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Customer Relationship ManagementFrom: Dr. Harjit Singh

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About CRM

CRM is basically for developing long lasting relationship with a customer. Thismaximizes profits, since it is cheaper to retain a current customer than it is to find a new one. It also consists of the processes a company uses to track andorganize its contacts with its current and prospective customers..

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Why CRM?

It typically costs 5-10 times as much to acquire a new customer as it does to retain an existing one. Some companies can boost profits by almost 100% by retaining just 5% more of their customers. Harvard Business Review (Reicheld & Sasser) Most companies lose 50% of their customers in 5 years (Harvard University) 70% ofrepeat purchases are made out of same customers.

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Determinants of CRM1. 2.

Trust Value it offers.

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Determinants of CRM

In addition to trust and value, salespeople must: Understand customer needs andproblems; Meet their commitments; Provide superior after sales support; Make sure that the customer is always told the truth; and Have a passionate interest inestablishing and retaining a long- term relationship.

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CRM Objectives1. 2. 3. 4.

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To simplify marketing and sales process To make call centers more efficient To provide better customer service To discover new customers and increase customer r

evenue To cross sell products more effectively

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CRM Benefits1. 2. 3. 4. 5.

6. 7. 8.

Develop better communication channels Collect customer related data Create detailed profiles of individual customers Increased customer satisfaction Access to c

ustomer account history, order information, and customer information at all touch points Identify new selling opportunities Increased market share and profit margin Increased revenues7

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CRM Benefits Contd..9. 10. 11.

12. 13. 14. 15.

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More effective reach and marketing Improved customer service and support Improved response time to customer requests for information Enhanced customer loyalty Improved ability to meet customer requirements Improved quality communication andnetworking Reduced costs of buying and using product and services Better standagainst global competition.8

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Role of salespeople in relationship buildingIn identifying potential customers and their needs; By presenting true image of the company By offering what customers need ; not what company wants to sell By handling customers complaints By informing company about customers new demands, likingetc

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Types of CRMWhen it comes to application of CRM, three broad classifications are possible. They are: 1. Operational CRM 2. Analytical CRM 3. Collaborative CRM.4.

http://www.tutorialreports.com/software/crm/operational.php

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1. Operational CRM

It provides support to "front office" business processes, e.g. to sales, marketing and service staff. Interactions with customers are generally stored in customers' contact histories, and staff can retrieve customer information as necessary. Purpose is to provide what customer want. i.e. reaching to the customer at right time at right place is preferable. Operational CRM processes customer data for a variety of purposes:Managing campaigns Sales Force Automation Sales Management System

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2. Analytical CRM

It analyzes customer data for a variety of purposes:Designing and executing targeted marketing campaigns Designing and executing campaigns, e.g. customer acquisition, cross-selling, up-selling, addon-selling Analyzing customer behavior in order to make decisions relating to products and serv

ices (e.g. pricing, product development) Management information system (e.g. financial forecasting and customer profitability analysis)..

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3. Collaborative CRM

It 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. Staff members from different departments can share information collected wheninteracting with customers. For example, feedback received by customer supportagents can provide other staff members with information on the services and features requested by customers. Its objective is to use information collected by all departments to improve the quality of services provided by the company13

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Collaborative Contd..

Act as data distributor within customers, manufacturers and partners. Manufacturers can use CRM information to develop products or find new market. CRM facilitates communication between customers, suppliers and partner by using new information system such email, link and data bank..

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CRM Strategies1. 2.

Customer Acquisition Customer RetentionRetain and expand your business and relationships with your customers through up-selling, cross-selling and servicing.

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Customer LoyaltyOffer programs to ensure that your customers happily buy what you offer only from you.

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Customer EvangelismEnable loyal customers to become a volunteer sales force.

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Cost ReductionReduce costs related to marketing, sales, customer service and support.

6. 7.

Improve Productivity Enhance your e-business strategies...15

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CRM Goals, Benefits and ValueCRM Increases

Internal: Revenue, Margins, Profitability, Results, ROI, ROA, Conversion Rates,

Knowledge, Strategy, Efficiency, Effectiveness, Creativity, Products, Innovation, Morale, Customer Focus External: Customer Acquisition, Up-selling, Cross-selling, Personalization, Interaction, Feedback, Service, Satisfaction, Loyalty, Evangelism, Relationships, Value, Understanding Internal: Costs, Time, Errors, Employee Defection, Frustration, Fear, Uncertainty, Doubt External: Customer Issues, Complaints, Attrition, Churn Dissatisfaction16

CRM Decreases

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Implementation of CRM1. 2.

3. 4. 5.

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 doled out tothe customers. Abundant supply of customer information Customers' information should be updated always Have cordial relationship with other companies targetingthe same customer segment..

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CRM for Whom?

Companies that do not have repeat business from customers will not gain much from CRM. Companies having walk-in customers not providing multiple sales and service channels will not benefit much from CRM. Again if maintaining long term relationship with customer is not a priority for the company, it will be wise not toinvest in CRM..

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CRM for Whom?

Then who benefits? The more the channels to access customers and more the numberof touch points with customers, greater is the need for CRM installation. Companies inbanking finance insurance airlines and hotels telecommunications and health care

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Technical Functionalities

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Multiple communication channel - This is one major factor of CRM, which enablesbusiness to be responsive to the needs and desires of its customers. The various

communication channels are: Web channel - This supports a number of customer service

and customer account management activities. Customers can verify and browse product descriptions and also report problems through this channel. 2. Fax channel -Company can use this channel to generate fax that is sent directly to customers, while customers use this to submit requests for information and contact. 3. Interactive TV channel - Cable TV companies interact with customers through this channel.20

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CRM Failure Reasons

Lack of employees cooperation Business focus- More on selling less on customer service Problem in data integration who will collect? Weak functional organizationof a company can cause customer and employees' confusion. Short term interestsare often given importance. Limited financial resources Other new technology andsolutions are introduced without implementing the necessary framework.

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Future of CRM

In short, the future of CRM is bright indeed. CRM will become deeply embedded asa business strategy for most companies. Technology will evolve while technicaland organizational challenges are overcome. Much will change in the years ahead,but one thing is certain: CRM is a journey, not a destination, and customers have their hands on the road map and the steering wheel. The rest is up to you. Are you ready?22

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