer touch
point channel.
• Business simulation: It is used in conjunction with Campaign Management Software, optimises offer, messaging
and channel delivery prior to the execution of campaign and compares planned costs and ROI projections with
actual result.
• Real time decision engine: It coordinates and synchronises communications across duplicate customer touch
points system. It contains business intelligence to determine and communicate the most appropriate message
offer and channel delivery in real time and support two-way dialogue with the customer.
7.12 Major ECRM Pitfalls and ways to Avoid them

In an attempt to quickly implement ECRM, too many companies start spending money before developing a
comprehensive ECRM strategy. A research study indicated that 57% of companies surveyed could not justify
investment in customer service programs due to the difficulty in measuring their impact on profitability. Two
out of five respondents said that their CRM projects are either “experiencing difficulty” or are “potential flops,”
according to a Data Warehousing Institute survey. These points echo a warning from experts like that, in spite of
their popularity; most CRM projects do not result in measurable benefits. In a typical CRM implementation, 28%
of the total cost goes to buying software, and 38% of the cost goes to services such as software customisations,
application integration and training. In order to justify the millions of dollars needed to successfully implement a
CRM system, the firm’s decision-makers must of identify and define their corporate strategy in order to see positive
returns for their investment. The following list outlines potential pitfalls with E-CRM implementation and how to
avoid them:
• Mismatch between a company and the vendor’s CRM software. Every effort must be made to find a vendor
whose product is flexible enough to emulate the company’s best practices and does not force the company to
adopt the vendor’s best practices. Realistically, no single software solution will handle all E-CRM needs equally
well. Therefore, each company should select the solution that best handles the critical customer-facing functions
and maintains robust links to the existing ERP system.
• A poor understanding of the company’s business processes. Each of the business processes should be reviewed,
analysed and documented before shopping for a vendor.
• E-CRM implementations that take more than 90 days have a high failure rate. A company should be sceptical
about implementations that are considerably longer than 90 days.
• Vendor stability should be a criteria used in selection. Check the financial stability of the vendor to assess
whether or not it is likely to be able to survive a softening economy.
• Rejection by end users always is a possibility when business functions are retooled. If the new processes required
for a successful E-CRM implementation are not developed with the knowledge, help and acceptance of the
employees who will be relied upon to use them, the project is doomed.
• Size of project: Some E-CRM implementations have failed because their initial scope was too broad. In light
of the state of the American economy in the fall of 2001, it would be prudent to start small with a pilot ECRM
implementation. The risk associated with a failed pilot is much lower than for a full rollout, and it gives your
company the opportunity to evaluate the positives and negatives of the pilot as you plan for a larger scale
implementation. Unfortunately, avoiding these “pitfalls” is, in many cases, easier said than done. Often this is
because sales and marketing teams are reluctant to adopt the new, automated CRM systems. Considering that
companies are investing up to $70 million in a CRM launch and millions more during rollout, CIO’s need to
both refrain from being seduced by vendor hype and to work closely with top management to ensure successful
implementations.
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7.13 Trends in ECRM
Recent developments in the field of E-CRM include a CRM package evaluation/procurement service, hosting of
CRM component applications and the use of Online Analytical Processing (OLAP) tools to develop Customer
Intelligence in order to enhance the effectiveness of E-CRM.
• CRM package evaluation/procurement service: ITenol is a California start-up Company that offers a service
called CRM Solution Acquisition Manager for automating the stages involved in choosing and implementing
a CRM package. All phases are covered, from defining a company’s requirements and evaluating vendors to
negotiating contracts and generating purchase orders. Once the service is set up, users collaborate to specify
business objectives and generate a request for proposal (RFP). ITenol contacts vendors when an RFP is available
and vendor reps can collaborate online in response. The service is free of charge to CRM vendors. Once a
company has purchased a CRM package, ITenol supplies web-accessible project management tools to help the
company install the software.
• Hosted CRM component applications: The market for hosting of fully-fledged E-CRM solutions is in decline,
partly because of the current economic climate and partly because the levels of customisation demanded by client
businesses to meet their particular needs are too complicated to provide in a packaged solution. Nevertheless, the
market for hosted CRM component applications, such as a hosted package from Satmetrix for gauging customer
satisfaction, is faring better. The level of investment required is much lower, yet the hosted applications do
provide added value to the client companies.
• Customer intelligence (CI): Integration of a company’s legacy systems, especially ERP system, with E-CRM
functionality is critical to the success of any E-CRM implementation. Taking this one step further, Customer
Intelligence focuses on applying the insights derived from customer analysis to E-CRM strategies, and then
acting upon these strategies to build value into customer relationships. The CI enabling technologies must be
tightly integrated with the ERP and E-CRM solutions in order to provide near-real-time data access and analysis.
OLAP tools, available from companies are the core enabling technologies that make the advanced analytics
required by Customer Intelligence possible. OLAP software enables the predictive modeling, data mining
and data visualisation that are needed to uncover hidden relationships in customer data that hold the keys to
understanding customer behavior and determining customer value.
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Summary
• The fact that customer service ranks near the bottom of the list of reasons due to purchase on-line suggests that
customers are willing to trade off better levels of “off-line” service for the convenience afforded by on-line
purchasing.
• E-CRM provides companies with a means to conduct interactive, personalised and relevant communications
with customers across both electronic and traditional channels.
• The trust of E-CRM is not what an organisation is doing on the web but how fully an organisation ties its online
channel back to its traditional channel or customer touch points.
• Contemporary customers facing traditional systems such as sales force automation and customer care often
have their own data models and data stores that manage only the information that their application requires and
generates.
• Information captured by an E-CRM system helps a company to identify the actual costs of winning and retaining
individual customers.
• The personalisation concept is a time saving mechanism that drives the advertising and content displayed on a
web site based on customer interest.
• Within the realm of personalisation, there are two types of software: rules-based and collaborative filtering
software.
• Call center representatives generate orders that are immediately routed to fulfilment, providing an integrated
• The basic framework for pre-implementation consists of business strategies, retooling business functions, process
re-engineering, technology and training.
• It is the responsibility of senior management to ensure that all employees understand the necessity of the changes,
how the new structure will benefit them, and how it will enhance their ability to serve their customers.
• Customer-facing applications must be coherently linked to the transactions that they generate behind the
scenes.
• Without integration of ERP and E-CRM systems, organisations risk redundancy of data, increased response
times and loss of customers due to delays and botched transactions.
• An important point in the framework is the initial phase which is Strategy Formation that should be considered
before any CRM implementation.
• Through developing and reviewing business strategies, organisations identify their key capabilities and the way
they could transfer them as value to their customers.
• “Off-the-shelf” solutions may implement quickly, but will crumble from rigid and proprietary limitations that
preclude the integration of additional functions and the ability to scale to meet future growth and dynamic
business demands.
References
• Schust, P., 2008. eCRM: Using the internet for customer relationship management at the TQU Academy
• Fjermestad, J. & Romano, N., 2006. Electronic Customer Relationship Management, M.E. Sharpe
• Introduction to CRM [Pdf] Available at: <http://mu.ac.in/myweb_test/MCA%20study%20material/CRM%20
-%20PDF.pdf> [Accessed 21 December 2012].
• E-CRM [Online] Available at: <http://www.scribd.com/doc/51517159/ecrm> [Accessed 21 December 2012].
• Softland E-CRM [Video online] Available at: < http://www.youtube.com/watch?v=NS2BGDTzbFY> [Accessed
21 December 2012].
• ECRM Connect [Video online] Available at: < http://www.youtube.com/watch?v=4rafVfZIctw> [Accessed 21
December 2012].
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Recommended Reading
• Dyche, J., 2002. The CRM Handbook: A Business Guide to Customer Relationship Management, 1st ed.,
Addison-Wesley Professional.
• Bakeer, R. & Harb, Y., 2010. E-Marketing and E-CRM: Theories and Case studies, Lambert Academic
Publishing.
• Tiwana, A., 2000. The Essential Guide to Knowledge Management: E-Business and CRM Applications.
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Self Assessment
1. _______ synchronises communications across otherwise disjointed customer facing systems.
a. CRM
b. Customers
c. E-CRM
d. Project planning
2. Personalisation software tools generate ___________ profiles for each customer using data from many sources
including customer databases, click stream data and transaction systems.
a. real-time
b. customer
c. artificial
d. online
3. The CRM offerings remain _______ centric.

