Customer Relationship Management

ENTERPRISE RESOURCE PLANNING
“Customer Relationship
Management”
Assignment 1
Dated 7th October 2010
Submitted to: Submitted By:

Mr. Anant Phani Akriti Sharma (03)
RajaniKant Gautam (24)
DFT-VII
National Institute Of Fashion Technology, Hyderabad

“Customer Relationship Management”
Index
Sr. Topic Page
no number
1. Customer relationship management : An Introduction 3-4
2. School Of Thought On CRM 4-6
3. CRM modules In ERP system 7-17
4. CRM Architecture 18-20
5. Basic CRM (Input->Process->Output) 21-30
6. Benefits of CRM 31-34
7. CRM in Retail Industry 35-38
2
1. Customer Relationship
management: Introduction
Customer relationship management (CRM) is a broadly recognized, widely-

implemented strategy for managing a company‘s interactions with customers, clients
and sales prospects. It involves using technology to organize, automate, and
synchronize business processes—principally sales activities, but also those for
marketing, customer service, and technical support. The overall goals are to find,
attract, and win new clients, nurture and retain those the company already has, entice
former clients back into the fold, and reduce the costs of marketing and client service.
Customer relationship management denotes a company-wide business strategy
embracing all client-facing departments and even beyond. When an implementation is
effective, people, processes, and technology work together to increase profitability, and
reduce operational costs.
In simple words, CRM is the process of acquiring, retaining and growing profitable
customers. It is not a mere technique, but a management culture to build and sustain an
effective customer relationship. Organizations must significantly revamp their traditional
learning and knowledge management programs. The customer relationship
management model, with its customer centric focus, places the customers needs first.
IT involves three fundamental steps:
1. Understanding customer completely

2. Aligning organizational capability in order to better deliver what its customers
may perceive as high value.
Facilitating the information available both inside and outside the organization.The result
of successful implementation of CRM creates great value of marketers and customers
which leads to mutual trust and loyalty. Following are the advantages of it over
traditional loyalty building methods:
 Reduce advertising cost

3
 Makes it easier to target specific customers by focusing on their needs
 Allows organizations to complete for customers based on service, but not on
price
 Prevents over spending on low-value clients or under spending on high-values
ones.
In India the CRM model is widely used in manufacturing and service organizations as a
brand loyalty tool.
4
2. School of thought on
CRM
The relationship marketing is supported by the growing research interest in different
facets of this concept. Researchers in different countries observed this shift in
marketer‘s orientation towards customer relationship and started exploring the
phenomenon. The initial approaches to CRM can be broadly classified as:
 The Anglo-Australia Approach,

 The Nordic Approach, and
 The North American Approach.
The Anglo-Australian approach integrated the contemporary theories of quality

management services marketing and customer relationship economics to explain the
emergence of relationship marketing
The Nordic approach views relationship marketing as the confluence of interactive

network theory, services marketing and customer relationship economics. The
interactive network theory of industrial marketing views marketing as an interactive
process in a context where relationship building is an area of primary concern for
marketers.
In contrast, the initial focus of the North American scholars was on the relationship
between the buyer and seller operating within the context of the organizational
environment which facilitated the buyer seller relationship.
One of the broader approaches to CRM emerged from the research conducted by
academics at the Centre for Relationship Marketing and Service Management at the
Cranfield University, U.K. The broadened view of relationship marketing addresses a
total of six key market domains, not just the traditional customer market. It also
advocated for a transition for marketing from a limited functional role to a cross-
functional role and a shift towards marketing activities for customer retention in addition
5
to the conventional customer retention in addition to the conventional customer
acquisition.
The six markets are as follows
1. Customer markets – existing and prospective customers as well as

intermediaries.
2. Referral markets – existing customers who recommend to other prospects, and
referral sources or ‗multipliers‘ such as doctors who refer patients to a hospital or
a consultant who recommends a specific IT solution,
3. Influence markets – government, consumer groups, business press and financial
analysts.
4. Recruitment markets – for attracting the right employees to the organization,
5. Supplier markets – suppliers of raw materials, components, services, etc., and
6. Internal markets - the organization including internal departments and staff.
6
3. CRM Modules in an
ERP system
When integrated with enterprise resource planning (ERP) software, customer
relationship management (CRM) modules help upper-level management and everyone
involved get an in-depth look at company financial and customer patterns that may
indicate the future of the company. Businesses often purchase this type of combined
CRM and ERP software not only to simplify its company evaluation and planning, but
also to save money: purchasing CRM and ERP system separately is often more costly.
Examples of companies that provide combined enterprise resource planning and
customer relationship management software include Oracle, NetSuite and
BizAutomation.com.
 Contact Management
Customer relationship management systems typically have a contact management

