Customer is the Focus

Strategy

Structure

People

Process

Systems
 Core and Extended Customer Service
Core Customer Service. Mechanical elements including Quality, Cost and service
Delivery.
Extended (Caring) Customer Service. Human elements including: Friendliness,
Caring, Flexibility, Problem-solving, and Recover y.
Customer Grade
Perceived
Outstanding A
Value

Exceeds
Expectations
B
Customer Perceived Customer
Satisfactory C Expectation Value Expectation

Unsatisfactory D

Failing F
Core Service Caring Service
Satisfies Delights
Core service will never exceed a grade of C or satisfactory. Don’t spend time and money
attempting to exceed expectations here. Caring service will allow the organization to
exceed customer expectations through perceived service delivery.
The Customer’s Perceived Value = The State in which the quality of a total
experience, perceived by the customer, exceeds its cost.

How is a Customer Delighted?

Expectations Customer Delight A condition in
attitudes which form a which experience exceeds
framework for judging expectations.
performance.

Touch Experience The point at Satisfaction The measure

Point which the customer reflecting a customers
Service
interacts or touches the experience against their
organization. expectations.

Quality A bundle of tangibles

Value The quality of an experience
and intangibles a customer takes
as perceived by the customer and
into account when evaluating the
related to its cost
experience
 Customers Value Package
Aesthetic - any sensory experience that
affects the perception of value (flavor,
visual appeal, smell, temperature, music,
Environmental - the physical sound levels).
setting in which the customer
experiences the delivery of the
product.
Interpersonal - the
customers’ experience o
human interaction with
those who deliver the
Procedural - what an
individual must go through
The Customer product or service.

to function as a customer Value Package

(waiting in lines, filling out
forms, visiting numerous
Financial - what the customer
facilities).
pays for the total experience, as
well as the nature of the
financial interaction.
Deliverable -
anything of which
the customer takes
custody, even Informational - the information a
temporarily. person needs to function as a customer
(where to go, who to contact, payment
amount, office hours).
Transaction vs. Relationship
Marketing:
Transaction Relationship
 Ongoing
 One-time
 Managing People
 Managing Brands
 Individual
 Mass communication
communication
 Market share
 Customer share
 Profitability of
 Profitability of
transaction
longevity
 Brand Equity
 Customer share equity
Customer Relationship Management
Customer Relationship Management (CRM) is a business
strategy to select and manage customers to optimize
long-term value.
CRM is a complete system that:
1)provides means and methods to enhance the
experience of the individual customers so that they will
remain customers for life.
2)provides both technological and functional means of
identifying, capturing, and retaining customers.
3)provides a cohesive view of the customer across the
enterprise.
Importance of CRM
 CRM must be part of an overall company philosophy.
 CRM is core to all businesses, essentially it is about
selling good products or services to the right people.
 CRM solutions must include not just systems, but also
people, process and strategy.
 CRM must focus on selecting and managing customer
value and loyalty through a long-term relationship.
 CRM is not a single system but a comprehensive
application architecture consisting of several systems.
 Purpose of CRM:
To meet the changing expectations of customer due to:
(a) social and demographic factors
(b) economic situations
(c) educational standards
(d) competitors product
(e) experience
Loyal customers are the source of most profits
A relatively small percentage of customers may generate
most of the profits.
Marketing cost and efforts are less for existing
customers.
Dissatisfied customers tell others about their
experiences, So do satisfied customers.
 Need for CRM
 CRM typically costs 5-10 times to acquire a new
customer.
 “Some companies can boost profits by almost 100% by
retaining just 5% more of their customers.”
 Most companies lose 50% of their customers in 5 year
.
 70% of repeat purchases are made out of indifference
to the seller, NOT loyalty….

Customer Customer Customer

Profit
satisfaction commitment retention
 Why customers move away?
New Miscellaneo
Associations us
Competitio 5% 3%
n
9%

Product
dissatisfaction
14%

Perceived
indifference
69%
Economics of Customer Retention

“Winning back a lost customer can cost up to 50-100

times as much as keeping a current one satisfied.”
Rob Yanke r, Partner, McKinsey &
Company
Goals of CRM
 Provide better customer services.
 Cross sell product, Cross-selling is a strategy of providing
existing customers the opportunity to purchase additional
items offered by the seller.
 Cross-selling involves offering the customer items that
complement the original purchase in some manner
more effectively.
 The telecommunications industry is a prime example of this
type of sales activity. When establishing local telephone
service, the new subscriber is often invited to enjoy other
telecommunications options offered by the service provider.
These may include long distance packages, cell phone
services, or high-speed Internet services.
Up selling involves promoting upgrades or add-ons to
customers that are extra purchases and increase
sales. When you up sell, you offer the customer another
product for purchase.
Incentives are crucial features of up selling. Incentives
such as a discount and/or free shipping give the
customer good reasons to purchase something extra
right away.