a. ECRM
b. profit
c. customer
d. channel
4. ____________________ tests various offers against control groups, captures promotion history for each customer
and prospect, and produces output for virtually any online or offline customer touch-point channel.
a. Campaign management software
b. Customer analytic software
c. Business simulation
d. Real time decision engine
5. Understanding customer economics relies on a ___________ ability to attribute customer behavior to marketing
programs, evaluate customer interactions along various customer touch point channels, and compare anticipated
ROI.
a. customer’s
b. company’s
c. software
d. hardware

a. Contemporary customers facing traditional systems such as sales force automation and customer care often
have their own data models and data stores that manage only the information that their application requires
and generates.
b. Collaborative filtering personalisation software inspires browsing of sites and choices based on personal
taste.
c. Rules-based software is quite easy to scale because rules do not require manual updating.
d. ECRM allows for more targeted campaigns and tracking of campaign effectiveness.
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7. Two key ways to improve customer service and support are through e-mail and _____________ campaigns.
a. customer facility
b. direct mail
c. call center
d. help centers

1. Primary Activities A. Promotional offers
2. Data mining B. Outbound logistics
3. Secondary C. The analysis of data for exploring possible

Activities relationships between sets of data
4. ECRM D. Firm infrastructures

a. 1-D, 2-C, 3-A, 4-B
b. 1-B, 2-C, 3-D, 4-A
c. 1-A, 2-D, 3-B, 4-C
d. 1-C, 2-A, 3-B, 4-D
9. New electronic channels such as the web and _____________have become the medium for fast, interactive and
economic customer communications.
a. mailing system
b. e-mail
c. data mining
d. personalised e-messaging
10. ECRM call center technology helps manage ______________ and tracking.
a. call routing
b. call transferring
c. customer help
d. customer service
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Chapter VIII
Implementing CRM
Aim
• explicate importance of the implementation of CRM
• explain the factors affecting CRM implementation
• elucidate the success factors of CRM
Objectives
• enlist the factors that lead to CRM failure
• explicate the CRM implementation challenges
• explain CRM implementation phases
Learning outcome
• describe the characterstics of good CRM implementation
• understand E-CRM implementation challenges
• identify the steps in implementing CRM
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8.1 Introduction
Successful CRM system implementation is critical for ensuring that the recipient organisation receives the features
and resources required to succeed. Staying involved ensures the organisation receives the product and services
expected. Without careful focus on implementation, the resulting CRM system can vary widely from the organisation’s
expectations set during the initial selection of the software. The result can be that your CRM users will lack the
features or training required to make effective use of the system, as well as potential timeline and cost overruns.
This can lead to a solution that feels more like an expensive mistake than a useful tool for the organisation.
The following are the main points to be considered before implementing CRM:
When does a CRM system make sense?
The crucial question of when to acquire some type of CRM has been made much easier by the explosion of low-
cost hosted software options. While this is not the time to discuss the value of SaaS (software as a service), the
ability to pay a few dollars per month per user for hosted CRM software greatly reduces the costs of a quality CRM
application.
Where to host the software?

Today, CRM software runs on platforms ranging from a single computer to a company network server to a company
Web server to a third-party hosting provider. The distributed nature of modern small businesses demands a networked
solution, not one designed for a single user. Sales managers need oversight of all salespeople, and only networked
CRM makes that possible.
Evaluating CRM candidates

Talk to other small businesses, in your market segment and in other segments. Finding a hosted CRM application
takes almost no effort, but choosing among multiple candidates does require some testing.
Accepting the CRM workflow

Sales people will complain the CRM software doesn’t work the way they like to work. This is, almost always, a
good thing. CRM vendors like us take feedback from all customers into consideration when we upgrade software.
You are receiving a pre-built “best practices” sales cycle framework with each CRM application.
User and manager adoption

A successful CRM implementation must be used by everyone involved in the sales process to provide customer
contact consistency and full management oversight. Only by complete compliance will the company benefit from
an automated sales and customer tracking application.
8.2 Characteristics of a Good CRM Implementation

Traditionally CRM or Customer Relationship Management software is used for organising contacts and contact
profiles. However, the business world has changed and a good CRM needs to go way beyond organising your
contacts and more into offering intuitive digital marketing features.
When looking for a CRM for your business look beyond contact management and be sure the system you chose will
allow you to assess how best to market to your contacts, be sure it has social monitoring, analytics for behaviors and
sales performance. You’ll want a CRM to centralise all your communication, manage your marketing campaigns,
document and collaboration management and ideally include lead generation. It’s not a small task, but the good
ones will have most of this.
There are many CRM options available including custom builds, but most are out-of-a-box, a one-size fits all or
“download and go” solution. So how do you shift through all the providers and find what is right for growing your
business?
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Here are a few high-level thoughts that will be helpful.

• Web-based: With web or cloud-based software the provider will host the service for your company. This is helpful
because it keeps your costs down by not needing to invest in additional hardware and when updates need to be
made it is simply taken care of for you through the provider. It’s more accessible and more secure than proprietary
hosting. No natural calamities can destroy the cloud and there are usually multiple backup options.
• On-site customisation: A good CRM design has taken this into consideration and will at least allow additional
and custom fields, allow you to create tags for grouping contacts. Most offer standard reporting, but you’ll
want to have the option to run custom reports based on a project need and for deeper analysis including contact
behavior reporting.
• Scalability: We need a CRM that will fit your business now and in 5 years or beyond. We look for flexibility
with the system, endless numbers of contacts and file storage, easy integrations, internal team collaboration and
marketing campaign management features. The provider you choose will need to be your IT partner, who will
grow with you and help you to meet your needs as they arise. The investment of training your employees to use
specific software can be challenging, so find the right fit for now and for down-the-road.
• Easy integration: Most CRMs are standalone and can take ample funds and resources to integrate with your
existing site, lead generation “hooks”, and other customer facing systems. A CRM should follow your business
and workflow, not the other way around. The more closely intertwined the CRM is with your technology, the
better.
• Social monitoring: It’s hard to believe, but there are many providers who are still not offering social monitoring.
This will eliminate a slew of candidates on your list quickly because this feature is a must.
Social media has changed everything! Social monitoring is quick and at-a-glance it helps your business to “listen”
to a contacts social media activity and determine how best to engage with them. It’s a powerful tool that weeds
through the internet chatter, gives you a single screen glance at a contacts activity and enables you to understand
a contact’s preferences, needs and sentiments before reaching-out to them. You can then attach that information to
their profile for future marketing.
The other value in social monitoring is to keep a pulse on what the web is saying about you and the competition.
Listen into what the competitions’ customers are saying about them and you may be able to pick-up a few unhappy
clients.
• Lead generation: Lead generation is one feature that wouldn’t be a requirement for CRM, but it is certainly a
business builder and a tool every business needs. There are a few CRM’s who have integrated lead generation
tools and are able to offer an all encompassing front-end and back-end marketing platform. Lead generation
tools are built into your website to assist with elevating your site’s “searchability“, capturing visitor information
and to build and manage your lead pipeline.
• Affordable: Your budget obviously will directionally dictate where you look for a CRM, but it’s not necessary
to spend 10’s or 100’s of thousands of dollars on a custom build. You can get something that’s built around your
business for a mere fraction of the cost.
8.3 Factors Affecting CRM Implementation

While factors which affect CRM success are generally company specific and always related to the overall CRM strategy,
factors which contribute to CRM failure apply to most organisations and can be viewed more universally.
• Lack of business cohesion or a lack of understanding of the business will often cause CRM implementation
failure. Without a clear CRM strategy, understanding of the business model or clearly defined business practices,
a CRM implementation will be an uphill fight and likely fail.
• Organisations that believe CRM software is Customer Relationship Management are not going to achieve
CRM. It must be recognised early that CRM software is merely an enabler to achieve CRM and while two are
related, they are separate.
• Poor planning or project management will not only contribute to a CRM implementation failure, but also often
result in staff embarrassment and job loss.
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• All employees must believe in the CRM strategy and the supporting program and software. They must be
educated in order to buy-in to the CRM implementation and utilisation. If not, user adoption will be a major
challenge and tasks such as software customisation will be based on either incomplete or erroneous information.
Time frames will not be adhered to and training will not be affective. At best, the implementation will take far
longer than planned and costs will be excessive.
• An unstable or insecure hardware and network platform is likely to challenge system integrity and can often
impose political risk that kills a project. Software as a service (SAAS) solutions typically mediate this risk and
this function is outsourced to the hosting provider.
• A contributing reason to CRM implementation failures is when the implementation becomes overly disruptive
to the organisation’s daily business practices. There is a fine balance between dedicating the necessary time and
resources to a new project and showing results.
• Choosing the wrong CRM provider will often end up in implementation failure. If a provider is chosen that is
too expensive, lacks expertise, cannot understand your business model and or cannot train employees properly–
the CRM implementation will be a failure. It may never actually get off the ground. Sometimes it can also boil
down to personalities. Some providers are so enamoured with their solution that they do not spend enough focus
on the business needs of the company involved.
• One of the benefits of a CRM implementation is that executives gain visibility and a clear understanding of the
company’s actual business practices. What they also get is a real look at their customer relationships. Failure
to achieve these basic objectives will render the CRM software application worthless.
• Data capture must be easy and system ease of use must exist. Many CRM implementations fail due to over-
complicating and over customising the system.
• An unsuccessful data conversion can impose strains on the new CRM system. Existing data need to be converted
or migrated into the new CRM solution. Depending upon the architecture of the database and data quality, this
can cause technical difficulties or pitfalls and is something that needs to be known ahead of time and prepared
for. If this is not addressed immediately, it can cause significant cost and time over runs.
8.4 CRM Implementation Challenges

