III SEMESTER

BA9156 Customer Relationship Management

REGULATION 2009
SYLLABUS
UNIT – I INTRODUCTION 9

Definitions - Concepts and Context of relationship Management – Evolution -

Transactional Vs Relationship Approach – CRM as a strategic marketing tool – CRM
significance to the stakeholders.

UNIT – II UNDERSTANDING CUSTOMERS 9

Customer information Database – Customer Profile Analysis - Customer perception,
Expectations analysis – Customer behavior in relationship perspectives; individual and
group customer’s - Customer life time value – Selection of Profitable customer segments.

UNIT – III CRM STRUCTURES 9

Elements of CRM – CRM Process – Strategies for Customer acquisition – Retention and
Prevention of defection – Models of CRM – CRM road map for business applications.

UNIT – IV CRM PLANNING AND IMPLEMENTATION 9

Strategic CRM planning process – Implementation issues – CRM Tools- Analytical CRM
– Operational CRM – Call center management – Role of CRM Managers.

UNIT – V TRENDS IN CRM 9

e- CRM Solutions – Data Warehousing – Data mining for CRM – an introduction to
CRM software packages.
Total: 45

TEXT BOOKS
1. G.Shainesh, Jagdish, N.Sheth, Customer Relationships Management Strategic
Prespective, Macmillan 2005.
2. Alok Kumar et al, Customer Relationship Management : Concepts and applications,
Biztantra, 2008

REFERENCES
1. H.Peeru Mohamed and A.Sahadevan, Customer Relation Management, Vikas
Publishing 2005.
2. Jim Catheart, The Eight Competencies of Relatioship selling, Macmillan India, 2005.
3. Assel, Consumer Behavior, Cengage Learning, 6th Edition.
4. Kumar, Customer Relationship Management - A Database Approach, Wiley India,
2007.
5. Francis Buttle, Customer Relationship Management : Concepts & Tools, Elsevier,
2004.

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 Unit I
Definition
“Customer Relationship Management is a comprehensive strategy and process of
acquiring, retaining and partnering with selective customers to create superior
value for the company and the customer.”
- Parvatiyar and Sheth

“Customer relationship management is about attracting, developing, maintaining

and retaining profitable customers over a period of time.”
- Massey, Montoya-Weiss & Holcom

What is CRM ?
Customer Relationship Management (CRM) is a business strategy that enables:
 organizations to get closer with their customers,
 to better serve their needs,
 improve customer service to enhance customer satisfaction, thereby
maximizing customer loyalty and retention.

CRM - Why is it important?

 CRM is the array of processes that help a company to understand the
preferences or dislikes of individual customers in order to build lasting
relationships.
 CRM solutions help to safely store volumes of customer data in an organized
easy-to-access manner. By analyzing this data, company can determine
individual customer behavior, analyze preferences and provide one-to-one
services to maximize customer satisfaction.

Definitions;
“CRM” as a business strategy designed to optimize profitability, revenue and customer
satisfaction. - defined by Gartner
History of CRM:
 1980s: Database marketing emerges.

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  1980s: Database helped larger organizations rather then small who only got survey
type info.
 1990s: CRM appears as a two-way communication device.
 1990s: CRM leads to programs such as frequent flyer miles and bonus points on
credit cards.
 2000s: Internet has helped expand from stagnant database and allows off-site
information storage.
 2000s: Used most frequently in financial services, high tech corporations and the
telecommunications industry.
What it does...
 Builds a database that describes the customers and the relationship they hold with
the company.
 Database: a collection of information that is organized in a way that allows it to be
easily accessed, managed and updated.
 Provides enough detail so that the company can offer the client the product/service
that matches their need the best
 May contain information about their past purchases, who is involved with the
account and a summary of all conversations.

The Concept of CRM:

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CRM Pyramid :

What to look for in CRM software:

 Make sure the primary goal (ie: customer service) is standard in the software.
Customization is very expensive.

 Be able to integrate smoothly and flawlessly.

 Make sure the program doesn't offer more then you need.

 Compare with other companies of equivalently the same size who have purchased
the same CRM software and examine their results.
Benefits of CRM:
 Research has shown that companies that create satisfied, loyal customers have more
repeat business, lower customer-acquisition costs and stronger brand value.
 This equals better financial performance.

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CRM may...
 Help marketing departments identify and target their best customers, manage
campaigns as well as discover qualified leads.
 Qualified Leads: prospects who seem most likely to buy because of some
information known about them.

 Improve sales and streamline existing processes.

 Form individualized relationships with customers.

 Give employees information needed to improve customer service and also to better
understand customer needs
It also...
 Is a fast way to identify and handle potential problems.

 Tracks all points of contact between a customer and the company.

 Provides all employees with product specs, product use information and technical
assistance.

 CRM quickly manages the scheduling of follow-up sales calls to assess the
satisfaction of customers and their repurchase probabilities (when and how much).
CRM leads to...
 Identifying prospects and helps them become customers.
 Closing sales more effectively and efficiently.

 Allowing customers to perform business transactions quickly and easily.

 Providing better service and support following a sale.
 Which = Customer Service!!

Customer Service
 Helps make call center more efficient.
 Aids in cross and up selling products.
 Cross Selling: Provide additional products / services.
 Up Selling: Upgrade existing products/services.
 Helps sales staff close deals faster.
 Simplifies marketing and sales processes.
 Allows companies to discover new customers.
It even ties into BI…
(Business Intelligence)
 CRM is closely related to business intelligence because both methods involve using
technology to gather, analyze and organize data in order to develop relevant
information.

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  CRM is just a more specific form of BI that concentrates strictly on customer’s
behaviors and actions, for both past and future information.
Technical Functionality
 Scalability: CRM may be used on a large scale while also being able to be reliably
contracted/expanded to whatever scale is necessary. So.. the data is flexible and
won’t distort when adjusted.
 Multiple communication channels: the ability to interface with users via many
different devices (phone, WAP, internet etc.) Basically, you can get what you want,
when you want wherever you are.

Concept and Context of CRM:

Buyer and Seller Relationship over the Ages
Barter Age
Customized Product Age
Mass Production Age
Customer
Consumer
Customization Age: 1:1 Relationship

What is CRM
a) CRM is about Strategy

CRM is about creating a competitive advantage by being the best at understanding,

communicating, delivering and developing existing customer relationships, in addition to
creating and keeping new customers (Strategic CRM)
Ask questions for a good CRM Strategy:
What products and services are we offering now and in the future?
In what markets?
What customer groups will these products and services appeal to?
Which of these are of greatest value to the organization? In terms of expenditure,
reliability, growth potential?
What additional needs do the most valuable customer groups have? Additional
products? Additional services?
In what different ways can we do business to deliver to our customers better?

What motivates companies to adopt CRM Strategies?

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  Competition: Globalization

 Customer Expectation: e-Commerce

 Technology: Touch points

 Diminishing impact of advertising: Information through e-mail and web sites

b) CRM – the ‘customer’ thread

Whether the customers are current / potential / selected CRM is about acquiring,
retaining, partnering, personalizing relationships with them

CRM helps businesses use technology and human resources to gain insight into the
behavior of customers and the value of these customers.

Concept of Personalization and Customization:

 Customization: Customization assumes that manufacturer will design / or enable

designing a product to suit customer needs.

 Personalization: Personalization is about customer becoming a co-creator of the

content of their experience.

 An integrated approach to identifying, acquiring and maintaining customers.

 Allows companies to coordinate their approach across channels, departments and

also geographically

Concepts of CRM

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Customer relationship management (“CRM”) is a term that refers to two things:
 A company’s strategy for managing leads and customer data
 Software that manages that data
In its simplest form, CRM is a database where sales and marketing teams store
critical account data:
 Contact & account information (contact names, emails, phone numbers,
SIC code, address, etc.)
 Source of the lead
 Sales rep name and activity history (calls, emails sent, inquiries, etc)
 Purchase history
 Projected revenue by customer

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  Marketing campaign data
CRM can also be an important reporting tool. For example, it can be used to:
 Generate revenue projections for a product, a sales rep, and your company
as a whole
 Tie revenue to the original marketing campaign
 Pull up lists of leads and activities by sales rep
 View the number of leads you have at each step in your sales process
 Track your progress against your goals
 Manage marketing campaigns
 Capture leads from your website
 Minimize the time your team spends creating manual sales & activity reports

Stages of CRM
1. The Pre-relationship Stage : The event that triggers a buyer to seek a new
business partner.
2. The Early Stage : Experience is accumulated between the buyer and seller
although a great degree of uncertainty and distance exists.
3. The Development Stage : Increased levels of transactions lead to a higher
degree of commitment and the distance is reduced to a social exchange.
4. The Long-term Stage : Characterised by the companies’ mutual importance
to each other.
5. The Final Stage : The interaction between the companies becomes
institutionalized.

The areas of CRM

Sales Force Automation (SFA)

Customer Service and Support (CSS)

Help Desk

Field Service

Marketing Automation

Context of Relationship Management

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CRM – the ‘customer’ thread
Whether the customers are current / potential / selected CRM is about acquiring,
retaining, partnering, personalizing relationships with them. CRM helps businesses
use technology and human resources to gain insight into the behavior of customers
and the value of these customers.

Concept of Personalization and Customization

 Customization: Customization assumes that manufacturer will design / or
enable designing a product to suit customer needs.
 Personalization: Personalization is about customer becoming a co-creator
of the content of their experience.

RELATIONSHIP MANAGEMENT- Hierarchy

Nine Truths of Relationship Management

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TRUTH # 1: Customers are no longer loyal.
TRUTH # 2: Customers do not really want a relationship but companies do.
- Your Best Customers Can Leave
- Your Marginal Customers Can Move
- Consumers Can Become Customers
TRUTH # 3: Customers want information.
TRUTH # 4: Customers not only want to be thanked for their patronage, they
expect it.
TRUTH # 5: Customers control the selling process.
TRUTH # 6: The Lifetime Value of a customer is not relevant.
TRUTH # 7: Do not overcomplicate the program.
TRUTH # 8: Keep reporting simple and focused on the customer.
TRUTH # 9: WHAT IF? Ask it often. Experiment every chance you get and don’t
call it testing.

Evolution of CRM
Buyer and Seller Relationship over the Ages
Barter Age
Customized Product Age
Mass Production Age
- Customer
- Consumer
Customization Age: one to one Relationship

***Industrial Revolution: “This is what I make, won’t you please buy it?”
***Customer Revolution: “This is what I need, Can’t you please make it.”

Companies have to turn from a ‘make and sell’ philosophy to ‘sense and respond’
philosophy.

As observed by Sheth& Parvathiar, developing customer relationship has historical

antecedents going back to pre-industrial era.

Much of it was due to direct interaction between producers of agricultural products

and their consumers. Such direct interaction lead to relational bonding between the
producers consumers.

In recent years several factors have contributed to the rapid development and
evolution of CRM. These include the growing de-intermediation process in many
industries, due to advent of sophisticated computer and telecommunication
technologies that allow producers to directly interact with end-customers.
Eg. Airlines, banks insurance computer program software.

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The de-intermediation process is fast changing the nature of marketing and
consequently making relationship marketing more popular. Databases and direct
marketing tools give them the means to individualize their marketing efforts. As a
result, producers don’t need those functions formerly performed by the middlemen.
Even consumers are willing to undertake some responsibilities of direct ordering,
personal merchandising and product use related services with little help from the
producers.

