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CUSTOMER RELATIONSHIP MANAGEMENT

INDEX

SR. CONTENT PAGE

NO. N0.
1 INTRODUCTION 6
2 LITERATURE REVIEW 8
3 TYPES 9
4 OBJECTIVES 12
5 ADVANTAGES AND DISADVANTAGES 13
6 NEW TRENDS 18
7 CONCLUSION 19
8 BIBLIOGRAPHY 20
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INTRODUCTION

Customer Relationship Management: In the mid-twentieth century, mass

production techniques and mass marketing changed the competitive landscape
by increasing product availability for consumers. However, the purchasing
process that allowed the shopkeeper and customer to spend quality time
interacting with each other was also fundamentally changed. As a result,
customers lost their uniqueness becoming an “account number”. Shopkeepers
lost track of their customers’ individual needs as the market became full of
product and service options. Many companies today are striving to re-establish
their connections to new as well as existing customers to boost long-term
customer loyalty (Chen and Popovich, 2003). Most companies engage in some
form of customer relationship management. When a company builds a customer
list, assigns opportunities to sales representatives, or handles customer support
cases, they are undertaking CRM-related activities.

CRM applications standardize, automate, and share these activities across

organizations to improve how companies interact with their customers.

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

 Allows companies to coordinate their approach across channels, departments

and also geographically

The concept of customer-relationship management started in the early 1970s,

when customer satisfaction was evaluated using annual surveys or by front-line
asking. At that time, businesses had to rely on standalone mainframe systems to
automate sales, but the extent of technology allowed them to categorize
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customers in spreadsheets and lists. In 1982, Kate and Robert D. Kestnbaum

introduced the concept of Database marketing, namely applying statistical
methods to analyze and gather customer data. By 1986, Pat Sullivan and Mike
Muhney released a customer evaluation system called ACT! based on the
principle of digital rolodex, which offered a contact management service for the
first time.

The trend was followed by numerous companies and independent developers

trying to maximize leads' potential, including Tom Siebel, who designed the
first CRM product Siebel Systems in 1993. In order to compete with these new
and quickly growing stand-alone CRM solutions the established ERP software
companies like Oracle, SAP, Peoplesoft and Navision started extending their
sales, distribution and customer service capabilities with embedded CRM
modules. This included embedding sales force automation or extended customer
service (e.g. inquiry, activity management) as CRM features in their ERP.

Customer relationship management was popularized in 1997, due to the work of

Siebel, Gartner, and IBM. Between 1997 and 2000, leading CRM products were
enriched with shipping and marketing capabilities. Siebel introduced the first
mobile CRM app called Siebel Sales Handheld in 1999. The idea of a stand-
alone, cloud-hosted and moveable customer bases was soon adopted by other
leading providers at the time,
including PeopleSoft, Oracle, SAP and Salesforce.com.

The first open-source CRM system was developed by SugarCRM in 2004.

During this period, CRM was rapidly migrating to cloud, as a result of which it
became accessible to sole entrepreneurs and small teams. This increase in
accessibility generated a huge wave of price reduction. Around 2009,
developers began considering the options to profit from social media's
momentum, and designed tools to help companies become accessible on all
users' favorite networks. Many startups at the time benefited from this trend to
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provide exclusively social CRM solutions, including Base and Nutshell. The

same year, Gartner organized and held the first Customer Relationship
Management Summit, and summarized the features systems should offer to be
classified as CRM solutions. In 2013 and 2014, most of the popular CRM
products were linked to business intelligence systems and communication
software to improve corporate communication and end-users' experience. The
leading trend is to replace standardized CRM solutions with industry-specific
ones, or to make them customizable enough to meet the needs of every
business. In November 2016, Forrester released a report where it "identified the
nine most significant CRM suites from eight prominent vendors".
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LITERATURE REVIEW

