Customer Relationship Management (CRM)

Contents
Customer Relationship Management (CRM)...............................................................................................1
Introduction.................................................................................................................................................3
Task 1..........................................................................................................................................................4
Article 1 – How a business can benefit from effective CRM and how it can be achieved........................4
AC1.1 Key aspects of CRM...................................................................................................................4
AC1.2 examination the benefits of CRM..............................................................................................5
AC1.3 analysis of the impact of quality systems on CRM.....................................................................6
AC2.1 an explanation of process necessary to effective CRM.............................................................7
AC2.2 an explanation of the role of internal staff in achieving effective CRM.....................................9
AC2.3 an assessment of the role of external stakeholders in achieving effective CRM.....................10
Task 2........................................................................................................................................................12
Article 2 – the role of loyalty scheme in CRM........................................................................................12
AC3.1 an analysis of how the loyalty scheme chosen gained information about customers.............12
AC3.2 explanation of the information gained informs marketing and customer’s service policy......13
Task 3........................................................................................................................................................14
Article 3 – case study of CRM................................................................................................................14
AC4.1 review of CRM in the organization..........................................................................................14
AC4.2 proposed improvements to CRM process...............................................................................15
AC4.3 proposed improvements to the role of staff in promotion customer relationship..................16
AC4.4 plan for the implementation of improvements.......................................................................16
Conclusion:................................................................................................................................................17
Bibliography...............................................................................................................................................18

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Introduction
CRM is one of the most important tools for keeping continuous interaction with the customers.
It includes the tactics and technologies that an organization uses to maintain interaction with
the current as well as potential customers. The success of an organization doesn’t solely
depend on attraction new customer rather the retention of existing customer. The benefits of
CRM, Roles internal staffs, role of external shareholders will be discussed in the assignment.
Quality management of CRM and Recommendations for improving the quality of CRM will also
be showcased in the project. The CRM of Tesco, a popular multinational retail store will be
demonstrated.

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 Task 1
Article 1 – How a business can benefit from effective CRM and how it can be
achieved.
Any types of organization want to build and maintain strong relationship with the customer as a
part of the business activities. Establishment and continuation of relationship with the
profitable customers is possible owing to the blessing of CRM. The application of CRM in
business organization is on the wheel of increase as the rate of competition from different
players is increasing.

AC1.1 Key aspects of CRM

There are several aspects of CRM in a business organization that play a crucial role for
maintaining relationship with the customers.

Definition, strategies to learn more about customers and improve relationships:

CRM includes all the aspects of interaction that an organization makes with its customers
whether the interaction is product or service related. Albeit, CRM refers to the relationship with
customers, CRM systems are also used to administer business to business relationship.
Customer relationship management is frequently considered as a business approach that
enables business to get better number of areas. The main CRM strategy includes understanding
customers, retaining customers, attracting new customers, winning new clients, increasing
profitably and decreasing cost (webopedia, 2015)

Collecting customer information: A wide range of information regarding the behavior of

customers can be collected by developing a system. The collected information will assist the
organization to treat customers appropriately. For example, the customer having strong loyalty
to the organization and product requires more attention from the organization as the customer
is more profitable than other customer. The information can be collected from orders forms,
warranty cards; customer rewards programs, feedback cards, complaints and websites. The
manager should concern the privacy of customer data (Queensland Government, 2015).

Systems to store customer information: Different types of technological devices and

software play an important role in the accumulation of customer data. Spreadsheet or excel

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program can be used when the amount of information is little. For storing more information,
software must be used. Customized software can be designed or software may be purchased
from third party. Purchasing professional software is less costly as many people purchase the
same software. It is needed for an organization to train the employees for using new software
properly (smarta, 2015).

Access to information for appropriate personnel : The employees of the organization

can access the database of customer and make many possible actions regarding the marketing
strategy or relationship strategy.