Holistic Marketing Framework

The THREE dimensions (CRM, Relationship Management and Marketing) are
extremely clearly integrated in a concept called ‘Holistic Marketing’ framework.
Management Decision depends on:
1. How can a company identify new value opportunities for renewing its
marketing – (Marketing Dimension)
2. How can a company create more promising new value offering? –
(Stakeholders Relationship Dimension)
3. How can a company use its capabilities and infrastructure to deliver the new
value offering efficiently? – (CRM Dimension)

Transaction VS Relationship approach

Transaction Approach Relationship Approach

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

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Some Key CRM Marketing Initiatives

 Cross- selling and up- selling

 Cross-selling: act of selling a product or service to a
 customer as a result of another purchase
 Up-selling: act of motivating customers to trade up to
 more profitable products
 Customer retention
 Churn analysis: identify who are likely to “churn” and
 understand why they leave and join

 Behavior prediction:

 Propensity-to-buy analysis:

 Understanding which products or services a particular customer is likely to

purchase

Next sequential purchase:

 Predicting what product or service a customer is likely to buy next

 Project affinity analysis:

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  Understanding which products will be purchased with other products

 Price elasticity modeling and dynamic pricing:

 Determining the optimal price for a given product, often for a given
customer or customer segment.

Proactive versus Reactive CRM

Types of CRM
I. Proactive versus Reactive CRM
II. Operational, Collaborative and Analytical CRM

I. Proactive versus Reactive CRM

(discussed in class)

II. Operational, Collaborative and Analytical CRM

1. Operational CRM: Front office CRM. Interaction between the customer and
marketer directly through customer touchpoint (POS, Call centers, web
etc.).
Face to face touchpoints: Sales/Service/Channel/Events/Stores/Promotions
Database driven touchpoints:
Telephones/Email/Mail/SMS/Fax/Loyalty Cards/ATM’s
Mass Media:
Advertising/PR/Websites

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 Any Transaction can take place through these touchpoints. Low level
managers interact in this stage and process the information to the mid level
managers

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.

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 get 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.

Operational CRM is focused on the automation of the customer-facing parts of

businesses. Various CRM software applications enable the marketing, selling and
service functions to be automated.
The major applications within operational CRM are as follows:
Marketing automation:

Marketing automation (MA) applies technology to marketing processes.

Several capabilities are offered by MA software: customer segmentation, campaign
management and event-based marketing. Software enables users to explore their
customer data in order to develop targeted communications and offers.
Segmentation, in some cases, is possible at the level of the individual customer.
Unique offers may be made to a single customer at an appropriate point in time.

Sales-force automation:

Sales-force automation (SFA) was the original form of CRM. It 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. Sales-force automation
software can be configured so that is modeled on the selling process of any industry
or organization.

Sales force automation software enables companies automatically to record leads

and track opportunities as they progress through the sales pipeline towards closure.
Intelligent applications of SFA are based on comprehensive customer data made

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available in a timely fashion to salespeople through various media such as desktops,
laptop and handled computers, personal digital assistants (PDAs) and cell-phones.
Sales force automation software has several capabilities, including opportunity
management, contact management, proposal generation and product configuration.

Types of CRM Applications I

 Operational CRM :
 Also known as “front-office” CRM
 Involves the areas where direct customer contact occurs.
 Two types of touch points: inbound and outbound contact
 Analytical CRM :
 Also known as “back-office” or “strategic” CRM
 Involves “understanding” the customer activities that occurred in the front
office.

Direct Kiosk Web/Chat

Interaction ATM Voice Voice

Operational Multi-Channel synchronization Integration

CRM

Provider
Direct Agent Intermediate Partners
Broker

Distribution Channel synchronization Integration

Collaborative
Marketing Sales Service/Support
CRM

Application Integration
Analytical
CRM
Customer data
Analytical Customer mart Product data mart
Business activity data mart
Intelligenc
e
Customer generic data warehouse

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CRM is about Strategy

CRM is about creating a competitive advantage by being the best at understanding,

communicating, delivering and developing existing customer relationships, in
addition to creating and keeping new customers (Strategic CRM)

The answers on the questions below will help to decide on a good CRM Strategy

 What products and services are being offering now and in the future?
 In what markets?

Designing a CRM Strategy

 Cog Wheel Process: CRM (UK) Ltd.
 (Four Key Areas of the Business)
- Strategy
- People
- Technology

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 - Processes

 Company Analysis
 Step 1: Define the existing customer relationship management processes
within the company

 Step 2: Determine the perceptions of how the company manages their

customer relationships both internally and externally

 Step 3: Design the ideal customer relationship management solutions relative

to the company or industry

 Step 4: Deliver a strategy for the implementation of the recommendations

based on the findings

What motivates companies to adopt CRM Strategies?

 Competition: Globalization
 Customer Expectation: e-Commerce
 Technology: Touchpoints
 Diminishing impact of advertising: Information through e-mail and web sites

STRATEGY
Choosing and implementing a system is a major undertaking. For enterprises of any
appreciable size, a complete and detailed plan is required to obtain the funding, resources,
and company-wide support that can make the initiative successful.

Benefits must be defined, risks assessed, and cost quantified in three general areas:
 PROCESSES: Though these systems have many technological components,
business processes lie at its core. It can be seen as a more client-centric way of
doing business, enabled by technology that consolidates and intelligently
distributes pertinent information about clients, sales, marketing effectiveness,
responsiveness, and market trends.
 Therefore, before choosing a technology platform, a company needs to analyze
its business workflows and processes; some will likely need re-engineering to
better serve the overall goal of winning and satisfying clients. Moreover, planners
need to determine the types of client information that are most relevant, and how
best to employ them.

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 PEOPLE: For an initiative to be effective, an organization must convince its staff
that change is good and that the new technology and workflows will benefit
employees as well as clients. Senior executives need to be strong and visible
advocates who can clearly state and support the case for change. Collaboration,
teamwork, and two-way communication should be encouraged across hierarchical
boundaries, especially with respect to process improvement.
 TECHNOLOGY: In evaluating technology, key factors include alignment with
the company’s business process strategy and goals; the ability to deliver the right
data to the right employees; and sufficient ease of use that users won’t balk.
Platform selection is best undertaken by a carefully chosen group of executives
who understand the business processes to be automated as well as the various
software issues. Depending upon the size of the company and the breadth of data,
choosing an application can take anywhere from a few weeks to a year or more

Implementation Issues
Dramatic increases in revenue, higher rates of client satisfaction, and significant
savings in operating costs are some of the benefits to an enterprise. Proponents
emphasize that technology should be implemented only in the context of careful
strategic and operational planning. Implementations almost invariably fall short when
one or more facets of this prescription are ignored:
 Poor planning: Initiatives can easily fail when efforts are limited to
choosing and deploying software, without an accompanying rationale,
context, and support for the workforce. In other instances, enterprises
simply automate flawed client-facing processes rather than redesign them
according to best practices.
 Poor integration: For many companies, integrations are piecemeal
initiatives that address a glaring need: improving a particular client-
facing process or two or automating a favored sales or client support
channel. Such “point solutions” offer little or no integration or alignment
with a company’s overall strategy. They offer a less than complete client
view and often lead to unsatisfactory user experiences.

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  Toward a solution: overcoming sliced thinking. Experts advise
organizations to recognize the immense value of integrating their client-
facing operations. In this view, internally-focused, department-centric
views should be discarded in favor of reorienting processes toward
information-sharing across marketing, sales, and service. For example,
sales representatives need to know about current issues and relevant
marketing promotions before attempting to cross-sell to a specific client.
Marketing staff should be able to leverage client information from sales
and service to better target campaigns and offers. And support agents
require quick and complete access to a client’s sales and service history.

Stakeholder Value Returned from the Benefits of CRM

 An integrated CRM (Customer Relationship Management) system is a
component of business improvement strategy focused around the customer.
It produces a 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
achieved. Improved ability to grow the business that is customer focused. The VP of
Sales and 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 salespeople up to speed and productive in selling
Higher lead to close ratios
The Sales People
The Customer Service representatives
Ability to provide a personal touch using personal information and quick
access to their account information. Personal satisfaction- becomes a hero in the eyes
of the customer.
Business Development/Marketing manager:

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 More effective marketing campaigns to targeted prospects. Faster feedback from
Sales results by linking campaign to sale. More effective marketing materials for the
sales person.
Financial perspective: CFO/Controller/Accounting Manager
Happier customers pay their bills- less time in the collection and credit memo
process. Reduction in costs of Administrative personal
Less employee turnover. Reduction in paper documents and filing system.
Improved efficiency using known business operational processes More sales revenue
and net profit.
The IT department
 A scalable 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 and
troubleshooting.
 A Crystal reporting system for easier report modification and creation.
 A highly configurable system that also has visual customization tools build
on Microsoft technology.
 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

UNIT – 2
Customer Information Database
 Collecting and using data about customers and market helps the firm to gain
a better understanding of the market which leads to utilize the sales and
marketing techniques in a effective way.

Understanding customer
 The customer knowledge and feedback developed thru database helps the
firm to develop an effective strategy for long term customer retention
 Quality, Price, delivery, convenience are some of the factors that could
explain why a customer continues to buy from a company

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Managing customer service
 Understanding the customer is the first step to develop positive, long term
relationship with them
 The customer information database can be used for :
 To improve customer handling by making info available to staff responsible
for sales, enquiries, help lines, complaints etc
 To improve understanding of customers purchasing lifecycle

Knowledge Management
 CRM starts with in-depth knowledge of customers, their habits, desires and
their needs by analyzing their cognitive, effective behavior and attributes.
 CRM applies this knowledge to develop and design marketing strategies to
cultivate long lasting mutually beneficial interaction and relationship with
customer.
 Customer knowledge and customer interaction on the basis of this knowledge
are the two pillars of any CRM design.
KM….. with focus on CRM
 As markets and product change with
 accelerating pace,
 marketing and sales people,
….. product / service design people must assimilate and apply current information
about their markets, their competition and the solution they can offer to the
customers.
 Marketing, sales, after-sales people would be the knowledge workers
 Forward looking companies have realized that their front office work force
could be more productive if they could utilize customer knowledge
 Successful companies not only possess customer knowledge but also able to
make critical business decision

KNOWLEDGE MANAGEMENT (KM)

 KM is a management discipline that treats intellectual capital as managed
asset. It is not about creating a central database that is a complete replica of
all that is known by employees.
 KM helps an organization to gain insight and understanding from its own
experience.
 KM is about embracing a diversity of knowledge sources, legacy systems,
existing data warehouses, portals, websites, customers, suppliers, partners,
external marketing agencies and cultivating this knowledge where it resides.
 KM implementation also protects intellectual assets form decay. It adds to
the firm’s intelligence and provides increased flexibility.

