PBA1323- CRM

Unit -3
 Learning outcomes fromPBA1323- CRM

• CO–1 Demonstrate an understanding of the role

customer relationship management in the
performance of a business organization.
• CO–2 Demonstrate an understanding of the role
of technology in managing relationships with
customers.
• CO–3 Design a CRM strategy for a company by
incorporating suitable analytical and conceptual
tools.
• CO–4 Identify the CRM practices / strategies
employed in any commercial enterprise and map
these to the conceptual knowledge acquired.
 PBA1323- CRM
UNIT -3
CRM STRATEGIES
• Concept of Customer Value-Sources for
Creating Customer Value-Strategies for
Customer Acquisition – Retention and
Prevention of Defection – IDIC Model of
CRM and CRM Value Chain – CRM road
map for business applications – Customer
Experience and CRM
 Customer value& sources of creating customer value
Recap
• We have already studied this chapter 2 in
detail
• Customer value
• Sources of creating customer value
• Customer value pyramid
• Systems in the company to be alignment for
creating great Customer value
• Customer value proposition
• Sources of creating customer value
• Life time customer value- numerical example
 Definition of new customer
• When a customer purchases a product for
the first time in an organization he
becomes a new customer.
• When he keeps repeatedly buying he
becomes an existing customer.
• A customer can be new in two ways
• New to the Product category, New to the
Organization itself.
 Customer acquisition strategy
Methods of acquiring new customers
• Advertising
• Sales promotions
• Public relation
• Events and experiences
• Direct marketing
• Word of mouth
• Personal selling
Acquiring new customers-Advertising
Philipkotler- advertising is any paid form of non
personal presentation and promotion of ideas , goods
or services by an identified sponsor.
Characteristics of advertising
• Reaches to larger audience
• Low cost per exposure
• Advertised products are believed to be genuine by
customers
• Build brand image
• One way communication
• expensive
 Acquiring new customers-Advertising
Elements of advertising
• Preparation of theme- sales or branding or promotion or boosting or killing
competition etc.
• USP
• Maintaining format, unique image, fonts
• Great & attractive slogans tiles , offers, sense of urgency
• Team work with marketing & sales
• Selecting the best agency and medium
Functions of advertising
• Updating the target group about the product
• Rectifying the false allegations or impressions created by anyone like rumors or
by competition
• Change in price or announcement of offers
• Building brand, persuading the customers
• Encouraging to switch brand
• Creating a sense of urgency to buy
• Availability of the product
Five M’s – marketing manager to keep in mind – in an AD CAMPAIGN
• Mission, money,message,media,measurement
 Acquiring new customers-Sales promotion
Sales promotion
Philip kotler-It is a variety of short term incentives to encourage
purchase of a product or services.
Characteristics of sales promotion
• Targeted at the ultimate customers
• Uses techniques like limited offer, coupons, contests, discounts etc
• Attracts attention of customers
• Offers strong incentives
• Creates speedy response
• Short term and limited periods
Benefits
• Powerful communication
• Incentives oriented
• Invitation to customers
 Acquiring new customers- Public relations
Philip kotler-variety of programs designed to promote and protect an
organizations image or its individual products.
Characteristics
• Highly credible
• Many forms such as news, events, and sponsorship etc.
• Reaches many prospects
• Dramatizes company image and products
• Relatively inexpensive
Benefits
• Credibility
• Ability to capture buyers
• Dramatization
 Acquiring new customers-Events and experiences

Philip kotler-events and experiences are sponsored activities designed

to create brand related interactions with prospective and existing
customers.
Benefits
Relevancy-customers are made to get involved personally
Involvement and engagement with customers
Implicit- Indirect promotion
 Acquiring new customers- Direct marketing