Today, sophisticated enterprise CRM systems can share all that information across the globe with a couple of clicks.
Actually, global CRM implementations include all the challenges and complexities of a single location and then
increase risk exponentially with each additional location and its associated variables and issues. Careful planning
is the key to any successful software implementation - and absolutely critical in multiple site projects. In a global
CRM implementation, knowing what’s ahead and the challenges that have confronted others before you is critical
to achieving the end goal. Many CRM projects focus on methodology and logistics. This article addresses some
common lessons learned that are often overlooked.
Language barriers should not be taken too lightly. It’s true that in the modern world you can find many team
members with multi-lingual skills. However, there is no substituting for native speakers in an experienced project
team. Language nuances and colloquialism can lead to miscommunications and unintended consequences. However,
team communications is just one of the language challenges. Many countries and regions have laws that require any
software to be translated in the native language where it is being used. Even if there are no legal or user requirements
for software localisation, customer facing applications such as portals or transaction documents such as quotes,
invoices and marketing collaterals should be localised to be effective. Though there are many services and software
systems that provide localisation, project teams need to make sure user interfaces, help documentation and training
materials are properly translated and user tested.
Language is just another manifestation of a culture. When implementing a CRM system abroad, cultural differences
may be subtle in some areas and starkly contrasted in others. Multi-cultural teams, whether virtual or on site, have to
learn to deal with different body languages, different cultural values and different work habits. What is considered a
innocent greeting touch or motion in one country can be an inappropriate or insulting gesture in another. Likewise,
work culture can often set misinterpreted expectations. In many European countries, workers are required to have 25
vacation days. On the other hand, in China, employees often work on Saturdays. In Scandinavian countries, during
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the summer, staff members often show up for work in the wee hours of the morning so they can leave at 3:00 PM to
enjoy the extended daylight. Latin America workers may routinely not show up before 9:00 or 10:00 AM. Global
project team members not from these regions may feel that their colleagues are slacking. Planning the project around
various national holidays, vacations, work day differences, and other cultural challenges is a constant challenge for
a project manager but critical to the success of a multi-national CRM implementation.
Cultural differences can also affect other factors of a software implementation, such as data collection. In some
countries, customers are reticent to provide specific information, including addresses and phone numbers. This is a
major challenge especially for CRM systems, which strive to be the customer system of record and deliver a 360º
view of the customer relationship. Even when you do have the right information, some governments do not allow
you to use that information in specific ways, such as email or telemarketing.
This brings us to regulatory compliance and local laws. In the last few years, many countries have adopted new data
retention and privacy laws to protect their citizens from the increasingly sophisticated and incredibly annoying global
marketing engine. In Germany, companies must institute a double opt-in mechanism for any marketing activities,
not just email. Even if the customer requests information from the company, the business is required to obtain a
confirmation that the customer does indeed want to be contacted. The US Can-Spam Act is somewhat less strict
but thirty-seven states have instituted their own more rigorous versions of this legislation. There are also varying
disclosure requirements, if customer data becomes compromised, with severe penalties if not adhered to.
In most global CRM software implementations, one of the first questions users will ask is how fast the system runs.
Remote systems delivery from headquarters or a shared services location, and even software as a service (SaaS)
CRM systems, can have severe performance issues in certain countries and regions of the world. This is where data
centre delivery, software architecture and implementation strategies all play a critical role. Getting answers to user
questions that will impact system performance is important.
If your global CRM implementation is confined within a continent or region, multiple site hosting may not be an issue.
If your offices are all connected via a high bandwidth VPN tunnel, your performance may be acceptable. However,
if your offices are spread across multiple continents, tools such as accelerators and enhanced VPN solutions may be
required. The question of latency is a real one, even with today’s web accelerator and caching technologies. There
are solutions out there, but they depend on the unique needs of each implementation.
CRM system performance will also be affected by the IT infrastructure in the individual offices. If the building
is old, it is likely the wiring is also old. Does the office have access to high speed internet? How many ‘hops’ are
required before the Internet connection gets to its destination? How old are the desktops? What other systems are
competing for bandwidth? In some cases, infrastructure can be tied to culture. In China, where hardware is more
expensive than labor, local management may be more willing to hire more workers than invest in faster machines
or better networks. The opposite is true in the U.S., where employees are challenged to manage more and more
work using faster and better systems. Convincing one group to invest in one or the other to optimise their CRM
implementation will be a change management challenge that needs to be addressed early.
Information security is another one of those hot buttons in a global CRM system implementation. In some regions,
data encryption and simple security permissions may be enough to protect your valuable information. Other global
regions are not capable or permitted to encrypt data at levels routinely used in the U.S. And in other parts of the
world, technology safeguards are not enough to combat virulent industrial espionage and outright theft. Your data may
not be safe even from the local or national government. A data management strategy has to be carefully considered.
How much information can you allow your local sales team to have? How likely are they to take the information to
a competitor? Small steps such as not allowing a list view of a search result to be downloaded, or even limiting the
search results to 3-5 records per page or a maximum number of records in total, can go a long way to prevention.
Some companies in select countries even prohibit printing from the system.
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8.5 Key Challenges in CRM Implementation
Following are the challenges in CRM implementation:
Defining clear objectives
The organisation 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, and many more. 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.
8.6 Steps to Implementing CRM

Following are the steps to implementing CRM:
• It may be necessary to use your suppliers’ consultants to make any changes or modify the system in order to
meet your exact requirements.
• Depending on the system, you may either have to install the software on the main server and potentially a copy
on remote users’ laptops. For example, if you have mobile sales people they may need to access the CRM data
while on the move.
• Make sure that you have a capable administrator trained, who can add new users and give access to the relevant
personnel. Likewise you may want some people to be able to access information but not to make any changes
to it. For example, while it may be necessary for sales people to access the system, you may not want them to
be able to change any information unless it is their own customers.
• If the organisation has someone who is responsible for personnel matters, they should be kept involved with
all of the processes and procedures.
• Only certain senior level personnel should have access to view the all modules as you don’t want everyone to
be able to see confidential information.
• User training is simply to ensure that everyone is comfortable with the CRM package and to help them set it
up in order to meet their requirements.
• Communicate to all users and put a policy in place that ensures that the system is used and updated on a daily
basis.
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“A CRM strategy cannot be developed in isolation. It must be relevant and linked to the overall corporate strategy,
and it must build on existing sales or marketing strategies that are already in use,” said Ed Thompson, Vice President
and distinguished analyst at Gartner, in a statement."
Following three steps will provide a solid framework for CRM success:
Set the destination
The CRM strategy should focus solely on reaching the intended destination, which is derived from the vision of
the company and the goals derived from this vision. Interestingly enough, this vision is heavily dependent on the
leadership of the company and on the selected CRM solutions.
“Ensure that the CRM vision is to articulate the future environment for the organisation in terms of profitability
and customer experience,” said Thompson. “During the initial stages of the CRM initiative - while the CRM vision
and strategy are being developed - the leadership and governance structure must be agreed upon and roles allocated
before it is stressed by the impact of change management upon employees.”
Audit the current situation

When assessing the starting point, all skills, resources, competitors, partners and customers need to be consulted.
Organisations need to identify how mature their existing approach to CRM solutions is before beginning the CRM
initiative. Most organisations have attempted some sort of CRM solutions in the past and even if the initiative was
considered a failure, foundations can generally be identified within the past program that can be leveraged for value
instead of ignored.
“Use the audit to evaluate the organisation against equivalent organisations in the same or a similar industry,”
Thompson said. “A competitive benchmark is an excellent way to gauge how far behind or ahead the organisation is
in comparison. Along with these two approaches, there are many other types of audit. Ultimately, companies should
use as many of these assessment types as possible to prepare for the development of the CRM strategy.”
Map the journey

