Customer Relationship

Management

actors that ushered in CRM

We are in business because we have customers to serve
Selling to Marketing
Production to Business Realisation
Intense competition
Increasing customer expectation
Fleeting loyalty
Increasing cost of customer acquisition & retention
Access to technology development

actors that ushered in CRM

Marketing Developments : Ps & Cs
Customer Solution

Customer Cost

Product

Price

Promotion

Place

Communication

Convenience

7 Ps

actors that ushered in CRM

Developments in Marketing
1950s

Consumer Marketing

1960s

Industrial Marketing

1970s

Societal Marketing

1980s

Services Marketing

1990s

Relationship Marketing

2000s

New Media Marketing

actors that ushered in CRM

Internet and the overall information proliferation

Rise of the value savvy customers
Increase in wealth & liberalisation
Rise of competition & market fragmentation
Increasing pace of innovation
Shortening PLC or product obsolescence
Increasing input costs and constraints in end pricing

Why CRM?

Unsatisfied customers will tell more people than

satisfied customers (viral marketing)

Only few unhappy customers complain while most simply

switch over their loyalty to other products/comptition

Loss of customer is loss of business, loss of opportunity to

grow and loss of profitability

Therefore feedback from customers is essential for marketer

to ascertain how the products and services are rated by the
customers and how they can be improved

portant Agencies for Business Success

Customers

Organisati
on
Success

Stakeholders

Employees

Customer

stomer is the most important Visitor in Our Premises.

s not Dependent on us. We are Dependent on Him.

s not an Interruption in our Work. He is the Purpose of

s not an Outsider to our Business. He is Part of it.

are not doing Him a Favour by Serving Him. He is doin

vour by Giving Us the Opportunity to do so.

t is Customer Relationship Management (CRM)?

RM is the development and maintenance of mutually beneficial

ng-term relationships with strategically significant customers

RM is an IT enhanced value process, which identifies, develops,

egrates and focuses the various competencies of the firm to the
oice of the customer in order to deliver long-term superior
stomer value, at a profit to well identified existing and potential
stomers.

t is Customer Relationship Management (CRM)?

rmation-Technology enabled Strategy aimed at identifying, targeting,

iring, and retaining the best mix of Customers.

helps in Profiling Prospects, understanding their Needs & Wants, an

ding Relationships with them by providing the most-suitable Products
a very High level of Customer Service.

egrates back and Front-office Systems to Create a Database of cus

tacts, Purchases, Information requested, Technical Support, etc.

database helps the Firm in presenting a unified-face to its customers,

Improve the Quality of the relationship.

t is Customer Relationship Management (CRM)?

CRM is an information industry term for methodologies, software,
and usually Internet capabilities that help an enterprise manage
customer relationships in an organized way.
For example, an enterprise might build a database about its
customers that describes relationships in sufficient detail so that
management, salespeople, people providing service, and perhaps
the customer directly could access information, match customer
needs with product plans and offerings, remind customers of service
requirements, know what other products a customer had purchased,
and so forth.

relationship
management
is a widely-implemented
t isCustomer
Customer
Relationship
Management
(CRM)?
strategy for managing a companys interactions with
customers, clients and sales
prospects.

It involves using technology to organize, automate, and

synchronize business processesprincipally 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 for better profits.
Customer relationship management describes a company-wide
business
strategy including customer-interface departments as well as
other
departments.

t is Customer Relationship Management (CRM)?

CRM is a business philosophy based upon individual
customers
and customised products and services supported by
open lines
of communication and feedback from the
participating firms that
mutually benefit both buying and selling
organisations.
The buying and selling firms enter into a learning
relationship,
with the customer being willing to collaborate with the
seller and
grow as a loyal customer. In return,, the seller works to
maximize
the value of the relationship for the customers
benefit.

t is Customer Relationship Management (CRM)?

CRM is Software, System & Technology

CRM is Data Storage & Analysis
CRM is a change in corporate culture from a Transaction Focus
to a Customer Centric one
CRM is retaining, developing & anticipating Demand
CRM is a strategy cycle focusing on Customers

t is Customer Relationship Management (CRM)?

ditional Focus on Transactions shifting to Relationship Market

Transactions Focus

Relationship Focus

Orientation to single sales

retention

Orientation to customer

Discontinuous customer contact

Focus on product features
Short time scale

Continuous customer contact

Focus on product benefits

Long time scale

Little emphasis on customer service

emphasis
Limited commitment to meeting
customer expectations

High customer service

High commitment to meeting

customer expectations

Quality is the concern of production staff

Quality is the concern of

Objectives of CRM

To identify & establish, maintain & enhance and when necessary,

terminate relationship with customers at a profit so that the objectives
of all parties involved are met; and this is done by mutual exchange
and fulfillment of promises.
TO DO BUSINESS PROFITABLY

Determinants of CRM
TRUST
The willingness to rely on the ability, integrity and motivation of
one company to serve the needs of the other company as agreed
upon implicitly and explicitly.

VALUE
The ability of a selling organisation to satisfy the needs of the
Customer at a comparatively lower cost or higher benefits than
That offered by competitors and measured in monetary,
Temporal, functional and psychological terms.