Direct marketing – Philip Kotler-refers to use of mail, telephone, or

internet to communicate directly.
Characteristics
Interactive, customized
Tele marketing, direct mailers and online marketing
Benefits
Personalized communication
Timely
Interactive
 Acquiring new customers- Word of mouth marketing
Word of mouth marketing refers to people to people verbal
communication, speech or written, or electronic
Benefits
• Reliable
• Personal
• Timely
 Acquiring new customers- Personal selling.
Personal selling- Face to face interaction with one
or more purchasers for the purpose of making
presentations, answering questions, and procuring
orders.
Characteristics
Personal interaction allows for feedback
Buyers are more observant
Relationship oriented
Benefits
Personal interaction results in good judgement
about prospect
Cultivation of one to one relationship
Immediate response is known in most of the cases.
Customer acquisition strategy methods and platforms
 Customer acquisition
Providing right offer to customers- right offer is one which attracts most of the
customers.
Key elements in providing the right offer
• Giving the right customer benefits
• Timing the offer
• Availability of product at the right season or time
• Understanding buying behavior of the customers at different times, zones, etc.
• After sales service criteria
• Attractive profitable offers.
Customer acquisition using customer data
CRM is an excellent tool that an organization uses to acquire new customers as well
as retaining existing customers.
organizations may use CRM to enhance its sales productivity/quality of customer
service.
CRM can be classified into four main categories, operational CRM, analytical CRM,
sales intelligence CRM, and collaborative CRM.
Generally, organizations use operational and analytical CRM tools to acquire new
customers.
These tools provide data related to customers, such as their needs and expectations,
customer contact history, and last purchases. This data helps an organization to
acquire new customers
 Customer acquisition
Organization may use several methods to acquire data;
Methods to collect primary data
• Observation method- observe buying behavior
• Interview method- group of individuals are asked questions
• Questionnaire method-written form of an interview to understand
the customer
• Schedule method – same like interview , difference will be
enumerators will fill data instead of customers.
Methods to collect secondary data
• Company records
• Internet
• Print media
 Concept of customer retention
Customer retention – all about maintaining long term relationship with
customers.
• Its an activity to reduce customer defections
• Organization strives to maintain the same over a period of time with
customers trout the lifetime.
• Customer will also stay with the organization, only if the quality of the
products is maintained and service standards are maintained.
• Customer retention activity normally aims at reducing brand switching and
customer dropping out.
The customer may switch brands due to
• Ethical issues, fraud, incorrect price with the existing brand
• Better offer from competition
• Group , family and sudden social influence
• Economic conditions and life style changes of the customer
• Unsatisfactory after sales service
• Individual perceptions and want of change out of boredom
 Customer retention strategies
Customer retention- concept-An organization cannot retain all its
customers, so it needs to identify those customers who has high LTV , who
are the most profitable customers.
Organization also need to find out the loyal and committed customers and
should take efforts and spend towards retaining them at any cost.
Customer retention strategies
Customer delight strategy- organizations should have a deep customer
insight to delight a customer so that the customer always stays with the
brand. Perceptions should be greater than expectations.CD=P>E
Perceived value of the customer strategy-the organization creates
additional value for its customers, without incurring additional cost.
Organization uses three modes to create additional value.
Loyal system strategy-refers where in the company rewards customer
for their support.
Customer club strategy -organization registers customers in a club and
gives value added benefits.
Sales encouragement strategy -free voucher, rebate, cash back
Customer engagement strategy -attach customer emotionally to the
brand in a manner so that the customer resist switching to competition.
Customer acquisition and retention
Upselling & cross selling
Cross selling
 Customer retention methods-Upselling
• Upselling is a sales strategy
when a customer is encouraged
to buy anything that would make
their primary purchase even
better. It’s like an upgrade to an
existing order. Marketers often
use this tactic in their campaigns
to generate more sales.
• The upselling technique also
provides value to customers
because it offers them to pay a
little more but wind up with a
better product.
• If a person is looking for a cheap
smartphone. It doesn't make any
sense. But it's a good idea to
offer a phone that's 10-15% more
expensive but equipped with a
better camera, for example.
Advantages
• The main idea of upselling and
cross-selling is to boost the
merchant’s revenues and the
overall bottom line
• When exposed to relevant
recommendations, clients buy
more often from you and bring
more money increases Customer
life time value to your brand.
• Although quality and pricing are
important, an individual
approach really matters to
shoppers now
• Cross-selling/upselling is based
on the customer’s preferences
and past purchases. Thus, these
techniques allow you to improve
personalisation for a better
customer experience.
 Customer retention methods-Cross selling