Concept of KM

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  People
 Process and
 Technology

KM - Conceptual frame
 An KM architecture can be developed if we know the following:
 Organizational structure
 Informational flow
 Information usage and storage
 Existing automation levels
 Existing data warehouse solutions
 Existing messaging systems
 Internet applications
 Any other legacy systems

KM Implementation
This approach may be adopted in 4 phases:
1. Evaluation
2. System Analysis, design and
development
3. Deployment
4. System evaluation

CRM-Value chain
 Customer Data > Customer Information > Customer knowledge >Wisdom to
completely satisfy customers

Implementation of CKM
 Resource Analysis
 Aligning CKM & business strategy
 CKM architecture design based on KM
 CRM knowledge and analysis
 CKM team foundation
 CKM team organization blueprint
 Develop the CKM system
 CKM deployment
 Organizational culture
 CKM performance and evaluation

Customer Expectation
 Truly successful business position itself for fully satisfying both current and
future customer needs
 The foundation of such a positioning is a precise understanding of customer
expectations
 In B2B setting, the customer expectation can be typically on following
dimensions

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 1. Supply reliability and flexibility
2. Supply lead time
3. Quality
4. Price
5. Technical support
6. Integration with customers processes and systems

Explanation
 The Market Intelligent Enterprise (MIE) must validate such an
understanding with other information on the customer and the market.
 It is necessary for the MIE to identify the drivers for customer expectation to
be able to anticipate shifts in expectation
 A mapping of customer expectation should lead to identification of discrete
customer segments that buy similar products and services, and demand
similar service levels

Managing Customer Experience

 Every interaction with a customer is an opportunity to delight the customer,
In B2B relationships, the major customer touch-points are:
 Marketing &sales.
 Customer support
 Billing & payment
 Dispute resolution
 Product development & testing.
Each of these interactions offers the enterprise an opportunity to demonstrate
its commitment to total customer satisfaction.

BROAD SPECTURM
 A typical Enterprise has a board spectrum of customers, right from
“terrorists”-extremely dissatisfied/alienated customers who actively erode
the brand equity of the enterprise.
 To “advocates”-delighted customers who actively work to strengthen the
market presence of the enterprise.
 Objective of managing customer experience for an enterprise is to convert
key customers to advocates and address the issue of the “terrorists” &
”rejecters” to minimize the negative impact on brand equity.
 Terrorist -> Rejecters -> Prospects / Conquest / Defectors -> Vulnerable -
>Supporter ->Advocate
 Building loyalty starts with taking right marketing approach. Relationship
marketing is a very effective approach in a B2B setting, where the focus is on
building and reinforcing a long term relationship with the customer with
every interaction

Managing CR on the basis of customer value

 The first step in managing CR is identification of key factors.
 This should be done on the basis of 2 factors

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  Life time value i.e., what the customer contributes to the enterprise
over his life time
 Strategic importance i.e., how much the customer contributes to
maintaining the competitive edge of the enterprise

Customer Lifetime Value

 It is defined as a value today of a customer based on the future profits over
its life expectancy
 The steps to estimating customer life time value are
 Estimate the annual revenues that customers generate each year
 Estimate the cost of acquisition
 Estimate the cost of retention
 Estimate how many years customers are likely to stay with the firm
 Know how to discount future earnings due to customers to their
present value

Embracing Market Intelligence Technologies

 “Disruptive technologies bring to a market a very different value proposition
than had been available previously” - Clayton Christensen
 The value proposition offered by current technologies to CRM truly makes
these technologies ‘disruptive’
 Technology and connectivity will remain the two great enablers for MIE.
Together they determine the velocity and quality of information flow

BEYOND CUSTOMER SATISFACTION:

Customers range from individuals who are extremely brand loyal at one
end of a continuum to individuals who demonstrate repeat purchase behavior at the
other end.
BRAND LOYALTY is the customer loyalty toward one brand without
accepting sub-situations
Customers who are brand loyal will buy only their preferred brand.

REPEAT PURCHASE BEHAVIOR:

It refers to subsequent purchases of a particular service caused by
factors other than loyalty to the brand.
The repeat purchase may be motivated by various factors such as price,
convenience, sales promotions or personal preferences’.

Customer Perception
 Perception is the second major psychological factor
 Perception can be described as “how we see the world around us”. All the
time we are receiving messages through our five organs viz., eyes, ears, nose,
mouth and skin, The different sights, sounds, smells, tastes and sensations
that we feel are knows as stimuli.

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  Each person recognize, selects, organizes and interprets these stimuli in his
own individual manner based on his needs, values and expectations and this
is knows as perception. Since each individual’s need, motives and
expectations are unique therefore each individual’s perception is unique.

Perception helps to explain the phenomenon of why different individuals

respond differently to the same stimulus under the same condition. As a
marketing manager, you are providing stimulus to your consumers through
the physical shape, color, size, fragrance, feel, taste of your product, it’s
package, advertisements and commercials.

Customer Profile analysis

 What makes up a customer profile?
 It depends on whether customers are businesses or consumers. In either case,
typically start with own customer data (such as location, purchases, spending
volume), append additional consumer or business data, then group into
segments that share similar characteristics.

Customer Profiles
 Demographics - age, income, gender, ethnicity, education level, etc.
 Geo-Demographic Clusters - there are many clustering databases available.
Some are industry specific, others are general. They often include data on
interests, lifestyles, purchasing behavior, attitudes and more.
 Survey Data - based on data available for purchase or gathered through
primary

Acquisition
 Acquisition is nothing but making profits by attracting the users to purchase
our product
 It emphasis on both sales promotional programs as well as service during the
time of purchase.
 Acquisition refers the process of attracting the new customers, making them
initial purchase and trying to incur gain for its investment on acquiring the
new customers.

Objectives
 Setting objectives should take into account the cost of Customer Acquisition.

 The following steps can be taken to identify the investment requires to win a
new customer and to track the return on investment.
1. Establish a system to enumerate all costs of acquiring new customers
2. Divide the total cost of acquisition by the number of new customers gained in
a given time period to determine the average cost of acquiring a customer
3. Determine the number of months the organizations must keep a customer in
order to provide a pay back on investment
4. Evaluate the average new customer profitability and set customer acquisition

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 objectives.

Process of Acquisition
 The acquisition process constitutes the following stages:
 Enquiry
- The prospective buyer undertakes a detailed enquiry with regard to several
aspects pertaining to the organization, product, nature of transaction and all
other related aspects.
 Interaction
- Where the customer interacts with the organization and obtains additional
information, clarifies and ensures already collected information
 Exchange
- Terms of exchange, mode of delivery and other things related to exchange
are settled at the exchange stage.
 Co-ordination
- Further coordinated effort on either side would lead customers to…
 Adoption
- Moving adoption of the product or service concerned and that completes the
acquisition process.

SOURCES OF INPUT FOR ACQUISITION

 The suspects-represents segment of the market that have potential to become
prospective customers.
 The enquires: whether they are intentional/casual provide for a approach.
 The lapsed &former customer.
 The competitors customer
 The referrals
 The existing buyers.

REQUISITES FOR EFFECTIVE ACQUISITION

 Focused Approach: (knowers, preferers, indifferent, rejectors).
 Providing a win-win platform.
 Initiate Forum For Communication.
 Attempt to Minimize “FUD”: (Fear, Uncertainty, Doubts).
 Projection of Benefits and not Products.
 Contextual Application. (initiator, influencers, Decider, Buyer, User)

PROCESS OF ACQUISITION
 The acquisition process are influenced by:
 Type of buying.
 Type of product.
 Type of customers.
 Economic Environment.
 Contextual Operations.

WHY CUSTOMER RETENTION PREFERRED?

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 Customer retention is the process of keeping customers in the customer
inventory for an ending period by meeting the needs and exceeding the
expectations of those customers.
 It is approach of converting a casual customer into committed loyal
customers.
 Customers come in a fold of an organization in following ways:
 Customer by chance.
 Customer by occasion.
 Customer by choice.
 Customer by repetition.
 Customer by loyalty.
They makes every effort to convert a customer by chance into customer into
loyalty.

RETENTION STRATEGY
 A plan identifying what basic retention objectives will be pursued & how will
be achieved in the time available is considered to be a customer retention
strategy.
 The welcome.
 Reliability.
 Responsiveness. (wanted to treat right)
 Recognition. (special attention ,appreciation)
 Rewards. (redeemable points)

SATISFACTION IN THE RETENTION PROCESS

 Satisfaction is a state of mind that occurs when then customer feels that his
expected requirements is fulfilled by what is offered by the orgn.
 Customer aims for four major components:
->Product satisfaction (tangible core benefit)
-> Peripheral satisfaction (addition to core benefit)
-> Ambience satisfaction (tangible & intangible)
-> Psychic satisfaction (individuality of customer)

DIFFERENT TYPES OF LOYALTY

 Loyalty in the marketing context may be defined as a willful, voluntary,
repeated choice of a specific brand of a product or type of service.
 Loyalty caters to fulfilling a particular category of need.
 Loyalty explained in terms of the extent of commitment to the brand
selected.

TYPES OF LOYALTY
 Loyalty towards brands. (hard-core loyalists, soft-core loyalists ,switchers)
 Loyalty towards stores. (developed with reference to the point of purchase)
 Loyalty towards an organization. (accept product or service by the orgn)

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 Loyalty towards sales persons. (salesperson of a store of an orgn)

How do the organizations reach loyal customer?

 The reach of loyal customers involves of actions, starting with identification
of the right market for the product concerned.
 Market identification.
 Segmented & targeted market.
 Prospective customers.
 customers.
 Loyal customers.

MARKET IDENTIFICATION
 For the purpose of market identification, the organization may go in for a
marketing audit programme.
 Marketing audit is a purposeful examination of marketing environment,
marketing activities & its effectiveness.
 It is a systematic approach to review the activities of marketing functions
towards reaching marketing goals.
 Marketing audit enables to find appropriate markets.
 The orgn in terms of its market share is expected to play any of the following
roles:
 A market leader (largest market share)
 Market challenger (close competitor orgn)
 Market follower (follower of market leader)
 Market niche( a small player- Nichers confine their operations in a much-
limited way)

MARKET SEGMENTED & TARGETED

 Marketing segmentation refers to grouping of customers on the basis of
selected criteria.
 Criteria includes: Age, income, gender, location, volume of purchase, type of
customers, buying habits, life style.
 A target market refers to a well-defined set of prospective customers, whose
requirements have been identified, and the organization can meet those
requirements profitably.

PROSPECTIVE CUSTOMERS
 In the target market, potential customers would be identified by means of a
systematic approach.
 The method of getting prospective customers may be any one or a
combination of more than one method:
->Referral letters.
->Through friends& relatives.
-> Various directories.
->Through trade associations.
->Advertisements.

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 ->Blind telephone calls.
-> Developing database.
-> Cold canvassing.
-> Follow-up of the competitor’s customers.
-> Customers of related products. Etc.

WHY DO ORGANISATIONS NEED LOYAL CUSTOMERS?

 By loyal customers the corporate always derives more benefits because of the
different roles they play.
 As partners and advisors, involving in organizations regular activities
 As advisors, give advice about the potential customer’s expectations, their
expected prices competitor’s offering and similar aspects
 As resources, in the sense that the organization can depend on them with
respect to new brand and brand extension programs.
 As change drivers, in view of cultural, social technological show new
directions to diversify in future
 Enable the organizations to run on very less operational costs, from the view
point of recruiting customers for new products.
 Loyal customers themselves act as major publicity source for promoting the
image of the organization.

Why do customers become defectors?

