Customer relationship

management
Customer
Relationship
Management
History of CRM

B&S RM CIMS CRM e-CRM

Time line

Late 80’s Early 90’s Mid 90’s 2002 - Future

B&S – Buying & Selling

RM – Relationship Marketing
CIMS – Customer Information Management Systems
CRM – Customer Relationship Management
e-CRM- A subset of CRM that focuses on enabling customer
interactions via e-channels (The web, email and wireless)
Definitions
• “is a business strategy with outcomes
– that optimise profitability, revenue and
customer satisfaction
– by organizing around customer segments,
– fostering customer-satisfying behaviors and
– implementing customer-centric processes.”
• “is a strategy
– used to learn more about customers' needs
and behaviors
– in order to develop stronger relationships with
them.”
Definition of CRM :

CRM is a business strategy directed

to understand, anticipate and respond to the
needs of an enterprise's current and potential
customers in order to grow the relationship
value. This definition can be defined by five
views.
Features of CRM

• Central Database
• Effectiveness
• Useful to various departments in an
organization
• Helps to attract potential customers and
retain existing ones
• High Cost
• Reduces Process Time
Underpinning Theory
• Customers have many points of contact with
an organisation
• Retaining customers is far most cost effective
than recruiting new ones
• Some customers are more profitable than
others
– The “80/20” rule
– For most firms, 80 percent of profit comes from 20
percent of customers
• Use of Technology
Potential Benefits Of CRM

• Customer retention
• Share of customer or share of
wallet
• Cross-selling
• Up-selling
Benefits Of CRM For Customers

• Continuity
• A contact point
• Personalisation
Three phases of CRM
• Acquiring New Relationships
– You acquire new customers by promoting your
company’s product and service leadership.
• Enhancing Existing Relationships
– You enhance the relationship by encouraging
excellence in cross-selling and up-selling, thereby
deepening and broadening the relationship.
• Retaining Customer Relationships
– Retention focuses on service adaptability – delivering
not what the market wants but what customers want.
Customer Types

• Platinum Heavy, reliable users, not price-

sensitive, try new products, loyal
• Gold Large users who push for price
breaks, shop around and not so loyal
• Iron Low volume or intermittent users;
cost to serve them is quite high
• Lead Demanding, want special attention
but don’t buy much and show no loyalty
Advantages of CRM
• While company is quickly growing, customers are more satisfied as
well
• Service provided in a better way, and a quicker way
• Sales force automated
• Integrated customer information
• Certain processes eliminated
• Operation cost cut, and time efficient
• Brand names more quickly established
• A central database so that everyone in your company can keep track
of customer contacts
• Sales and marketing teams can benefit from having all this inside
knowledge about customers
• Lets you set up rules for distributing work throughout your
company
• Lets you pick and choose the functionality that you want
Objectives of crm

• To Improve Customer Satisfaction

• To Improve Efficiency of Business
• ToExpand Customer Base
• To Manage Time and Resources
effectively
• Enhance sales and support teams
• To reduce operational costs
COMPONENTS OF CRM

• To satisfy customer expectation, CRM

model implementation needs to integrates
the components of CRM

• Technology
Information
• Process
• People
• Information
TECHNOLOGY

• It assists and supports BPR, thus

facilitates work practice changes and
adopting innovative ways .

• It plays important role by linking front

and back office function to provide
efficient and effective management.
PROCESS

• A business process refers to collection of tasks

that results in a desired business outcome.

• To realize effective process change, company

should re-examine all of their customer
management business processes.
PEOPLE

• Commitment from top level management

is crucial for success of CRM .