system that allows companies to stay organized when it comes to maintaining
contact with customers. Contact management modules allow you to assign a
customer account to a representative or account manager. Within this CRM module,
representatives can input both the date and time of contact or attempted contact as
well as detailed notes and information about the representative-customer interaction.
Many times, contact management systems also have a built-in calendar system that
allows you to set a specific date and time in which to follow-up with the customer.
 Sales Automation
Sales automation modules streamline the sales process by centralizing information

about leads, customers and other data needed by a sales professionals and
company managers. Sales automation helps sales representatives keep track of
leads and prospects, giving them tools--such as sales call reminders--and steps to
follow throughout the sales process. Many sales modules also support territory
7
management, which means that sales representatives can be assigned by
managers to a specific geographic region.
 Marketing Module
Marketing CRM modules included with an enterprise resource planning (ERP)

software connect several company departments, including sales and customer
service personnel. The marketing management modules aggregate customer
contact information into a database, which allows you to print address labels,
generate form letters and perform email marketing at any time. Most marketing
modules also give you tracking tools to measure the effectiveness of your marketing
campaigns.
 Order Management
Order management integrates with the sales automation module and also includes
billing. This CRM module gives sales people a comprehensive view of products and
services which can be offered to customers and leads. Order management tools
give customers a way to pay for products, automatically generate billing statements
and can send invoice notice reminders to customers. When included with an ERP
system, order management modules also supports inventory management and
product fulfillment duties of company personnel.
 Analytics
An analytics section within your ERP system ties together and connects each of the
CRM and company modules. This module generates reports and charts that present
financial and sales information, such as revenue forecasting models. The analysis
module gives real-time information on sales patterns, trends in marketing as well as
inventory-related information.
3.1 Features & Functions of Marketing CRM
8
Marketing CRM provides a central marketing platform that enables organizations to
analyze, plan, develop, and execute all marketing activities through all customer
interaction points. This integrated application empowers marketers with complete
business insights – enabling you to make intelligent business decisions and to drive
end-to-end marketing processes. It supports critical marketing processes, including:
 Marketing resource and brand management
o Manage and optimize the use of marketing resources including budgets,

people, time, and assets.
o Align all activities and resources around strategic marketing goals.
o Gain visibility and control into your marketing processes.
o Accurately manage the marketing budgets and costs.
o Increase brand awareness with proper usage and consistency across

enterprise and third-party agencies.
o Facilitate collaboration among team members and coordinate marketing

activities across the enterprise.
 Segment and list management
o Manage enterprise customer and prospect data without the need for IT support.
o Define accurate segments with a consolidated view of all relevant enterprise

customer data.
o Gain insights into customer segments with data visualization features.
o Easily perform segmentation using an interactive, drag-and-drop interface.
 Campaign management
9
o Make relevant and personalized real-time offers through inbound marketing
channels.
o Execute marketing activities through all inbound and outbound interaction

channels: direct mail, e-mail, phone, web, fax, and SMS.
o Build customer relationships with dialog marketing that builds on previous

interactions to make the follow up interactions more relevant and personalized.
o Leverage online marketing channels to plan, develop, and execute e-mail

marketing campaigns.
 Loyalty management
o Create specific loyalty programs by defining customer tier levels, points

management, and partner management capabilities.
o Define loyalty rewards program rules, conditions, and offers using the flexible
CRM rules builder.
o Drive loyalty program membership with membership-handling capabilities;

robust point management, tier management, and card-handling capabilities
across multiple channels.
o Process points accruals and redemptions with the scalable loyalty-processing

engine.
 Trade promotion management
o Optimize allocated trade funds to best generate sales volumes and to maximize
brand awareness.
o Centrally plan and align all trade activities
o Accurately develop sale volume forecasts and financial accruals with

downstream performance data.
10
o Close the loop on trade claim payments and deductions.
o Automate trade settlements and redemption processes with integration to

financials, close the loop on trade activities, and track plan and actual figures.
o Gain insight into trade promotional effectiveness at multiple planning levels:

product, category, account, and segments.
 Lead management
o Maintain a single source of all enterprise lead information.
o Automated the entire lead life-cycle process from lead generation, prioritization,
distribution, and follow-up processes.
o Extend your lead management process to partner organizations to increase

conversion rates.
 Marketing analytics
o Understand the effectiveness of marketing activities.
o Convert reports and data into actionable insights.
o Evaluate effectiveness of various marketing activities, channels, and tactics
o Use advanced analytical algorithms to cluster, classify, and segment customer

base.
o Predict customer behaviors, anticipate their needs, and create more relevant,
targeted messages.
3.2 Features & Functions of Sales CRM
Sales CRM helps sales professionals become more efficient and effective, providing the
knowledge needed to turn insight into action and acquire, grow, and retain profitable
relationships. The application helps organizations plan, execute, and analyze sales
11
operations throughout the sales cycle, find new ways to accelerate buying decisions,
uncover new areas of revenue potential, and implement new methods to improve sales
productivity. It supports the key sales processes, including:
 Sales planning and forecasting
o Enhance performance with coordinated planning and execution of sales