It is essential to discover the reasons as to why customers become defectors.
Following are some of commonly found defection drivers :
 The customers specific need has not been fulfilled
 Perceived better value for money from the competitors offerings.
 Developed misunderstanding with value delivery system
 Displeasure at the point of purchase
 Inherent feelings of individuals to try new products
 Dissatisfied with the performance of after sales service
 Compulsion due to technological and environmental forces
 Demographically moved away from the market place
 Personal reasons

Strategies to prevent defection and recover lapsed customers

 Total knowledge about Customer Behavior : like behavioral & migration
patterns of the target customers
 Interactive Communication systems
 Special Promotion Campaign : to attract the attention of likely defectors.
 Developing Barriers to Exit : by means of emotional appeal, durability, life-
time utility, flexibility, concessional price schemes etc.,
 Knowledge about Life Style and Life cycle: represents organizations'
matching offerings to activities, interests and opinions of customers.
 Establish measurement System: for measurement of customer satisfaction
and related aspects.

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 Attempt to track losses: To understand the cumulative impact

WHY DO COMPANIES MEASURE CONSUMER SATISFACTION?

 Measuring consumer satisfaction is a means of determing how well a product
or service is meeting customer expectations & organizational objectives.
 It is to communicate “we care” message to customers.
 Customer satisfaction is often measured by surveying customers and by
recording certain objective measures of operational activity.

STAGES OF CUSTOMER SATISFACTION SURVEY.

 Defining the problem & objectives.
 Plan the survey design.
 Design the questionnaire.
 Select the sample.
 Collect the data.
 Analyze the data.
 Draw conclusion and prepare a report.
 Follow up.

BRAND SWITCHING BEHAVIOUR

 Brand switching is the behavioral action of the customers with reference to
their choice of brand.
 A number of factors are responsible in initiating the brand switching
behavior.
 Dissatisfaction with present brand.
 Change in fashion.

MODULES IN CRM
 The CRM applications are a convergence of functional components ,
advanced technologies and channels.
 Functional components : It include sales applications, marketing automation,
and customer service and support applications.
 Channels include the web, call centre's, phones and mobile services.

SALES APPLICATIONS
 The cornerstone of CRM is SFA (sales force automation).
 The SFA is automating the fundamental activities of sales professionals, both
internally and in the field.
 Common applications include:
 Calendar &scheduling.
 Contact& account management.
 Compensation.
 Opportunity & pipeline management.
 Sales forecasting.
 Proposal generation & management.
 Pricing.

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 Territory assignment& management.
 Expense reporting.

MARKETING APPLICATIONS
 They form the newest breed of applications complement SFA applications
and provide capabilities unique to marketing.
 Common applications include:
 Web-based/ traditional marketing campaign planning, execution & analysis.
 Collateral generation & marketing materials management.
 Budgeting & forecasting.
 A marketing encyclopedia (a repository of product, pricing & competitive
information)

CUSTOMER SERVICE & SUPPORT APPLICATIONS.

 These applications have gained a major importance for effective customer
retention & in many cases profitability depends on providing superior
service.
 Common applications include:
 Customer care.
 Incident, defect, and order tracking.
 Field service.
 Problem and solution database.
 Repair scheduling & dispatching.
 Service agreements & contracts.
 Service request management.

REGAIN STRATEGIES
 Three relevant strategies that a service provider could look into in order to
regain lost customers, customization, differentiation and “wow” strategy.
 Customization: It is an extension of one-to-one marketing where customers
are treated as individuals and not as account numbers.
 It provide the latitude of the customer would enjoy and feel empowered to
choose & customize its options.

DIFFERENTIATION STRATEGY
 Differentiation is the ability to provide unique and superior value to the
consumer in terms of service quality, special features, or after-sales services.
 It allows a firm to command a premium price or premium market position
which leads to higher profitability.
 As customers are segmented, hence it is utmost important that different
segments should be addressed and dealt with accordingly.

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 UNIT-III

A BASIC CRM MODEL

 DATA SOURCES - DATA GATHERING SYSTEM - DATA WAREHOUSE
SYSTEM - INFORMATION DELIVERY SYSTEM - INFORMATION
USERS.

CRM PROCESS
 It is defined as any group of action that is instrumental in the
achievement of the output of an operation system, in accordance with
a specified measure of effectiveness.

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  The final objective of the CRM process is to originated a powerful
new tool for customer retention.

BENEFITS OF CRM PROCESS

 Ability to retain loyal & profitable customers & channels for rapid
growth of the business.
 Acquiring the right customers, based on known characteristics, which
drives growth & increased profit margins.
 Increasing individual customer margins, while offering the right
products at the right time.

WHY DO YOU NEED TO CREATE THIS PROCESS ?

 Marketing organizations are significantly behind their organizational
counterparts in providing bottom-line business benefits
 CRM process is the systematic determination of the methods by which
a project is implemented, economically and competitively
 Process Planning is the intermediate stage between project kick-off
and implementation.

 To do this effectively we must..

 Creatively translate business innovation, structural transformation, and
value measures into CRM investment priorities, and
 Continually refine iteration approach based on following five major areas:
 Customer
 Competition
 Market
 Growth
 Technology innovation.

 Process Selection Procedure

 This determines how the service will be produced. It involves.
 Major Technological changes
 Minor technological changes
 Specific component choice
 Process flow choice
 Major Technological Changes
 This includes the following:
 Does technology exist or not?
 Are there competing technologies between which we should
choose?
 Should the technology be developed in the country itself
 Should innovations be licensed from foreign countries

A CLOSED-LOOP CRM PROCESS

 Gathering information. (about customers-internally/externally)
 Perform data aggregation. (customer data repository is produced)

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  Create “exploration warehouses”. (Analysis- profitability &
predictive modeling).
 Execution of strategies. (Developing mktg campaigns-targeted
segments.

CRM-BUSINESS TRANSFORMATION
 All organizations have been following a set of their own procedures to
market their products, services or promotional activities.
 The different organizations have different sales strategies and
processes and therefore different technology is needed for each
company.

ITERATIVE OR REPEAT CYCLE

 Iterative cycle as follows:
 CRM modification.
 Determine the boundaries of patterns.
 Fix the limits of channel models.
 Define/Refine POI models.
 Preference and corrective gap.
 Provision technology ecosystem.
 Make a “Go-To-Market” blueprint.
 Plan, deliver, and manage implementation.
 Assess customer lifetime value.
 Measure & access program value.
 Repeat the iteration.

CRM-Iterative process
 First, understand customers need, sales channel preferences (sample, direct
sales, telesales and profitability)
 Second, define your coverage strategies-how you plan to increase target
customer, acquisition, retention and penetration.
 Third, use this information to carefully evaluate and select technology and
vendors.

MAKE A GO-TO-MARKET STRATEGY

 Based on the outcome of the first two steps: revise your go-to-market ,i.e. the
plan for acquiring and increasing customers.
 This strategy needs to include the definition of your target customers as well
as the design of customer contact channels, jobs & processes.

DATA SOURCES
 Two main categories of data sources are internal.
 Internal sources exist within the firm in the form of the various business
units.

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  External data sources consist of organizations and individuals outside the
firm.
 These external sources consist of customers, suppliers, the government, and
even competitors.
 As competitors advertise sales, special features or discounts, or discounts,
organization can track these issues over time.

DATA GATHERING
 The data i.e. gathered from internal sources is most likely already in a
computer readable format and is entered into the data warehouse as
activities in the business units are performed.
 Much of the data gathered from external sources is converted to a computer
format as transactions are performed.

DATA GATHERING SYSTEM

 The data warehouse system consists of the stored data, software that
maintains the data in an up-to-date condition, and
Software that managers and controls the warehouse.

ARCHITECTURE PERSPECTIVE

 1. CUSTOMER.
 2. STRATEGY.
 3. PROCESS.
 4. ORGANIZATION.
 5. PEOPLE.
 6. INTELLIGENCE.
 7. AUTOMATION.
 8. DATA.
 9.TECHNOLOGY

THE ENTERPRISE CRM STRATEGIES

 By combining the nine steps, one can really start listening to the
customers, and understand what they saying, even in real time.
 Once that is achieved, profits began follow as optimization
techniques are applied.
 The successful business-case driven project be: 1.effective change
management.
 Technology-enabled evolution.

IMPLEMENTING CRM
 A very detailed comprehensive action plan was developed based on
understanding that CRM will require an enterprise wide transformation.

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  The CRM business transformation Map shows the various aspects of that
change, they are involved five inter-related areas:
 Business Focus.
 Organizational Structure.
 Business Metrics.
 Marketing Focus.
 Technology.(Refer the diagram)

EXPLANATION
 The key to building the CRM action plan was in understanding where the
organization stood relative to each of five aspects of change.
 The next step in the planning process was a gap analysis. This analysis
essentially compared current stage against optimal relative to the five aspects
of business, to identify and specifically describe the gaps.

CRM organizational holes

1. Marketing, sales and service practices.

2. Collection, capture, processing and deployment (use) of customer information.
3. Distribution and operations effectiveness at customer touch points.

The CRM business cycle

1. Understand & differentiate.

2. Develop & customize.
3. Interact & deliver.
4. Acquire & retain.

How the organization focuses its attention on retention?

Attrition: An organization focusing attention of retention must obviously focus

attention on attrition.
Attrition is a process of gradually weaving down. This is a patronage with the
product or service, or the provider of the product or service. This is the step
initiated towards defection.
Attrition, if not arrested, will lead to defection.
Therefore, organizations must carefully observe attrition signals and enforce
preventive measures, so that customers could be maintained at the retention
stage.
The attrition signals vary from business to business & from customers to
customers.

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 In practice the attrition will be identified by the ways of increase in the number
of complaints, decrease in the frequency of contacts, decrease in personal
visits, decrease in enquiries, decrease in the volume of business, decrease in
the number of active buyers, decrease in the extent of interaction .

Handling complaints towards improving retention:

Complaints are to be viewed as opportunities given by customers for increasing

the operations of the organizations towards value-added performance.
Complaints may have different levels of impact on customer retention: It may
classified into four major heads:
Complaints expressed and resolved (chances of customer retention is more).
Complaints expressed but not resolved (the customer is likely to move attrition
process).
Complaints not expressed but resolved (the chances of retention is much higher).
Complaints not expressed and not resolved (the probability of the customer
becoming a defector is more).

CRM---APPLICATION AND TECHNOLGY SOLUTIONS

To do mapping, various scenarios can be formulated by mixing and matching

processes, technology components, and people issues.

The grid cell for service and mobile devices has been recently filed up in the banking
sector as one access the account details-banks on the cellular phone.
Traditional banking insurance and brokerage firms etc. are the ones to benefit most
from these tools. The reason being that:
The complete concept of CRM can be mapped on a technology solution:

Four components of a CRM:

Customer value management strategy.
CRM roadmap keeping in mind the industry.
Database solutions.
Customer access channels.

What is a CRM Roadmap?

A CRM Roadmap is a strategic plan that identifies how an organization can meet
and exceed its customers' needs. This includes, but is not limited to, assessing how
the sales, marketing and service entities work together to:

 gain insight from their customers (e.g. purchase history, desired

products/services),

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  produce valuable offerings/products (e.g. personalized product) and
 Provide the ultimate customer experience (e.g. multiple touchpoints, 360
degree view of the customer).

The “10 Step Roadmap to CRM Success” is based on a proven model and if
followed, will help ensure that your CRM solution will meet your business’s
objectives, be successfully adopted, and help drive your business forward.