Helps sales staff close deals faster

Increase customer revenue

 Personally recognizing customers;
 Offering appropriate value and great service to
encourage repeat business;
 Ensuring that employee and customer
satisfaction continues to improve.
 Beating the competition by offering a better
product, competing on the service experience
rather than price alone.
Benefits of CRM
 Simplify marketing & sales process
 Access to customer information
 With CRM, all of your customer information is in
one centralized location and is constantly updated
every time an activity happens with a prospect or
customer.
 So now you have up to the minute tracking of all
your prospects and customers.
 Benefits of CRM
 Increase Sales Effectiveness
 Make sales teams more effective by automating
tedious repetitive tasks.

 With CRM, sales people can automate a big chunk of

their daily tasks such as sending out emails,
generating reports, organizing leads and so on.

 With CRM's Mobile access, sales people have instant

access to customer information when they need it,
without being tethered to a computer.
 Benefits of CRM
 Reduce Customer Support Time
 CRM enables your service agents to answer all
customer inquiries quickly, accurately and
consistently by phone, e-mail, chat or in person.

 With FAQ s and the knowledge base you can help you
customers help themselves.
 Benefits of CRM
 Retention rate: CRM increases customer loyalty,
which increase revenue per customer and frequency of
purchases.
 Referrals: CRM can turn customers into advocates.
Referrals typically have higher retention rates and
spending rates than other newly acquired customers.
 Increased sales: CRM leads to increased cross-selling,
upgrades, or simply more products by existing
customers.
 Reduced costs: CRM can lead to more cost effective
marketing; avoids expenses of mass marketing.
 Benefits of CRM
 Provide better customer service
 Cross sell products more effectively
 Help sales staff close deals faster
 Simplify marketing and sales processes
 Increase customer revenues
 Reduced costs, because the right things are being done
 Increased customer satisfaction, because they are getting exactly
what they want
 Ensuring that the focus of the organisation is external
 Growth in numbers of customers
 Maximisation of opportunities
 Increased access to a source of market and competitor
information
 Long term profitability and sustainability
Customer Life Cycle Management
Customer Need
Assessment and
Acquisition

Customer
Customer development through
Retention personalization and
Referrals for new
Customization
Customers

Customer Equity
Leverage through
Cross Selling and
Up Selling
 RFM Data in CRM
 Organizations can find their most valuable
customers through “RFM”
 Recency - How recently a customer purchased
items.
 Frequency - How frequently a customer
purchased items.
 Monetary Value - How much a customer
spends on each purchase.
 CRM evolution
Stage State Culture
Satisfaction Re-active Meet customer needs
Based Respond to complaints
Minimal evaluation of customer
service levels
Performance Pro-Active Evaluate customer perception
Based
Identify customer retention factors

Commitment Very Pro- Evaluate multiple customer needs

Based Active Continuous inbound/outbound
flow and feedback
Continuous improvement
 Stages of CRM:

Stage 2 • Marketing Stage 6

• Collecting • Accessing Stage 4 more
information • Storing information effectively
information • Analyzing • Enhancing
customer the
Stage 1 Stage 3 behaviour Stage 5 customer
experience
CRM Components
Staff Customer CRM may include:
Call Center Management
Customer Call Center Software
Interaction Contact Management Software
Customer Relationship Management
Center
Customer Interaction Center
Customer Service
Self-serve Channels Document Production
E-Business
Electronic Commerce
Customer Sales Electronic Purchasing
Executive Information System
Field Service Management
Help Desk Management
Customer Marketing Marketing
Mobile Computing
Online Auctions
Customer Field Service Various Portals
Sales
Systems Sales & Marketing Systems
Sales Force Automation
Customer Service Supply Chain Automation
Telemarketing / Telesales
Value Chain
Customer Analysis & Voice Over IP
Reporting Web Collaboration, Chat, Email
TYPES OF CRM:
Front Office
Operations (sales,
Operational marketing, service
Inter- etc)
department
coordination

Collaborative Analytical
Enhance
Company
Relationship
with Customer
Types of CRM:
 OPERATIONAL CRM