activities across all channels.
o Provide a complete picture of projected revenue and anticipated sales volume

over time.
o Increase the accuracy of demand plans and sales forecasts.
 Territory management
o Optimize account coverage and distribution of sales resources across clearly

defined territories.
o Improve resource utilization with clear visibility into assignments and

availability.
o Place the right resources in the right locations at the right time to optimize team
performance.
 Accounts and contacts management
o Provide a single, comprehensive view of all information necessary to manage

the sales accounts.
o Capture, monitor, and track all critical information about prospects, customers,
and partners.
o Access key contacts, critical relationships, detailed customer profiles, and the
status of all recent interactions at anytime and from any location.
12
 Activity management
o Focus the collective energy of your sales team on actions proven to promote
profitable business.
o Foster efficient team collaboration with better transparency and coordination of

sales activities.
o Manage customer visits, account profiles, and activity-driven sales processes.
o Seamlessly synchronize your e-mail, contacts, calendar entries, and tasks with
leading groupware solutions.
 Opportunity management
o Track, qualify, and distribute leads to the most appropriate sales professionals.
o Monitor the conversion of opportunities into revenue.
o Identify stalled deals, monitor quota attainment, simulate strategies to push

deals through the sales cycle faster, and scrutinize the quantity and quality of
sales opportunities with pipeline performance management.
 Quotation management and order capture
o Guide sales professionals through the product configuration process to ensure

that complex product and service recommendations fully meet customer
requirements.
o Ensure consistent, accurate, and up-to-date pricing – regardless of the sales

channel.
o Generate accurate quotes, capture customer orders, confirm product

availability, and track orders through to the fulfillment process.
13
o Integrate end-to-end business processes to optimize supply chain planning,
synchronize billing activities, and ensure the efficient fulfillment of customer
orders.
 Sales contract management
o Develop and manage long-term customer contracts, incorporate customer

agreements into ongoing customer processes, and monitor the sales process
from inquiry to completion.
o Seamlessly integrate with back-end financial and accounts receivable

processes to generate invoices, process payments, credit returns, and process
claims.
 Sales performance management
o Increase revenue and profitability by strategically employing incentive

compensation to align the goals of individual sales professionals with those of
the organization.
o Develop, implement, and manage compensation plans to retain and motivate

your sales professionals to succeed – allowing them to track performance and
simulate potential compensation of deals in the pipeline.
 Sales analytics
o Monitor the overall health of your business by creating accurate forecasts,

proactively monitoring pipeline performance, effectively managing budgets, and
properly allocating resources to meet revenue goals.
3.3 Features & Functions of Service CRM
CRM reduces the service costs while enhancing customer satisfaction by increasing
efficiency and delivering consistent high-quality service. The application supports the
following key business processes:
14
 Sales and marketing for service
o Develop and execute targeted, installed-base marketing campaigns.
o Generate and process service contract quotations, and service orders.
o Conduct solution-based selling.
 Service contract management
o Manage service contracts, automatically verify entitlement, manage service-

level agreements, and alert agents when a customer's contract is about to
expire.
o Support a variety of service contracts, including standard parts and labor

contracts and usage-based contracts.
 Customer service and support
o Access information on service histories, contracts and service entitlements,

service levels, installed base, and warranties through an easy-to-use interaction
center screen.
 Return and depot repair
o Automate the entire return and depot repair process, including creating the
return materials authorization (RMA), billing and shipping repaired products to
customers, and issuing and tracking loaner units as necessary.
 Field service management
o Organize, plan, and dispatch service resources to meet service demands using
Gantt charts, geo-maps, or a powerful optimization engine.
o Execute and confirm service orders as well as manage van-stock spare parts
with mobile devices.
15
 Warranty and claim management
o Manage the entire warranty and claims process, from return merchandise
authorization (RMA) to receipt and inspection.
o Coordinate with third-party logistics providers to ensure timely customer credits

and avoid unnecessary goodwill allowances.
 Installation and maintenance
o Track customers' installed base of products and their configuration with

graphical hierarchical representation.
o Predict impact of new product installation for fast and accurate service.
o Minimize downtime with planned maintenance service.
 Parts logistics and finance
o Manage parts inventory and parts procurement with native integration to SAP
ERP logistics capabilities.
o Streamline invoicing, revenue recognition, and cost allocation with native

integration to SAP ERP financial capabilities.
 Service analytics
o Identify problems and trends, and take corrective action if needed.
 E-service
o Provide a secure, personalized portal for customer support and service over the
Web.
o Enable customers to troubleshoot their product issues, create service requests,