Identify Your Strategic Team:

Your strategic team will be responsible for communicating with your users and
getting feedback on any issues that arise during and after implementation. They
can take a role in prioritizing new projects, making sure they will be beneficial in
meeting your company’s objectives. As you go through this journey, they will
generate excitement and create the culture necessary for user adoption. Think of
them as your “CRM Champions”.
Your team should include key stakeholders who can represent cross-functional roles
(i.e. sales, marketing, service, sales support). An executive member will also be
needed to ensure your initiatives meet the corporate objectives. Don’t forget to
include a project leader (BA) on your team that understands your business, its
customers and the CRM capabilities.
Tip: Pick team members that have good relationships with their colleagues, are
respected, and are early adopters.

Create A Vision & Objectives:

Your vision and objectives will be used as the “acid test” during your
implementation and to prioritize any future CRM projects or initiatives. Use them
to start developing the culture that is necessary for important business change. The
objectives must be measurable and support the vision. Make sure that you can
validate your objectives using dashboards/reports. For example, one objective may
be to increase win/loss ratio of all opportunities by 30%.
Tip: Think about creating an internal marketing campaign to promote CRM and
the goals that must be achieved.

Identify Pain Points:

Identify pain points from each key stakeholder. Create a list. This will be used to
help strengthen user adoption by giving some “wins” to each. Remember to check
against your objectives and kill two birds with one stone!
Tip: Have any excel spreadsheets that are used by several users to capture critical
information? Think about embedding it as a custom object in your CRM. It will
save them time and allow you to build metrics from the data captured.

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 Map Business Processes:

Mapping out business processes will help you understand how to leverage and
properly align your CRM to your company’s overall business objectives and your
customer’s needs. Make sure that you work with each business unit and understand
what their process is. Review the flowcharts and get sign-off once you have
agreement that the process accurately reflects their business flow. Every step
should have one owner who is accountable for its success.
Process maps have several benefits. They include: a quicker learning curve for new
employees, greater productivity, and a means to automate workflows. All will result
in reducing costs. To find out more about the importance of business processes read
“What's Happening Behind The Scenes May Be Holding Your Company Back!”

Align CRM To Business Processes:

Customize your CRM so that it is aligned to your processes. Understand how the
technology can be leveraged (workflow automation, workflow approvals, data
validation, etc.) to improve productivity and increase visibility. Make sure you
check your objectives to see if they have been met. Focus on the top highest value
processes and consider phased roll-outs. Results: quick payback on your
investment, quicker learning curve of the application, and less resistance by users to
adopt.

Import Quality Data:

Data quality is critical to CRM success and user adoption. Time must be taken to
identify all data sources and ensure data quality and integrity prior to importing
into your CRM application.
Tip: Gather all legacy data and place into an excel spreadsheet. This will give you
an easy means to de-dup, improve quality and standardize on formats such as
state/province and country codes. You may also want to look at a 3rd party tool
such as DemandTools by CRMFusion Inc. if you have a large amount of data.

Create Powerful Analytics:

Creating reports and dashboards will help ensure your checks and balances are in
place. Make sure that you have KPI’s and other metrics that benefit your
executives, managers, and users. Generate metrics to help track user adoption,
track if you are meeting your objectives, and monitor data quality.

Test Before Release:

Test, revise, and test again using a small pilot group that represents each business
process owner. Gather information and recommendations that they offer to help

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streamline and make your CRM application as foolproof as possible. This step will
minimize catastrophes during training and in the first few weeks after deployment.
Make sure that your pilot group is “onboard” as they will spread the word as to
their thoughts on this new system!

Train Users:

Make sure that all key stakeholders and users understand how to use your CRM
application. This not only includes “rules of engagement”, but also the terminology
of the data, especially in pick lists. This will help ensure that your organization
captures accurate data resulting in accurate analytics which is crucial to user
adoption.
Tip: Create a CRM guide and worksheet for each group (i.e. sales, marketing, and
service). The worksheet should include exercises that are relevant to their required
CRM tasks.

Review & Evaluate:

CRM is a long term solution that can grow with your organizational and customers’
needs. Make sure that you look for continual improvements and projects that will
add value to your business. By thinking and breathing “CRM”, your organization
will get great value and success from its use.

UNIT-IV
CRM PLANNING AND IMPLEMENTATION

CRM PLANNING AND IMPLEMENTATION:

Strategic CRM planning process – Implementation issues – CRM Tools- Analytical

CRM – Operational CRM – Call center management – Role of CRM Managers.

WHAT IS CRM?

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A CRM strategy has numerous aspects, but the basic theme is for the company to
become more customer-centric.
This does not necessarily create a new revenue stream today or even tomorrow.
It will add customer loyalty to your business’s bottom-line.
Our methods are primarily Web-based tools and internet presence because
they will allow your company to keep up with the new businesses that
provide information about their own and their competitors products freely.
CRM will make an impact in all areas of your business.
Your business should allow your customers to get current information at any time
from any source.
This information needs to flow through your organization without getting lost or
altered.
When CRM is implemented correctly, it will show up on the bottom-line as positive
customer feedback as well as increased revenue.
Your current business processes are not customer-centric.

CRM: INTERNAL AND EXTERNAL CONSIDERATIONS:

It is obvious that a good CRM strategy, implemented via a well-designed web site,
can tremendously benefit the purchasing experience, both for the customer and the
business.

CRM IMPLEMENTATION

How to choose the right crm solution:

If you choose the right crm solution you can immediately increase the
effectiveness of your sales, marketing, and support organizations. They understand
what marketing campaigns are most effective, where your most profitable
customers come from, how effective your sales cycle is, what types of customer
support problems you face, and how quickly they can be resolved.

A FRAME WORK FOR SUCESSFUL CRM:

A CRM framework maximizes the possibility that your CRM implementation

will be among the 32% of projects that succeed .
Companies that have successful implemented CRM solutions are reporting
excellent results and the interest surrounding the topic is greater than ever.

CRM Technology:

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 CRM is disciplined business strategy. CRM technology is the driver of the
strategy.
Technology, in the form of networked collaboration, communication, knowledge
management and automated electronic processes can enable different groups
within the company to work seamlessly as one unit to fulfill the CRM vision.
The accepted definition of CRM technology is generally accepted to apply to
"front office" processes.
CRM technology mandates that all interactions between the customer and the
company are recorded and stored in a central information database, which can
be shared with anyone in the company who contributes to processing the
customer's transaction.
CRM technology fulfils the vision of CRM are through the streamlining of
processes and the acquisition of information to form knowledge about the
customer.
Types of CRM Technology
 Operational CRM
 Analytical CRM
 Collaborative CRM

Operational CRM:
Operational CRM is the customer-facing applications of CRM—the a fore
mentioned sales force automation, enterprise marketing automation,
and front-office suites that encompass all of this simultaneously.
This is the “ERP-like” segment of CRM.
One facet of operational CRM is the possibility of integrating with the financial and
human resources functions of the enterprise resource planning (ERP) applications
such as PeopleSoft and SAP. With this integration, end-to-end functionality from
lead management to Order tracking can be implemented.

Analytical CRM:

The analytic segment includes data marts or data warehouses such as

customer repositories that are used by applications that apply algorithms to dissect
the data and present it in a form that is useful to the user.
Analytical CRM is the capture, storage, extraction, processing, interpretation, and
reporting of customer data to a user.

Collaborative CRM:

The collaborative CRM reaches across customer touch points.

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It is the communication center, the coordination network that provides
the neural paths to the customer and his suppliers.
It could mean a portal, a partner relationship management (PRM) application, or a
customer interaction center (CIC).
It could mean communication channels such as the Web or email, voice
applications, or snail mail.
It could mean channel strategies. In other words, it is any CRM function that
provides a point of interaction between the customer and the channel itself.

CRM Technology Components

 CRM Engine
 Front-Office Solutions
 Enterprise Application Integrations (EAIs) for CRM
 CRM in the Back Office

CRM Engine
This would be the customer data repository.
The data mart or data warehouse is where all data on the customer is
captured and stored.
This could include basic stuff such as name, address, phone number, and
birth date.
The purpose is a single gathering point for all individual customer
information so that a unified customer view can be created throughout all
company departments that need to know the data stored in this CRM engine
house.

Front-Office Solutions
These are the unified applications that run on top of the customer data
warehouse (CDW).
They could be sales force automation, marketing automation, or service
and support and customer interaction applications.

Enterprise Application Integrations (EAIs) for CRM:

These sit between the CRM back office and front office.
They also sit between the newly installed CRM system and the been-
around-forever enterprise legacy systems.
They also allow CRM-to-CRM communications.
“They” are pieces of code and connectors and bridges that as a body are
called EAIs, formerly known as middleware.

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 EAIs provide the messaging services and data mapping services that
allow one system to communicate with disparate other systems,
regardless of formatting.

CRM in the Back Office:

Analytical tool are known as “Back Office” of the CRM.

Analytics are becoming increasingly integrated from the beginning with
the elements of the CRM.
The analytical algorithms are working in background; they have clear
and distinct visibility (By which we can see for miles and miles) within the
operational applications which are accessing in real time.
Embedded analytics are now part of a few of the multifunctional CRM
applications.

Customer Life Cycle:

The life cycle of the customer is the process the customer has been undergoing to be
with company for all the years.
This includes the customer’s purchase history, perhaps how often she’s taken
advantage of special offers directed at her or her customer class.
Depending on what company identify as important to customer’s return on
investment (ROI), it could also include customers’ marketing value to company and
how much revenue that marketing value could be worth indirectly.
To find out what is the expected revenue generated from a single customer over the
anticipated lifetime of that customer’s relationship with company is both the
customer life cycle and the customer lifetime value (CLV).

Customer Interaction
Some of the value that technology brings to the table in CRM is through increased
customer interaction that doesn’t necessarily occur with a human being.
It is convenience and the ability of the customers to get something they need without
having to rely on a busy human being, or worse, a lazy human being.
Customer Interaction is a critical component of CRM—especially the online variety.

The SFA applications:

The following list is a compilation of multiple SFA applications

• Contact management:
It covers the basics:

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 Name, address, phone numbers, company, title, personal and business
information.
Activity related to the individual; attachments related to the individuals; and
level of the decision maker.
Thus basically it manages the contacts for the organization.

• Account management:
This standard feature allows the salesperson or sales manager to handle
individual corporate accounts.
Each account has multiple links to other information, beyond the corporate
name or address, including the contacts by corporation and the
proposed opportunities by corporation.
Thus it manages the accounts for the organization.

• Opportunity management
The facets that opportunity management covers:
Specific opportunity, the company it belongs to, the salesperson or team that is
working it.
Assignment of revenue credits if there is a sales team, the potential for closing
this particular opportunity, the final results of this opportunity.
Stage of the sales process this opportunity is in, and the potential closing date.

• Lead Management
Lead Management functionality is a subset of Opportunity Management
A qualified lead becomes an opportunity.

• Proposal management
In this it is determined who is responsible for what part of the proposal.
It can also control the effective completion of the proposal by guiding the
stages of evolution of the parts of the proposal.
Quote generation
It is a simple tool that generates quotes for customers.
Order tracking
This feature tracks the status of the invoice and the product delivery.
Sales quota management
It allows the sales manager to see how the individual sales person is doing
relative to their quotas within some defined time segment.