• Cross-selling is another great practice to

encourage people to buy more. Here how it
works: a customer is shown a variety of
products that may complement their needs.
For instance, you are purchasing a pillow.
The related products will be a set of sheets or
pillowcases.
• Advantage-If you cross-sell something that
meshes with your customer’s needs, they will
trust your brand even more
 Customer development
& KPIs acquisition, retention and Development
Concept of Customer development- process by which companies
increase the value of their customer by upselling and cross selling.
• Cross selling – involves selling additional products
• Upselling- involves selling higher priced product
Strategies for customer development.
Event based marketing- Events help the company to develop more
customer base and cross selling & upselling.
Data mining- check previous records to determine the customer
repurchase chances.
Customization- improve the channel of communication like emails, sms,
telephonic calls and increase the value of customer
Shared customer knowledge -improve value of customer by providing
them consistent and reliable information across various channels
Promotion optimization- promote upselling and cross selling
campaigns across various channels and customer segments to improve
promotion across various platforms.
 Customer development
& KPIs acquisition, retention and Development

Main aim of an organization is to acquire customers , retain and develop them, KPI s are critical success
factors that help the company to define and measure its progress against pre defined organizational goals.
 Customer development
& KPIs acquisition, retention and Development
 CRM Models - concept
• In order to enable the smooth functioning of
the customer service, certain models are
followed. These customer relationship models
have been developed over the past few
decades by various researchers. The most
common models relating to CRM are IDIC
Model, QCI Model, and CRM Value Chain
Model.
 IDIC Model
• The IDIC (identify, differentiate, interact, customize) is a model developed
by Peppers & Rogers (1995). The model helps to assess the expectation of
customers and their value to the business
 IDIC Model-Identify customer expectations
Identify customer expectations
• A business working towards customer relationship management
has to first identify its customer needs, wants and preferences.
• This helps to curate new products and strategies oriented towards
customers.
• Example- Nestle conducted a market survey to identify the
customer base for their coffee by assessing the nations where
caffeine intake was high.
• It found that Western countries had a more positive outlook
towards coffee drinks while Eastern nations preferred tea as their
caffeine drink.
• The company then established its coffee brand, Nescafe, in the
Western countries. The brand also offered coffee-flavored candies
in Eastern countries to gauge reaction to the flavor.
 IDIC Model- Differentiate customer expectations
Differentiate customer expectations
• To meet customer expectations it is important to differentiate customer
base into value and need (Peppers & Rogers, 1995). This differentiation
helps to prepare strategies that meet company goals and customer
expectations for strong customer relations.

• Differentiation by value helps to identify customers that are loyal and

should be focused on. Their feedback can be valuable for product line
extension, increased efficacy, and performance, as well as revenue
generation .

• Differentiating existing customers on the basis of their needs helps to

strategize promotions .

• For instance, apart from analyzing the customers who add value to the
company’s brand image, DuPont made it a point to understand that other
customers needed effective customer service to address their needs
individually.
 IDIC Model-Customer interaction
Customer interaction
A conversation with a customer should pick up where the last one left
off. Effective customer interactions provide better insight into
customer’s needs.
• Customer interactions help to understand customer expectations
and how they relate to business products and services .
• The interaction, based on customer value and needs, provides a
chance to collect feedback, opinions and wants.
• Unilever always has its sales representatives and customer care
executives ready to discuss possible improvements they can make
on their product line or take feedback for improvements.
• This has helped them develop customer-oriented products.
 IDIC Model- customization
Customizations to meet customer expectations
• After identifying, differentiating and interacting with the
customers a fair idea can be drawn for new strategies
and product customizations
• For instance, market research firms like McKinsey
realized the need for customizations from the feedbacks
of customers.
• Their customers expected increased customizations on
their requests.
• This will help them in taking their own strategic decisions
based on the reports of McKinsey. McKinsey
incorporated the clause of providing a percentage of
customization leverage in its reports.
 IDIC model case study
• United airlines case study
• https://www.ukessays.com/essays/market
ing/the-idic-model-of-united-airlines-
marketing-essay.php
 CRM- Value chain model
The CRM value chain is a model which businesses can follow when
developing their CRM strategies (Buttle,2004); (IDIC -
DEVELOPED IN 1995)This model had been developed by a range of
SMEs such as IT, software, telecoms, financial services, retail, media,
manufacturing, and construction.
This model is built from strong theoretical principles and the practical
requirements of the business. The primary purpose of this model is,
according to Buttle (2004), to ensure that the company builds long-term
mutually beneficial relationships with its strategically significant
customers.
 CRM Value chain
• .
Primary stage of the value chain model
• The primary stage of the value chain consists of different processes. Each of
which has its own concepts and tools which help enable the use of the
model. The primary stage helps to:
• locate the customer,
• understand their habits,
• interact to develop a relationship and,
• them to provide customer service
• Furthermore, this process helps the business to maintain a relationship with
their customers by serving customer’s desire to build a lasting relationship.