• CRM projects requires full time attention

of implementation of project team with
representatives like sales , marketing ,
manufacturing and IT.
Information

Information is the raw material of CRM.It

allows businesses to easily maintain
information about the business
relationships, generally storing such data
so that employees can safely access the
records in real time.
Barriers To CRM

• Lack Of Guidance
• Integration Problem
• Employee Problems
• Inaccurate data
 SLA-Service Level Agreement
•  SLA “is really just a description of the service you’ve bought and
paid for SLA should include:
• The purpose of the SLA,
• Description of service, • Duration of service, • Installation time
table, • Payment terms, • Termination conditions, and • Legal
issues such as warranties, indemnities, • And limitation of
liability.
The SLA, then, is a contract between the service provider and the
customer – typically a business or organization, rather than an
individual consumer. Three keys to effective SLAs Whether
you’re the service provider or the customer a well thought out and
clearly executed SLA can strengthen your relationship by setting
reasonable expectation, clear measures of performance, and
rewards when performance is excellence or remuneration If it falls
short.
CRM Marketing Initiatives

•Cross-selling and Up-Selling

•Customer Retention
•Behavior Prediction
•Customer Profitability and Value
Modeling
•Channel Optimization
•Personalization
•Event-Based Marketing
Cross Selling and Up Selling

• Cross-selling- the act of selling a product or service

to a customer as a result of another purchase.
• Example- New mothers buy clothes for their babies
and then themselves as well.
• Up-selling- motivating current customers to trade
up to more profitable products.
• Example- McDonalds super size option.
Cross Selling and Up Selling Ctd.
These two forms of selling are an art and knowing
which products will increase the customer’s buying
is the key.
Here are some things to think about:
• Selling customers something they wouldn’t want or
need could cause them to buy less.
• Not every customer is a good candidate for these
types of selling.
• Understanding the ways how and whether the
customer responds to promotions
Customer Retention

• Understanding why customers leave for competitors

is key to find ways to retain them in the future.
• Churn- the customers leaving one business for its
competitors.
• When a customer leaves there is:
• Loss of revenue
• Loss of investment in acquiring them
Customer Retention Ctd.

• Loss of stable market for new products

• Businesses have studied the characteristics of those
who have left their business to understand why, to
predict who might leave next, and to find out who is
desirable to keep.
• They also are tying to find what method might work
best to keep these customers, such as promotions or
free stuff
Behavior Prediction
This uses past consumer behavior to foresee the future
behavior of their customers.
This analysis includes several variations.
1. Propensity-to-buy analysis- understanding what a
particular customer might buy.
2. Next Sequential Purchase- predicting the customers next
buy.
3. Product Affinity Analysis- Understanding which
products will be bought with others. Also known as
market basket analysis.
4. Price elasticity modeling and dynamic pricing-
determine the best price for a given product.
Behavior Predictions Ctd.

The marketing decisions that come for this analysis:

1. Preemptively offering discounts or fee waivers to
existing customers who are at risk of churning.
2. Refining target marketing campaigns so smaller
customer segments or specific products.
3. Packaging certain products together and fixed-
pricing them to sell more products and increase their
profitability.
4. Cross-selling products likely to be purchased with
other products.
Customer Profitability and
Value Modeling

• Customer Profitability- deals with the company’s

view of the possible profit to be made from its
customers.
• Value Modeling –deals with the value of the
customer’s other features like ability to bring in
more profitable customers or the potential to be a
more profitable customer.
• Value modeling is only as accurate as the
customer’s data is rich.
Channel Optimization
• Offering the right message to the right customer at
the right time.
• Example: Customers who us Internet banking
services might prefer a new emailed offer with their
regular statement and a customer visiting a branch
office might prefer a cup of coffee along with a
brochure.
• Once you understand the channels your customers
prefer to interact with your company you must then
decide what is the best way to communicate with
them.
Personalization

• This is the capability to customize customer

communication based on knowledge preferences
and behaviors at the time interaction.
• Examples: a site you bought CD’s from greet you
and offers you CD’s that are of your favorite artists
when you enter the site or the home shopping
channel operator greets you on when you call and
helps you quickly purchase what you need and all
because you shopped there once before.
Personalization Ctd
• The first example used variable insertion to personalize the
site for the current customer because it had information
recorded from the last transaction. Over time, the
customer is more and more known to the company through
study of the customer’s profile: data, past purchases, click
stream data, and web survey responses. Then the company
knows what to offer the customer to entice them to buy
more or keep them from churning.
• Example: if a person responds to a discount on skis then
they might also buy cold weather apparel.
• Using personalization can take out he guess work in your
business.
• Personalization in the B2C space is based on studying click
stream data (one’s navigation path through a company’s
Website.
Event Based Marketing