register products and warranties, and track orders.
16
 Channel service
o Manage and assign external resources to customer services orders.
o Enable third-party technicians to receive, execute, and confirm service orders.
 IT service management
o Streamline IT helpdesk operations with ITIL-compliant solution for incident,

problems, request for change, and so on.
o Provide transparency and increase customer satisfaction with service-level

management, knowledge articles, and analytics.
o Ensure alignment between IT operations and business priorities through native

integration between CRM and ERP.
17
4. CRM Architecture
The Customer relationship management architecture can be broken down into three
categories, and these are
1. operational,
2. collaborative, and
3. analytical.
Each plays an important role in Customer relationship management, and a company

that wants to success must understand the importance of using these three components
successfully.
Operational CRM
Operational CRM deals with the automation of certain business processes. An example
of business processes that are connected to operational CRM are marketing and sales.
When a connection is made to a customer, the information related to this interaction will
be automatically stored in a database, and the company can pull up specific information
on that customer when it is needed.
Operational CRM can further be broken down into three components. These
components are Enterprise marketing automation, Customer service automation, and
Sale force automation. The Enterprise marketing automation will give the company
information about the business climate, and it will also provide them with crucial data on
their competitors, as will as trends within the industry and other important variables. As
the name implies, Enterprise marketing automation deals with strategies a company can
use to strengthen their marketing tactics. Customer service and support will automate
specific processes that are connected to service. An example of this could be item
returns or customer complaints.
18
Sales force automation will be responsible for automating some of the company's sales
tasks. An example of tasks that SFA would automate are demographics, customer
needs, and accounting management. A number of corporations will use call centers to
store data on their customers. Once the customer makes a call, the customer service
representative can provide them with relevant information. Many companies will also
automate processes such as allowing customers to access their accounts
Analytical CRM
As the name suggests, Analytical CRM deals with analyzing data that is collected by the
company. This data will be analyzed so that the company can enhance its customer
service capabilities.
By enhancing its customer service capability, a company will build a stronger

relationship with its customers. There are a number of common ways that Analytical
CRM is used to achieve this. A number of companies will use the data they've collected
and analyzed to cross-sell products to their customers, as well as retaining customers
that may normally switch to another company. Analytical CRM can also be used to
provide important information to customers within a short period of time. In addition to
building stronger relationships with customers, Analytical CRM can be an important tool
for fraud prevention and detection. It can analyze the patterns of sales, inventory, and
profits in order to find any patterns that are not consistent.
Analytical CRM is also important when it comes to both product development and risk
management. It is important to realize that Analytical CRM is an ongoing process. The
company may need to alter its strategies or methods based on the information that is
analyzed through this process.
Collaborative CRM
Collaborative CRM is important because it places an emphasis on the interactions that

a company will make with its customers. These interactions could be personal, or they
19
could come through mediums such as the telephone or the Internet. Collaborative CRM
will give companies a powerful form of communication that will utilize multiple
technologies.
It will also be responsible for providing services over the Internet so that the costs of the
service can be reduced. When interactions are made with customers, Collaborative
CRM will allow the company to provide them with useful information. At the highest
level, CRM should be an important part of all interactions that a company makes with its
customers.
20
5. Basic CRM (Inputs-

>Process->Output)
5.1 CRM Input
The information box at the bottom effectively highlights the extraction from the core
transaction data, account data, and external data. And then the various steps required
to build the customer information system. The functionality box highlights the five key
21
aspects of studying the customer relationship through target marketing and campaign
management as one box. Behaviour modeling, profiling and segmentation, customer
risk analysis, and customer valuation all surrounding the customer environment. Various
technologies are utilized for implementation of CRM functionality such as Data Mining,
Analytic processing, Query & Reporting, Statistics, and Information Access, which all
surround the core content-base: Data warehouse.
CRM actually represents an enterprise business strategy that involves focusing

knowledge, business processes and organizational structures around customers and
prospect for the whole organization. Surrounding this business strategy is an
information technology infrastructure consisting of data warehouses, decision engines
and integrated middleware for touchpoints/channels in order to better understand
customer behaviour and respond in a timely and relevant manner.
Apart from the above mentioned, POS ,that is, Point Of Sales and SAF, That is Sales
automation Force are a important sources for data collection in case of sales CRM:
 Point of Sales
The POS system software typically handles a myriad of customer based functions
such as sales, returns, exchanges, layaways, gift cards, gift registries, customer
loyalty programs, BOGO (buy one get one), quantity discounts and much more. POS
software allows for functions such as pre-planned promotional sales, manufacturer
coupon validation, foreign currency handling and multiple payment types, inventory
control, purchasing, receiving and transferring of products to and from other
locations. Other typical functions of a POS system are to store sales information for
reporting purposes, sales trends and cost/price/profit analysis. Customer information
may be stored for receivables management, marketing purposes and specific buying
analysis. Many retail POS systems include an accounting interface that ―feeds‖ sales
and cost of goods information to independent accounting applications. All the data
stored in the POS systems acts as an input to the CRM systems.
 Sales Force Automation System
22
Sales Force Automation System (SFA), typically a part of a company‘s customer
relationship management system, is a system that automatically records all the
stages in a sales process. SFA includes a contact management system which tracks
all contact that has been made with a given customer, the purpose of the contact,
and any follow up that might be required. This ensures that sales efforts are not
duplicated, reducing the risk of irritating customers. SFA also includes a sales lead
tracking system, which lists potential customers through paid phone lists, or
customers of related products. Other elements of an SFA system can include sales
forecasting, order management and product knowledge. More developed SFA
systems have features where customers can actually model the product to meet
their required needs through online product building systems.
5.2 CRM Process Framework
Several scholars studying buyer-seller relationships have proposed relationship