Analysis of customer behavior: The appropriate analysis of customer data is needed for all
types of organization for reaching the culmination of success. It helps to treat customer
according to the purchasing and other behavioral patterns.

Use of data to inform marketing, customer service and quality system: The data
must be used for marketing, customer service and quality system. These data help to take
action for innovating new product for the customer. The use of data brings competitive
advantage for the organization (Cateora et al. 2008).

AC1.2 examination the benefits of CRM

Targeting more cost effectively: Traditional targeting system doesn’t focuses on customer
heterogeneity. The strong databases of customer help the organization to target the actual
customer properly as the demographic, psychographic and behavioral data are available in the
databases (Armstrong and Kotler, 2012).

Increase sales: Appropriate targeting and proper implementation of marketing is

accomplished through CRM. Apart from this, the database is used for cross selling and up
selling which brings the total increase in the level of sales.

Increase profits: CRM helps to keep continuous relationship with the customer. The loyalty
of customer is increased and new marketing programs can be implemented appropriately
which result the increase in the level of profits (Chaffy, D, 2013).

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Mass customization of marketing message: Mass customization is only possible by the
proper use of CRM. As the demographic, psychographic and behavioral information are stored
in the database, each customer can be treated differently (Armstrong and Kotler, 2012).

Customer satisfaction: The relationship marketing is possible through the use of customer
data. As customers are treated according to their desire, they become satisfied with the
organization. Customer satisfaction is also ensured for regular interaction with the organization
(Armstrong and Kotler, 2012).

Competitive advantage: If any company in the market is richer in acquiring customer

insights, the organization will likely to enjoy the benefits of competitive advantages. The
organization can treat the customer appropriately (Armstrong and Kotler, 2012).

Customer retention: Customers are indifferent to the organization that doesn’t kept
continuous relationship with the customer. The loyalty of customer increases and the rate of
customer retention increases owing to the proper implementation of CRM.

AC1.3 analysis of the impact of quality systems on CRM

Total Quality Management: It is a set of management techniques that aims at maintenance
of quality at every level of the organization. The main purpose of total quality management is to
bring customer satisfaction. CRM is concerned with the satisfaction of customer and it builds
relation with customer directly. TQM is initiated to concern every personnel of the organization
regarding the quality of products and services. Both are customer oriented. CRM helps to bring
quality of the product by providing information of customer. CRM use customer insight in
product and relationship. Both management concepts aim at recognizing and listening
customer needs. To build strong relationship with customer and develop strong loyalty of
customer both quality and continuous relationship are needed (CRM, 2015).

ISO standards: The customer relationship management should be characterized by the

evaluation recognized laboratories and certified in accordance with international standards
organization recommendations. According to ISO, producing companies searching a product
definition and marketing questions must avail information from customer. ISO standards are

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required to establish actual process for clarifying customer demands and linking those needs
across the organization. CRM appraisal criteria should provide the foundation for a momentous
and objectives CRM software assessment. The assessment factors may comprise marketing and
customer support, sales force mechanization, equipment consumption, User sustain to exhibit
experimental measure that are established as a part of ISO dealings (Qualitydigest, 2015).

Balanced scorecard: The balanced scorecard of CRM can be implemented to drive the
success of CRM strategy. It is defined as an assessment system that deliberately connects long
term CRM strategy, objectives and also examines short term tactics and action that drive the
performance of CRM. For building a balanced CRM scorecard, it requires planning and
implementation of five steps: defining CRM strategy, selecting CRM strategic measure,
cascading CRM strategic measure through the organization, implementing a CRM performance
reporting solution and entrenching CRM measurement in organizational culture (destination,
2015).

AC2.1 an explanation of process necessary to effective CRM

Creating a customer culture: Customer oriented culture means a situation where every
employees of the tries to satisfy the demand of customer. As the competition is increasing,
each organization tries to provide more customer oriented culture. An organization need to
follow some procedures to develop customer oriented culture (customer champions, 2015).