 Gives support to ‘Front Office’ business process (e.g. sales,

marketing etc)
 Any interaction with customers is stored in customers contact
histories, which the staff can retrieve as necessary.
 Gives staff access to important information about the customer.
 Operational CRM possesses customer data for a variety of
purposes
 Managing campaigns
 Enterprise Marketing Automation
 Sales Force Automation
 Sales Management System
 Components of Operational CRM
CUSTOMER SERVICE AND SUPPORT (CSS)
 Is the part of a company's CRM department that interacts
with a customer for their immediate benefit, including
components such as the contact center.
 20-25% of CRM
 Provides information to support customer call center
activity
 Build customer satisfaction & loyalty
 Resolve customer issues after the sales responsively
 It comprises two key functional areas:
 Cases:- Track every interaction of customer service &
support teams with each customer.
 Solutions:- Maintain a centralized database of solutions to
leverage knowledge across the enterprise.
SALES FORCE AUTOMATION (SFA):

 These are tools which automate the collection and

distribution of all types of sales or sales related
information.

 Calendar management, activity management, sales

reporting and forecasting, lead distribution and
tracking of sales contacts with customers are some
of the capabilities offered within these solutions.
 Sales Force Automation (SFA)
 35-40% of all CRM activity
 Sales force automation comprises of:
 Account Management
 Contact Management

 Activity Management

 Revenue Forecasting

 Reporting & Analysis

Components of Operational CRM
 Field Force Automation (FFA)

 Field Service or Field Force Automation (FFA), is an

attempt to optimize processes and information
needed by companies who send technicians or staff
"into the field" (or out of the office) for maintenance
and repair of equipment at the customer's location.
 It involves a combination of some or all of the
following: CRM applications, work order
management, dispatch, wireless technology.
 3-5% of all CRM activity
 Components of Operational CRM
 Marketing Automation (MA):
 Applies technology to marketing processes
 Generating lists of customers to receive mailings or
telemarketing calls, scheduling automatic or manual
follow-up activities and receiving third-party lists for
incorporation into the campaigns are all typical functions.
 Ensures high efficiency by creating integrated, highly-
targeted campaigns and tracking results across all
channels.
 Target the Best Customers.
 Manage Marketing Campaigns.
Components of Operational CRM
 Marketing Automation (MA)
 It comprises of two main functional areas:
 Campaign Management
 Lead Management
 3-5% of CRM, but growing 5X faster than all
others.
 Interacts with S FA to support field sales efforts
 Inbound and outbound e-mail management
capabilities are also becoming popular
components of the marketing automation
suites.
Marketing Automation Process
Flow
 2. Analytical CRM
 analyses the customer data for various purpose
such as design and execution of targeted
marketing campaigns to optimize marketing
effectiveness, design and execution of specific
customer campaign,
 analysis of customer behavior to aid product
and service decision making, management
decision, prediction of probability of customer
defection.
Components of Analytical CRM
 OLAP (Online Analytical Processing)
 One of the most popular type of decision-support
analysis, allowing the average business person to
explore data online with the aim of focusing on
detailed data.
 More often, this means generating an online report,
analyzing the results and submitting a detailed query
in order to understand the result data.
 Data mining :
 Data mining tools identify patterns in data and deliver
valuable new information that can increase a company's
understanding of itself and its customers.
 The three types of data mining are:

 Prediction: The use of historical data to determine

future behaviors.
 Sequence: Sequential analysis identifies
combinations of activities that occur in a particular
order.
 This is used to determine whether customers are
doing things in a particular order.
 Association: Association analysis detects groups of
similar items or events.
 3. Collaborative CRM covers aspects of a company's
dealings with customers that are handled by various
departments within a company, such as sales, technical
support and marketing.