Modern marketers are rediscovering the ancient mantras for success in

corporate world and blending them with contemporary marketing practices.
Long term survival and competitive advantage can only be attained by
establishing an emotional bond with the customers. A shift is taking place from
marketing to anonymous masses of customers to developing and managing
relationships with more or less well known or at least some identified customers
(Gronroos, 1994). CRM refers to all business activities directed towards
initiating, establishing, maintaining, and developing successful long-term
relational exchanges (Heide, 1994; Reinartz & Kumar, 2003). One of the results
of CRM is the promotion of customer loyalty (Evans & Laskin, 1994), which is
considered to be a relational phenomenon, (Chow & Holden, 1997; Jacoby &
Kyner, 1973; Sheth & Parvatiyar, 1995; cited by Macintosh & Lockshin, 1997).
The benefits of customer loyalty to a provider of either services or products are
numerous, and thus organizations are eager to secure as significant a loyal
customer base as possible (Gefen, 2002; Reinartz & Kumar, 2003; Rowley &
Dawes, 2000). Recent developments in Internet technology have given the
Internet a new role to facilitate the link between CRM and customer loyalty
(Body and Limayem, 2004). It is common knowledge that a dissatisfied and
unhappy customer will share his unfortunate experience more than a satisfied
customer. It is also observed that a fraction of unhappy customers choose to
complain while others simply switch their loyalty to others service providers.
Loss of customer is loss of business along with the opportunity for business
growth and profitability. Feedback collection from the customer is essential for
the supplier to ascertain customer satisfaction and scope for improvisation
(Sugandhi, 2002).
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TYPES

 Strategic

Strategic CRM is concentrated upon the development of a customer-centric

business culture.

 Operational

The primary goal of customer relationship management systems is to integrate

and automate sales, marketing, and customer support. Therefore, these systems
typically have a dashboard that gives an overall view of the three functions on
a single customer view, a single page for each customer that a company may
have. The dashboard may provide client information, past sales, previous
marketing efforts, and more, summarizing all of the relationships between the
customer and the firm. Operational CRM is made up of 3 main components:
sales force automation, marketing automation, and service automation.

 Sales force automation works with all stages in the sales cycle, from
initially entering contact information to converting a prospective client into
an actual client. It implements sales promotion analysis, automates the
tracking of a client's account history for repeated sales or future sales and
coordinates sales, marketing, call centers, and retail outlets. It prevents
duplicate efforts between a salesperson and a customer and also
automatically tracks all contacts and follow-ups between both parties.
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 Marketing automation focuses on easing the overall marketing process to

make it more effective and efficient. CRM tools with marketing automation
capabilities can automate repeated tasks, for example, sending out automated
marketing emails at certain times to customers, or posting marketing
information on social media. The goal with marketing automation is to turn a
sales lead into a full customer. CRM systems today also work on customer
engagement through social media.

 Service automation is the part of the CRM system that focuses on direct
customer service technology. Through service automation, customers are
supported through multiple channels such as phone, email, knowledge bases,
ticketing portals, FAQs, and more.

 Analytical

The role of analytical CRM systems is to analyze customer data collected

through multiple sources and present it so that business managers can make
more informed decisions. Analytical CRM systems use techniques such as data
mining, correlation, and pattern recognition to analyze the customer data. These
analytics help improve customer service by finding small problems which can
be solved, perhaps by marketing to different parts of a consumer audience
differently. For example, through the analysis of a customer base's buying
behavior, a company might see that this customer base has not been buying a lot
of products recently. After scanning through this data, the company might think
to market to this subset of consumers differently, in order to best communicate
how this company's products might benefit this group specifically.
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 Collaborative

The third primary aim of CRM systems is to incorporate external stakeholders

such as suppliers, vendors, and distributors, and share customer information
across groups/departments and organisations. For example, feedback can be
collected from technical support calls, which could help provide direction for
marketing products and services to that particular customer in the future.

 Customer data platform[edit]

A customer data platform (CDP) is a computer system used by marketing

departments that assembles data about individual people from various sources
into one database, with which other software systems can interact. As of
February 2017 there were about twenty companies selling such systems and
revenue for them was around US$300 million.
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OBIECTIVES of CRM
The following are the important objectives of CRM

