Customer Relationship Management (CRM)

What is CRM?
CRM is a business strategy that aims to understand, anticipate and manage the needs of an organisations current and potential customers. It is a comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology. CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers.

Definition of CRM
CRM is the approach implemented by an organisation, which integrates strategy, business processes and functionalities to build up , to maintain and expand relationships with customers.

Business processes

sustain
Strategy

CRM

function alities

maintain

create
people
Integrated approach of CRM
CUSTOMER BASE EXPANSION

The purpose of CRM

The focus [of CRM] is on creating value for the customer and the company over the longer term. When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs . CRM enables organisations to gain competitive advantage over competitors that supply similar products or services .

OBJECTIVES OF CRM
CRM aims at integrating all business strategies that places the customer at the centre of a business consciousness. Aligning of organisation towards customers. Integrating your customer touch points. Knowing and understanding your customers and potential customers. Establishing and managing relationship with customers.

Principles of CRM
Differentiate customers: - all customers are not equal; recognize and reward best
customers disproportionately. - understanding each customer becomes particularly important, and the same customers reaction to a cellular company operator may be quite different as compared to a car dealer. - besides for the same product or the service not all the customers can be treated alike and CRM needs to differentiate between a high value customer and a low value customer.

Principles of CRM
While differentiating customer is
- sensitiveness, preferences and personalities - lifestyle and age - culture background and education - physical and psychological characteristics.

Differentiating offerings - low value customer requiring high value customer offerings.
- low value customer with potential to become high value in nature. - high value customer requiring high value service. - high value customer requiring low value service.

Principles of CRM
Keeping existing customers: -Grading customer from very satisfied to very disappoint should help the organisation in improving its customer satisfaction levels and scores. -Satisfaction level for each customer improves as well as customer retention with the organisation. Increase loyalty: - loyal customers are more profitable. - company has to invest in terms of its product and service offerings to its customers. - it has to innovate and meet the very needs of its clients/ customers so that they remain as advocates on the loyalty curve. - referral sales invariably low cost high margin sales.

Principles of CRM
Relationships and interaction with customers: - with the new marketing approach it becomes an imperative for
businesses to formulate their marketing activities to and build relationships, networks and interaction with a number of different, but often equally important markets. -the importance for a business of retaining its customers, with evidence suggesting that retention of customers leads to increased market share and eventually bigger profits.

Why is CRM important?

Todays businesses compete with multi-product offerings created and delivered by networks, alliances and partnerships of many kinds. Both retaining customers and building relationships with other value-adding allies is critical to corporate performance. The adoption of C.R.M. is being fuelled by a recognition that long-term relationships with customers are one of the most important assets of an organisation.

What does CRM involve?

Organisations must become customer focused Organisations must be prepared to adapt so that it take customer needs into account and delivers them Market research must be undertaken to assess customer needs and satisfaction

Types of CRM
1.Proactive versus Reactive CRM 2.Operational, Collaborative and Analytical CRM

Proactive versus Reactive CRM

Operational, Collaborative and Analytical CRM

1. Operational CRM: Front office CRM. Interaction between the customer and marketer directly through customer touch point (POS, Call centers, web etc.). Face to face touch points: Sales/Service/Channel/Events/Stores/Promotions Database driven touch points: Telephones/Email/Mail/SMS/Fax/Loyalty Cards/ATMs Mass Media: Advertising/PR/Websites Any Transaction can take place through these touch points. Low level managers interact in this stage and process the information to the mid level managers

Operational, Collaborative and Analytical CRM

2. Collaborative CRM: Two way dialog between a company and its customers through a variety of channels (business partners, agents, brokers, intermediaries) to facilitate and improve the quality of customer interactions and maintain a long term profitable relationship.
Performed by Mid level managers and transform the information to the top level managers and decision makers.

Operational, Collaborative and Analytical CRM

3. Analytical CRM: Known as back-office or strategic CRM. It involves understanding the customer activities that occurred in the front office. Using technology, mass data is going to transformed into business knowledge (behavior patters, preferences, values of customers).
Top Level managers and decision makers establish the process and convey the message to the mid level and low level managers for implementation.

BENEFITS OF CRM
Develop better communication channels Collect customer related data Create detailed profiles of individual customers Increased customer satisfaction Access to customer account history, order information, and customer information at all touch points. Identify new selling opportunities Increased market share and profit margin. Improved response time to customer requests for information. Improved quality communication and net working. Better stand against global competition.

CRM and Related concepts.

Knowledge management with focus on CRM:
As Peter Drucker defined information is data endowed with relevance and purpose. To effectively implement a CRM solution it is very important to identify real knowledge about different types of customers, (most grow able customers, most valued customers, below zero customers)from excess of internal and external data, figures, surveys ,etc. Marketing, sales after-sales people would be knowledge workers. Front office could be more productive if they could utilize customer knowledge.