Commission management
This tool calculates the commission for salespeople.
Territory management
Here in short it means a new person takes over an existing territory or a
territory can be redistricted and redivided among existing salespeople
geographically.

• Pipeline Management

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 The “sales pipeline” is a peculiar term for the execution of the established
sales process.
Each company has its criteria for what constitutes its sales process.
If company successfully embeds sales process into SFA application then the
company can properly use that application.

• Sales Forecasting
SFA programs have adequate sales forecasting tools as sophisticated
spreadsheet like tools for forecast fundamentals.
Sales forecasts are good guesses in spite there are algorithms of the program
Other SFA Applications:

•Incentive compensation system

This particular feature allows vice-presidents of sales to design compensation

plans and to track them.

•Competitive information system

This is often tied into multiple sources so that the salesperson could do the
research online and internally to find what is needed.

•Telesales campaign management

This feature helps inside sales manager design tele-marketing campaigns.

•Sales assistant

This feature helps the beginners to learn the sales process of the company
they work for.

•Expense reporting

This feature ties expense reporting into both accounting and CRM systems.
It integrates back and front office functionality.
•Learning management system/content delivery tool

It provides a means for newer employees to understand the sales

process and experienced employees to request and receives appropriate
sales information and tools ranging from brochures to competitive
information.
•Marketing encyclopedia

It is a centralized repository for all the marketing materials so all salespeople

have access to appropriate materials for their customers.

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•Partner management capabilities

It helps to manage the partners and track the sales brought by them.
•Integration with service, marketing, and Internet applications
Little pieces of code called Application programming interfaces are used
to integrate with either third party systems or their own back office
systems.
•Custom sales process and methodologies
Some methodologies are developed for the organization for the sales purpose.
Other SFA features/functions
•Software distribution to mobile users
This is more of an infrastructural feature that makes simplified distribution
of code to multiple user’s inn multiple locations much easier for system
administrators.
•Quote pricing engine
This is the feature that draws from customer records, product catalogues,
need assessment, and customized product configurations and generates a
quote to customer.
•Smart scripts
These are customizable scripts for telesales to maintain some sort of
Monolithic sales organization “integrity”. eBriefings
It allows the creation and deployment of specific discussions according to
defined workflow.
•Voice recognition
Right now it means not much more than making calendar entries of
varying sorts and getting your current customer data via interactive
voice recognition (IVR).

Sales Force Automation: The Technology

SFA becomes powerful not only with the functionality aspect but with the
combination of the functionality and the flexibility of the technology.
Two aspects of SFA functionality and technology make SFA useful to both the
professional and mangers.
It allows them to analyze data, embed best practices for future sales people and do it
with a desktop

Data Synchronization

Data synchronization is the process of updating information among unconnected

computers such as laptop, mobile, or desktop.
Salespeople in the field maintain a subset of master database and update their local
data while others work on same data simultaneously.

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Synchronization allows corporate managers and sales teams to share information
created by field salespeople.

Data Synchronization Process

Data synchronization takes network infrastructure bandwidth. Data

synchronization process involves following steps

Step 1:

Remote databases are created for mobile salespeople and branch offices.
Each database is a relevant subset of the corporate database.

Step 2:

The synchronization system tracks changes pertinent to the particular salesperson

to both the remote databases and the host database.

Step 3:
Remote salespeople can connect to the home office using low bandwidth modems or
wide area network (WAN) connections. Salespeople who are at desk can connect via
their local area network (LAN).
Step 4:

During the connections, log files are exchanged that contain new information to be
updated in the respective databases.

Call Center Mean: Customer Interaction:

Customer interaction center (CIC), also known as the customer

contact center or multimedia call center. CIC sophistication lets you
call in on your phone and walk through a website that will handle
the most common problems easily, with online information at the
ready. The functionality is deep, the technology is complex, and the
results are strong.
This is collaborative activity is one aspect of what makes this a CRM
application. The customer directly interacts with the company
through a customer service representative and variety of
communications channels, and both use tools that make the
interactions valuable. The customer could be interacting with the
website through self-service application. If a human being isn’t
involved directly as a customer service representative, there are
virtual service representatives. Now that all but the most difficult

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 and complex problems can be automated, customer satisfaction has
been improving dramatically.

•The Functionality:
Consider one example of typical call you might make to computer
company technical service representative. A lot of functionality is
involved in this call.
There is call routing, assignment management, call tracking,
entitlement processing, workflow, problem resolution, etc. There are
activities that are going on without the knowledge of the customer,
such as logging and monitoring.
•The Technology:
The technology for CIC and customer contact centers is
complex and involves a mix of telecommunication and other
communications channels, such as email, the Internet, faxes, or CRM
Software. By adding advanced telecommunications
and web-enabled CIC technology, the ante is upped heavily. The
technologies are designed to create collaborative environment for the
customer contact representatives. It also means a self service.

Certain concepts for web enabling the call Centre:

•ACD (Automatic Call Distribution)

This is phone call workflow, which is how a call gets routed
based on the defining characteristics of the call.

•IVR (Interactive Voice Response)

This is the menu-driven voices that specify which choices you
can make by selecting numbers on your telephone pad. Benefit here is
that the it can handle the routine transactions without the benefit of a
live agent eg. Credit card Company telling the balance.

•CTI (Computer telephony integration)

These are the technology application and interfaces that allow
data integration with telephones.

•Web-Enabling the Call Center

Web-enabling the call center is in agreement with the new
economics principle that customers want control over their decision
making. They don’t want to be forced into their vendor’s rules, nor do
they want be railroaded into a decision. Self –service becomes a
critical psychological component as well as an
effective one.

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 CALL CENTER MANAGEMENT:

A Call centre is a group of agents and/or automated voice response units that
support customer contact functions over the telephone. They are assisted by
computers.
A Call centre must anticipate and accommodate customer’s
needs by delivering the right information, at the right time, in the right way, with
the right quality.

Call center management can benefit from the six strategies provided in this event,
using these tools to improve performance of the center as a whole.
1. Quantify the service, occupancy, and cost implications of missing staff.

When there is a lack of adherence to the call center schedule, understaffing results.
Understaffing affects the customer, other agents and management. When agents are
not where they should be customers must wait longer to have their questions
answered, and other agents have less ‘breathing room’ in the call flow because they
are needed to pick up extra calls. Because customers are waiting longer in the phone
queue, call center management will be faced with increases in
telephone costs per hour.
2. Describe options for setting adherence performance goals and selling to the staff.

It is possible to work with the agents to set reasonable occupancy goals and
scheduling outlines.
3. Identify the reasons for attendance and adherence problems.

There are three basic reasons for non-performance:

1) Don’t know: the agent may either be unclear about what the expectations are, or
they may be unaware of how their behavior is not meeting the expectation. Giving
the agent timely feed back either personally or by posting numbers publicly can
help resolve the problem.
2) Can’t: the agent may require more training, although adherence problems are
rarely lack of training. More likely there could be a barrier

Identify reward and consequence programs that support adherence goals. Since
positive and immediate consequences are most effective, the call center
management will want to look for ways to incorporate them into every work week.
Budgets for positive consequences may not be large – but even small

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acknowledgments can go a long way. Verbal affirmations are important, but small
tangible affirmations also work well.

5. Communicate the “power of one” to all frontline staff.

Emphasize the “power of one” to highlight the importance of every agent’s
adherence. Having tables or charts available to make visual those Quantifiable
issues (#1) can be helpful. So can activities like Tennis Ball/Water Balloon Toss in
which six agents are paired off and given a ball or balloon which they must toss
back and forth. Replace one person in the pair and keep the toss moving.
Then take one person away without providing a replacement to show how quickly
understaffing can create stress and dropped balls – which, of course, represent calls.

6. Review how WFM software helps in adherence tracking and reporting

capabilities and how to justify them.
This is where software such as Monet Workforce Management (WFM) software can
streamline the call center and help supervisors achieve the goal of right person in
right place at right time.
Real-time dashboards, alerts and proactive management reports provide those
quantifiable that demonstrate the “power of one”. Software can help properly
forecast call center volume, create optimized schedules and even help call center
management plan for exceptions, all of which boosts real-time schedule adherence.
To gain more insight, access the call center management webinar in full.

3.5
Steps in developing
and implementing
strategies

3-27

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 Objectives of CRM

 Customer Retention
 Customer Acquisition
 Customer Profitability

3-13

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 UNIT-V

TRENDS IN CRM
e- CRM Solutions – Data Warehousing – Data mining for CRM – an introduction to
CRM software packages.

Features of eCRM:
eCRM implies capabilities like self service knowledge bases, automated email
response, personalization of web content, online product bundling and
pricing.
eCRM gives Internet users the ability to interact with the business through
their preferred communication channel.
It also allows business to offset expensive customer service agents with
technology.
eCRM puts much emphasis on the customer satisfaction and reduced cost
through improved efficiency.
eCRM use customer data for personalization, cross-selling and up-selling.
Sales Force Automation(SFA )and Enterprise Marketing Automation(EMA) is
integrated in the eCRM.

What is eCRM can lead:

eCRM provides Access
Access creates Information
Information enables Measurement
Measurement is an imperative for Process Improvement
5. Process Improvement leads to Growth in Revenues & Profit.

Prospects and customers will communicate with the enterprise via a mix of
channels, which may vary depending upon where they are in the buying cycle.

For example, when responding to direct marketing, contact may be by bingo-card

or telephone. When making a purchase decision it may be field sales or a telephone-
ordering centre. Post-sales contact may be via a support help-desk.

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All front-office functions (customer touch points) will share a central CRM
database. Integration between the CRM database and the so-called back-office
systems e.g. accounts, manufacturing, distribution, ERP etc may be real time or
batch interface depending upon need.

The benefits of multiple contact channels are obvious – customers have choice - they
will use whichever contact channel in most convenient to them. The information
captured during all customer contact and transactions is held on a database in a
structure and easily accessible way. What’s more, it can be made available to
anyone in the organisation. Core data need only be keyed in once – front office and
back office systems share the same core records, although each will have additional
information specific to their processes.

CRM Technology tools:

Integration of CRM with ERP: An ERP (Enterprise Resource Planning) system
allows to integrate engineering, customer service, planning materials,
manufacturing, finance and human resources across a single facility or across
multiple locations.
Need to integrate CRM with ERP solutions: There are number of reasons why
business should integrate CRM and ERP solutions. Companies with high volumes of
sales transactions see almost immediate benefits in order-to-cash process.
Specifically, the cost savings come from reducing errors in order entry,
implementing approval workflows for discounts, and reducing the manual labour
required to enter orders in both CRM and ERP. Even organizations with relatively
low order volumes can experience significant cost reductions through improved
order accuracy.
There are several marketing benefits associated with integrating CRM and ERP,
such as greater insights into customer base. ERP systems store customer’s financial
relationship with the company. CRM solutions store their buying patterns and
marketing demographics. Unifying these two stores of customer data can help
organizations ensure that their sales, marketing and service expenditure are
targeting their most valuable customers and prospects.
To make integration successful, it is important to work with business-solution
expert who will provide the company with the insight needed to select an integration
architecture and development plan, based upon functional needs and technical
suitability.
II. Using the Internet in CRM: The Internet is already being used to great
advantage in CRM. It is indeed an ideal medium for effective customer contact and
customer care/service in several businesses. Many companies in these businesses
thrive by opting for the Net in handling customer relations and providing service to
the customers.
Forming “Virtual Customer Communities”: Today, customers everywhere are
forming self-servicing, tight –knit virtual communities. Internet chat rooms a part
of this process. The chat rooms are easy to start, join and participate. And they
accommodate people with different personalities. These virtual communities
exercise a powerful influence on the market in respect of several products.

