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Customer Relationship
Management
(CMA210)
Mr F. Makudza

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Approach to Module
Delivery/House keeping
• Assessment
• One in-class test
• One individual assignment
• One group assignment
• End of semester examination
• Use of cell phones
• Participation
• Access to notes
• Sources
• Consultation times
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Course Objectives
• To enable students to understand CRM and its
benefits
• To assist students in managing contacts, leads, and
opportunities
• To integrate information in marketing, customer
support, service, accounts, and management
• To develop strategies for optimum interaction
between the organisation and the customer
• To improve individual and group performance
through building better business relationships

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 Individual Assignment 1
• In the field of customer relationship management (CRM), they are
company networks, rather than companies, that compete for
customers. Validate this statement, supporting your arguments using
relevant practical examples. (25 Marks)

• Your assignment should be 1500 words long (+/- 10%)

• Use font size 12, Font style Times new roman, line spacing 1.5, Justify your text.
• All cited sources should be referenced using the Harvard Style of referencing
• Use of visuals highly encouraged
• Plagiarism is a serious academic offense.

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Lets talk customers ...

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Ooops…so not all drinks are coke?

Customer
Preference
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 vs Customer
Experience

Shangha
i Maglev
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Marketing is a game of war…
Cu
sto
me
rS
tra
teg
y

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So marketing makes it or breaks…
Customer Value

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The fight for survival nasty …
Customer
Retention

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The customer Is the trophy….
Customer
Competition

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 Marketing… Customer
Attraction

BAT COMPANY

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 Marketing
vs
Marketing

Customer
Distraction

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 CRM Defined
• CRM is the core business strategy that integrates internal processes
and functions, and external networks, to create and deliver value to
targeted customers at a profit- Buttle (2008).
• CRM is a complete set of activities covering all functions of the
organization, relating with and supporting a consumer- Wimshurst &
Mackay (2002).
• CRM is a business strategy that maximizes profitability, revenue and
customer satisfaction by organizing around customer segments,
fostering behaviour that satisfies customers and implementing
customer centric processes – Rogers (2007)

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 Objectives of CRM
• Enable the company to quickly identify, contract, attract and acquire
new customers.
• Obtain a better understanding of the customers – their wants and needs
• Define the appropriate product and service offering and match it to the
customer’s unique needs.
• Manage and optimize a company sales cycle.
• Identify cross-selling and up-selling opportunities.
• Increase retention of existing consumers through improved after sales,
service and support.

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Why CRM?

CRM also helps in:

• Reducing the burden of excessive customer costs.
• Enhancing marketing effectiveness by carefully selecting customer for
various programs.
• Streamlining order processing and inventory management.
• Personalizing the market offerings, based on the preference of the
customer groups.
• Building customer loyalty and commitment

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 Who is the customer?
• The customer in a B2B context is different from a customer in the B2C
context.
• The B2C customer is the end consumer: an individual or a household.
• The B2B customer is an organization: a company (producer or
reseller) or an institution (not-for-profit or government body).
• CRM practices in the B2B context are very different from those in the
B2C context

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 Characteristics of B2B
customers
Marketing Structure and Demand
Business markets contain fewer but larger buyers.
Business customers are more geographically concentrated.
Business buyer demand is derived from final consumer demand.
Demand in many business markets is more inelastic—not affected as much in the short run
by price changes.
Demand in business markets fluctuates more, and more quickly.
Nature of the Buying Unit
Business purchases involve more buyers.
Business buying involves a more professional purchasing effort.
Types of Decisions and the Decision Process
Business buyers usually face more complex buying decisions.
The business buying process is more formalized.
In business buying, buyers and sellers work more closely together and build close long-run
relationships.
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• CRM consists of three components:
• customer,
• relationship, and
• management

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 CRM
• Customer: The customer is the only source of the company’s present
profit and future growth. However, a good customer, who provides more
profit with less resource, is always scarce because customers are
knowledgeable and the competition is fierce.
• Relationship: The relationship between a company and its customers
involves continuous bi-directional communication and interaction. The
relationship can be short-term or long-term, continuous or discrete, and
repeating or one-time.
• Management. CRM is not an activity only within a marketing department.
Rather it involves continuous corporate change in culture and processes

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 PRINCIPLES OF CUSTOMER
RELATIONSHIP MANAGEMENT

• Total experience management

• Business segmentation
• Quick service
• Interact personally with your customers:
• Treat your customers differently
• Real time information management

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 Types of CRM
• There are basically four types of CRM i.e strategic CRM, operational CRM,
analytical CRM and collaborative CRM.