CRM and Related concepts.

Metrics ,ROI,Balance scorecard method, benchmarking are some of the common technique of KM implementation is the key to CRM. The key to successful customer KM is personalisation,i.e. how to extract the knowledge that is pertinent to the user and translate it into a format that is easily understood. ROLE OF CRM IN THE CONTEXT OF SCM: In the context of SCM, where alliances and partnerships are key to success, CRM plays an important role in building long term relationships. Apart from the end-users, it involve internal employees, channel members and other external entities such as advertising agencies and consulting organizations.

CRM and Related concepts.

ERP AND CRM: Like ERP,CRM solutions focus on automating and improving business processes, albeit in front-office areas such as marketing, sales, customer service and customer support. CRM aims to provide organizational effectiveness by reducing sales cycle and selling cost, identifying markets and channels for expansion and improving customer value, satisfaction, profitability and retention. Regain management: the cost of acquiring a new customer is 9 to 12 times that of holding on to an existing customer.

COMMERCIAL CONTEXT OF CRM

BANKS: It deal with large number of individual retail customers. Banks want CRM for its analytical capability to help them to manage customer defection (churn)rates and to enhance cross-sell performance. Automobile manufacturers: they sell through distributor / dealer networks. They have little contact with the end-user owner or driver. They use CRM for its ability to help them develop better and more profitable relationships with their distribution networks. High-tech companies- manufacture complex products that are generally sold by partner organizations. Eg : small innovative software developers have traditional partnered with companies such as IBM to obtain distribution and sales.

COMMERCIAL CONTEXT OF CRM

Consumer goods manufacturers: it deal with retail
trade. They use CRM to help and develop profitable relationships with retailers. CRM helps them understand costs-to-serve and customer profitability. IT enabled purchasing processes are applied to strategically significant customers.

EVOLUTION OF CRM
The CRM movement is less than a decade old. The systems and software that are available help companies better understand and serve the existing customers, while enabling them to acquire new, profitable customers.
5th Wave

4th Wave
3rd Wave 2nd Wave 1st Wave

90 s

today

EVOLUTION OF CRM
1st wave: single function client server systems:

- it began in the mid-,90s, CRM solutions are designed to support

particular group of employees- technical support personnel, the sales force, call centre agencies, or the marketing department. 2nd wave: integrated 360-degree client server systems: corporate customer began demanding more integrated solutions. CRM managers were seeking the blessed- to create a 360 degree view of their customers relationship. The integrated CRM solution enabled the employees to provide a single-face to the customer by enabling employees to work from a common set of customer information and to use a set of loosely coupled customer-facing applications.

EVOLUTION OF CRM
3 rd wave: customers serve themselves via the web: - Customer self service and internet architectures became the next big hype in CRM. Many people referred to the suppliers that embraced this new wave as e-crm players. Customer touching e-commerce applications characterized the third wave of CRM catalyzed by the internet.EG: LIC premium calculator, premium paid through internet. 4th wave: internet integrated with POS &ERP: -CRM suppliers re-architect their integrated application suites to take further advantage of the internet. - by using web browsers and thin clients, these CRM solutions are able to offer much broader access to CRM functionality by integrating the CRM systems with back end ERP and legacy systems. - fourth wave solutions also begin to tie together customer self-service via the web with customer service through the contact customer. Eg Walmarti9f one product has been sold it will be informed to backend though ERP.

EVOLUTION OF CRM
5th wave: Redesign business- customers point of view - CRM solutions further focus on what matters most to the customers when making decisions about application functionality and IT architectures. - it is the era in which customer portals abound and give the customer direct access to all of the information and application functionality they need in order to do business with companies.

Transactional VS Relationship Marketing

Transactional Marketing Functional Marketing Focus on a single sale Orientation on product feature Short time scale Little emphasis on customer service Moderate customer contact Quality is a concern of production Relationship Marketing Cross-functional marketing Focus on customer retention Orientation to customer values Long time scale High emphasis on customer service High customer contact Quality is everyones concern

CRM AS A STRATEGIC MARKETING TOOL

Customer Relationship Management (CRM) is the marketing management practice of identifying, attracting and retaining the most valuable customers to sustain profitable growth. Customer Relationship Management is also the process of making and keeping customers and maximizing their profitability, behaviors and satisfaction. Maintaining relationship is the key to success of your business. By doing that, your first-time customer can become a repeat customer, thereafter a client, then an advocate and finally your partner in progress.
The 80-20 principle is valid in sales & marketing too. 20% of the customers deliver 80% of revenues and many times, more than 100% of profits. Existing customers deliver most of the revenues. However more attention and money is often spent on non-customers. It is therefore important to identify the most valuable customers (MVCs) for the success of the business.