development process models (Borys & Jemison, 1989; Dwyer, Schurr, & Oh, 1987;
Evans & Laskin, 1994; Heide, 1994; Wilson, 1995). Building on that work we develop a
four-stage CRM process framework comprised of the following four sub-processes:
 a customer relationship formation process;
 a relationship management and governance process;
 a relational performance evaluation process, and
 a CRM evolution or enhancement process
23
5.2.1 The CRM Formation Process
The formation process of CRM refers to the decisions regarding initiation of relational
activities for a firm with respect to a specific group of customers or to an individual
customer with whom the company wishes to engage in a cooperative or collaborative
relationship. Hence, it is important that a company be able to identify and differentiate
individual customers. In the formation process, there are three important decision
areas:
1. defining the purpose (or objectives) of engaging in CRM;
2. selecting parties (or customer partners) for appropriate CRM programs; and
3. developing programs (or relational activity schemes) for relationship

engagement with the customer.
24
5.2.2 The CRM Governance Process
Once a CRM program is developed and rolled out, the program as well as the
individual relationships must be managed and governed. For mass-market customers,
the degree to which there is symmetry or asymmetry in the primary responsibility for
whether the customer or the program sponsoring company will be managing the
relationship varies with the size of the market. However, for programs directed at
distributors and business customers the management of the relationship would require
the involvement of both parties. The degree to which these governance responsibilities
are shared or managed independently will depend on the perception of the norms of
the governance processes among the relational partners given the nature of their CRM
program and the purpose of engaging in the relationship. Not all relationships are or
should be managed alike. In fact, several studies suggest appropriate governance
norms for different hybrid relationship.
Whether management and governance responsibilities are independently or jointly

undertaken by relational partners, several issues must be addressed. These include
decisions regarding role specification, communication, common bonds, the planning
process, process alignment, employee motivation, and monitoring procedures.
Communication with customer partners is a necessary process of relationship
marketing. It helps in relationship development, fosters trust, and provides the
information and knowledge needed to undertake the cooperative and collaborative
activities of relationship marketing.
Another important aspect of relationship governance is the process of planning and

determining the degree to which customers need to be involved in the planning
process. Involving customers in the planning process would ensure their support in
plan implementation and in the achievement of planned goals. However, not all
customers are willing to participate in the planning process nor is it possible to involve
all of them in relationship marketing programs for the mass market. Yet, the
involvement of major customers in the planning process is desirable and sometimes
necessary for managing a cooperative and collaborative relationship.
25
Finally, proper monitoring processes are needed to safeguard against failure and
manage conflicts in relationships. Monitoring processes include periodic evaluation of
goals and results, initiating changes in the relationship structure, design, or the
governance process if needed, and creating a system for discussing problems and
resolving conflicts. Good monitoring procedures help avoid relationship destabilization
and the creation of power asymmetries. They also help keep CRM programs on track
given proper alignment of goals, results, and resources.
5.2.3 CRM Performance Metrics
Periodic assessment of results in CRM is needed to evaluate if the programs are

