CUSTOMER RELATIONSHIP MANAGEMENT

UNIT-1
Introduction to Customer Relationship Management
CRM is about acquiring, developing and retaining satisfied loyal customer, achieving
profitable growth, and creating economic value in a company’s brand. CRM is not a new
concept but an age-old practice, which is on the rise because of the benefit it offers,
especially in the present market scenario.

The concept CRM is the methodology which enables the organization to understand the
customers’ needs and behaviour better. It introduces reliable processes and procedures for
interacting with customers and develops stronger relationships with them.
The process helps organization in assimilating information about customers, sales,
marketing effectiveness, responsiveness and market trends. Then this information is used
to give insight into behaviour of customers and value of retaining those customers.
Definitions of CRM

There can be multiple definitions of CRM from different perspectives −

 From the viewpoint of the Management, CRM can be defined as “an organized
approach of developing, managing, and maintaining a profitable relationship with
customers.”
 By equating the term with technology, the IT organizations define CRM as a software
that assists marketing, merchandising, selling, and smooth service operations of a
business.
FEATURES OF CRM
A well- designed CRM has the following characteristics:
(1) Customer Based: Customer Relationship Management is a customer oriented feature
with service response based on customer input, one-to-one solutions to customer’s
requirements, direct online communications with customer and customer service centers
that help to solve customers’ questions.
(2) Automation of Sales: Every sale transaction can be recorded, by tracking sales
records that is name of a customer, purchase details etc. Firms have to install automation
system to record such transactions.
(3) Use of Technology: Firms make use of technology to keep detail information of
customer needs. Use of ICT, Computer to store information, e-mail Systems, Mobile
phone data and even paper note cards etc. storing all the data from all departments (ex-
Sales, Customer service, marketing and HR) in a central location gives, management and
employees immediate access to the most recent data when they need it.
 (4) Opportunity Management: This feature helps the company to manage
unpredictable growth and demand and implement a good forecasting model to integrate
sales history with sales projections.
FUNCTIONS OF CRM:
CRM performs various functions for the marketing department of the organization.
These functions are as follows:
a. Managing Leads – It refers to generating and retaining potential customers.
b. Qualifying and Converting Leads – It refers to the assessment of generated leads to
know potential and profitable customers.
c. Managing Opportunities – It refers to utilize every possible opportunity to get long-
term benefit from customers.
d. Keeping a Track on Activities – It refers to capture information, such as customers’
buying pattern, quantity purchased, and time spent by customers in the store.
e. Managing Reporting and Forecasting – It refers to process input data, such as
average time spent by the customers in the store and their preferences for the product.

INGREDIENTS OF CRM
Take a look at the following illustration. It shows the
ingredients that work together to form a successful
CRM system.
Here are some of the important ingredients of CRM −
 Analytics − Analytics is the process of studying,
handling, and representing data in various
graphical formats such as charts, tables, trends,
etc., in order to observe market trends.
 Business Reporting − Business Reporting includes accurate reports of sales,
customer care, and marketing.
 Customer Service − Customer Service involves collecting and sending the
following customer-related information to the concerned department −
o Personal information such as name, address, age
o Previous purchase patterns.
o Requirements and preferences.
o Complaints and suggestions.
 Human Resource Management − Human Resource Management involves
employing and placing the most eligible human resource at a required place in the
business.
 Lead Management − Lead Management involves keeping a track of the sales leads
and distribution, managing the campaigns, designing customized forms, finalizing
the mailing lists, and studying the purchase patterns of the customers.
 Marketing − Marketing involves forming and implementing sales strategies by
studying existing and potential customers in order to sell the product.
 Sales Force Automation − Sales Force Automation includes forecasting, recording
sales, processing, and keeping a track of the potential interactions.
  Workflow Automation − Workflow Automation involves streamlining and
scheduling various processes that run in parallel. It reduces costs and time, and
prevents assigning the same task to multiple employees.
OBJECTIVES OF CRM
The most prominent objectives of using the methods of Customer Relationship
Management are as follows −
 Improve Customer Satisfaction − CRM helps in customer satisfaction as the
satisfied customers remain loyal to the business and spread good word-of-mouth.
This can be accomplished by fostering customer engagement via social networking
sites, surveys, interactive blogs, and various mobile platforms.
 Expand the Customer Base − CRM not only manages the existing customers but
also creates knowledge for prospective customers who are yet to convert. It helps
creating and managing a huge customer base that fosters profits continuity, even for
a seasonal business.
 Enhance Business Sales − CRM methods can be used to close more deals, increase
sales, improve forecast accuracy, and suggestion selling. CRM helps to create new
sales opportunities and thus helps in increasing business revenue.
 Improve Workforce Productivity − A CRM system can create organized manners
of working for sales and sales management staff of a business. The sales staff can
view customer’s contact information, follow up via email or social media, manage
tasks, and track the salesperson’s performance. The salespersons can address the
customer inquiries speedily and resolve their problems.

