Professional Documents
Culture Documents
Session 2 - Customer Relationship Management
Session 2 - Customer Relationship Management
Transact
The CRM continuum
Many times CRM is criticized ..
But many times organizations often view CRM
from a limited perspective or adopt CRM on a
fragmented basis
the lack of a widely accepted and clear definition of
its role and operation within the organization
an emphasis on information technology aspects
rather than its benefits in terms of building
relationships with customers
the wide variety of tools and services being offered
by information technology vendors, which are often
sold as CRM.
Confusion about CRM terminology
Customer relationship management is often used
interchangeably with the terms
relationship marketing,
customer relationship marketing,
enterprise relationship marketing (ERM),
technology enabled relationship marketing (TERM),
customer managed relationships (CMR) or
customer management (CM).
It is also used to refer to a specific IT solution such as a data
warehouse or
a specific application such as campaign management or sales force
automation.
Reason behind failure of CRM projects .
Most of the time the reason is half hearted (not considered strategic) , compartmentalized (disintegrated),
poorly executed (not able to create right organizational culture) CRM.
What is not CRM?
Piece of software solution
Sales tactics
Call center services
Empowerment to pass goodwill waivers
Relationship building by software attributes of
a contact person
CRM (piece of software & consulting industry)
as a business segment
Core
Product / Basic Expected Augmented Potential
Core Product Product Product Product
benefit
A set of Encompasses all
The attributes and the possible
fundamental Marketer must conditions A product that augmentations
service or turn the core
benefit that the benefit into a buyers normally exceeds and
expect when customer transformations
customer is basic product.
they purchase expectations the product might
really buying
this product. undergo in the
future.
Hotel guests
A hotel guest is Hotel
minimally expect
buying rest and room includes a
sleep. The a clean bed,
bed, bathroom,
purchaser of a fresh towels,
towels, desk,
drill is buying working lamps,
dresser, and
holes. and a relative
closet.
degree of quiet.
Parcelcopter
A quadrocopter remotely controlled DHL Maintenance on demand (MoDe), co-
drone transporting medicines created with DHLs customer Volvo
Trucks, uses sensors that automatically
send back vehicle and component
performance to identify when and
where truck maintenance will be
required.
Formulating Value preposition (Example
Dominos Pizza)
The target customers (Convenience minded
pizza lover)
The benefits offered to these customers
(Delivery, Speed & Quality)
The price charged relative to the competition,
(15 percent premium over competition)
A formal statement of the value proposition
(good quality pizza delivered at your doorstep
within 30inutes).
A checklist for value preposition
1. Is the target customer clearly identified?
2. Are the customer benefits explicit, specific, measurable and
distinctive?
3. Is the price, relative to competition, explicitly stated?
4. Is the value proposition clearly superior for the target customer
(superior benefits, lower price or both)?
5. Do we have, or can we build, the skills to deliver it?
6. Can we deliver it at a cost that permits an adequate profit?
7. Is it viable and sustainable in the light of competitors and their
capabilities?
8. Is it the best of several value propositions we considered?
9. Are there any impending discontinuities (in technology, customer
habits, regulation, market growth, etc) that could change our
position?
10. Is the value proposition clear and simple?
Value assessment
Traditional means of customers assessment
of value (Customer survey)
Requests respondents to rank particular
features or service attributes on a four or five
point scale from very satisfied to very
dissatisfied or very important to very
unimportant
trade-off analysis
Trade off analysis - Example
The value the organization receives
Fundamental to the concept of customer
value are two key elements.
First, determining how existing and potential
customer profitability varies across different
customers and customer segments.
Second, understanding the economics of customer
acquisition and customer retention and
opportunities for cross-selling, upselling and
building customer advocacy.
Customer profitability analysis
The value the organization receives