CRM AS A STRATEGIC MARKETING TOOL

FINANACIAL (RESULTS)

SHAREHOLDE R VALUE

REVENUE
Customer (context)
pdt innovation Customer intimacy Operational excellence
Innovation processes Customer management processes Operational processes

PRODUCTIVI TY

VALUE POSITION F
BUSINESS PROCESSES

Internal processes

Learn &growth

WORK CLIMATE

COMPETE NCE

TECHNOLOG Y

CRM AS A STRATEGIC MARKETING TOOL

Identify the Most valuable Customers (MVCs)

To identify our customers, we need to ask plenty of questions: Here are some of them: Do you know who your most valuable customers are? Who owns him and his data? The product group? The sales team? Or the IT department of your company? What if the customer has many product relationships in your company? Can you identify the customer if he calls you? Or when he e-mails you? Do you know how much money does he make for you? Which products of yours does this customer have? What is the total value of this customer relationship? If he calls up at the call center, would your agent know the entire relationship? Can he talk about all your different products in the same call?

CRM AS A STRATEGIC MARKETING TOOL

Why CRM practice is required in your organization? Leads generated from your expensive campaigns may be lost because they were not tracked properly. New customers may be lost because, having acquired, you have not kept in touch with them (Hole in the Bucket Syndrome) Business from your existing clients may not happen because you really dont know who they are, what they are buying and what they will need. Credibility with the customers may be lost because your sales and support force is not fully informed about them and havent done their homework well
enough.

To create customer equity, you need to provide him the best experience. Customer experience is defined as a consistent representation and flawless execution, across distribution channels and his interaction touch points, of the emotional connection and relationship you want your customers to have with your company and your brand.

CRM AS A STRATEGIC MARKETING TOOL

Now it is clearly understood that CRM as a strategic management practice helps companies acquire, grow and retain customers. In this heavily automated technological world, is there a possibility to automate these practices, thereby increasing productivity and the chances of increasing the success ratio? From Management, let us move into technology. With the advent of intuitive (sensitive)programming technologies, today there exist many software application programs developed by reputed companies for managing the relationship with its customers. Siebel, Microsoft CRM, MYSAP, Salesforce.com etc are highly flexible, integrated applications that help customers achieve this objective. The following explains how it can be achieved. Ways to win the customer By tracking and managing your leads to a closure. By documenting all sales cycles & account info and creating a knowledge base By breaking functional silos and tightly integrating all customer-facing processes. by keeping continuous track of your customers preferences / propensities (tendency)and getting intimate; and Getting a 360 degree view of the customer and becoming accountable as an organization

CRM AS A STRATEGIC MARKETING TOOL

How does it help sales function? Supports key functions such as contact management, opportunity management Forecasting a 360-degree view of all customer accounts and interactions Automate and organize sales force activities for focused selling and closing, synchronize(coordinate) the calendar, to-do items and contacts so you can access your key accounts. Helping marketing function Supports key functions such as campaign management and analysis, and customer demographic analysis. Create prospects lists using an advanced filtering capability. Create email blasts through mail merge and telemarketing scripts for phone campaigns. Benefiting customer Service function Provides an efficient workflow and easy access to information while synchronizing customer data across all communication channels Provide self-service and assisted service to optimize resources Create configurable task lists for consistency in coaching Customer Service Reps Effectively schedule CSRs by analyzing when and how customers contact you.

CRM AS A STRATEGIC MARKETING TOOL

Workflow Automation Design and automate replies or confirmations for web forms and email queries Generate leads based on predefined campaigns and customer segmentation Route customer request based on employee skills or customer priority Set times or alarms to remind staff to take specific actions Define escalation(rise) processes and notification alerts Query or update customer and third-party database. Dynamically add new, or update, workflows without shutting the systems down. Define and integrate partner-specific workflow steps. Use predefined queries or create your own to define and test decision blocks within a workflow.

CRM AS A STRATEGIC MARKETING TOOL

Business Analysis and Reporting CRM allows users to quickly view pre-configured reports or create new ones and view real-time or historic data for any business function. Powerful business analysis tools such as Sales management reporting and analysis, Customer service reporting and analysis E Commerce reporting and analysis, Partner management, Marketing campaigns, Demographic Sampling and Data integration can be had from the application which shall help you arrive at informed decisions. Most of these applications seamlessly unify information from e-mail, web chat, web forms, wireless devices, telephone and fax. And it provides complete integration of customers and partners and the front-office functions of sales, marketing, service, as well as accounting, distribution and other back- office activities to give you a complete view of your customers and employees.