Flexibility is important as the journey can take a number of years and can change en route. Establishing a plan before
starting the process provides a roadmap to keep the project focused on the end goal. An effective CRM strategy
and selected CRM solutions will explain how an organisation will achieve their CRM vision as it is the integrated
blueprint for how the organisation will achieve its sales, marketing and customer service goals. The CRM strategy
will answer such questions as: What is the ideal customer base? What products or services is it going to sell, to
whom, at what price and through which channels?
The strategy must also be able to give subjective answers to more-holistic, organisation-wide questions,
including:
• What is the best way to build customer loyalty?
• How will the organisation connect with a customer to create a positive “gut feel”?
• What will drive customers to recommend the organisation, brand and products to others more often to the point
that they are willing to pay a premium price?
“Setting the destination, auditing the current situation and mapping the journey is an iterative process that may
require several revisions before a final CRM strategy is developed,” Mr. Thompson said. “The challenge is to avoid
rushing the development process, as the company may be committed to many years of change.”
8.7 CRM Implementation Phases

Most industry consultants believe that CRM software implementation is as much art as it is science. In science,
consistent input and efforts can accurately predict and replicate the outcomes of predefined actions and events. In
art, however, we model the best representation or expression based on the variables and diverse conditions at the
time. The outcome is uncertain for we often make adjustments and adapt to new ideas, new information or new
human capital as we make progress.
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Like our prior discussions regarding HR software, and CRM software selection projects should follow a strategic
approach and disciplined process in order to maximise the likelihood of successful outcome. The following software
selection phases illustrate a proven approach used by many consulting firms.
Phase I: Planning
The implementation planning phase should begin with the end in clear sight. Quality project plans start with
proven implementation methodologies and project management best practices. For instance, project plan tasks
should not consume less than 4 hours or more than 20 hours (or if one does it should be consolidated with other
tasks or segmented into more specific tasks, respectively). All activities should identify task precursors, be effort
based (not time or elapsed period based), assigned to responsible resources and lead to specific milestones. With
this minimum project planning criteria, you’ll be in a position to model the plan, flex resource allocations, identify
capacity constraints, view work breakdown structures (WBS) and monitor at the critical path. Microsoft Project is
by far the most popular project planning tool and works fine for most CRM software implementations. If you’re
new to project management or planning, you may want to check out the Project Management Institute (PMI) as a
source of good project plan methodology, disciplined processes and best practices.
CRM software implementation engagements generally commence with a project team kick-off meeting. If advanced
preparation has been made, by the end of the meeting the implementation scope is clearly defined, the most salient
tasks surrounding the project plan are established, administrative procedures are identified, project management
guidelines are determined and project monitoring and control processes are agreed upon.
Key project team activities to be completed in the Planning phase are illustrated below:
• Organise the project team; make sure you have a committed executive sponsor, an well versed project manager,
credible subject matter experts (SMEs) for each line of business, cross company representation from the user
communities and capable Information Technology (IT) staff.
• Establish clear project goals and quantifiable success metrics
• Craft a detailed project scope. Vague or indefinite scopes make for at-risk projects. Also remember that scope
creep is a constant challenge in nearly all CRM projects. A comprehensive and detailed project scope will
facilitate the project team in maintaining focus and maximising the likelihood of project success.
• Thoroughly review existing business processes and keep an open mind to business process re-engineering. Don’t
repeat flawed or inefficient processes in the new software system simply because it’s the way it has always
been done. The period when implementing a new CRM software system is often an ideal time to also upgrade
business processes for an even more powerful return on investment.
• Solidify your business process workflows. This is an activity helped by process mapping software (visio,
mindmap or PowerPoint can work fine) or whiteboard sessions. Make sure processes are defined from end to
end in order that cross-divisional intersections are included.
• Determine CRM software utilisation. Align the process workflow maps with the CRM software system. Chances
are the software will accommodate most, but not all, of the process maps. Software voids are sure to be found
and adjustments to the process or the software will have to be evaluated.
• If incurring software customisation, be sure to create the specification and design documents as early in the
process as possible. Software customisation is an activity frequently delivered late and often requiring multiple
iterations before it is complete. Beginning early can provide some buffer so that this activity doesn’t end up on
the critical path.
• Like software customisation, develop your system integration design documents as early as possible. Also, it is
very wise to review a sampling of your existing data to determine its data cleanliness. Most companies possess
dirty data and do not know it or don’t know the extent of it. Performing an early data sampling will allow you
to identify how dirty your data really is and plan the data cleansing process earlier.
Phase II: CRM Software Design and Conference Room Pilot

A Conference Room Pilot (CRP) is a systemic approach to prototype the proposed operation of an information
system, to learn how it works or should work, and to decide how to best manage the business with it, prior to the
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go-live conversion. CRP’s usually begin with an introductory CRM software training course. In general terms,
the CRP is used to test and validate the company’s business model with the new business software system. The
CRP results indicate confirmation or illustrate gaps and areas requiring a more detailed design effort prior to full
implementation. Several CRP objectives are illustrated below.
• To explore policy and procedure alternatives and evaluate improvements
• To train project team members in the new CRM system, including configuration options, setup parameters,
procedures, internal controls, modification capabilities and reports
• To gain a more practical understanding of the strengths and weaknesses of the software application
• To evaluate the software for fit and optimise the system where possible
• To test and confirm design alternatives for appropriateness and impact
• To help develop and confirm the plan for live data setup, conversion and implementation
A number of key decisions must be made when implementing CRM software modules. For each software application,
there should be a designated subject matter expert (SME) or Sponsor who will assume responsibility for the configured
application. Typically, the software vendor or third party consultant will provide implementation consulting to assist
the project team in making these important decisions while setting up the CRP environment. The CRP configuration
will force a balance between the operational desires of the company and the software’s capabilities.
Additional activities included in the CRP are highlighted below:
• Confirm end to end business process transaction flows
• Adopt new procedures and TFR’s (transaction flow reviews); this activity is often facilitated with the CRM
software’s automated work-flow design tool
• Explore and confirm the design of primary CRM keys (such as Customer ID, Customer Name, Territory, Lead
Source, and many more.)
Consider building intelligence into the keys where it makes sense - you may want to segment keys or force
certain characters to represent types of values
Recognise the permanence of most primary keys - they are not easily changed as history must also be
updated for analysis and comparative reporting
• Map out the data conversion process. Sample and verify the cleanliness of the historical data; scrub data as
necessary, then perform another sample conversion and reconcile; don’t convert dirty data with the intention of
cleaning it up after it is in the new system
• Explore the configuration setup and file maintenance software parameters; they generally can be manipulated
to offer significant work-around opportunities
• Document user and system security profiles; confirm integration and back door security tests
• Review, develop and tailor (transaction entry) forms; if you modify forms do it by user role or class and not by
individual users; test and verify efficiency with actual users performing actual tasks
• Catalogue your reporting requirements (report format, content, production frequency, distribution, and many
more.)
• Develop integration points and data transfer design documents early; plan for thorough system integration
testing
• Evaluate and develop system enhancements or productivity aides which will promote user adoption
• Perform frequent system and user testing; first by project team members and then by random actual users
Business process alignment

CRM software implementations offer an ideal time to revamp and reengineer business processes. While business
process improvement (BPI) exercises do impose additional change (which therefore requires additional change
management), they also offer increased efficiency in conjunction with the new software for a more powerful
result.
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Phase III: CRM Software User Training
The Project team participants will have received CRM application software training in the Design and CRP phase.
Following the core project team training and a complete testing of the application during the CRP phase, the person
in charge of training (typically from the software vendor) will deliver additional CRM software end user training
in the form of either classroom training or a train-the-trainer program.
User training courses differ from the earlier project team training in that they emphasise the day-to-day user activities
and do not include the set up, configuration or process alternatives available throughout the CRM system. This allows
the users to focus on only the tasks that they need to be concerned with and leaves the configuration and business
process alternatives to the project team. Experience clearly reveals that user retention is the most challenging obstacle
faced by users. It can therefore be advisable to schedule user training immediately before the go-live (cut-over). It
is also important that management provide the uninterrupted availability of those individuals scheduled to receive
training so that training can be both efficient and productive. User training is often performed using a Train-the-
Trainer program. All users who will be responsible for using the application in everyday activities are trained in the
processes necessary for their routine tasks.
Stay focused on the primary and core responsibilities and don’t try to make your staff technology experts - it won’t
work. Empower your staff with the screens, information and knowledge to become better at their roles, not technology
gurus. Some other training suggestions are listed below.
• Invest your implementation time in the optimal areas – with a significant focus in training programs. CRM
systems, more so than other type of business applications, should have less focus on software and more focus
on people, processes and training. A comprehensive training program and post-production staff support are
directly correlated to the adoption and use of the new business system and the achievement of the company’s
objectives.
• Be certain you have finished all software configuration, pilot Q.A., and testing before you introduce user training.
It’s a mistake to unknowingly make the users the testers or Beta site which results in the unintended result of
losing their confidence in the new system just before the go-live event.
• Develop a rock solid training curriculum, classroom approach, hand-out materials and agenda; integrate cross
reference materials where they can add value.
• Develop a solid, user based, real-world training curriculum; it’s a mistake to use the software vendor’s generic
training materials; instead use a tailored curriculum that the users can more closely comprehend.
• Depending upon your user base computer literacy levels, you may want to consider skill-set assessments which
measure PC skills and can then append the training curriculum as required.
• Provide multiple methods of user help-based resources such as a support desk, printed materials, role aides,
reference sources, Queue Cards, a knowledge base and online documentation. You may want to consider
provisioning a separate training company application instance where users can go to experiment without the
risk of corrupting the system.
• If you’re using internal help desk resources, make sure they are thoroughly trained, tested and ready for incoming
user requests.
Events that take place just before the Cut-Over (‘go live’) event include validating final modifications, reconciling a
full system conversion pass, reviewing expected outcomes and making final adjustments as required. The conference
room pilot and user training will include multiple testing scripts to validate the readiness of the system, the knowledge
of the users and integrity of the data. It is important that you also perform an Application Readiness Review with
each user community prior to the Cut-Over and have a fall back contingency plan in the event the cut-over fails and
you must revert back to the prior system.
The alternative to a point in time cut-over is parallel processing. If used, parallel processing should be performed
for at least two period cycles in order to be effective. Although parallel brings less risk and is regarded as a stronger
safeguard for new system introduction, most companies do not have the resources to perform all transaction processing
twice in two separate systems and then perform reconciliation’s.
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Phase IV: CRM Software Implementation Go-Live