. For instance, to develop this kind of network, Amway chose to

make their customers a part of their marketing plan. The company
worked to include their loyal customers to develop more
connections for the company in return of greater concessions on
products and services, along with a percentage of commission on
sales through them to their related networks, thus building a quite
extensive customer network.
 CRM Value chain
• For instance, Airtel, one of the leading
telecommunications providers in India,
created an application wherein the
customers can access all information
related to their services. Customers can
also customize their subscription and
service plans as per their needs. The
customers can also talk to customer
service to manage their service plans. This
helped Airtel with better leverage and
helped to create a valuable network.
 CRM Value chain
The secondary stage of the value chain
model
• The secondary stage of CRM value chain
model is a supportive stage that provides
structure and helps the business to
perform its primary functions
 CRM Value chain model- Primary stage
Customer portfolio analysis
The first stage deals with grouping customers to which of customers are
most profitable
• The identification of a customer is the prime responsibility of
an organization as it helps establish the target audience and
develop products and services. The customers to be identified
are the ones who can add value to the business and are the most
desirable for a business to succeed. The analysis helps to create a
profile of customers, their needs. Furthermore, it helps the business
to strategize for effective interaction and help discover highly valued
customers for a long-term relationship The first stage deals with
grouping customers in order to determine which of customers
are most profitable.

• The result the companies should seek is their target customer

base. They should rate and segment their clients into groups
that are most desirable to do business to meet their criteria for
what a hot customer is.
 CRM Value chain
Network development
• The process of network development
is slow and steady as it requires
extensive interaction between the
organization and the customers, at
every step of the relationship.
Moreover, the customer needs to be
engaged at the pre-sales, sales and at
the post-sales stage.
 CRM Value chain- Primary stage
Value proposition development
• The proposition of value in relation to a product or service
comes when the organization has an overall idea of what the
customer needs, and how the company can strategize to
provide to the customers. The process involves:
• identification of resources,
• development of sources and,
• development of products and services to address the value-
based needs of customers.

• EXAMPLE- Airtel, one of the leading

telecommunications providers in India, created an
application wherein the customers can access all
information related to their services. Customers can also
customize their subscription and service plans as per their
needs. The customers can also talk to customer service to
manage their service plans. This helped Airtel with better
leverage and helped to create a valuable network.
 CRM Value chain- Primary stage
Manage customer lifecycle
• Customers may not remain indefinitely loyal to a business.
The lifecycle of a customer may include the time from which
an individual is a prospect to the time when the individual has
become a customer and left it. On the other hand, in some
cases, the customer might become interested in advocating
the services and products of the company to their peer
network. Furthermore, the company is always interested to
convert the customer into its advocate, thus, helping in
extending the lifecycle of a customer.
 CRM Value chain- secondary stage
Leadership and culture: Effective leadership helps to create a good
business value proposition towards customer management. It
prioritizes customer relationship management processes.

Procurement Processes: They include the tasks that the company

needs to follow to produce a product or service as understood through
customer profiling and network analysis. If the company requires a
generic product or service, the process works to make it possible. On
the other hand, if the customers are more centric towards personalized
offerings, the processes help deliver the same on behalf of the
organization.