meeting expectations and if they are sustainable in the long run. Performance
evaluation also helps in taking corrective action in terms of relationship governance or
in modifying relationship marketing objectives and program features. Without proper
performance metrics to evaluate CRM efforts, it would be hard to make objective
decisions regarding continuation, modification, or termination of CRM programs.
Developing performance metrics is always a challenging activity as most firms are
inclined to use existing marketing measures to evaluate CRM. However, many existing
marketing measures, such as market share and total volume of sales may not be
appropriate in the context of CRM. Even when more CRM oriented measures are
selected, they cannot be applied uniformly across all CRM programs, particularly when
the purpose of each program is different. For example, if the purpose of a particular
CRM effort is to enhance distribution efficiencies by reducing overall distribution cost,
measuring the program's impact on revenue growth and the customer‘s share of the
business may not be appropriate. In this case, the program must be evaluated based
on its impact on reducing distribution costs and on other metrics that are aligned with
those objectives. By harmonizing the objectives and performance measures one would
expect to see more goal directed managerial action by those involved in managing the
relationship
5.2.4 The CRM Evolution Process
26
Individual customer relationships and CRM programs are likely to undergo evolution as
they mature. Some evolution paths may be pre -planned while others evolve naturally.
In any case, several decisions have to be made by the partners involved about the
evolution of the CRM programs. These include decisions regarding the continuation,
termination, enhancement, and modification of the relationship engagement. Several
factors could hasten any of these decisions. Amongst them relationship performance
and relationship satisfaction (including relationship process satisfaction) are likely to
have the greatest impact on the evolution of the CRM programs. When performance is
satisfactory, partners would be motivated to continue or enhance their CRM program
When performance does not meet expectations, partners may consider terminating or
modifying the relationship. However, extraneous factors could also impact on these
decisions. For example, when companies are acquired, merged, or divested, many
relationships and relationship marketing programs undergo changes. Also, when senior
corporate executives and senior leaders in the company move, CRM programs undergo
changes. Yet, there are many collaborative relationships that are terminated because
they had planned endings. For companies that can chart out their relationship evolution
cycle and state the contingencies for making evolutionary decisions, CRM programs
can be more systematic.
27
5.3 Output
CRM software generated reports which are useful for various departments in the
organization. The following g diagram shows the list of departments benefitted by the
CRM reports.
marketing
Sales CRM customer

Support
Inventory
control
5.3.1 Sales
The objective of sales CRM is to maintain focus on productive activity to acquire, grow,
and retain profitable relationships with functionality for sales planning and forecasting,
territories, accounts, contacts, activities, opportunities, quotations, orders, product
configuration, pricing, billing, and contracts. Some reports generated to meet these
objectives are:
 Sales by Lead Source
 Potentials Closing by this Month
 Pipeline by Stage & Probability
 This Month Sales Report
 Accounts by Industry
28
5.3.2 Marketing
Marketing CRM analyze, plan, develop, and execute all marketing activities through all
customer interaction points. This central marketing platform empowers marketers with
complete business insights – enabling the organization to make intelligent business
decisions and to drive end-to-end marketing processes. The reports generated in this
regard are:
 Leads by Source Report
 Campaigns Revenue Report
 Campaign Leads
 Potentials by Campaign
5.3.3 Customer Support
CRM aims at reducing the cost of service while enhancing customer satisfaction and
maximize customer loyalty and boost revenue by transforming customer interaction
center into a strategic delivery channel for marketing, sales, and service efforts across
all contact channels. The reports generated by CRM catering the above aims include:
 Products by Cases
 Cases By Origin
 Cases By Status
 Cases By Priority
 Popular Solutions
5.3.4 Inventory Control
CRM aims at optimizing the inventory levels, inventory tracking, purchase order
tracking, and location transfer and serialized parts . CRM incorporates robust purchase
ordering functionality, multi-level pricing, tracking, reorder points, RMA, exchanges and
29
much more while optimizing the inventory levels to maximize profits at all touch points.
The CRM reports helpful in this regard include:
 Purchase Orders by Status
 Quotes by Stage
 Invoices by Accounts
 Sales Orders by Status
 Products by Support Termination date
30
6. Benefits of CRM
Customers are Profitable over a period of time
Studies by the US-based Bain and Company have shown that a customer becomes
more profitable with time because the initial acquisition cost exceeds gross margin while
the retention costs are much lower. When an organization retains the customer, it gets a
larger share of the customers wallet at a higher profit-one percent increase in sale to
existing customer increase profits by 17 per cent while the same amount of sale to new
customer increased profit by only 3 per cent. This huge different is explained by the fact
that for most companies the cost of acquiring the customer is very high. It costs six to
eight times more to sell to a new customer than to sell to an existing one. The same
study also highlighted that a company can boost its profit up 85 per cent by increasing
its annual customer retention by only 5 per cent
Similarly, studies have shown that the probability of selling a product to a prospect is 15
per cent while it is 50 per cent to a existing customer. Thus, the time, the effort and the
costs of selling are much lower for an existing customer.
Customer probability is Skewed
An analysis of the revenue and profit contribution of customer base of banks in the US,
Europe and Australia showed the following:
The top 20 per cent of the customers contribute to 150 per cent of the profits while the
bottom 20 per cent drain 50 per cent of the profits and the rest 60 per cent just break
even.
Experiences of Indian organizations are on similar lines. In a large public sector Banks,
the top 23 per cent of the customers contribute to 77 per cent of the revenues. Similarly,
the top 27 per cent customers of a leading cellular phone service provider contributes to
75 per cent of the revenues.
31
The implication of such a skew in customer profitability and revenue contribution are
startling for organizations, which use to conventionally treat ‗all customers are equal‘.
Competitors have to just lure these top customers and the organization would face
serious problems. It also highlights the fact that one has to adopt different strategies for
different customer groups:
 Programmes have to be developed to retain and build stronger bonds with the
top ‗gold standard‘ customers so that they do not get ‗poached‘
 Activity-Based Costing analysis has to be done with the middle group of
‗potentials‘ so that the cost of serving this customers are reduced. In addition,
cross-selling and up selling should be done to increase the profitability of these
customers.
 An analysis of the bottom growth has to be done to identify those customers who
can be shifted to the ‗potential‘ group. For the remaining, the cost of service has
to reduce by encouraging them to use lower cost channels. In extreme cases,
some of these customers will be encouraged to defect to competitors.
Outsourcing of loss making customers to specialized low overhead agencies is
an emerging trend.
Marketing Benefits of CRM
CRM will gradually reduce organization‘s dependence on periodic surveys to gather