 Organizational alignment: Organizations base their values on customer feedback, link

values to their brand; encourage employees to align their behavior to the values and
filly reward employees.
 Top team clarity: Employees are well guided of their roles from the top of the
organization.
 Listen to customer: the evaluation from customer regarding the service or product
should be collected from ultimate customer. The complaints should be treated properly.

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  Building trust: accessibility, responsiveness from the organization, promptness in
fulfilling the demand of customer, doing it right the first time and following customer
will build the trust of customers.
 Maximizing the value of customer feedback.

Collecting and processing customer information: Information must be collected from

customer on a regular basis. Customer should be encouraged in providing information
regarding the experience of customer. Broad data of customer should be stored in the database
by organizing appropriately. This information will be used to target customer properly and
execute the marketing strategy (Clow, K., & Baack )..

Making customer oriented systems: The internal and external system in delivering service
to the customer should be designed according to the desire of customer. Services cape,
software and other process of the organization must focus on providing better service to
customer.

Complaints procedures: In many cases, customer doesn’t make complaints as they think
making complaints is waste of time. The organization should design a system that will
encourage customer to make complaint and also see the response of the problem.

AC2.2 an explanation of the role of internal staff in achieving effective CRM

The internal staff of the organization comprises senior management, IT managers, Operational
manager, Front line, Administration. The role of all internal personnel is essential for gaining
the objectives of the organization and satisfying the needs of customers.

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Determination of the aims and objectives of systems: The aims and objectives of
adopting CRM in an organization may include high level of customer service, high level
efficiency, low level of operating cost and aiding the marketing department in satisfying
customer. Apart from this other specific goal can be held.

Choice of the systems: Choosing the appropriate system is one of the most important tasks
of internal staff of the organization. Inappropriate selection of system may bring fruitful result
for the organization. There are many types of software for managing CRM. The internal system
in delivering service to customer and receiving feedback from the customer should be designed
accurately.

Implementation and manage of the system: The employees of the organization are
responsible for managing the system of CRM. Proper monitoring and handling of system
depends on the knowledge of the customer. Proper training is required to increase the skills of
personnel.

Liaison with software suppliers: Many organizations provide different types of software for the
success of CRM. The main vendors of software are Oracle, SAP, Salesforce, Microsoft, Kana,
Amdocs, Phaseware, Greenropes, coverage enterprise etc. (crm search, 2015). New software
may come into the market with new benefits. The internal staff should have a strong
communication with the supplies of software.

Analysis and use of data: The collected data are analyzed by the internal employees of the
organization for developing or taking new strategy for the organization. Data are analyzed by
different types of software which is run by the administrator.

Implementation of customer service policies and processes: The internal employees

and administration are responsible for implementing the system. A proper linkage is required
among the internal staff to bring success in CRM.

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Understanding customer service as a key responsibility: Providing and ensuring better
service for the customer is the main motto of the employees. The entire system aims to fulfill
the demand or need of the customers.

AC2.3 an assessment of the role of external stakeholders in achieving effective CRM

The main types of external stakeholders include Shareholders, suppliers, community groups
and customers. The external stakeholders also play an important role for the success of CRM
system.

Agreement with strategies: it is needed for the external stakeholders to take the new
system of the organization positively. The mutual agreement with the system helps everyone to
participate in the implementation of CRM.

Reporting: The outside organization makes report regarding the service, financial data,
customer and competitors. They can clarify the actual picture of the organization and make
recommendation for the improvement of the entire system.

Sharing information: Customer, supplier and community groups may share crucial
information with the organization. Supplier and distributors can provide information regarding
the choice of customer and competitor. A good relationship must be build with the outside
people of the organization.

Complying with customer service policies: Compliance with the service polices of the
organization by the outside stakeholders will bring smile in the face of manger. For getting
compliance from the outside stakeholders, continuous communication should be done.