• This is a time sensitive marketing or sales

communication reacting to a customer-specific event.
• Example: sending an application for collision insurance
to people who recently had a car accident.
• Businesses today are to focus in on the individual
customer in a real time situation and get away from the
blank event-based marketing.
• An example of this ideal goal of reacting to customer’s
event in near real time is: when a customer receives
coupons at the store, right after their purchase, that they
might be interested in.
Event Based Marketing Ctd.

• This kind of marketing requires solid process

automation and a well calibrated workflow to be
effective in influencing the customer’s buying
behavior.
• The ultimate goal of a company, despite the type
of customer communication, is to get them to
visit the store or website to buy products they
are happy with.
CRM and Customer Service

• Customer service is the interaction between

the a customer and the company usually via
traditional channels like hone or email.
• CRM is a strategic process implemented to
maintain and retain customer for longer term.
Techniques to improve Customer Service

Call Centre and Customer care: call centers

increasingly known as contact centers ,customer
interaction centers or somewhat optimistically
customer care centers or even knowledge centers
.What they haven’t always known is how to
perform it effectively. Call centre operators had
been responding to each call as if it were unique
in effect proving their executives partially right.
 2.Call Centers - Definition
Call centres are a key enabling arm of Customer Relationship Management. A well
designed call centre will integrate people, process, and technology to improve operational
efficiency and maximize the value of the customer relationship for both inbound and
Call Centre
outbound contact. Technologies

People Process
IVR ACD
 External customer  Marketing / up-selling
 Internal customer  Technical support
 Sales Force  Product support
 Support team  Service support
 Back-office  7 x 24 support
CTI
 Technical staff
Information

• Customer data updates, purchase • Customer history, billing, purchases,

information value, profile
• Leads tracking update, customer • Product & service information,
tracking updates Data packages, prices
Warehouse
• Call statistics, inquiries, etc. • Marketing hints, reports, promotions
Call Routing
• A company’s customer support “help desk” might
actually be made up of several or many r-
geographically dispersed contact centers .Call routing
is the ability to move callers from the phone queue to
the next available agent. Routing enables accurate and
effective matching of customer requirements to agent
skills and availability. By implementing routing,
companies are taking the first and most essential step
in evolving the contact centre to meet individual
customer service requirements and enterprise revenue
generation goals.
Call Routing
To further minimize customer wait times , “ load balancing” ( the
ability of the network to automatically route a customers call to
the first available operator is a critical operational objective.
Network routers monitor operator availability while keeping
track of the incoming calls in the queue ,using switch technology
to allocate calls appropriately .It is also called as precision call
distribution, facilitates calls to be routed to agents who have
access to specific information or with particular areas of expertise
It can delineate a companies valuable customers by mapping the
incoming phone number to the customer profile, thus prioritizing
customer calls to favour repeat customers or routing customers to
speciality agents who are instructed in ways to differentiate
treatment based on the customers assigned segment.
Contact Centre Sales Support
• The call centre as a point of sale is a relatively new
practice that requires a combination of robust customer
data and CSR finesse, because the CSR needs to
transcend his traditional role of answering questions. For
eg.Thats a great pair of shoes .would you like a belt to
match?”
• The simple act of mentioning a complementary
Product or service is a way to provide product information
to customers who might not have otherwise known about
it, thereby establishing mind share.
Customer satisfaction Measurement

The demise of customer has been greatly

exaggerated, companies are using more
innovative ways to gather information about
customers impressions and leveraging the
findings to improve service. Responses are input
into customer databases and included as part of
individual costumer profiles. Such companies
design online surveys to solicit customer
feedback that can directly how a company
improves its customer communications.
Web based self-service