data. Collection of data related to buying and consumption behavior will be an ongoing
process. In many cases, the transaction data is automatically collected some times real
time as in the e-commerce transaction. This rich repository of customer information and
knowledge updated through regular interactions and actual customer transactions and
purchase behavior will help marketers to develop and market customer centric products
successfully.
Customized promotions-based customer preferences and purchase patterns will
substantially reduce the wasteful expenditure of mass communication and even direct
mailing. As a customized promotion are more focused and are based on a deeper
insight of existing customers, they have a greater chance of conversion to sales.
32
Service Benefits of CRM
Research findings conducted across industries as a part of a Technical Assistance

Research Project (TARP) indicate that:
 95 per cent of the customers do not bother to complain, the just take their
business else where.
 Most loyal customers take time to complain. This enables the product / service
provider to improve and ensure that such mistake do not recur.
 A typical dissatisfied customer will tell an average of 14 others about a bad
experience while she will tell only six about a satisfying experience with an
organization.
 70 per cent of customers who complain will do business with a company again if
it quickly takes care of a service problem.
The benefits of CRM can be bulleted in the nut-shell as follows:
Marketing
 Helps Marketing to identify, categorise and target their best customers
 Manages marketing campaigns with clear goals, objectives and quantifiable

data for ROI
 Generates quality leads for the sales team
Sales and Account Management
 Improve telesales, account management and sales management
 Improve structure of existing sales processes
 Give your sales staff better support tools
 Track and gain insight into organisational sales status
33
Build Customer Relationships
 Improve relationships with customers
 Retain your existing customers by improving customer satisfaction
 Identify your best customers and provide them the highest level of service.
Empower Your Employees
 Provide employees with the information they need
 Help your employees understand customer needs
 Build relationships between your company and your customers
Integrate your Partners
 Provide partners with the means to share information
 Track partner activity
 Integrate Partners into one system
34
7. CRM in Retail
Organization
Retail consists of the sale of goods or merchandise from a fixed location, such as a
department store, boutique or kiosk, or by mail, in small or individual lots for direct
consumption by the purchasers. Retailing may include subordinated services, such as
delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys
goods or products in large quantities from manufacturers or importers, either directly or
through a wholesaler, and then sells smaller quantities to the end-user. Retail
establishments are often called shops or stores. Retailers are at the end of the supply
chain. Manufacturing marketers see the process of retailing as a necessary part of their
overall distribution strategy.
7.1 Retail And CRM : Reasons
Retailers experience a vast difference when they treat their customers as a partner.
This serves to basically improve the entire supply chain. The wholesaler as well benefits
when the retail industry maintains and sustains a good relationship with the customer.
Another factor that contributed to CRM success in the retail industry is the failure of
enterprise resource (ERP) systems in lending the competitive edge that is needed.
CRM retail software encourages good marketing which includes the usage of CRM
software as a means of collecting and managing customer information, using that
information to segment your market and basically endeavoring to do so, on the basis of
this collated information. It means using a CRM product to collect and manage
customer intelligence to segment your database by common interests, purchasing
history, demographics and other relevant customer information.
CRM enables retailers to address the right information to the most appropriate customer
35
segment. It helps the retail industry to send personalized messages to each customer
with information catered to his likes. CRM helps retailers take their customers
successfully through the sales and marketing process
Market analysts dispute the correct figure but all are of the opinion that companies will
pour billions of dollars into the CRM industry. This is because of its ability to maneuver
customer relationships in the direction of profitability. The philosophy behind adopting
retail CRM - the way the retail industry treats its customers influences future profitability.
Companies are making bigger investments in CRM solutions. Retail CRM serves to
support marketing, sales, and service processes involved in the business. CRM causes
changes in the organization and the business work processes. CRM helps achieve a
way of managing customer relationships in a better manner. Partner Relationship
Management is yet another offshoot of CRM projects. It serves to support channel
partners and all other channels as well between an enterprise and its end customers.
The chart in the next page shows the CRM objectives in a retail organisation.
36
37
7.2 CRM Retail Software Benefits:
The benefits of the CRM software in retail industry are:
 targeting prospects
 acquiring new customers
 campaign management
 lead distribution
 long-term relationship value
 effective selling processes
 forecasting
 transactions done at the lowest cost
 better service and
 handling post-sales service
 support issues with call center
38
Bibliography
 ―Customer Relationship management- A step by step Approach‖ by H. Peeru
Mohamed and A Sagadevan
 ―CRM at the speed of Light‖ by Paul Greenberg
 ―The CRM Process: Its Measurement and Impact on Performance‖ by Werner
Reinartz, Manfred Krafft, and Wayne D. Hoyer
 ―Customer Relationship Management: Emerging Practice, Process, and
Discipline‖ by Atul Parvatiyar & Jagdish N. Sheth
 Website links
 http://crmtutorial.com/Customer-Relationship-Management-(CRM)-
Tutorial/a42p1
 http://www.ehow.com/list_6632233_common-crm-modules-erp-
system.html
 http://marketingteacher.com/lesson-store/lesson-crm-business-
strategy.html
 http://www.ehow.com/how_7167193_build-crm-system.html
 http://www.informit.com/articles/article.aspx?p=23101
 http://www.crm-software-
system.net/software_requirements_checklist.html
 CRM Software vendors
 SAP
 Oracle
 Terrasoft
 Infosys
 Lawson
39