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 1. Strategic CRM
• Strategic CRM focuses upon the development of a customer-centric business
culture.
• This culture is dedicated to winning and keeping customers by creating and
delivering value better than competitors
• In a customer-centric culture you would expect resources to be allocated
where they would best enhance customer value, reward systems to promote
employee behaviours that enhance customer satisfaction and retention, and
customer information to be collected, shared and applied across the business
• Many businesses claim to be customer-centric, customer-led, customer-
focused or customer-oriented, but few are.
• Pasina imi vatengi, hapana zvatiri…N. Richards
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 2. Operational CRM
• Operational CRM automates and improves customer-facing and
customer supporting business processes.
• It focuses on the interface with the customer i.e what can be done to
enhance customer satisfaction
• Operational CRM targets the marketing, selling and services functions
of customer operations.
• CRM software applications enable the marketing, selling and service
functions to be automated and integrated

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 3. Analytical CRM
• Analytical CRM is concerned with capturing, storing, extracting, integrating, processing,
interpreting, distributing, using and reporting customer-related data to enhance both
customer and company value.
• Analytical CRM builds on the foundation of customer-related information.
• Customer-related data may be found in enterprise-wide repositories: sales data
(purchase history), financial data (payment history, credit score), marketing data
(campaign response, loyalty scheme data) and service data.
• With the application of data mining tools, a company can then interrogate these data.
• Intelligent interrogation provides answers to questions such as:
• Who are our most valuable customers?
• Which customers have the highest propensity to switch to competitors?
• Which customers would be most likely to respond to a particular offer?

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 4. Collaborative CRM
• Collaborative CRM is the term used to describe the alignment of
normally separate enterprises in the supply chain for the more
profitable identification, attraction, retention and development of
customers.
• For example, manufacturers of consumer goods and retailers can align
their people, processes and technologies to serve shoppers more
efficiently and effectively.
• They employ practices such as co-marketing, category management,
collaborative forecasting, joint new product development and joint
market research.

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CRM constituencies
There are many stakeholders with an interest in CRM:
• Companies implementing CRM
• Customers and partners of those companies
• Vendors of CRM software eg SAP, ORACLE
• Vendors of CRM hardware and infrastructure
• Management consultants
• Non profit making organisations

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 Marketing concepts/
orientations/ Philosophies –the
evolution of CRM
• Customer centrism has evolved over time and has passed through
various phases.
• The way it is understood by the 21st century marketer is different
from how it was understood, say, in the 18th century.
• The following concepts explain the evolution of marketing and CRM:
1. Production concept/orientation, 2. Product concept/orientation,
3. Selling concept/ sales orientation, 4. Marketing concept, 5.
Societal marketing concept, 6.Relationship marketing concept

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 1.Production
concept/orientation

• A marketing philosophy which holds that consumers favour cheap

products.
• Focuses on mass production and mass distribution.
• Customer’s voice is not considered.
• Emphasis is on production improvement, not customer satisfaction.
• Focuses on gaining economies of scale in production and thereby
offering a cheap product.

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 2. The Product Concept

• The concept suggest that a good product sells itself

• The product concept holds that consumers will favor products that offer
the most in quality, performance, and innovative features.
• Under this concept, marketing strategy focuses on making continuous
product improvements.
• However, focusing only on the company’s products can also lead to
marketing myopia. For example, some manufacturers believe that if they
can “build a better mousetrap, the world will beat a path to their doors.”
But they are often rudely shocked. Buyers may be looking for a better
solution to a mouse problem but not necessarily for a better mousetrap.

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 Selling concept

• Is a concept which holds that if customers are left alone they will not
buy much of the company’s products.
• This concept is based on the maximisation of sales through heavy
selling and promotional effort.
• There is no customer-seller relationship.
• Often practised when firms face over-capacity
• The philosophy assumes that customers who are persuaded into
buying the product will like it.

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 Marketing/ Customer focused
Concept

• It is based on the customer-centric philosophy, which postulates that

firms need to go into the field (market) and identify the needs and
wants of the customers and turn these needs and wants into products.
• The concept holds that the company exist to provide customer value
and satisfaction
• Companies will carry out marketing research to know the needs and
wants of customers
• They then produce a product which meets those needs.

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 RELATIONSHIP MARKETING
CONCEPT
• It is based on the idea that “if you are good to your customers, they keep
coming back because they like you, when they like you, they tend to spend
more because they are delighted, when they spend more, you tend to treat
them better and the shareholder value increases via customer value”.
• It focuses on networking and net weaving with all stakeholders of the
business.
• Its aim is to attract, develop and retain customers, through superior customer
services.
• Marketing needs to influence other departments to co-operate in delivering
customer satisfaction.
• It is thus based on creating long lasting relationships.
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Benefits of CRM
• Cost savings, revenue enhancement, and strategic impact
• Increased sale revenues
• Increased margins
• Improved customer satisfaction ratings
• Decreased general sales and marketing administration costs
• Identifying and targeting the most profitable customers and having a deeper knowledge.
• Ability to manage marketing campaigns with clear objectives.
• Increased market share due to customer relationships
• Decreased marketing and promotion expenses
• Improved channel efficiency
• Reduce service expenses with online self –service
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Summary
• CRM is a core business strategy
• CRM is the key component for the success of every industry.
• It creates the way to maintain harmonious relationship with the
customers.

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