 The customers themselves, without the help of a

live person can resolve their problems or find out
answers to their queries using the web. This model is
founded on the principle of enabling customers,
partners and employees to obtain information or
conduct transactions directly over the internet,
avoiding time consuming and costly traditional
processes involving multiple verbal or written
interactions. It provides control, performance,
convenience and efficiency
Call Scripting

Scripting helps a company's contact centre present a

uniform image of the company by ensuring that the
company responds in a consistent way to common
problems so two different customers don’t get two
different answers.Such scripts eliminate agent
guesswork by providing the CSR with a logical
series of talking points and guiding her through a
dialog with the customer based on factors such as :
The reason for contact,curent product promotions,
past due bills
Cyber Agents

• Cyber agents attempt to pull together the best of

both personalization and advanced
technology.Cyberagent is given a personality –
complete with voice and facial expressions-often
communicating with web visitor by her first
name. They are the means of providing basic
customer support.
Workforce Management

• Staffing a contact centre has traditionally been a

matter of determining who can work for them.
This tool specializes in staff planning and
optimization ,and several products are specific to
contact centre staffing .With staffing issues
claiming up to 70 percent of a contact centers
operating budget ,the ability to track performance
against customer satisfaction levels and fine tune
staffing choices accordingly is the goal of
customer support executives.
CRM and Data Management
 Types of Data

Data comes to four basic flavors :reference data, transaction

data, Warehouse Data, and Business View Data.
1.Reference data –represent a list of things of the same type,
such as the list of products on your product master file.
Reference data reflects reality. Reference data is created at
the same time the order is being taken .It describes the
things that interact when a transaction occurs. It describe
the type of object like name, description, cost,length,and
dimensions of the object. It is a one time data .
Transaction Data

Transaction data represents repeating occurrences of the

same type of event such as an order file. If the customer
changes his mind on the quantity or product before it has
been shipped we need to change the record to reflect the
new quantity so the customer receives what he wants.
Today organizations focus initial efforts on ensuring that
transaction data is clean as it moves into the data
warehouse. This includes the data about the objects that
are involved in transactions as well as transactions data
itself.
Warehouse Data

Data warehouse are built from the information captured

in transaction systems. After the data warehouse
records have been loaded they should not be changed
even if the source transaction changes. The data
warehouse tracks all transactions and changes over
time so that companies can analyze history patterns
and trends. A data warehouse is a collection of data
that supports decision making processes.
Business view Data
It is generated from data warehouse .Business
views are calculations or summaries compared
over period of time. Business view data is never
updated the views are just created from the data
warehouse periodically. This data focus on
particular business area such as answering
questions like: how many complaints have been
from customers in last three years?
Identifying Data Quality Issues
We need to manage the quality of raw material inventory
but why is data quality a problem. Just like manufacturing
material data can be bad when it comes from the
source ,it can become damaged during handling ,damaged
while in storage or misused in the manufacturing process.
Most common sources of data quality problems:
1.Customer Data Deterioration: The time we start pitting
information into any customer database, the quality starts
to deteriorate. Some seven to ten percent of consumers
and businesses physically relocate every year and their
old contact information becomes useless.
2.Source Data Quality: Transaction data
sources have highly variable levels of quality
and its often poor. It is difficult to measure the
source of the quality of that data. It was never
previously cared if there were three or four
different addresses for the same customer
.quality concerns have now increased because
companies now recognise the gold mine of
customer knowledge they capture in all these
trasaction systems.
Lack of Standards and edits

There are no standards governing data entry and no

edits applied when data is being captured in the
source system. The must be cleaner to clean the
data in the file the more credibility it will have
and more the company can make it to convert it
for making better customer decisions.
 Poor Database design

• Previously it was expensive and took long time to

build new systems, due to this often data was
lost .But now after considering the importance and
criticality of customers ,all databases should be
built and used in a way that ensures that each data
element means only one thing and stores that one
kind of data.
Trust