After the support staffs are in place and the final risk analysis and readiness assessments give the green light, the
company is ready for the cut-over and CRM go-live event. Below are a few suggestions to achieve an anti-climatic
go-live experience.
• The cut-over event is a prime time to have extra feet on the ground. When the go-live event happens, your
full project team, including executive sponsor, should be shadowing the user communities in order to project
confidence and be instantly available for user requests or the inevitable software irregularities that are sure to
arise. Be sure to coordinate with administrators of related systems, such as the back-office Enterprise Resource
Planning system, and liaise with the help desk resources periodically throughout the early days of the go-live.
• It’s also a good idea to have additional staff from your software vendor or third party consultant on hand. On
site trained resources to stand over the shoulders of users at go-live is a worthwhile investment.
• When users have issues, questions or problems, refrain from just supplying them with quick answers and instead
show them the help resources that have been created to provide such information. This will both grant the user
an on-demand information resource and validate that the help materials are accurate and complete.
• The users’ greatest reluctance of the new system generally occurs on the first production day. It is very important
that the change management plan include the findings discovered from throughout the implementation and be
ready for user adoption challenges. Winning the early days following the go-live event sets the stage to win the
long-term implementation. Losing the early days sets the stage for an uphill battle.
CRM Implementation: Setting Up

The set-up phase of CRM implementation can take place one of two ways. CRM implementation can be done in
house, by yourself, your employees, or your own IT department, depending on the size of your business. Many small
businesses prefer simple programs that allow this phase of CRM implementation to take place in house, without any
extra expenses. For larger companies, with more complex CRM needs, or for those who are technically challenged,
bringing in an outside firm to take care of this portion of the CRM implementation might be best.
CRM Implementation: Customisation

Once setup is complete, the next portion of CRM implementation includes customising the software and importing
your existing records and information. Most CRM packages allow you to add and remove data fields and create
specific forms and files, making CRM implementation a perfect fit for your business. During this part of CRM
implementation, bringing over the data you have on hand already should be completed. With many CRM programs,
such as Prophet, by Avidian, this can be done by simply importing the information from existing program, like
Outlook, during CRM implementation. Whether you or an outside firm take care of this step, this phase of CRM
implementation is probably the most important; as it determines what information you will have accessible at all
levels of your business.
CRM Implementation: Training

One of the most intimidating steps in CRM implementation can be training your employees to use the new
system. Training features should be a point of consideration when you are deciding which program to use in CRM
implementation. While there are some inexpensive options for CRM software available, they are only truly affordable
if they are user-friendly and easily learned during the CRM implementation process. Look for a company that offers
both self-teaching tools, plus the option for in-depth training, should it be necessary with CRM implementation
becomes a bit more than your employees can handle. Prophet is a great choice, as it offers online tutorials to get
you started, as well as affordable, in-depth training programs for you and your employees. Without proper training,
CRM implementation is a completely useless effort.
CRM Implementation: Maximising Opportunities

Once your program is in place and training is completed, the final step in CRM implementation is an ongoing one.
Figuring out how to best use the information you collect and maximising the features available with your own CRM
program is a continuous process within CRM implementation. Driving your business and increasing sales through
monitoring and analysis of customer habits is a great reason to use CRM implementation. Others find that CRM
implementation pays off best for them due to the focused marketing that can be enacted. Still more companies
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find that the task automation and task management that are accessible after CRM implementation are the favourite
benefits. Exploring all of the ways that CRM implementation can make your business more profitable is a step that
will never end and will keep your business growing.
Post Implementation Phase

The following are the contributing factors for the success of the post-implementation phase:
• A critical factor in achieving post implementation success is to make sure that the CRM software solution
directly supports your customer strategy and mirrors your business process model. Accomplishment of this
objective begins in the design and planning stage and must be continually revisited during and following the
implementation. Implementing CRM software without corresponding CRM strategy is an uphill battle that will
eventually unseat even the most successful software implementations.
• The CRM software should provide visibility to business process execution and deviations in order to refine
processes and drive continuous process improvement. CRM analytics should deliver real-time or near real-time
customer and business process visibility to all phases of operations, especially sales, marketing and customer
service. Several software as a service (SaaS) and non-hosted CRM software systems do a good job of providing
a 360 degree view of the customer relationship; however, establishing the most important metrics and measures
will require thoughtful planning and implementation effort.
• Use the CRM solution to its fullest extent. The more it is used, the sooner its usage becomes second nature and
the sooner that benefits are realised.
• In an era of increased compliance and demand for constant system uptime, make sure you build system redundancy
and secure the data with a proper system backup as well as business continuity program.
• Establish the most salient metrics, begin with a base line and generate ROI and productivity reports on a periodic
basis. This will show you what is working or not working relative to initial expectations. It will allow efforts to
be put into areas that generate the highest impact results and adjust those areas that are not achieving success.
For instance: If there is a specific marketing objective supported by an outreach program – follow it closely,
generate reports, analyse, learn and take action.
• Get recurring feedback from all CRM stakeholders. Understand their perceptions of what is working and
not working. Find out what aspects of the CRM implementation they find to be of the greatest benefits and
disappointments. Catalogue and prioritise their suggestions or recommendations for continued efforts.
• Proper training of all employees is crucial to post implementation success. This includes clear communications
between executives and staff on exactly what is expected of whom and what rewards and or system of benefits
are in place for success. Training is a recurring program which should be initiated at least with every CRM
software upgrade.
• Maintain a working relationship with the CRM manufacturer or solution provider. This relationship will keep
you abreast of new advancements and opportunities.
• Monitor the data continuously. Make sure that you not only capture customer information and other important
data, but also remove bad data that can “gum up” your system. All too often duplicate forms or entries can
impinge on productivity. Old data such as closed out accounts need to be removed if they are not properly
identified. In other words, keep the system up to date and periodically review the application for duplicate
accounts, deprecated information and other erroneous data.
• Optimise your software forms as you gain experience with the system. Fine tuning forms will streamline data
entry, reduce duplicate keying and make the system much more user friendly.
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8.8 Post Implementation Pitfalls

Failure to conduct a post-implementation review, and establish continual successive reviews
• It’s amazing how many implementations are never evaluated. IT implementation statistics are horrifying; 14%
percent are abandoned or fail completely, 40% either barely achieve or never meet their objectives. The statistics
for CRM implementations in particular are even worse, between 50-80%, according to The Gartner Group and
Meta, fail outright. Therefore the first step after going live, is conducting the post-implementation review not
setting specific metrics and incentives for the users
• Each department should have a clear understanding of the metrics that will change after the implementation.
Something as simple as stating that a complete client history will be available to each Customer Service
Representative after the implementation can easily point out the benefits of not having to hunt through three
departments for warranty dates. Document any changes to these metrics and amend them as you change the
scope of the implementation. Realise implementations are dynamic, objectives change but justify those changes,
and market them to your user community. Disseminate them as soon as possible.
Failure to establish change procedures

• The second part of Gareth Herschel’s comment continues, “The second notion is that it takes 18-24 months
to change and reinforce the behavior of end users with new CRM software.” Since a CRM implementation is
never complete, and we expect constant change with the client interaction, a thoroughly documented Standard
Operating Procedure for implementing change must be in place with clear lines of authority. Disseminate the
new procedure immediately and plan for the required time before it becomes effective. Measure the success of
your change procedures, and refine them constantly.
• The post-implementation review should be part of the initial project scope. The development of a post
implementation plan from the review can eliminate the second phase of the implementation. This process should
be repeated with each successive phase, post-implementation review, refinement of the post-implementation
plan, until you’ve finished the implementation. Trick statement there, according to Herschel’s philosophy,
you’re never done.
8.9 Implementation of E-CRM