People or employees: They are the most important support

structure of a business, as they interact with customers to understand
the way CRM needs to work. They may include the sales staff, customer
service staff, production staff or the delivery staff.
 CRM Value chain- secondary stage
Data and information technology: Today’s CRM processes are
quite reliant on Information Technology and Data. The data helps in
acquiring information related to customers’ needs. Information
technology helps in analyzing the vast amount of data to develop value
propositions. Also, customer information drives CRM and helps in
strategizing new processes that might help to address the customers’
needs.
Organization design: A more opt and suitable organization design is
a must to support the CRM strategy

Conclusion-CRM strategies need to be supportive to ensure

organizational success.
Value chain model offers a comprehensive guide for organizations
looking to frame an inclusive CRM strategy. However, a critical
shortcoming of this model is that it fails to consider competitors
analysis as a part of its process. Furthermore, with the markets
becoming increasingly clustered and dynamic, competitors affect
business greatly in terms of sales, revenues and brand presence.
CRM – Value chain model- four types of customers
• customers are merely expensive to acquire and service.

• Buttle has identified four types of strategically significant

customers (SSC),.
first group of customers as we call
• such as the high lifetime value customer that is a crucial SSC and the
present day of all margins earned in a relationship.
• He stated that tempting as it may be to believe, not all high volume
customers have high LTV. If they demand JIT, customized delivery,
or are in other ways costly to serve, their value may be significantly
reduced.
• We know of one company that applied activity-based costing
disciplines to trace process costs to its customer base; as a
consequence, the company re-engineered its manufacturing and
logistics processes, and salespeople negotiated price increases
CRM – Value chain model- four types of customers
• The second group of SSC is, according to the above author
benchmarks that are customers that other ones copy. For instance, a
manufacturer of vending machine equipment is prepared to do
business with any company because they can tell other customers
that they are supplying to the world’s biggest vending operation
(Buttle, 2000).
• The third group of SSCs is customers inspirations. They are the
ones that find new applications, come up with new product ideas,
find ways of improving quality or reducing cost. They may be the
most demanding of customers or frequent complainers, and though
their own LTV potential low, they offer other significant sources of
value.
• The fourth one deal with what Buttle (2004) calls cost magnets
relating to those that absorb a disproportionately high volume of
fixed cost, thus enabling other, smaller customers to become
profitable
 CRM road map for business applications
• Organizations need to have first clear vision and
mission
• Organizations has to well define their Business
objectives.
• Organizations need to know which CRM capabilities
they have, and which they need to realize their
strategic goal or achieving their Business objectives.
• There are primary steps (which have been used
cross-industry, including financial services,
electronics and high-tech, consumer products,
manufacturing, etc.) to follow when developing a
CRM Roadmap towards achieving their Business
objectives
 CRM road map steps
1. Gain senior level Leadership
2. Gather information
3. Assess current state and define future
state gaps
4. Identify value opportunities
5. Link value opportunities to strategic CRM
capabilities
6. Define CRM projects & requirements
7. Develop a Business case
8. Develop a roll out strategy
 CRM road map
step 1: Gain Senior Level Sponsorship

• A Roadmap effort without senior level

sponsorship and with little cross-unit
influence can diminish the returns of such an
effort. As with any project an organization
undertakes that involves significant change to
business processes, organizational structures,
or roles and responsibilities, the lack of key,
influential sponsorship reduces the
effectiveness of the project, since there is no
driving force for implementation.
 CRM road map- step 2: Gather Information

• It is critical to gain insights of various key stakeholders and

decision-makers within the organization. These insights can be
acquired most effectively by holding one-on-one meetings. We use
an "interview template" that consists of more than 30 questions.
This template serves as the foundation for framing initial
discussions with the client.

• Examples of questions that help us gauge the health of the client's

CRM include: How would you define CRM?
•
What types of customer information is captured/tracked
(acquisition/retention costs, churn, cost to serve, etc.)?
What information would you like to know about your customers that
you currently do not?

• Depending on the scope and effort of the project, these meetings

may include not only executives, but also individuals all the way to
the front line. Given their more frequent and direct interactions with
the customer, front-line personnel may know more about customer
needs, preferences and concerns that may not have been
communicated to the executive level.
 CRM road map -step 3: Assess Current state and
Define Future state Gaps

• Through these meetings, we gain an understanding of the client's

current CRM capabilities and significant opportunities to improve
their customer relationships, and map out our findings. We also
strive to understand their company's future direction (usually
between 6 months and 2 years).