Customer Relationship Management

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Customer Relationship Management

Uploaded by

Copyright:

Available Formats

ENTERPRISE RESOURCE PLANNING

Submitted to: Submitted By:

National Institute Of Fashion Technology, Hyderabad

2. School Of Thought On CRM 4-6

3. CRM modules In ERP system 7-17

4. CRM Architecture 18-20

5. Basic CRM (Input->Process->Output) 21-30

6. Benefits of CRM 31-34

7. CRM in Retail Industry 35-38

Customer relationship management (CRM) is a broadly recognized, widely-

1. Understanding customer completely

 Reduce advertising cost

 The Anglo-Australia Approach,

The Anglo-Australian approach integrated the contemporary theories of quality

The Nordic approach views relationship marketing as the confluence of interactive

The six markets are as follows

1. Customer markets – existing and prospective customers as well as

Customer relationship management systems typically have a contact management

Sales automation modules streamline the sales process by centralizing information

Marketing CRM modules included with an enterprise resource planning (ERP)

3.1 Features & Functions of Marketing CRM

 Marketing resource and brand management

o Manage and optimize the use of marketing resources including budgets,

o Align all activities and resources around strategic marketing goals.

o Gain visibility and control into your marketing processes.

o Accurately manage the marketing budgets and costs.

o Increase brand awareness with proper usage and consistency across

o Facilitate collaboration among team members and coordinate marketing

 Segment and list management

o Define accurate segments with a consolidated view of all relevant enterprise

o Gain insights into customer segments with data visualization features.

o Easily perform segmentation using an interactive, drag-and-drop interface.

o Execute marketing activities through all inbound and outbound interaction

o Build customer relationships with dialog marketing that builds on previous

o Leverage online marketing channels to plan, develop, and execute e-mail

o Create specific loyalty programs by defining customer tier levels, points

o Drive loyalty program membership with membership-handling capabilities;

o Process points accruals and redemptions with the scalable loyalty-processing

 Trade promotion management

o Centrally plan and align all trade activities

o Accurately develop sale volume forecasts and financial accruals with

o Automate trade settlements and redemption processes with integration to

o Gain insight into trade promotional effectiveness at multiple planning levels:

o Maintain a single source of all enterprise lead information.

o Extend your lead management process to partner organizations to increase

o Understand the effectiveness of marketing activities.

o Convert reports and data into actionable insights.

o Evaluate effectiveness of various marketing activities, channels, and tactics

o Use advanced analytical algorithms to cluster, classify, and segment customer

3.2 Features & Functions of Sales CRM

 Sales planning and forecasting

o Enhance performance with coordinated planning and execution of sales

o Provide a complete picture of projected revenue and anticipated sales volume

o Increase the accuracy of demand plans and sales forecasts.

o Optimize account coverage and distribution of sales resources across clearly

o Improve resource utilization with clear visibility into assignments and

 Accounts and contacts management

o Provide a single, comprehensive view of all information necessary to manage

o Foster efficient team collaboration with better transparency and coordination of

o Manage customer visits, account profiles, and activity-driven sales processes.

o Monitor the conversion of opportunities into revenue.

o Identify stalled deals, monitor quota attainment, simulate strategies to push

 Quotation management and order capture