When approaching the development and implementation of E-CRM there are important considerations to keep in
mind:
• Define customer relationships: Generate a list of key aspects of your customer relationships and the importance
of these relationships to your business.
• Develop a plan: Create a broad Relationship Management program that can be customised to smaller customer
segments. A suitable software solution will help deliver this goal.
• Focus on customers: The focus should be on the customer, not the technology. Any technology should have
specific benefits in making customers’ lives easier by improving support, lowering their administrative costs,
or giving them reasons to shift more business to your company.
• Save money: Focus on aspects of your business that can contribute to the bottom line. Whether it is through
cutting costs or increasing revenue, every capability you implement should have a direct, measurable impact
on the bottom line.
• Service and support: By tracking and measuring the dimensions of the relationship, organisations can identify
their strengths and weaknesses in the relationship management program and continually fine tune it based on
ongoing feedback from customers.
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Summary
• Without careful focus on implementation, the resulting CRM system can vary widely from the organisation’s
expectations set during the initial selection of the software.
• CRM software runs on platforms ranging from a single computer to a company network server to a company
Web server to a third-party hosting provider.
• A successful CRM implementation must be used by everyone involved in the sales process to provide customer
contact consistency and full management oversight.
• Web or cloud based software is affordable because it keeps your costs down by not needing to invest in additional
hardware and when updates need to be made it is simply taken care of for you through the provider.
• Lack of business cohesion or a lack of understanding of the business will often cause CRM implementation
failure.
• Without a clear CRM strategy, understanding of the business model or clearly defined business practices, a
CRM implementation will be an uphill fight and likely fail.
• It is very wise to review a sampling of your existing data to determine its data cleanliness.
• One of the benefits of a CRM implementation is that executives gain visibility and a clear understanding of the
company’s actual business practices.
• An unsuccessful data conversion can impose strains on the new CRM system.
• When implementing a CRM system abroad, cultural differences may be subtle in some areas and starkly
contrasted in others.
• Information security is another one of those happening buttons in a global CRM system implementation.
• CRM software implementations offer an ideal time to revamp and reengineer business processes.
• A CRM strategy cannot be developed in isolation.
• Training is a recurring program which should be initiated at least with every CRM software upgrade.
• The conference room pilot and user training will include multiple testing scripts to validate the readiness of the
system, the knowledge of the users and integrity of the data.
• Driving your business and increasing sales through monitoring and analysis of customer habits is a great reason
to use CRM implementation.
• A critical factor in achieving post implementation success is to make sure that the CRM software solution
directly supports your customer strategy and mirrors your business process model.
• Parallel processing should be performed for at least two period cycles in order to be effective.
References
• Finnegan, D. & Willcocks, P. L., 2007. Implementing CRM, John Wiley & Sons
• Fratian, G., 2008. Planning Your SAP CRM Implementation, Galileo Press
• CRM [Pdf] Available at: <http://mu.ac.in/myweb_test/MCA%20study%20material/CRM%20-%20PDF.pdf>
• Effective CRM implementation [Pdf] Available at: <http://www.fivepaths.com/files/supporting-documents/
effective_crm_implementation.pdf> [Accessed 21 December 2012].
• How to prepare for and execute a successful CRM implementation? [Video online] Available at: <http://www.
youtube.com/watch?v=BdLCoWWR7vw> [Accessed 21 December 2012].
• Flory, P., Webinar recording: Why do most CRM implementations fail? [Video online] Available at: <http://
www.youtube.com/watch?v=lZntfLG2Rok> [Accessed 21 December 2012].
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Recommended Reading
• Kumar, A., Sinha, C. & Sharma, S., 2007. Customer Relationship Management: Concepts & Application, John
Wiley & Sons
• Das, S., 2007. Customer Relationship Management, Excel Publications
• Nakkiran, S. & Franklin, J., 2004. Business Process Outsourcing (BPO), Deep and Deep Publications
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Self Assessment
1. CRM software runs on platforms ranging from a single computer to a company ____________.
a. network
b. network server
c. LAN
d. PC
2. Most CRMs are ____________ and can take ample funds and resources to integrate with your existing site.
a. cloud based
b. independent systems
c. dependant systems
d. standalone
3. With web or ________-based software the provider will host the service for your company.
a. cloud
b. network
c. area
d. computer
4. _______________ is quick and at-a-glance it helps your business to “listen” to a contacts social media activity
and determine how best to engage with them.
a. Social monitoring
b. Scalability
c. On site customisation
d. Lead generation
5. Which of the following CRM solution requires pro-actively trained and informed users with a choice of training
methods; help, online training, or formal classes?
a. Data
b. Successful
c. Static
d. Dynamic
6. An unstable or insecure hardware and network platform is likely to challenge system ____________.
a. security
b. integrity
c. completeness
d. software
7. It is very important that the ____________________ include the findings discovered from throughout the
implementation and be ready for user adoption challenges.
a. CRM development
b. change culture
c. change management plan
d. CRM software
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1. Factors affecting CRM success A. Reduce duplicate keying
2. Cut-over B. Parallel processing

3. Fine tuning forms C. Company specific
4. An alternative to a point in
D. Validating final records
time cut-over
a. 1-A, 2-D, 3-B, 4-C
b. 1-B, 2-C, 3-D, 4-A
c. 1-C, 2-D, 3-A, 4-B
d. 1-D, 2-C, 3-A, 4-B
9. ______________ is important as the journey can take a number of years and can change en route.
a. Scalability
b. Reliability
c. Security
d. Flexibility
10. Lack of business cohesion or a lack of understanding of the business will lead to CRM implementation
_______.
a. success
b. failure
c. development
d. steps
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Case Study I
Call Center: Providing Call Centers with Real-time, Intelligent Call Routing
Avaya IP Office is an all-in-one solution specially designed to meet the communication challenges facing small and
medium-sized businesses. Where can contact centers that employ IP Office find a scalable contact center solution
that offers high-end functionality at an affordable price?
Zeacom, an Innovator-level member in the Avaya Developer Connection program, provides an integrated Contact
center solution that delivers real-time, intelligent call routing and offers contact centers the tools they need to manage
information, improve customer service and boost staff productivity. A single, fully integrated solution for telephone,
faxes, email and web-based contacts, Zeacom Contact Center 4.0 gives users the power to continuously monitor
their contact center in real time and make changes on-the-fly without requiring third-party assistance or specialist
in-house resources. With the solution, managers can easily set up agents to be dedicated to one media type only,
one queue only or to handle a wide variety of blended mediums from various queues. The Zeacom Contact Center
multimedia interaction modules are fully integrated into a comprehensive reporting package, helping contact center
managers to have a complete picture of agent and call activity, regardless of the contact medium used. Modules are
described below.
CT control
CT Control offers complete control over the delivery of phone, email, fax and web-based contacts. Skills-based routing
matches agent skills and experience to a number of different queues, and delivers each call to the most appropriately
skilled agent available. Other features and functionality include sophisticated reporting and administration tools,
resolution codes, work time, queue blocking, alerts and wallboard control. All help increase contact center efficiency
from both a management and agent perspective.
Agent desktop
Agent Desktop empowers agents through open communication, enabling them to handle not only multiple phone
calls, but also emails, Chats, Faxes and Web Callback requests – all from their Agent Desktop application. Agent
Desktop allows contact center managers to view real time information on Queue and Agent performance, demand
calls and change a queue‟s operating mode. As contact centers become an increasingly integral component of
many companies operations, the need to monitor the performance of individual agents and queues becomes equally
important.
Callback
Callback offers callers the option of an automated Callback without losing their position in the queue. Once a
Callback has been placed, it advances in the queue as if the caller was still on the line. When the Callback reaches
the front of the queue, it is delivered to an agent. Callback functionality is revolutionizing queuing principles and
customer 89service as callers realize they do not need to wait in a queue to talk to an agent. Contact center managers
and agents can also use Callback to optimize traffic peaks and staffing lows.
Email queuing
Email Queuing allows contact centers to treat emails the same way as they treat phone calls, working in combination
with CT Control and Agent Desktop to provide a tightly integrated email management tool. Email Queuing not
only allows for the fair distribution of emails to appropriately skilled agents, but also helps maintain a consistent,
professional approach to all inbound sales and service communications.
Fax queuing
Fax Queuing distributes faxes to contact center agents directly, with the ability to view faxes on screen. This
eliminates misplaced orders, paper confusion and delays– creating faster responses and providing a superior level
of customer service. By applying the intelligent routing and reporting capabilities of Zeacom Contact Center to
faxes, Fax Queuing helps ensure that every customer contact is handled in a timely and professional manner. Fax
Queuing maximises the sale opportunities for businesses by providing potential customers a simple way to send
signed orders through, giving them instant contact with agents in the contact center.
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Web chat
Web Chat helps reduce website abandonment rates and improve customer service levels and web based sales by
offering online chat sessions to support web content on the site. Web users are provided with real-time access to
an agent. Potential customers can request live interaction by establishing a one-to-one text conversation with a
contact center agent, making the site more interactive and providing a superior level of customer service. Agents
have the ability to “push” and “trace” a URL directly to online customers, allowing them to respond to queries by
automatically presenting callers with appropriate web pages. Callers are able to view the path required to access
information within a website and can return to it at a later time.
Reports
The Reports module enables users to run customized reports about their contact center agents, call handling and
system setup. It provides data that is meaningful and easy to analyze, allowing managers to accurately measure
contact center and voicemail performance and get the statistical output needed to make informed management
decisions, prioritize goals and set performance standards. Administrators can review general system operation
statistics, configuration details, usage, call frequency and duration. Zeacom has an onboard database that collects
comprehensive statistics on every facet of every contact, whether Phone, Email, Fax, Web Chat or Web Callback.
In contrast to many other reporting packages, Zeacom’s off-the-shelf module allows users to report on all types of
communication within their contact center from the one platform.
(Source: Introduction to CRM [Pdf] Available at:< http://mu.ac.in/myweb_test/MCA%20study%20material/CRM%20

