CRM

Business Challenges
Businesses in many industries may lose up 50% of their
customers over a five year period.
Studies have shown its 6 to 7 times more expensive to
acquire a new customer than it is to retain a current
customer.
As little as a 5% increase in customer retention can
increase profits by 25 to 95%.
Yet many businesses are still focused only on customer
acquisition and see customers from the fragmented view
of individual transactions

Cost of new customer acquisition

7-8 times of retaining current
customers
(Yankee Research global connectivity
experts)

Customer Relationship
Management

50% current customers do not

contribute to profit
(AMR Research)
Top 20% customers contribute 60% of
revenue and 70% of profit
20 : 80 rule
Fortune 500 companies will lose
50% of customers in 5 years
(Peppers & Rogers Group)
Only 4% of unsatisfied customer
complain. 65~90% do not repurchase
(Anderson Consulting)
82% of customers whose complaints
resolved repurchased
98% coupon are scrapped.

Customer is important
Analysis on Customers essential

Customer is
There is only one boss. The customer!
He can fire everybody in the company, from the chairman
on down, simply by spending his money somewhere else.
Sam Walton, founder of Wal-Mart

When products become so similar and technologies are

commonly available , CUSTOMER EXPERIENCE is the
only true differentiator

Todays customer is

Smarter
leaner
more price conscious
has lower morale
overwhelmed by competitors
more demanding
less forgiving
harder to satisfy
less loyal

Core Marketing Concepts

A fundamental paradigm shift is occurring

in how company market to customers.
What's In
One-to-One Marketing
Customized Products
Share of Wallet
Life Time Value
Event Driven Marketing
Know Your Customers
Manage Your Customers
Differentiate Customers
Cross-sell / Retention
l0% of Market, l00% of
Customer

What's Out
Mass Marketing
Standardized Products
Market Share
Present Value
Program Driven Marketing
Know Your Products
Manage Your Products
Differentiate Products
Acquisition
100% of Market, 10% of
Customer

History of CRM

B&S

RM

CIMS

CRM

e-CRM

Time
line
Late
80s

Early
90s

Mid 90s

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 echannels (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.

Potential Benefits Of CRM

Customer retention
Share of customer or share of wallet
Cross-selling
Up-selling

Potential Costs Of CRM

IT infrastructure
Process change

Benefits Of CRM For Customers

Continuity
A contact point
Personalisation

What CRM means?

Customer ?

Relationship ?
Channels of interaction, segmentations

Management?
organization of customer related information

Relationships with whom?

All stakeholders including

Customer

Employees

Suppliers

Government

Citizens

I focus on Customers here.

The Customer Relationship Management (CRM).

The Meaning of Relationships

Continuity

Mutuality

Interdependence

Understanding

Trust

Value of customer relation

Three simple business goals of CRM

Acquire the right

customers with
high potential
value

Customer
Acquisition

Customer
Retention
Customer
Development

Cross- and upsell by offering

the right products
at the right time

Retain profitable
customers and
increase their
long-term value

Evolution of customer relation over time

The process of

Targeting
Acquiring
Servicing
Retaining
and
Building long-term relationships with customers

CRM Versus Mass Marketing

Traditional
Traditional
Mass
Mass
Marketing
Marketing

Shotgun
ShotgunApproach
Approach

CRM
CRM

Rifle
RifleApproach
Approach

Define customer
relationship management

CRM is NOT
1. a technology.
CRM is just a new system to install, new code to write.
2. sales force automation (SFA).
CRM is just a business development process for our salespeople.
3. customer loyalty.
CRM is a synonym for customer loyalty.
4. database marketing.
CRM just allows us to leverage our customer data better.
5. call center technology.
CRM is just a way to cut costs in the call center.
6. a project.
We can install CRM in 30 days with this team of three!
7. a producer of intangible benefits.
You just cant measure relationship management concretely.

CRM is a customer-focused
business philosophy designed to
effectively create experiences
that attract, acquire and retain
customers.
To realize the benefits,
enterprises must implement collaborative processes
and technologies that support customer interactions throughout all
channels.

CRM ?
A company-wide business strategy
designed to optimize profitability,
revenue, and customer satisfaction by
focusing on highly defined and precise
customer groups.

Customer Relationship Management

..an enterprise approach to understanding
and influencing communications in order
to improve customer acquisition, customer
retention, customer loyalty, and customer
profitability.

Customer-centric

Under this philosophy, the company

customizes its products and service
offering based on data generated through
interactions between the customer and the
company

CRM Definitions

An enterprise wide business

strategy designed to optimize
profitability, revenue and customer
satisfaction by organizing the
enterprise around customer segments,
fostering customer-satisfying behaviors
and linking processes from customers
through supplies. (Gartner Group)

An data-driven approach that

enables companies to assess each
customers current needs and potential
profitability and tailor sales offers and
service. It often involves using multiple
channels to improve effectiveness and
efficiency. (Goff et al. 1998 Mckinsey
Quarterly, No3)

A management discipline utilizing

specialized tools, technologies, and
techniques to facilitate the operation
and improvement of front-office
business functions with the intent of
optimizing the total value derived
through customer relationship. (Pivotal
software Inc. 1999)

An enterprise approach to
understanding and influencing
customer behavior through
continuous relevant communication to
improve customer acquisition,
customer retention, and customer
profitability. (NCR corps.,1999)

What is CRM?
Organizing
Organizing Around
Around
Segments
Segments

Tracking
Tracking Interactions
Interactions

Fostering
Fostering Satisfaction
Satisfaction

Linking
Linking Processes
Processes

Special
Special Promotions
Promotions
Targeting
Targeting
Markets
Markets and
and Individuals
Individuals

People - Belief that your customers and employees are

your most important asset and that long-term survival
depends on these relationships.
Process - Structuring your organization and business
processes to support the culture.
Technology - Automating and integrating business
processes to capitalize on the culture.