 Collaborative CRM's ultimate goal is to use information

collected by all departments to improve the quality of
services provided by the company.
 Principles of Customer Relationship
1. Continuously learn about your customers.
2. Interact personally with your customers.
3. Handle different customers differently.
4. Retain the right customers.
5. Create business rules to drive all customer
relationship management decisions and automation.
6. Empower agents with information and training
7. Effective analysis is crucial.
8. React to the findings.
Relationship Building Strategies:
1. Communicate frequently
2. Offer customer rewards
3. Hold special events
4. Build two-way communication
5. Enhance the customer service
6. Launch multicultural programs/ ways
7. Understand customers problems.
Building CRM by Customer Retention
1. Provide best services – Reach to customers
expectations
2. Building trust through relationship
3. Be quick to resolve the problems
4. Keep in touch
5. Reward loyalty
6. Offer customer surprises
7. Use automation to re-engage customers
8. Leverage customers feedback
9. Keep informing
 Implementation of CRM
 To implement CRM, following factors need to be given due
consideration
 Easy interaction between customers and company,
 Easy access to information about company like content of
customization, advantages of the company, benefits to
the customers.
 Abundant supply of customer information
 Customers' information should be updated always
 Have cordial relationship with other companies targeting
the same customer segment
 Analyze human resources and ensure that everyone has
an understanding of philosophy of CRM
 BE RELIABLE- consistent performance is what
customer wants from us
 BE CREDIBLE- if the customer buy the product,
he wants to safe and guaranteed.
 BE ATTRACTIVE- body language
 BE RESPONSIVE– accessible, available and
willing to help customer whenever the customer
has a problem.
 BE EMPATHETIC- be in customer’s shoes and
grasp his point of view
 Need for e-CRM
Due to the introduction of new technol
Due to globalization
 to satisfy the customers at global level
 Sometimes customer itself prefer to do
online purchasing.
Also, e-CRM is used for attracting &
keeping economically valuable customers
& eliminating less profitable ones.
Process of e-CRM
 Benefits of e-CRM
 Convenience
 Improvement in overall quality of customer experience
 Increased profitability
 Low implementation Cost
 Rapid Development
 Accessibility
 Instant Information Sharing
 Increased customer loyalty
 More effective marketing.
 Improved customer service and support.
 Through e-CRM, right tools helps sending right orders to
right customers at right time.
 Greater efficiency and cost reduction.
Some Applications of Technology in CRM
 Call centers
 These are organizations which deal directly to the
customer interactions.
 These are otherwise known as "Customer Care
Centre" or "Contact Centre" indicating more
technological sophistication and multichannel
support.
 Call centre technologies entered the market place to
effectively alleviate some of the repeat work and
increase efficiencies, allowing companies to handle
escalating call volumes.
 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
eff iciency.
 Customer satisfaction measurement:
 Survey mails are the major way for companies to
monitor customer satisfaction.
 Nowadays, these survey forms are even personalized
to specific customers or customer groups.
 Responses are input into customer databases and
included as part of individual customer profiles.
 Such tracking of customer satisfaction over time
enables a company to fine tune how it communicates
with its customers according to their preferences.
 Cyber agents
 Cyber agents are 'life like representatives‘ normally
depicted on a company’s web site as a real person.
 It is an attempt to put together the best of both
personalization and advanced technology.
 It is given a personality and is having facial expressions and
volume.
 Usually a cyber agent addresses the web visitor with his/her
first name.
 It can draw from the wealth of detailed information to
answer basic FAQ s as well as guide a customer to the
appropriate screen for a definite purpose/action.
 Web site
 It is the efficient and effective use of worldwide web
for providing information to the customers, by a
company who had created that site, in a hassle-free
manner.
 The main advantage of a web site is its 24 hours
accessibility.
 Usually gathering information from the site is a
simple task and is cost-effective.
 Information Technology and CRM:
Examples
 Cookies
 “A “cookie” is a parcel of text sent by a server to a web browse
and then sent back unchanged by the browser each time it
accesses that ser ver. HTTP cookies are used for
authenticating, tracking, and maintaining specific
information about users, such as site preferences and the
contents of their electronic shopping carts”.

 Illustration: The online store, Amazon, uses “cookies” to

provide a personalised service for its customers. Amazon
requires customers to register with the service when they
purchase items. When registered customers log in to Amazon
at a later time, they are ‘greeted’ with a welcome message
which uses their name (for e.g. “Hello John”). In addition,
their previous purchases are highlighted and a list of similar
items that the customer may wish to purchase are also
highlighted.
CRM Limitations
Not feasible for every market and
customers
customers don’t want to be committed to
every brand/relationship
Not feasible for low-involvement,
habitual purchasing in B2B or B2C
Some markets/customers may have low
“personalization potential”.
 Reasons fo r Failure of CRM
 CRM Strategy not clear
 CRM strategy and vision need to define what
customers experience at each touch point, and how
will they be handled at each touch point. The vision
needs to be clear to everyone.
 Implementation was limited to software installation
 Inadequate motivations for employees to learn,
provide input, and take full advantage of the
information systems
Technology Errors
Customer data is in more places than expected.
Different CRM solutions are in place but do
not work well together.

People errors

Introducing CRM to hundreds of employees at

a time.
Changing the system, but not the people.