-%20PDF.pdf> [Accessed 24 December 2012]).
Questions
1. What is Avaya IP Office?
Answer
Avaya IP Office is an all-in-one solution specially designed to meet the communication challenges facing small
and medium-sized businesses.
2. What is Zeacom and what does it provide to the customers?

Answer
Zeacom, an Innovator-level member in the Avaya Developer Connection program, provides an integrated Contact
center solution that delivers real-time, intelligent call routing and offers contact centers the tools they need to
manage information, improve customer service and boost staff productivity. A single, fully integrated solution for
telephone, faxes, email and web-based contacts, Zeacom Contact Center 4.0 gives users the power to continuously
monitor their contact center in real time and make changes on-the-fly without requiring third-party assistance or
specialist in-house resources. With the solution, managers can easily set up agents to be dedicated to one media
type only, one queue only or to handle a wide variety of blended mediums from various queues.
3. What is fax queuing?

Answer
Fax Queuing distributes faxes to contact center agents directly, with the ability to view faxes on screen. This
eliminates misplaced orders, paper confusion and delays– creating faster responses and providing a superior
level of customer service. It helps to ensure that every customer contact is handled in a timely and professional
manner and maximises the sale opportunities for businesses by providing potential customers a simple way to
send signed orders through, giving them instant contact with agents in the contact center.
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Case Study II
Good People Lead to Good Customer Service– The Nordstrom Story
Nordstrom, which has been in business since 1901, and has 100 full line stores, and 50 Nordstrom Rach discount
stores in the US, has long understood that it is more cost-effective to retain old customers than it is to keep trying
to attract new customers. Nordstrom does this by encouraging its employees to take the “long-term” view when
dealing with customers.
While every company or organisation wants to hire nice, motivated people, at Nordstrom, they want to hire people
who are already nice and already motivate to do a good job before they come to work at a Nordstrom. Nordstrom
believes the key to good customer service is to hire good people and keep working with them, nurturing them, and
giving them the tools that they need to succeed, including attractive, inviting stores; high-quality merchandise, a
wide range of product choices and sizes, and customer-friendly policies such as the Nordstrom unconditional, no–
questions– asked, money– back return policy.
Previous retail experience has never been a prerequisite for getting hired at Nordstrom. In fact, if a job applicant
has already worked in retail, that experience might be a detriment because the applicant may have developed bad
customer – service habits, such as reflexively saying, “no” to the customer, rather than “yes”.
A college degree has never been a prerequisite for succeeding at Nordstrom. Enthusiasm, a desire to work hard,
and a capacity to generate your own traffic are much more important. Nordstrom retains its customers by offering
different products in an attractive and customer– friendly store. What is inside the store– the residential feeling,
layout, design, lighting, seating, wide aisles, larger fitting rooms, display fixtures, amenities and, of course, the
merchandise–is an essential facet of customer service the Nordstrom way. With convenience and openness the
trademarks of its store design, Nordstrom wants to make it as easy as possible for customers to circulate and shop
throughout the entire store, and for sales associates to help them do just that.
Store layouts typically resemble a wheel. The “hub” of the wheel is the escalator well; the spokes are the marbled
aisles that lead directly back to each of the 30 or so departments. The subtitles and details create a shopping experience
that is easy, convenient and pleasurable. Most department stores in suburban malls have just one elevator; Nordstrom
has two elevators in its three level stores.
The waiting areas around elevators are extra wide to make it easy for customers to navigate baby strollers or
wheelchairs, and the elevators themselves are larger than average, making it easier to load and unload those strollers
and wheelchairs. Escalators are 42 inches wide– compared with the 36– inch– wide escalators found in most other
department stores– allowing spouses or children to ride next to each other.
With its heritage as a show company Nordstrom’s footwear department (most stores have four or five separate
departments are its show places: as a convenience, women shoes are always located near the most prominent store
entrance. Because shoes are the most important customer draw (after all most people have a hard time finding a pair
that fits), the company devote about three times more space to the women’s shoe department than the competitors
do and fills that space with more inventory than any other store offers. As an extreme example, the Mall of America
store in Minimises, styles, and colors; a more typical suburban store will carry 70.00 pairs.
Customers frequently comment on how comfortable the seating is throughout the store; husbands and boyfriends can
always be found sitting restfully, waiting for their ladies, rather than hurrying them out of the store. Nordstrom knows
that customers will stay a little longer and buy one or more shoe if they– and their gentlemen– are comfortable.
One of the Nordstrom touches that keeps shoppers in the store is the retailer’s live piano player, which has long
been a Nordstrom signature that engages a customer’s senses, and creates the ambiance of an inviting place. Usually
located by the escalator, the Nordstrom piano has become something of a cultural icon. Condoleezza Rice, the US
Secretary of state, once joked that her ability was just goods enough to get her a job playing at Nordstrom.
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Leonard Lauder, retired chairman and chief executive officer of Estee Lauder Cos, once commended that, “A
Nordstrom piano doesn’t take up much room. It’s a small idea, but it’s a genius idea.” Nordstrom’s large, carpeted
dressing rooms, fitting rooms and customer lounges are finished with upholstered chairs and or sofas. Fitting rooms
in the more fashionable ready-to-wear departments include tables, table lamps and telephones. Particular attention
is given to the lighting of the mirrors in the dressing rooms. Nordstrom uses a combination of incandescent and
fluorescent lights so that the customer can see the actual colors of the item being purchased. Nordstrom also adjusts
the coolness of the dressing rooms with a dedicated thermostat that is separate from the thermostats that control the
temperature on the sales floor and in the adjoining rooms. Although independent thermostats add to Nordstrom’s
costs, they also add to the customers comfort. When a customer is sequestered in a small, hot and stuffy room, trying
clothes on and then taking them off, that customer will invariably want to get through the experience as quickly as
possible. Nordstrom keeps those rooms comfortable because Nordstrom doesn’t want customers to leave; Nordstrom
wants customers to stay. Consequently, the company will do whatever it takes to keep that customer in the store, to
continue to give her the opportunity to buy stuff.
Food and restaurant services have increasingly become an important attraction at Nordstrom. They generate profits
while enhancing the shopping environment and, of course, give customers another reason not to leave the store.
Nordstrom has several restaurant concepts, depending on the size and location of the individual store. The Espresso
Bar (known as the e-Bar), which is usually located at an entrance outside the store, serves gourmet coffee drinks,
Italian sodas and pastries to Nordstrom customers as well as people walking through the mall. Café Bistro serves
soups, salads, sandwiches, pastries and beverages. The Grill offers full service dining of quick sandwiches, soups,
salads, beer, wine, and full bar in an elegant atmosphere. This restaurant is very popular. If there is not a table ready
for you, Nordstrom will take your reservation and continue to go forth and shop. They’ll give the customer a beeper,
promising to contact him when his table is ready.
In several of its larger stores, Nordstrom offers a concierge desk where shoppers receive special attention, whether
it is helpful information about the store, a restaurant recommendation, or assistance in calling a cab. Need to check
your coat, umbrella and packages with the concierge? No problem.
The Customer Service department in each store offers check cashing privileges for Nordstrom cardholders, immediate
posting of payments to Nordstrom accounts, answers to inquiries regarding those accounts, monthly statements and
credit line increases, complimentary gift wrapping and purchase of gift certificates.
Some of the larger stores have a SPA Nordstrom, which offers natural aromatherapy, herbal body wrap, massage
therapy, natural spot manicures and aromatic facials. Inexpensive shoe shines are available in the men’s area of
many Nordstrom stores. Nordstrom also offers other features such as free gift-wrap, and a personal shopping service,
where a designated Nordstrom Personal Shopper will accompany the customer throughout the store to help with
every purchasing decision.
A couple of years ago, two female reporters from the Washington Post surveyed the ladies restrooms in all the
department stores in the Washington, DC area. Their criteria were all the things we took for in a good restroom–
ample space and suppliers, cleanliness, diaper– changing facilities, and many more. We don’t usually associate
clean restrooms with customer service, but why not? When your restrooms are clean and well supplied, you are
telling your customer that you care about every aspect of their experience with you company. That is how you retain
customers in a competitive world. Adhering to its simple customer service formula for 105 years, Nordstrom must
be doing something right.