• It is important to develop strong

relationships so that customers trust
us enough to share their
information with us which can
impact the quality of our database.
Sales Rep willingness to share (the politics of data)

• The politics of data starts from the fact that information

has power. Sales rep have special relationships with
certain customers and they know that their income is
based on their ability to build relationships and influence
customer to purchase. They do no t believe in sharing the
information and customer data because its like giving
away their bread and butter. It is necessary to get sale reps
to participate in the CRM program, so they must be
provided some benefit out of the information they share,
which then can create a specific database, and for longer
time period.
Customer Trust

• This situation occurs when you require

information that you don’t really need or the
customer doesn't understand why you need it,
this practice makes people suspicious. Asking
for just what you need to complete the
transaction starts to build the relationship
with a sense of trust.
Planning and getting Information Quality

Accurate information and reports are the life

blood of an effective sales force, to ensure
consistently high quality data companies
needs to train its users create and implement
a data quality process-
Following are the stages which help to plan and
get qualitative information:
Process

1.Data Profiling
2.Data Control
3.Data Integration
4.Data Augmentation
5.Monitor Data
6.Assign Ownership, Train users, and commit to a
data quality process
Using Tools to Manage data

• The basic method of measuring data quality for both the

baseline and the final result involves selecting a random
sample of target customers from the target database and
examining each of the elements as to whether it passes
the criteria:
• Information Quality Elements:
1.Completeness:Non-blank
2.Accuracy:Represents reality
3.Consistency:Logical coherence between sets of data
4.Validity:conformance to the accepted standard.
Types of Data Analysis

• OLAP-Online analytical processing is an advanced data reporting

tool. the term drill down is more appropriately applied to the
practice of online analytical processing, known as OLAP. OLAP
has become the most popular type of decision support analysis,
allowing the average business person to explore data online with
the aim of focusing on data at a lower and lower level of the data
hierarchy.  this mean generating an online report, analyzing the
result, and submitting a more detailed query in order to understand
the result data.
• OLAP data are multidimensional which
means that the information can be
compared in different ways .For eg. an
organization can compare its sales in
February with the sales in March, and then
compare those results with sales from
another location ,which might be stored in
another database.
Click Stream Analysis

• the data that illustrates a Web visitor’s footprint

around the site, how long he stayed, what he did
during his visit, and when he returned. They’re
the equivalent of a camera in a department store
recording a shopper’s every move.It is a process
of collecting ,analysing and reporting aggregate
data about the pages visited by visitors.
Traffic analysis and E-commerce analysis are the
two levels of click stream analysis .Traffic
analysis tracks the following:
1.Number of pages visited by visitors
2.Data transmitted by visitors
3.Time taken by pages to upload
E-commerce analysis notices the buying behavior
of visitors on a webpage. It checks out what a
visitor buys out of the shopping cart.
Collaborative Filtering

• It is a method of recommending products

or services to visitors on a website. It
tracks the buying behavior of visitors
through online purchases made by them.
After this it categorizes visitors based on
similarities among them. Data collected
through this method is further used to
provide product suggestions to the visitors.
Personalization and Collaborative Filtering

• The practice of tailoring communications directly to a

customer segment or, increasingly, to an individual
customer. The premise of personalization is that, by
collecting sufficient customer data, a company can
market to an individual’s unique needs, both now and in
the future.
• Personalized communications is the principal techniques
via which companies can convince customers they
understand them.
• Personalization is the practice of
tailoring communications directly
to a customer segment or,
increasingly to an individual
customer.
Data Reporting

• Data Reporting is the process of collecting and

submitting data to authorities entrusted with
compiling statistics. Accurate data reporting
gives rise to accurate analysis of the facts.
Data reporting measures performance ,and analyses
other key elements that can then be shared within
the organization or with the public.
• Reporting translates raw data into
information. It helps companies to monitor
their online business.