CRM is a Management Tool, encompassing all

functions, for focusing on the customer

Sales
Service
Marketing
Mfg
Product
Planning
Purchasing
R&D

Spares

CRM is a set of operating business processes built around

the customer

CRM is the front end (customer facing) activity. It needs to be firmly

supported by all other back-end processes.

CRM

FAST FWD

ERP
SCM

MFG
PURCHASING

R&D

All improvement initiatives under the CRM Umbrella

Makes Four Marketing Dreams Come True

1.

Dream to target and serve customers on an individual

basis (prefer 1 to1 marketing to mass marketing).

2.

Dream to enjoy log term relationships with them,

especially with the profitable customers (preferring
commitment to flirting).

3.

Dream to get rid of barriers and distortions created by

the non-value adding intermediaries (preferring direct
marketing)

4.

Dream to reduce marketing cost progressively.

Architecture of CRM
There are three parts of application architecture of CRM:

operational - automation to the basic business processes

(marketing, sales, service)

analytical - support to analyze customer behavior,

implements business intelligence alike technology

co-operational - ensures the contact with customers (phone,

email, fax, web, sms, post, in person)

Operational CRM
Operational CRM means supporting the so-called "front office"
business processes, which include customer contact (sales,
marketing and service)
Operational part of CRM typically involves three general areas of
business:
Sales force automation (SFA)
Customer service and support (CSS)
Enterprise marketing automation (EMA)

Analytical CRM
Data gathered within operational CRM are analyzed to segment
customers or to identify cross- and up-selling potential.

Collaborative CRM
Collaborative CRM facilitates interactions with customers through
all channels (personal, letter, fax, phone, web, e-mail) and
supports co-ordination of employee teams and channel.

CRM Components
Closed Loop Processing

Operational CRM
Business Operation Management
Marketing

Sales

Analytical CRM
Business Performance Management

Planning/
Analysis

Service

Action

Marketing data
Analysis

Feed
Back

Collaborative CRM
Customer Interaction Management
Web
Personalization

Call Center
Automation

Web Sales
& Service

Sales Data
Analysis

Customer Data
Analysis

Add Customer Attrition to the P&L Sheet

Components of Operational and Analytical CRM

Operational CRM:
effective and efficient use and management of people, process and technology

Analytical CRM:
the measurement of people, process and technology

Communication

Customer

Communication

Bridge the divide.

Segmentation

Member

Conversion

Value
Segmentation

Retain

Value

Customer is

KING
Understand him !!!

Bottom-line !!!!

How to build Loyalty?

Framework of building Loyalty
Drivers

CRM

Phased Elements

Degree of
Relationship

Improving
Core Products/Service
Innovation of Channel Mgmt.

Customer
Satisfaction

Attitude,
not Action

Reward Program
/Continuing Campaign

Repurchase
/ Cross-selling

Action, not Affinity

(Artificial Loyalty)

(CR Strategy)

Trust/
Intimacy

Recognition
of Relationship,
Referral

Customer
Loyalty

A Brand-Infused Causal Model

Loyalty-the customer-facing tip of the

CRM Iceberg
Increase
Cross-sell

Loyalty
Encourage
WOM
(word of mouth)

Increase Email
Click-thru and
Open Rates

CRM
Customer Direct
Communications

Encourage
Multi-channel
Buying
Identify
Customers at
all Touchpoints

(email, postcards, etc.)

Increase Re-buy
Rates

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

 Disadvantages:
-Organizational wise change of priority to customers.
- Significant investment of time and money
- Threatens managements control/power struggle
- Heightens peoples resistance to change
- Inappropriate integration leads to disaster

Thats All There Is To It

Organization
Customers

Touchpoints
Field Sales

Website
Email
Call Center

POS
Traditional Mail

Retail
Fax
PDA

Field Sales

Website
Email

Sales

Marketing

Call Center

POS

Service

Traditional Mail

Retail

Finance

Fax
PDA

Production

Field Sales

Website
Email

Sales

Marketing

Call Center

POS

Service

Traditional Mail

Retail

Finance

Fax
PDA

Production

Field Sales

Sales

Website
Email

Marketing

Call Center

POS

CRM

Service

Traditional Mail

Retail

Finance

Fax
PDA

Production

Process, Technology, People

Field Sales

Website
Email

Sales
Selling Knowledge
Product Knowledge
Solutions Knowledge
Customer Knowledge

Marketing

CRM

Service

Call Center

POS
Traditional Mail

Retail

Finance

Fax
PDA

Production