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The power becomes all the more significant in view of the speed with which they can
be mobilized. Words spread fast on the Internet. Marketers can form their own
virtual communities as a part of their CRM programmes.

Differences between CRM and eCRM:

Major differences between CRM and eCRM:

Customer contacts

CRM – Contact with customer made through the retail store, phone, and fax.

eCRM – All of the traditional methods are used in addition to Internet, email,
wireless, and PDA technologies.

System interface

CRM – Implements the use of ERP systems, emphasis is on the back-end.

eCRM – Geared more toward front end, which interacts with the back-end
through use of ERP systems, data warehouses, and data marts.

System overhead (client computers)

CRM – The client must download various applications to view the web-
enabled applications. They would have to be rewritten for different platform.
eCRM – Does not have these requirements because the client uses the
browser.

Customization and personalization of information

CRM – Views differ based on the audience, and personalized views are not
available. Individual personalization requires program changes.
eCRM – Personalized individual views based on purchase history and
preferences. Individual has ability to customize view.

System focus

CRM – System (created for internal use) designed based on job function and
products. Web applications designed for a single department or business
unit.
eCRM – System (created for external use) designed based on customer needs.
Web application designed for enterprise-wide use.

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System maintenance and modification

CRM – More time involved in implementation and maintenance is more

expensive because the system exists at different locations and on various
servers.
eCRM – Reduction in time and cost. Implementation and maintenance can
take place at one location and on one server.

eCRM strategy components:

When enterprises integrate their customer information, there are three eCRM strategy
components:

1. Operational: Because of sharing information, the processes in business

should make customer’s need as first and seamlessly implement. This avoids
multiple times to bother customers and redundant process.
2. Analytical: Analysis helps company maintain a long-term relationship with
customers.
3. Collaborative: Due to improved communication technology, different
departments in company implement (intraorganizational) or work with
business partners (interorganizational) more efficiently by sharing
information.

Different levels of eCRM:

In defining the scope of eCRM, three different levels can be distinguished:

Foundational services:
This includes the minimum necessary services such as web site effectiveness and
responsiveness as well as order fulfillment.
Customer-centered services:
These services include order tracking, product configuration and customization as
well as security/trust.
Value-added services:
These are extra services such as online auctions and online training and education.

Self-services are becoming increasingly important in CRM activities.

The rise of the Internet and eCRM has boosted the options for self-service
activities. A critical success factor is the integration of such activities into traditional
channels. An example was Ford’s plan to sell cars directly to customers via its Web
Site, which provoked an outcry among its dealers network.

CRM activities are mainly of two different types. Reactive service is where the
customer has a problem and contacts the company. Proactive service is where the
manager has decided not to wait for the customer to contact the firm, but to be

57
aggressive and contact the customer himself in order to establish a dialogue and
solve problems.

Steps to eCRM Success:

Many factors play a part in ensuring that the implementation any level of eCRM is
successful. One obvious way it could be measured is by the ability for the system to
add value to the existing business.

There are four suggested implementation steps that affect the viability of a project
like this:
1. Developing customer-centric strategies
2. Redesigning workflow management systems
3. Re-engineering work processes
4. Supporting with the right technologies

E-BUSINESS OF CRM

CRM combines business process and technology that seeks to understand a

company’s customers from multifaceted perspective.
The core process competencies in CRM are cross-selling, up selling, customer
service and support, and field service and retention management.
In first stage: the most important issues and attributes that the CIO’s think
when determining the selection of a particular type of CRM solutions.
In the second stage: To build up an efficiency measurement model of CRM
solution providers, which can be used by the management to improve their
performance on the different parameters and use it for proper use resource
allocation.
WHY CONSIDER CRM IN YOUR E-BUSINESS STRATEGY?

Most traditional companies were in the midst of a thriving economy using the same
business model they had employed since their inception.
Though computers and electronics were used to streamline internal operations,
very few companies actually saw an advantage of using the same methods to
sell their products.
Customer relationship management (CRM) when applied to traditional business
models will often expose the following weaknesses in your organization.

Data warehousing:

A data warehouse is a repository of an organization’s electronically stored data. Data

Warehouse are designed to facilitate reporting and analysis. This classic definition of the
data warehouse focuses on data storage. However, the means to retrieve and analyze data,
to extract, transform and load data, and to manage dictionary data are also consider
essential components of a data warehousing system. An expanded definition of data

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warehousing includes business intelligence tools, tools to extract, transform, and load
data into repository, and tools to manage and retrieve metadata.

Benefits of Data warehousing:

Some of the benefits that a data warehouse provides are as follows:
1. A data warehouse provides a common data model for data, regardless of the data’s
source. This makes it easier to report, analyze information than it would be if multiple
data models from disparate sources were used to retrieve information such as sales
invoices, order receipts, general ledger charges etc.

2. Prior to loading of data into data warehouse inconsistencies are identified and resolved.
This greatly simplifies reporting and analysis.

3. Information in the data warehouse is under the control of data warehouse users so that,
even if the source system data is purged over time, the information in the warehouse can
be stored safely for extended periods of time.

4. Because they are separate from operational systems, data warehouses provide fast
retrieval of data without slowing down operational systems.

5. Data warehouses facilitate decision support system applications such as trend reports
(e.g. Items with the most sales in a particular area within the last two years), exception
reports, and reports that show actual performance versus goals.

6. Data warehouses can work in conjunction with and hence enhance the value of
operational business applications, notably customer relationship management systems.

Call Center Process:

The Call center is the real operation theatre in telemarketing. In a CRM call center,
customers communicate in many ways that include phone, e-mail, web chat, personal
sales representative, Voice over Internet Protocol (VoIP) and a host of others.
Several tele callers are hired for tele call operations.CRM call centers help companies
realign their entire organization around customers. And thus, it is a strategic business
initiative sales, marketing and services as well as other.

groups are connected and coordinated through the CRM applications. Before a call
ismade to the customer, all recent activity with that customer should be reviewed. Then
asales strategy needs to be planned , based upon observed opportunities. The use of
CRMsoftware in the Call centre allows the assignment of a value to each customer if
theculture supports that philosophy.How the Call Center works?It usually has a manager
in overall charge, a few supervisors and the required number of tele-callers. Normally,
the tele-callers are grouped in teams of six or seven callers, eachsupervisor handling one
such team. The tele-callers sit in front of a computer terminaland speak into their
headsets as telephone operators do in any telephone exchange.Simultaneously they access

59
information on the terminal, and add fresh data on it as the tele-calling progresses. The
tele caller opens the call by greeting the prospect appropriately. Then she politely seeks
the customer’s permission to have a brief conversation. She strikes the right chord with
the prospect and explains the offering. She generates adequate interest in the product and
tries to clinch an order. If this step does not materialize, follow up calls are made to
secure the order.
The tele-callers are usually provided with a script with which they practice a game. Once
they become comfortable, they resort to improvisation as required and try to make tele-
marketing more effective. The scripts for the calls are worked out jointly by the
telemarketer and professional consultants hired by the telemarketer. They are also
pretested with a few prospects. The supervisor is always available close at hand, she
keeps track of productivity and the call quality of her team.

Advantages of CRM Call Center:

CRM helps the company identify most valuable customers and understanding their
lifetime values. Using CRM, the call centers design the organization systems and service
to best meet the needs of customers and maximize their value. CRM is intended for long
term relationship building. Besides capturing the different forms of customer interaction,
CRM allows to capture and store all available customers in the central history database.
This allows agents the ability to pull up a customer’s entire history while the two interact.
Communication and service are more effective and efficient. Most CRM products also
track trends in purchasing and customer feed back .

Requirement Analysis: CRM Business Transformation Process: In most companies, the

business focus, organization structures and related business metrics are the biggest
inhibitors of CRM initiatives. All areas of the organization will have to change, in order
to truly support and foster CRM initiatives.

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As shown in the diagram, for any organization, business starts with acquisition of
customers. However, any successful CRM initiative is highly dependent on a solid
understanding of the customers.
Understand and Differentiate: Organizations cannot have relationship with the customers
unless they understand them-what they value, what types of service are important to
them, how and when they like to interact, and what and when they want to buy. True
understanding is based on a combination of detailed analysis and interaction. To create
and foster a relationship, organizations have to act on what they learn about customers.
Customers need to see that a company is differentiating service and communication based
both on what they have learned independently and what the customers have told them.

Develop and Customize: In the product oriented world of yesteryears, companies develop
products and services and expected customers to buy them. But in today’s customers
focused world, product and channel development have to follow the customer’s lead.
Organizations’ are increasingly developing products, services and even new channels,
based on customer needs and service expectation.

Interact and Deliver: Interaction is also a critical component of a successful CRM

initiative. It is important to remember that interaction doesn’t just occur through
marketing and sales channels and media; customers interact in variety of ways with
different divisions of the organization, including distribution and shipping, customer
service and online.
To foster relationships, organizations need to ensure that
All areas of the organization have easy access to relevant, actionable customer
information
All areas are trained how to use customer information to tailor interactions, based on
both customer needs and potential customer value.
With access to information and appropriate training, organizations will be prepared to
steadily enhance the value they deliver to customers. Delivering value is a cornerstone of
any relationship. Value is not price of the product or the discount offered. In fact,
customer perception of the value are based on a number of factors ,including the quality
of products and services, convenience, speed, ease of use, responsiveness and service
excellence.

Acquire and Retain: More the organizations learn about customers, easier it becomes for
them to identify areas that fetch great value for the organization. Those are the customers
and customer segments a company will want to clone in its prospecting and acquisition
efforts. And, because they will continue to learn about what is valuable to each segment,
they will be much likely to score a “win” with the right channel, right media, right
product, right offer, right timing and most relevant message.
Successful customer retention is based simply on the organization’s ability to constantly
deliver on three principles:
Maintain interaction, never stop listening

Continue to deliver on the customer definition of value.

Remember that customers change as they move through differing life stages.

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 Be alert for the changes and be prepared to modify the services and value proposition as
they change.
Prioritizing the changes: Since there might be many gaps, an organization has to be
prepared to make several changes to make, prioritization is critical. The organization
should evaluate each of the strategies identified to plug gaps based on-
Cost: To implement including initial one-time costs, as well as anticipated on-going
expenses.

Overall benefits: Some changes may have larger impact on the organization’s ability to
increase customer value and loyalty.
Feasibility: Based on organization’s readiness, data and system support resource skill-
sets and a number of other factors.
Time required: including the time necessary for training and addressing ‘cultural’
change management issues related to a specific strategy.