Determinants of CRM

In addition to Trust & Values;

Understand customer needs and problems
Meet their commitments
Differential pricing
Availability of products & services
Provide superior products / after sales services / support
Make sure that the customer is always told the truth
Establish dialogue / feedback on a continued basis
Have a passionate interest in establishing and retaining
a long-term relationship/perspective

e Customer Progression Ladder

Suspec
ts

Prospec
ts

Rejects

Firsttime
Custom
ers

Repeat
Custom
ers

Clients

Advocat
es

Partners

es in the Development of Customer Relationship

Partners

Degree of Involvement

High
Advocates

Clients
Repeat
Customers
1st Time
Customers

Low
Transactional

Collaborative

Nature of Customer Relationship

e Cycle of Customer Relationship

High Cooperation
Low Competition

Low CooperationPre-Relationship Development

Stage
Stage
High Competition

Maturity
Stage

Severance
Stage

Time

What should the FOCUS & MAIN ACTIVITIES

of a sales person be in each stage of the
Relationship Development Process?

es in the development of Customer Relationship

The Pre-relationship Stage

The event that triggers a buyer to seek a new business

partner.
The Early Stage

Experience is accumulated between the buyer and seller

although
a great degree of uncertainty and distance exists.
The Development Stage

Increased levels of transactions lead to a higher degree of

commitment and the distance is reduced to a
social exchange.
The Long-term Stage

Characterised by the companies mutual importance to

each other.
The Final Stage

The interaction between the companies becomes

institutionalized.

dels of Customer Relationship Management

The Evans and Luskin (1994) model for effective
Relationship Marketing

Relationship marketing inputs

Understanding customer expectations
Building service partnerships
Empowering employees
Total quality management

Relationship marketing outcomes

Customer Satisfaction
Customer loyalty
Quality products
Increased profitability
Assessment state
Customer feedback
Integration

anaging Customer Relationships

The salesperson must be involved in the following activities in order to
initiate, develop and enhance the process that is aimed at building
trust and commitment with the customer.
Initiating the relationship

Engage in strategic prospecting and qualifying

Gather and study pre-call information

Identify buying influences

Plan the initial sales call

Demonstrate an understanding of the customers needs

Identify opportunities to build a relationship

Illustrate the value of a relationship with the customer

anaging Customer Relationships

Developing the relationship

Select an appropriate offering

Customise the relationship

Link the solutions with the customers needs

Discuss customer concerns

Summarize the solution to confirm benefits

Secure commitment

anaging Customer Relationships

Enhancing the relationship

Assess customer satisfaction

Take action to ensure satisfaction

Maintain open, two-way communication

Work to add value and enhance mutual opportunities

anaging Customer Relationships

Opportunities for
Adding Value

High
Use a non
customised
approach

Build a strong
and lasting
relationship

Seek better
opportunities
elsewhere

Focus on
loyalty-building
programme

Low
Low

Potential Profitability
of Customer

High

ctions of Customer Relationship Management

Direct Functions: are the basic requirements of a company that are

necessary to survive in the competitive market place.

Profit
Volume and
Safeguard

ndirect Functions: are the actions necessary to convince the customer

o participate in various marketing activities.

nnovation
Promotion
Scout and
Access

ole of Sales People as Relationship Builders / Promote

Identifying potential customers and their needs

Approaching key decision makers
Negotiating and advancing dialogue and mutual trust
Coordinating the cooperation between customers and the company
Identify untapped business potential
Contributing to constructive resolution of existing conflicts
Provide feedback on competitors offerings and services
Comprehensive approach tailored to meet specific needs
Prepare and implement result oriented action plan
Leading the customer relationship development team

Facets of CRM

Customer needs
Customer response and influence
Customer satisfaction
Customer loyalty
Reclaiming lost customer
Customer complaints
Customer service

scovering the Customer: Consumer Sector

Social Class
Urban /
Rural

Region
CONSUM
ER
BEHAVIO
UR

Culture

Religion

Economic
Status

scovering the Customer: Consumer Sector

Some examples;
Urban
Price

Rural

Value driven

Time Availability

Cost driven

A major constraint

Not a constraint

Culture

Nuclear family

Joint family

Quality

Major criteria

Minor criteria

Brand preference

Preferred

Education/Knowledge

High

Indifferent
Medium

Complaint redressal Immediate response,

Gets more upset fast
normally

Lack of it is taken

scovering the Customer: Consumer Sector

ome examples;

rice

Upper
Premium

ime Availability

ulture

Quality

Middle
Value
Low

Major criteria

High

Nucleus

is a criteria

Preferred

ducation/Knowledge High

omplaint redressal

Cost

Medium

Family composition
plays no major role

rand preference

Lower

Joint family
Not a criteria

Preferred
High

Immediate response
normally

No spl. preference

Low
Fast response

Lack of it is taken

discovering the Customer: Core Sector

Decision
Making
Process
Customer
Type

Financial
Ability

Image

Price
Sensitivity
CONSUM
ER
BEHAVIO
UR

Attitude /
Orientation

Bargaining
Power

Buying Process &

Role of CRM

CRM

Should I
buy a
vacuum
cleaner?

No

Yes

Considerations;
Social segment
Economic status
CRM
Home environment
Couples working status
Availability of domestic
help
Deciding
Scout the market to identifyfactors
vacuum &
cleaners types and
evaluation
;
meet
representatives

CRM

CRM

Product features &

benefits
Image
Cost
Past experience with
company
Service & maintenance
facility
Quality & Durability
Complaint redressal
Short
listing &
and
Paying
capacity
Demonstration
Financing
Final
Assessme
nt

Buy

Postpone / Dont buy