CRM AS A STRATEGIC MARKETING TOOL

Conclusion
The attempt here have been to describe the importance of following CRM practices for acquiring, retaining and growing customers for sustained success for companies and how it could be automated as an application practice with the help of organizations IT infrastructure. The whole infrastructure combined with the knowledge that it brings forth, guide the destiny of companies in this extremely competitive world. CRM forms the biggest strategic asset that the companies can have for effectively implementing its marketing plans.

Components of CRM Systems :

SFA - SALES FORCE AUTOMATION MARKETING AUTOMATION CUSTOMER SERVICE AND SUPPORT ANALYTICS

Components of CRM : SFA

Components of CRM : SFA A Sales Force Automation (SFA)
system provides an array of capabilities to streamline all phases of the sales process, minimizing the time that reps need to spend on manual data entry and administration. This allows them to successfully pursue more customers in a shorter amount of time than would otherwise be possible. At the heart of SFA is a contact management system for tracking and recording every stage in the sales process for each prospective customer, from initial contact to final disposition. Many SFA applications also include features for opportunity management, territory management, sales forecasting and pipeline, workflow automation, quote generation, and product knowledge.

Components of CRM : Mktg :

Components of CRM : Mktg Systems for marketing (also known as marketing automation) help the enterprise identify and target its best customers and generate qualified leads for the sales team. A key marketing capability is managing and measuring multichannel campaigns, including email, search, social media, and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. Marketing automation also encompasses capabilities for managing customer loyalty, lists, collateral, and internal marketing resources. As marketing departments are increasingly obliged to demonstrate revenue impact, todays systems typically include performance management features for measuring the ROI of campaigns.

Components of CRM : Customer Service and Support :

Components of CRM : Customer Service and

Support Recognizing that customer service is an important differentiator, organizations are increasingly turning to technology platforms to help them improve their customers experience while increasing efficiency and keeping a lid on costs. The core for customer service has been and still is comprehensive call center management, including such features as intelligent call routing, computer telephone integration (CTI), and escalation capabilities.

Components of CRM : Analytics :

Components of CRM :
Analytics Relevant analytics capabilities are often interwoven into applications for sales, marketing, and customer service. Sales analytics let companies monitor and understand customer actions and preferences, through sales forecasting, data quality management, and dashboards that graphically display key performance indicators (KPIs). Marketing applications generally come with predictive analytics to improve customer segmentation and targeting, and features for measuring the effectiveness of online, offline and search marketing campaign.

Components of CRM : Analytics

Components of CRM : Analytics Web analytics have evolved significantly from their starting point of merely tracking mouse clicks on Web sites. By evaluating customer buy signals, marketers can see which prospects are most likely to transact and also identify those who are bogged down in a sales process and need assistance. Marketing and finance personnel also use analytics to assess the value of multi-faceted programs as a whole. Customer service analytics are increasing in popularity as companies demand greater visibility into the performance of call centers and other support channels, in order to correct problems before they affect customer satisfaction levels. Support-focused applications typically include dashboards similar to those for sales, plus capabilities to measure and analyze response times, service quality, agent performance, and the frequency of various customer issues.

Stakeholder value returned from the benefits of CRM

An integrated CRM system is a component of business strategy focused around the customer. It produces multiplication of results throughout the organization. The following is a listing of benefits to specific stakeholders in an organization. The business owner(s) - higher net profitability with increased net sales and reduced operating costs. - A system that can scale to your growing business - business success and their vision is required -improved ability to grow the business that is customer focused The sales manager

-ability to view sales opportunities stuck at a milestone and needing sales

coaching.

 Shorter sales cycles for improved sales efficiency. Quicker to get new sales people up to speed and productive in selling. The sales people: - ability to provide a positive prospect/ customer experience in building the relationship. - an efficient and consistent sales process for various target markets. - ability to provide the customer with quick feedback on related open or close support/ service issues. - access to current products /services provided to determine up-selling or cross- selling opportunities. The customer service/ support manager - faster support call resolution -quick ramp up time for new service representatives. - more calls resolved by CSRs instead of escalated up.

Stakeholder value returned from the benefits of CRM

The customer service representatives - ability to provide a personal touch using personal information and quick access to their account information. Personal satisfaction- become a hero in the eyes of the customer. Business development /marketing manger More effective marketing campaigns to targeted prospects Faster feedback from sales results by linking campaign to sale. Financial perspective: Controller/Accounting manager Happier customer pay their bills- less time in the collection and credit memo process. Reduction in paper documents and filing system. Improved efficiency using known business operational processes.

Stakeholder value returned from the benefits of CRM

The IT department: A scale able system that can grow and not have to be replaced in a few years A reliable and relational database backend that reduces the time for support troubleshooting. A highly configurable security system to meet your business needs. All other employees: Increase in productivity by using one main system that has the information and processes they need for a consistent customer experience. Boost to employee satisfaction.