Acting in partnership: The organization and the stakeholders can implement the system
jointly to bring the success of the system. Supplier, shareholders and customer can improve the
quality of the service by sharing information and working like a partner of the organization.

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Giving feedback: The outside stakeholders consume the service of the organization that is
developed by the internal staff. They can make proper appraisal of the service. The feedback
from the outside stakeholders is much more needed for the organization to improve and bring
innovation in the system.

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 Task 2
Article 2 – the role of loyalty scheme in CRM
Customer loyal scheme is important for any kind of organization to increase the rate of
customer retention. In competitive market where customer can easily switch from one supplier
to another, loyalty scheme can reduce customer switching behavior (The marketing donut,
2015).

AC3.1 an analysis of how the loyalty scheme chosen gained information about customers
Purchasing habits: The loyal customer is determined on the basis of purchasing behavior.
The loyal customer purchases more from the organization occurring low cost for the
organization. As the purchasing history of customer is updated on a regular basis, the actual
habits of customer in purchasing can be identified and the organization can communicate with
that customer to remind.

Opinions: Customer becomes more interested in sharing their experience with the
organization and they become like a family member of the organization. Their opinion can
assist the organization in developing and designing new things for the organization.

Preferences: The customer always share information with the organization and provide
suggestion for the organization. The stored information can assist the organization to learn
more about the preferences of customer regarding service and product.

Profiles of customers: Name, Address, Contact, preference and other important information
are stored in the database which can be used for cross selling and up selling by the
organization. It makes easier for the organization to inform customer about the new message
of the organization and target the customer for new product.

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AC3.2 explanation of the information gained informs marketing and customer’s service
policy
Targeting group of customers: CRM of an organization provides vast data about the
customer. Previously customer was targeted regardless of the heterogeneity. At present it
become possible for the organization to target the actual customer considering the
heterogeneity among the customer. The messages for selling luxurious product are targeted
towards the rich customer in an area.

Product development to meet customer needs: Product can be developed by

considering the actual needs of the customer as the information regarding the preferences and
choices of customer are stored in the database of the organization. The feedback from
customer helps an organization to develop product accurately.

Adapting marketing mix: Marketing mix includes product, price, place and promotion and
new extensions of it are people, process. Customer may not satisfy with the features of existing
product, with the current promotional media and distribution procedures. As the information
regarding the choice of customer is available in the database, the organization can cause
changes in the marketing mix with the changes of situation.

Personalizing marketing: Personalized marketing refers to marketing messages is created

for individual customer. It is often done in automated process by using computer software to
draw the individual message and developing customer centric recommendation engine. The
software of the organization can assist to develop personalized marketing for the organization
(marketing-school.org, 2015).

Choice of media for promotion: There are different types of media around the customer.
The actual choice of media for promotion of marketing messages is critical for the organization.
For instance, promotional offer is done through newspaper but customer doesn’t expose to the
media. As the customer provides information of watching media, the organization can choose
the right media.

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 Task 3
Article 3 – case study of CRM
AC4.1 review of CRM in the organization
Tesco is a British multinational retail store that sells different types of groceries and general
merchandises across the whole country in UK considering the preferences of customer. It
maintains relationship with the customer through different types of Medias.

System in use: Tesco target the customer individually rather than targeting them as a group.
To maintain or increase relationship with customer, it offers Loyalty card, club card and
comment card. It partners with different types of companies such as hotel and car hire
facilities, offers different scheme for the family members, receive feedback from customer
through comment card and communicate with customer by Facebook, Twitter, Email and
telephone.

Current role of staff: Every employees of the organization are prompt in delivering service to
customer and maintaining relationship with the customers. They are assigned to train the
customer in using new product, helping to make choices by providing information,
implementing service policies and process of the organization and Liaoning with the suppliers.
They also collect feedback from the customer and use the data in delivering service to
customer.