Measuring Success: Implementing CRM is time consuming and demands a significant

commitment across the cross-section of the organization. It is crucial that the action plan-
Establish means of measuring your progress on CRM initiatives
Establish enterprise wide measures of success and metrics that can be applied to all of
your CRM initiatives.
Apply these metrics on an ongoing basis to ensure continued funding of your CRM
initiatives. A common challenge in many organizations is that various groups,
departments and divisions have varying means of measuring and reporting on the success
of their CRM and customer related initiatives. Some may look at response rates and
others may look at capture rates. Some may look at increasing in average order, others
may look at number of contacts required to close a sale. Needless to say, the result is a
lack of consistent results on CRM initiatives, and confusion between departments ad in
senior management about the measures of success of these initiatives.
Ideally, each of the potential initiatives should be tied to projected improvements in
customer dynamics-acquisition, retention, penetration and/or reactivation. The next step
is to determine how improvements in these dynamics impact revenues, costs and/or
competitive differentiation.
Finally, it is important to establish universal metrics around these customer dynamics.
Each of these four dynamics can be measured by the following: percentages, number of
customers, number of products per customer etc. Since customer relationships represent
ongoing investments, it is important to also project the future behavior and projected
value of your customers while measuring the success of your CRM initiatives. This is the
concept of Lifetime Value (LTV).
A customer scorecard can be developed to reflect customer dynamics in a way that is
most meaningful to your organization; this scorecard should reflect measures of
acquisition, retention, penetration and reactivation across al business lines, divisions and
functional areas. The customer score card concept reinforces the concept of cumulative
enterprise-wide impacts on customer relationships. A scorecard should be fairly simple in
order to facilitate easy understanding

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CRM implementation: The following are the guidelines to follow before CRM is
implemented at the company.

1. Develop corporate wide CRM engagement from key shareholders: Many CRM
projects fail because critical stakeholders are not involved in setting CRM strategy,
assessing requirements and selecting options.

2. Envision the company’s CRM strategy: CRM is more than just software. It is also
about selecting appropriate methodologies and business practices to help your business
enable better relationships with customers
Set some high level customer relationship goals in areas such as increasing customer
retention, speeding problem resolution, closing a higher percentage of sales etc.

3. Determine and Prioritize CRM drivers and requirements: Priorities such include
solving problems in the areas such s functional areas that are causing the most pain, cost
and missed opportunity for the business, areas where employees are most or least
resistant to changing business, weaknesses compared with competitors, complexity of
each area that require addressing and identifying other systems with which it needs to
integrate.

4. Develop a CRM roadmap: Develop a master plan consisting of several smaller steps
and projects that will take you towards achieving the corporate CRM vision.
For each step spell out key outcomes and metrics, roles and responsibilities, budgets and
time lines. Start with low-risk/high reward projects to build momentum and success.
Make sure all key stake holders in each project are included up front in solution
evaluation and implementation process toe ensure faster, higher user adoption at the end.

5. Think Integration:
Determine how, where and when CRM tools need to integrate with one another and with
other applications. This includes evaluating the business processes flow, and identifying
process-related customer interactions and transaction that need to be integrated.6. Do
Your Homework and create a short list: Check out prospective vendors financial and
customer references. Talk to peers who have more experience in the CRM area, search
websites and pursue publications.
7. Apply the 80-20 rule in the selection process: Compare how vendors stack up in
terms of solution strengths and weaknesses. Have vendors spell out terms and conditions,
through document pricing, training, methodology, milestones and metrics for successful
deployment.
8. Keep everyone in the loop: Once you have made a selection, err on the side of over
communicating. Get internal evangelists involved early, and encourages inputs along the
way as you roll it out. Offer flexible training options to help accommodate different

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schedules and learning preferences. This will also speed adoption and produce benefits
more quickly.
9. Learn, Adjust and Evolve: Develop a mechanism to monitor use, get feedback and
adopt the solution as necessary to make sure its evolving with business and customer
needs. Depending on the type of CRM package deployed, you can use surveys, ongoing
education, user groups and other venues to stay on top of knowing how these needs are
changing, as well as what types of adaptations the solution will be needed over time.

CRM Software Selection:

Installing a good CRM software package is the cornerstone of any customer relationship
management program. Without good CRM software, gathering and storing the multitude
of details gained about a customer from each interaction would be very difficult. Small
business CRM software has gone ahead in leaps bounds in recent years, with several top
quality packages now available to choose from. Prior to beginning the search for good
CRM software technology however, there are a few basic features you should seek in a
potential

CRM package:

Basic Functions: The CRM software should manage data relating to both individuals and
companies and it should also provide time management features. As most businesses use
Microsoft Office, including Outlook, the CRM package should offer seamless integration
with MS Office and/or fax software, as the ability to compose letters, faxes and email
without leaving the CRM software is vital.

Recognized CRM Software Supplier: Do your research. Make sure your proposed
CRM software supplier is recognized in the industry and has a solid backing with
reputable customer testimonials and reliable 24/7 technical support.·

360 Degree Customer View: It is important to know which people work for the same
company; who said, emailed or wrote what to whom, and when. These details need to be
a single click away. Does the CRM package you are considering provide this 360-
degreeview?
Seamless Connectivity: These days it is becoming more and more common for a
growing business and its mobile workforce to utilize networked access to a central
database, to mobile phones, and to PDAs. You need to ensure your CRM software
package supports all the connectivity required by your company.

Managing Campaigns: In order to optimize your business marketing dollars, tracking of

marketing campaigns and measuring their performance is critical. You will need a CRM
package which provides this function.
Managing Leads: If you want sales opportunities to become closed sales, tracking leads is
of prime importance. Make sure you select CRM software which provides lead tracking.·
Data Transfer: Unless you are starting a business from scratch, you will probably need
to import information from previous software. Make sure you will be able to import

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directly, instead of spending hours processing the data through an intermediate stage or
even worse, manually. You will also need the ability to export data in order to exchange
information with businesses that might use another CRM software package.

External Support: To get the most from any CRM package, you will find tips from
fellow users, industry-specific templates, and plug-ins to be vital. Make sure the package
you are considering is well-known and supported.CRM gurus Dr Martha Rogers and Don
Peppers say that practicing good CRM means you need to develop a one-to-one learning
relationship with each customer, over four stages:· Identification· Differentiation·
Interaction

Interaction it’s about treating different customers differently. It requires a shift in

thinking, perseverance, discipline, and very good CRM software. It will take you many
interactions with a customer to improve identification of their details. You will need
many customers before you can place them in different segment sand cater to their needs
by segment. It may take even longer before you know enough to customize individual
offerings. So get researching, for the very best computer CRM software technology
suitable to your business. Without it, you are certain to be pushing up hill in your quest to
run a successful customer relationship management program.

Reasons for failure of CRM Programmes: Too often management views CRM as an
easy solution to their business problems. It is often initiatives begin and unfold the
management realizes the gaps in the expectations.

Some of the causes of failure are:

1. Mistaking CRM as the substitute for good marketing management:

Many marketing managers view a CRM programme as the substitute for marketing
management assuming that the programme would lessen the hard work involved in
marketing. They place excessive expectation on the CRM software and think the software
will by itself look after their customer management tasks.
No CRM programme can substitute the hard grind that marketing is all about. CRM
requires superior marketing managers and staff, who are not only sensitive to the
customers, but also willing to put in the needed work in the execution of the CRM
programme.

2. Failure to appreciate the dynamic nature of marketing: Customer’s needs and the
value they perceive in various offerings are subject to change overtime. Technology and
environment too keep changing, affecting the firm’s customer management strategy.
When CRM programme does not take cognizance of this dynamism of marketing, it fails.

3. Preoccupation with gathering of data and neglect of its application: Application of

the insights on customers to marketing action is the core of CRM.. The usefulness of this
expenditure depends entirely on the extent to the information is applied to marketing
actions.

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4. Inadequate appreciation of the potential of the customer database: The firms lack
adequate appreciation of the potential customer base. Their CRM programmes remain as
just, PR programmes. They stop with just quarterly customer mailings or monthly
customer letters. Measurements of customer satisfaction and protocols for applying the
results there of for calculating the efficacy of marketing are usually non-existent.

5. Failure to use brand intelligibly in the CRM programme: Using brand intelligibly
is the key to successful mass marketing. It is seen whenever the brand and its values are
not utilized throughout the CRM process, the results are not favorable. The way
customers interact with brands has been changing in recent years. Multiple channels have
contributed to this. This means that in the present times, the brand must work in all the
channels/media and all the levels/touch points at which the communication take place.
CRM must first know how the customers consume its brand and how they relate to it.
Using this knowledge, the brand’s value proposition and the various benefits it offers
should be tailored to the individual customer and communicated to him in a specific way
6. Reluctance to measure customer satisfaction precisely: Manny managers are
reluctant to precisely measure the level of customer satisfaction .They also fail to set
clear parameters/ metrics for this measurement. Obviously, these managers have no way
of finding out whether CRM implementation has brought in benefits or not.

7. Failure to follow up the feedback from the customers: Analysis shows that in many
cases, firms painstakingly gather feedback from customers, but afterward forget about it
completely. After coercing the customers to fill in any number of feedback forms,
suggestion forms and survey questionnaires, they make no attempt to action the feedback
or to initiate a further dialogue with them. This is worse than not gathering feedback at
all.

8. Reluctance to share the data on customers with all staff: Many firms have a
protectionist approach to information. Their thinking is that information should be made
available only on a ‘need to know’ basis within the organization and must be tied closely
to rank. This is anti-ethical to CRM.

CRM programmes believe in making all relevant information available to all those in the
organization, who interact with the customer in one way or the other

9. Ignoring the need for efficient, trained, well-motivated employees: Happy

customers are the outcome of happy and well motivated employees. And such employees
bred only in great workplaces.
CRM-Notes having efficient, well-motivated and happy employees. The challenge is
often with the speed of response. The firm must resolve customer’s problem adequately
and quickly. Employees with the right motivation ‘customer –first’ attitude creates a
satisfied customer.

10. Some CRM programmes incur very high costs: Running a CRM Programme,
especially the creation and maintenance of an effective customer database involves
significant costs. There are software costs, hardware costs, systems cost, people related

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costs, training and motivation costs and so on. The business must be capable of
generating such revenues and profits that costs of CRM programme do not pose a
problem at all. There must also be proper control of the costs of CRM-both investment
costs and operation costs. The CRM programme succeeds only when the net is positive.

11. Failure to appreciate that the scope for CRM varies over businesses:

All businesses and all customers do not lend the same scope or applying CRM.

Failure to appreciate this basic fact will lead the CRM programme to failure.

For example, in FMCG businesses where the end customers run into millions, and are
distance from the company by several tiers of middlemen and geography, a one –to-one
relationship is difficult to maintain. They may be better of with traditional mass
marketing/communication strategies.

12. Failure to fit in the needed flexibility: In some cases, CRM programmes fail as they
are designed without the needed flexibility. A rigid structure will be incapable of
supporting one-to-one marketing. It will not be able to respond to individual customer’s
needs in specific ways.

13. Poor planning affects business goals: Poor planning affects the company’s views of
interaction with customers and increases the chances of addressing the wrong issues.
Planning must be based on creating new initiatives that will make doing business better
for the customer.
It includes taking small steps to reach the larger goal.

14. Resistance to Change: Remaking a company to be genuinely customer-centric is

new and uncharted territory and as with anything new, there is always resistance to
change. Change often forces people to regress to what they know and protect what they
have always been comfortable with.

15. Commitment from senior management: A solid and total commitment from the
most senior management is a must for the CRM project work. The project must have a
dedicated senior executive with the strength to sell the program throughout the
organization as is champion, assuring the company’s commitment.’

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