TYPES OF CRM
Here are the four types of customer touchpoints according to the ability of being
controlled by the brand –
1. Company Created Touchpoints: These are the planned marketing messages created
and controlled by the company. Promotional tools, packaging, and company assets
like websites fall under this type of customer touchpoints.
2. Intrinsic Touchpoints: These touchpoints are intrinsic to the offering. They are
experienced when the customer buys the offering and when the consumer consumes
the offering. A brand might or might not have full control over these touchpoints.
3. Unexpected Touchpoints: These are unexpected references or information that are
not cannot be directly controlled by the brand. Word of mouth marketing, viral
marketing, and word of mouse communication are some examples of unexpected
touchpoints.
4. Customer-Initiated Touchpoints: These touchpoints come into existence when the
customers contact the club themselves. Some examples include telephonic
conversation with the customer care representative, a walk-in to the service station,
etc.
Customer touchpoints are further classified into three types according to the stages of
buyer journey. These are –
  Pre-purchase: All the interactions of the brand with the customer before the sale is
actually made. For example, advertisements, word of mouth, reviews, influencer
promoted content, etc.
 Purchase: The interactions of the brand with the customer during the sale. Examples
include the brand website, packaging, the physical store, customer service team, etc.
 Post-purchase: All the interactions of the brand with the customer after the sale has
happened. Examples are emails, customer service team, loyalty program
communications, etc.
CUSTOMER TOUCH POINTS

Touchpoint definition: A touchpoint is any time a potential customer or customer comes

in contact with your brand–before, during, or after they purchase something from you.
Customer touchpoints are the stages or points where your brand interacts with
customers from start to end.
The purchase was made at your physical store, but the journey started online with an ad
and went through various mediums. This is why all your customer touchpoints are
important and designed to serve the customers right. Based on which phase of
the customer journey your customers are in, customer touchpoints are divided into 3
buckets:
 Before purchase
 During purchase
 After purchase
Examples of Before Purchase-

 Online ads -Also known as digital banner ads, these are the ads that you see on various
websites either on the side, bottom or on the top. This effective touchpoint helps drive
traffic and leads to your website.
 Social media- You can reach thousands of people or potential customers with social
media channels such as Instagram, LinkedIn, Twitter, Facebook, Pinterest, etc.. You
can target these people via posts, hashtags, paid ads, etc., which is handy for customer
acquisition.
 Referrals- Word-of-mouth marketing or referrals is more effective than any
promotional or marketing campaign that you might run. A staggering 83% of
customers said they trust their peers, family, and friends for referrals.
 Search engine optimization (SEO) -Almost every brand with an online presence
relies on search engines to connect with consumers, and search engine optimization
(SEO) helps you take control of those connections.
 Blog content - Posting quality content on your website blog can increase your organic
search traffic by over 400 percent. But solid SEO results isn’t the only reason blog
content facilitates some influential consumer touchpoints.
 Your company website- At some point, consumers will come to your company
website. To make this an enjoyable and valuable consumer touchpoint, spend time
developing the UX/UI and check all of your content to ensure that it is error-free, fully
functional, and up to date.
 Boosted social media content - Boosted social media content has marketing dollars
behind it. Using the tools provided by each platform, you can segment and target
 particular groups of people based on information shared on their public profiles, such
as region, gender, age range, and even interests and activities.
 Video- There’s a reason successful YouTube content creators have incomes of more
than six figures. Video is the most frequently consumed content medium on the
internet, and YouTube is the second most visited site after Google.
 Partnerships - Not all consumer touchpoints are on your website or with content you
share. Utilizing partnerships can help you extend your reach to more people in your
target market by reaching consumers who trust and follow your partners.
 Press releases - Never underestimate the power of a well-crafted press release. When
shared with trusted news media members, press releases provide consumers and
experts in your industry and community with timely updates about your company and
its offerings.
 Print and out-of-home campaigns - Consumers sometimes set their devices down
and explore the world; when they do that, you want to make a connection. Print and
out-of-home campaigns, such as billboards, public transportation advertisements, or
paper flyers, might seem old-fashioned.