1. Turning prospects into advocates

2. Minimizing defections
3. Having a large proportion of loyal advocates
4. Having a profitable relationship of the type the customers would desire
and with those who desire them.
5. Using cross selling opportunities without annoying customers.
1. Turning prospects into advocates: The service marketers should identify and
qualify prospects. Customer forms the basis on which all strategic activities
should be built. The service company should convert prospects into customers.
CRM uses the inputs of customer database of the company extensively. The
company has to select prospective customers and identify the customer groups.
Then, it should convert the customers gradually into advocates. Needless to
say, satisfied customers recommend the use of services to their friends and
relatives.
a. Minimizing defections: One of the important objectives of CRM is
minimizing customer defections. CRM defines customer defections and
determines the exact rate of customer defection. The following examples
illustrate how customer defections occur. Customers are attracted to
competitors due to their lower prices. The cell phone and airlines
industries experience customer defections very frequently due to lower
prices.
b. A regular internet user may change his or her regular cybercafe for faster
browsing speed.
c. When a hotel or a restaurant serves a customer poorly, he may shift to
another one.
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d. Customers may move from one city to another or one locality to another
and change their banks to the nearest available branch.
The CRM strategy arrests potential defectors by finding out the major reasons
for defections and rectify them.

3. Having a large proportion of loyal advocates: A customer goes through stages

in his relationship with a brand. He may finally reach the advocate stage where
he actively canvasses for a brand. The service firm should try to convert its
good customers into advocates, who in turn, would become the ambassadors of
the brand. This follows from the first objective and should result in a large
number of loyal customers. Loyal customers have an increased level of
commitment to a brand. The marketing cost for loyal customers is minimum.
The referrals (advocates) give positive word of mouth recommendations to
other potential customers. Such recommendations reduce the cost of serving
them when they repurchase from the service provider.

4. Having profitable relationship: Customers vary in attitude and behavior. In a

competitive market place, customers are exposed to hundreds of selling
messages. Customers have limited ability to process information. A number of
constraints influence their decision making. Every sale is the result of complex
interaction with customers. So, building strong casual relationship with
customers is very important. The CRM strategy maintains an ideal relationship
without giving an impression to customers that their privacy is being invaded.
Using cross selling opportunities without annoying customers: Customers can
be groomed for purchasing not one product of the company but for a series of
products from the same organization. Credit facility may be provided to
customers to buy other service products of the same service provider.
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Advantages of using CRM

1. It helps manage all of your customer data in one place and allows
workers to be more productive and efficient by tracking customer’s history and
adding reminders for the sales calls and meetings.

2. It helps to manage your growing database and speeds up the growth

process.

3. It helps centralise data. The process becomes automated such as sending

auto emails and SMS to customers.
4. It builds long-lasting relationships with customers, through small but
meaningful functions, such as sending them birthday wishes.
5. Determine how and where to make improvements in your business. For
example, you can evaluate your business strategy integration with other CRM
services and third-party apps.

Disadvantages of using CRM

1. The transition from manual to automatic processes is always one of the

major obstacles which you could face while implementing CRM.
2. The psychology of being tracked; with the implementation of CRM
software even the team will have concerns about the possibility of being
hacked. However, with the right training and guidance, it can be rectified.

3. A slowdown in processes. Yes, once you bring in a tool it is going to

slow down your processes a little. Think about it, you now have to record all the
discussion you had with a client on phone or you have to take notes on the
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client. Of course, it is going to slow you down in short-term but the long-term
benefits outperform the disadvantage

NEW TRENDS

Call centers

Contact center CRM providers are popular for small and mid-market

businesses. These systems codify the interactions between company and
customers by using analytics and key performance indicators to give the users
information on where to focus their marketing and customer service. This
allows agents to have access to a caller's history to provide personalized
customer communication. The intention is to maximize average revenue per
user, decrease churn rate and decrease idle and unproductive contact with the
customers.

Growing in popularity is the idea of gamifying or using game design elements

and game principles in a non-game environment such as customer service
environments. The gamification of customer service environments includes
providing elements found in games like rewards and bonus points to customer
service representatives as a method of feedback for a job well
done. Gamification tools can motivate agents by tapping into their desire for
rewards, recognition, achievements, and competition.