• We use the results to determine how close these organizations are to

meeting and exceeding their customers' expectations, and present
the gaps between their current state of CRM and their desired state.

• We then compare the current state of CRM against best practices

within the clients' respective industry and across industries that
reveal opportunities to help our client become not only an industry
leader, but also a cross-industry world-class leader.
CRM road map step 4: Identify Value Opportunities

•
Value opportunities represent the potential benefits delivered by
being more customer-centric. We identify and categorize value
opportunities along the lines of people, process and technology by
analyzing the gaps between the organization's current state and its
desired future state. Once value opportunities are identified,
meetings should be held with the executive team to prioritize them.
• One example of a "process" value opportunity is improving data
capture for all customer contacts across sales functions and touch
points (e.g. phone, e-mail, etc.). "People" value opportunities may
involve additional training on service procedures for capturing
customer data. "Technology" value opportunities might include
developing a data warehouse.
 CRM road map step 5: Link Value Opportunities to strategic
CRM Capabilities

Once we determine where the value opportunities lie, we map each to

the 21 world-class CRM capabilities detailed in the study mentioned
above. Identifying which strategic CRM capabilities are needed enables
organizations to more effectively direct their CRM efforts and ensure
they derive the projected value of any CRM projects.
• Below is a sample of link between a specific value opportunity and
its corresponding strategic CRM capabilities:

• Value Opportunity:
• Improve customer understanding
• strategic CRM Capability:
• Possess good knowledge of the customer

• Leverage customer information from the service process

• Understand customer profitability and cost-to-serve.

CRM road map step 6: Define CRM Projects and Requirements

Once value opportunities are prioritized, specific CRM projects need to be

developed. Defining and executing CRM projects will ensure the company masters
the relevant strategic CRM capabilities.

• An effective way to define relevant projects is through brainstorming sessions

with the client. Samples of the outcome of a session might include:
• Understand customer profitability
Enhance call center operations by implementing sophisticated touchpoint
technologies
Establish a data warehouse
Improve sales force training
• Once CRM projects are defined, it is critical to go one step further and identify
the business and technical requirements needed. These should be specific and
address the necessary people, process and technology components of each
project.
• For "Understanding Customer Profitability," functional requirements might
include creating a common definition for profitability formula for:
• Products, channels, sales staff, customer segments, individual customers
Ensuring consistency across the enterprise
Defining components of the formula (acquisition, marketing, servicing costs,
etc.)
 CRM road map-step 7: Develop Business Case
•
Once the costs are quantified for each project, potential benefits are
estimated. This is much more difficult than simply quantifying
project costs. The use of our study "How much are CRM capabilities
really worth" provides significant value here. We are able to quantify
the benefits of mastering specific CRM capabilities (identified in
step 5) and thereby complete the most difficult part of the business
case. A key requirement is to ensure that senior executives are in
agreement with and will support the extent of expected benefits.
• Business cases enable a company to prioritize each project's value to
the organization. With the creation of a "value realization plan,"
client executives have a tool to judge the impact of changes to the
CRM investment plan. An accelerated implementation could be
modeled to quantify the effect of earlier CRM benefits. Similarly, an
extended investment plan allows them to quantify the impact of a
slower implementation in terms of lost benefits over time.
 CRM road map step 8: Develop a Roll-out strategy

Developing a roll-out strategy enables

organizations to focus their resources, money and
time on the most important projects that help
them become customer driven.

• Prioritization and phasing of projects is

conducted with the executive team, a process in
which they evaluate the results of the business
cases, and consider for each project's financial
results, duration, level of effort required, and
technical impact.
 CRM road map for business applications

Achieving success in developing intimate and enduring relationships

with customers begins with a holistic consideration of an organization's
functions and abilities that affect its consumer's objectives.

Developing a CRM Roadmap therefore, is a

continuous process
and not just a one-time exercise, because customers' needs and
preferences change constantly.