Questions
1. What does Nordstrom believe?
2. How does Nordstrom make it easy for customers to circulate and shop throughout the entire store?
3. What is the function of Customer service Department of Nordstrom?
150/JNU OLE
Case Study III
Role of CRM in Indian Retail Market
Retailing is India’s largest industry accounting for over 10% of the country’s GDP and around 8% of the employment.
Retailing is also one of key elements of a marketing strategy. It facilitates the targeting process making sure that a
product reaches particular group of consumers. Retailers provide a collection of service benefits to their customers.
Such as being located in convenient places, providing a range of alternatives to choose from and selling goods in
quantities that match the personal consumption level.
The Indian retailing sector is highly fragmented with 97% of its business being run by the unorganised retailers
such as the traditional family run stores and corner stores. Organised retailing, however, is at a very nascent stage
though is share is expected to rise to 9-10% by the year 2010. The last few years have witnessed immense growth
in this sector. In order to keep pace with increasing demand, there has been hectic activity in terms of entry of
international labels, expansion plans and focus on technology, operations and processes. Large Indian players like
Reliance, ITC are making significant investments in this sector. With growing competition it is becoming increasing
difficult for retailers to survive in the new economy. A new revolution of customised marketing is taking place and
for retailers to survive today, they must adopt revolutionary thinking. CRM is an emerging tool that enables retail
marketers to maintain their presence in the dynamic marketing environment. Initially CRM was the tool preferred
by manufacturers in order to motivate and retain retailers. Now-a-days retailers are applying the same tool in order
to retain then customers. The objective is to get the customers to maintain loyalty towards the store, irrespective of
the products and brands that they prefer to buy.
How will CRM help to ensure continuous growth and success?

• The retailers or marketers need to have a better understanding of customers at the individual level.
• They should provide the consumers with specific product– related information and deliver goods targeted to
their specific need.
• Targeting “The moment of truth is consumer goods and services marketing are extremely important.
• They should focus on customers‟ orientation with a long term perspective, with high customer commitment.
The following tools can be used as a part of practicing CRM by the retailers:
• Personalisation: Make customers feel that they have achieved personal value, by matching product value to
individual customers’ personal value.
• Communication: Make efforts to stay in touch by informing customers about new arrivals.
• Rewards: Offer tangible rewards, discount offers, exciting prizes, customer loyalty bonus and personalized
discount coupons, implement customer – member loyalty programs.
• Special treatment: Categories and differentiate among loyal customers and non-loyal customers.

Questions
1. What do retailers provide us with?
2. What is the objective behind retailers opting for the CRM technology?
3. How is the Indian retailing sector fragmented?
151/JNU OLE
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Recommended Reading
• Al-Shammari, M., 2011. Customer-Centric Knowledge Management: Concepts and Applications, 1st.,IGI
Global.
• Bakeer, R. & Harb, Y., 2010. E-Marketing and E-CRM: Theories and Case studies, Lambert Academic
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• Bamford, J., 2005. CRM Project Management: Managing OTS Enterprise Wide Application Implementations,
1 st ed.,Custom Publishing.
• Das, S., 2007. Customer Relationship Management, Excel Publications
• Kincaid, W. J., 2003. Customer Relationship Management: Getting It Right!, Prentice Hall Professional
• Kostojoh, S., Johnson, M. & Paulen, B., CRM Fundamentals, APress Publication
• Kostojohn, S., Johnson, M. & Paulen, B., 2011. CRM Fundamentals, Kindle Edition
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• Kumar, A., Sinha, C. & Sharma, S., 2007. Customer Relationship Management: Concepts & Application, John
Wiley & Sons
• Kumar, V. & Reinartz, W., 2012. Customer Relationship Management: Concept, Strategy, and Tools, Springer
Publication.
• Nakkiran, S. & Franklin, J., 2004. Business Process Outsourcing (BPO), Deep and Deep Publications.
• Nakkiran, S., 2004. Business Process Outsourcing (BPO): Concept, Current Trends, Management, Motilal UK
Books of India.
• Payne, A., 2005. Handbook of CRM: Achieving Success through Customer Management, Butterworth-Heinemann,
1st ed.
• Payne, A., 2012. Handbook of CRM, 1 st ed., Routledge Publication.
• Peppers, D. & Rogers, M., 2011. Managing Customer Relationships: A Strategic Framework, 2 nd ed.
• Rajola, F., 2003. Customer Relationship Management: Organisational and Technological Perspectives, Springer
Publication
• Shanmugasundaram, S., 2010. Customer Relationship Management: Modern Trends And Perspectives, PHI
Learning
• Tiwana, A., 2000. The Essential Guide to Knowledge Management: E-Business and CRM Applications.
• Tseng, M. M., & Piller, F., 2003. The Customer Centric Enterprise, 1st ed., Springer Publication.
154/JNU OLE
Self Assessment Answers
Chapter I
1. c
2. a
3. b
4. a
5. d
6. b
7. b
8. a
9. c
10. d
Chapter II
1. b
2. d
3. b
4. a
5. c
6. a
7. c
8. d
9. d
10. a
Chapter III
1. d
2. b
3. a
4. b
5. c
6. d
7. a
8. a
9. c
10. d
Chapter IV
1. a
2. d
3. b
4. c
5. d
6. a
7. c
8. c
9. b
10. d
155/JNU OLE
Chapter V
1. d
2. b
3. a
4. d
5. b
6. d
7. a
8. c
9. c
10. b
Chapter VI
1. d
2. c
3. b
4. c
5. a
6. c
7. d
8. a
9. b
10. a
Chapter VII
1. c
2. a
3. d
4. a
5. b
6. c
7. b
8. b
9. d
10. a
Chapter VIII
1. b
2. d
3. a
4. a
5. d
6. b
7. c
8. c
9. d
10. b
156/JNU OLE

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E-Customer Relationship Management

This book is a part of the course by Jaipur National University, Jaipur.

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II. List of Figures...................................................... VII

III. List of Tables.................................................... VIII

V. Case Study............................................................ 147

VI. Bibliography....................................................... 152

VII. Self Assessment Answers................................. 155

• explicate importance of CRM

• explain the strategies of CRM

• elucidate the goals of CRM

• examine the aspects of certification

• analyse the obstacles in the success of CRM

• describe the true costs of customisation

• understand the relationship between the customers and the CRM

• identify the major CRM packages

1.1 Customer Relationship Management

This insight allows for:

1.2 The Evolution of CRM

1.3 Goals of CRM

Build a customer growth strategy

Avoid the whipsaw effect

Don’t buy in to the technology magic bullet

Measure satisfaction with CRM

Plan for growth

1.4.1 Operational CRM

1.4.2 Collaborative CRM

1.4.3 Analytical CRM

1.5 CRM Pyramid

1.6 CRM and its Components

The components of CRM are:

1.6.1 People Management

1.6.2 Lead Management

1.6.4 Customer Service

1.6.6 Work Flow Automation

1.6.7 Business Reporting

1.7 CRM Drivers

1.8 The Changing Role of CRM: CRM and Telemarketing

1.9.1 Beware of Trojan Horses

1.9.2 Understand the True Costs of Customisation

1.9.3 CRM Software is not a Magic Wand

1.9.4 Don’t Overreach

1.10 Internet’s Influence on CRM

1.11 CRM and Globalisation

1.11.1 Relationship with Customer

1.11.2 Globalisation and CMR

1.12 Major CRM Packages

Microsoft Dynamics CRM

6. Which of the following statements is true?

7. The objectives of _____________ CRM are reduction and service improvements.

• explore importance of customer strategies

• explain the customer interaction cycle

• elucidate the customer strategy basics

• examine the customer interaction cycle

• analyse the customer touch points

• describe the customer retention strategies

• understand customer profiling and modeling

• identify customer contact technology strategy

2.2 Customer as an Asset

2.3 Customer Service Concerns