Contact-center automation

Contact-center automation, the practice of having an integrated system that

coordinates contacts between an organization and the public, is designed to
reduce the repetitive and tedious parts of a contact center agent's job.
Automation prevents this by having pre-recorded audio messages that help
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customers solve their problems. For example, an automated contact center may
be able to re-route a customer through a series of commands asking him or her
to select a certain number in order to speak with a particular contact center
agent who specializes in the field in which the customer has a
question. Software tools can also integrate with the agent's desktop tools to
handle customer questions and requests. This also saves time on behalf of the
employees.

Social media

Social CRM involves the use of social media and technology to engage and
learn from consumers. Because the public, especially young people, are
increasingly using social networking sites, companies use these sites to draw
attention to their products, services and brands, with the aim of building up
customer relationships to increase demand.

Some CRM systems integrate social media sites like Twitter, LinkedIn and
Facebook to track and communicate with customers. These customers also
share their own opinions and experiences with a company's products and
services, giving these firms more insight. Therefore, these firms can both share
their own opinions and also track the opinions of their customers.[18]

Enterprise feedback management software platforms combine internal survey

data with trends identified through social media to allow businesses to make
more accurate decisions on which products to supply.

Location-based services

CRM systems can also include technologies that create geographic marketing
campaigns. The systems take in information based on a customer's physical
location and sometimes integrates it with popular location-based GPS
applications. It can be used for networking or contact management as well to
help increase sales based on location
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CONCLUSION

Customer relationship management is based on customer because survive was

made in the global market and focused on the customer and the customer is
becoming a key factor for the small and big companies. The companies know
that its cost is more to acquire a new customers than to get an existing customer
for a making a purchase. Another aspect of survival of CRM is that knowing the
customer better and also his/her preferences will allow the companies to acquire
new customers more easily and facilitates targets crossselling.

CRM is based on the basic marketing belief that an organization that knows its
customer like an individual. The organization’s components include the
database warehouse that store all the company information of the customer. For
the collection of the customer database, they are using the customer service
system, call centre, e-commerce, web marketing, operation system than get the
complete information of the customer and the sales system. In the portable sales
communication, the CRM is appointment making of the service. In the practice,
the CRM system is the range from automated customercontacts system to the
company wide pooling for the customer information.

CRM is a system for capital investment that integrates the strategy, marketing
and the IT system. It is also is a strategic know how to handle the customer
relations from a company point of view.

The strategy is based how to develop, establish and increase the relation with
the customer for profitability perspective. It is based on the knowledge of the
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individual customer’s need and potential, the company makes a strategic to find
out the different of the customer with other customer to gain the customer for a
long period of time. The cut across traditional the organization structure is to
force the customer in the integration of the company activities. By the
implementation of CRM is not a small task of any organization. There is no
doubt that the CRM can be major factor that give the competitive advantage for
the maximum market and customer. If any company implement the
inappropriate CRM than quality demand by the customer is going to be 161
declined. Their results the customers leave that company and never return to the
organization because of the bad experience with the organization.

CRM integrates sales, marketing, service, enterprise resource planning and the
supply chain management through the business process by using technology
solution, information resource and automation to maximize the customer
contact. The banking industry in India has undergone radical changes due to the
liberalization and globalization measures undertaken since 1991.

Today, Indian banking industry is one of the largest in the world. Banks are
looking to create pool of satisfied and delighted customer who is vital non-
financial asset through efficient services in the emerging IT era.

Customer Relationship Management (CRM) provides interactive, personalized

and relevant communication with customers to develop and maintain
relationships. CRM is a holistic strategy which can help the banks to build a
relationship with their customers that can last a lifetime, enables to develop
philosophy that is oriented towards the customers. After opening up the
financial sector to the global players, Indian banking sector faces enormous
challenges of attracting and retaining customers.

The present study revealed that the private banks are ahead in attracting and
retaining customers because of good personal relationship with the customers.
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Reasons for opening accounts with a bank by the customers are factors like
convenient location, overall reputation, employee behaviour with the customer,
etc.

Private Banks are offering more value-added services for special group of
customers (class-banking approaches). The demographic profile of the
respondents indicates that all the respondents above 20 years and professional
have their accounts with private banks. People with middle age group,
professionals, businessmen and higher income group people want to operate
with a public sector bank because of overall reputation of the bank. The overall
scenario for banking behaviour of customers is almost similar for public and
private banks. Developing a product for the customers without knowing what
customer expects is futile.