The correct strategy can help your organization form deeper

relationships with its consumers, and also obtain a competitive
advantage in the marketplace.
 Customer Experience and CRM
Customer experience is an aggregate impact of all experiences and
interactions a customer has got with organization
Overall experience a customer has received from the company product,
people, service , process and other outputs and events.
According HBR- Its an exchange of stimuli, feelings between an
organization and customer.
Sum total of all experiences a customer has received. If the experiences
is high, naturally customer is satisfied and he will be retained.
If this is low customer will separate from the product and organization.
Three pronged approach to concept of customer experience
Designing the right offer- Delivering right product to customer
Delivering value- delivering right product advantage- after sales
service, quality
Developing potential- providing continuous improvements in product
design
 Customer Experience and CRM
Methods of improving
Customer experience
1.Experience mapping -
customers experiences are
checked by focus groups,
interviews , telephonic
conversation and gaps are
recorded for improvisation.
2.Mystery shopping-
Strangers are asked to
behave like customers and
experiences are recorded and
gaps are understood.
 Customer Experience and CRM
3.Process mapping- The actual process is mapped to find out the gaps and
design the best customer experience
Ideal methodology for designing the correct process will be
Inform the customer=>customize the products=>Transact the order=>Deliver
the order=>Do the after sales service
4.Customer activity cycle- represents stages that the customer undergoes
while making buying decisions
Deciding what to do ?Involves decisions like what product to be purchased
from where
Implementing the decision-Involves purchasing the product- How do you
purchase
Reviewing the purchase- comparing the desired product attributes , with what
is purchased.
5.Participant and Non participant observation
Participant observation- marketers directly interact with customers and
record the transaction
Non participant approach- Marketers from distance observe the
customers transaction.
Strategies for improving customer experience
• Communication strategy-
An organization communicates
to customers through various
methods- ads, brochures, blogs ,
websites, chat sites, social
media, news letters, annual
report etc.
• Brand association strategy-
associating itself to project the
brand through advertisements ,
events , representing the brand
through brand shops, celebrities,
social events, quality of the
product etc.
• Customer associates brand for a
specific reason
• BMW- For superior engineering
• Hyatt hotel- luxury stay
• Adidas- for sports athletes
special
• Sensodyne- tooth sensitivity
 Strategies for improving customer experience
• Product strategy- An organization can make its product completely
different from that of competitor and create a separate useful USP from
that of competitor so that the product itself stands out as a strategy for
the customer to buy the product
• Electronic media strategy- The online presence of the product
portfolio in terms of advertisements, social media marketing and
buying the product without visiting the store etc. becomes a strategy as
most of the customers are hooked to electronic media , internet and
online.
• People strategy- customers not only buy the product only by quality ,
but also by the service providers.employees of the organization who
directly interact with customers influences the customers. The best after
sales support, crm team makes the customer to come again and buy the
product.
 Customer satisfaction & customer loyalty
Customer satisfaction & customer loyalty helps organization in
terms of
• Minimizing cost of sales
• Improving repeat purchases from existing customers
• Improving rate of retention of existing customer
• Improving product quality
Key components that drive customer satisfaction & loyalty
• Consistent communication
• Superior product quality and customer service
• Improved level of value creation to customers
As per Harvard there are certain success factors for achieving
customer satisfaction and loyalty
• Organization should have customer focused culture
• Top management should have customer focused vision and should render
support
• Employees should be rewarded with performance objectives for customer
focus
• Continuous improvement should be a looked in the customer service
aspects
• Continuous training should be part of organization for customer focus.
 Influence of CRM software on customer experience
The implementation of CRM software can have significant impact on
Customer experience.

CRM software is a business tool that an organization uses to collect and

maintain information related to its customers like the needs and
preferences of the customer, customer contact history, last purchases,
demographic details etc.

CRM software enables and helps an organization

To provide error free and quick customer service
It enhances customer profitability
Enables organization to maintain long term communication and
relationship.

The features of CRM Software

Usability-user friendly
Flexibility- should be able to change as per the requirements of the user
High performance- Integration with other interfaces, reliability and fast.
Scalability-can work on large amount of data
END OF UNIT 3