Examples of During purchase

 Brochures - Product catalogs or brochures are a great way to showcase your products
or services via online soft copies or hard copies. Images and descriptions of products
help customers get all the information needed to purchase.
 Customer reviews - Many websites let customers post product reviews; they can rate
the product and post specific information or comments about aspects. It’s important to
remember your potential customers are referring to these reviews and evaluating their
purchase decisions.
 Point of sale - A final touchpoint before your customers will make a purchase, is a
crucial touchpoint in the ‘during purchase’ phase. The sales reps will provide
information about the product and what concerns, needs, and requirements it will take
care of.

Examples of After purchase

 Feedback surveys - Sent after product purchases, these customer feedback surveys
help evaluate the customer experience. If the customer experience was unique, what
made it so? If not, what could be done better? These are just some points on which you
can get information and improve your customer operations.
 Emailing lists - Many of your customers would want to receive your emails about new
products, offers, etc., and they will sign up or those. This is an excellent opportunity to
upsell or cross-sell your products. Also, your customers will always have additional
needs, and if they are happy with your offerings, they will return to you repeatedly.
 Billing - This is probably the least important touchpoint for many brands, but we
respectfully disagree. Just because they’ve purchased something does not mean your
customers won’t have any negative experiences
 Community management - Community management turns a good social media post
into a great one. When people comment and share your content, a community manager
is there to respond and keep the conversation moving positively.
 IMPORTANCE OF CUSTOMER TOUCHPOINTS
Once identified, your customer touchpoints will serve as a guide for improved customer
satisfaction across the entire customer journey. The benefits of knowing your customers’
touchpoints include:

 Less stress for customer service: improving customer satisfaction rates at each
touchpoint will improve resolution rates on first contact.
 Better customer experience: ensure customers have a seamless, frictionless experience
across all channels
 Repeat business: a great customer experience will affect their decision to purchase from
the same company again
 Build loyalty: increased customer satisfaction allows you to build a loyal customer base
Touchpoint Mapping
To start touchpoint mapping, you must be mindful of these four essential aspects.
Without these points, it may not work as an effective marketing method.

1. Identify each touchpoint- Your customers will interact with your brands at various
stages. You need to recognize these and bucket them as:
Before purchase- Website, Advertisements, Word of mouth
During purchase- Product demos, Point of sale, Checkout lines.
After purchase- Thank you messages, Billing, Customer surveys

2. Map them - Once you know the stages at which your customers will engage with your
brand, rate the experiences chronologically. Classify them as awareness, consideration,
sale, and purchase.
3. Improve touchpoints- Identifying touchpoints is only half the battle. What comes next
is important, improving your touchpoints to improve customer interaction. If it’s
customer service, then ensuring all queries are resolved in a timely fashion, if it’s billing
then, making sure there are no discrepancies, etc.
4. Review regularly - With after-purchase touchpoints, you will always interact with
your customers through advertisements, marketing emails, and customer surveys. These
need to be continually visit and refined for improved customer interaction and
experience.