Service policies in use: Tesco at all times tries to offer better service to its customer and
fulfilling their needs at extremely competitive prices. The employees talk to customer and
understand their views and attitudes. It keeps continuous relationship with its loyal customer. It
offers different loyalty scheme cards and club card to its customer. It has able to create a wide
variety of products for its customer by using the data gathered from cards. Visa, Master, Tesco
credit cards are used as a convenience way of customer transaction. Customer complaints are
received through comments card. Other online and offline Medias are also used for
communication with the customers (Tesco, 2015).

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Quality bench mark used: Tesco provide better quality in goods and services at a low cost.
It targets its customer individually instead of as a group. The product and service of the
organization monitored and updated regularly. For example, to make sure that the pricing
policies are followed in all retail store, Tesco has employed price checkers. The feedback from
the customer is used to improve the quality of product and services of the organization. It
always conducts marketing research to increase the satisfaction of customer and rate of
customer retention (Tesco, 2015).

AC4.2 proposed improvements to CRM process

New software systems: New software should include in the process of delivering serve to
the customer. Tesco can purchase some more Microsoft, Bullhorn and Infusion software for the
employees to provide better service to the customers.

Customer service policies: More feedback should be gained from customer and encourage
in making complaints should be done in the service polices of the organization. More contacts
with the customer may be accomplished.

Working towards recognized quality standards: Quality standards should develop for
every task in delivering service to the customer. Both in product and service quality should be
consistent in line with other established brands.

Introduction of mystery shoppers: The mystery shopper can actually judge the real
picture of the organization. More mystery shoppers can be hired from outside research firms to
judge the quality and accelerate the performance of employees.

Introduction of a CSR department: The CRS department should be providing more

personnel and technology to increase the quality of service. Enough human and financial
resources should be ensured for the department to monitor customer and collect information.

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AC4.3 proposed improvements to the role of staff in promotion customer relationship
Recruitment of the right staff: Albeit, the employees of Tesco are well suited for their jobs,
it can recruit some energetic and smiling faces employees to deal with the customer. More
knowledgeable employees can be employed in the top level management to make accurate
decisions.

Training: The performance of the employees is increases by training. Employees necessitate

learning new things with the change of time. More training is needed for the frontline
employees who can bring the first positive impression about the organization. To handle new
CRM software, training is needed.

Clear vision and mission: Every personnel of the organization should be concerned with
vision and mission of the organization. Proper clarification of goals and objectives of the
organization aids employees to accomplish their job taking into account the vision and mission
of the organization.

Appropriate access to customer data: To understand the behavior of customer,

employees should have much knowledge of demographic, social, behavioral and cultural
knowledge of the customer. Access to customer data for the front line customer should be
made easier.

AC4.4 plan for the implementation of improvements

Some methods can be followed can be followed to increase the quality of CRM. CRM should be
improved properly to provide better service to the customer other than the competitions.

Foster word of mouth conversation: Tesco can create strategy so that the customer talks
about the service of the organization. It can hold more programs like loyalty card scheme and
club card scheme to create more word of mouth communication among the employees.

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Take care of frustrated customer and use feedback: Contact should be made with the
depressed customer to learn the reason of their depression. This data will help the organization
to find the drawbacks of the organization and improve the quality of service.

Keep track of customer: The customer behavior should be tracked by the organization to
learn the changing behavior of the organization. It will help to amass more data about the
attitudes of customers.

Be honest: The data collected from the employees should be used for good purpose and
protection of the data should be ensured. Customer will be dissatisfied with the organization if
their information is shared with other organization.

Conclusion: From the above discussion it is clear that CRM is require for every organization
to increase the rate of customer retention and providing customer oriented goods and services.
The employees of the organization must have promptness in satisfying customer need and
collection information from the customers. CRM is needed to develop marketing and service
strategies for the organization. It helps to provide better service to the customer at lower
prices. So, proper implementation should be ensured for all types of organization to keep the
current customer and attraction new customer.

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