Introduction to CRM Systems and

Technologies
Session 1
 Session-1

• Intro to CRM Systems & Technologies

• CRM Architecture
• Types of CRM
• Integrated CRM Systems
 What is CRM?
• Discussion

• CRM is as old as the Customer

– What is new now….
 What is CRM?
DIFFERENT PERSPECTIVES FOR
INTERNET STOREFRONT
CRM PRODUCT

CALL CENTER CRM PRODUCT COMPANY

CHIEF PRIVACY
OFFICER
Opt-In Marketing
Live chats/ chatbots

DATABASE VENDOR
Connecting databases to
applications
MANAGING RELATIONSHIPS THROUGH IMPLEMENTATION AND
ANALYSIS OF CUSTOMER DATABASES

MARKETING SALES SUPPORT

OPERATIONAL
CRM
CRM SYSTEM

RELATIONSHIP MANAGEMENT

SHARED ANALYTICAL MANAGEMENT

DATABASE CRM
 Evolution of CRM
Product centric view (1960s/1970s)
Selling as many products as possible without regard to who is buying them. No awareness of the
customers

Classical Marketing Tactics (1980s)

Television ads, mass mailings, bill boards-the companies put them and waited for customers to
come in
Increasing competition/ Deregulation

New Age Marketing and CRM strategies Decrease customer churn

(1990s) Increase customer satisfaction
MORE THAN COST REDUCTION Customer differentiation (to discern which
Call centers (ATM, IVRS), Analytics ones to keep and which ones to loose)
Mass customization, Personalization Providing analytical support

Objective-Maximize Profitability
‘CRM done well influences customer emotion/ experience’
It humanizes their purchase or service request or complaint
BASIC PRINCIPLES OF CRM
 Basic Principles
• Different treatment for different customers
– Measure the value of each customer (Lifetime)
• Who are the profitable customers
• How long they have been there with you
• How long they are likely to stay with you

“all customers are equal”

“customer at any cost”
-Two Fatal Mistakes
 Basic Principles
• Different treatment for different customers
– Keep track of how much business/ money you are getting from each customer
– For customers with high lifetime value, you can travel an extra mile secure in
the knowledge that you will make up the money you spent on them.
• Therefore, the service level depends on the lifetime value of the customer.
 Unified View

• Across Product Lines

• Across Divisions
• Across Functions
• Across Geographic Locations
• Across Touch Points…………………
 CRM experiences 
• You buy a laptop abroad and it does not work when you come back
• A customer has just lodged a complaint and a sales person approaches him for
marketing
• What is to be done with the 100 email addresses of customers who abandoned
their shopping carts during their last web visit
– Do you give a 5% discount if they fill a form explaining why they left
– Reward repeat customers
– Reward repeat/ profitable customers
Customer Relationship Management

Islands of Automation Need To Be Bridged

Over time, channels & operational systems are added to cater to changing customer demands. The result…several
functional groups are interacting with customers independently .

Sales Force

Customer
Service

Direct Mail

Web

$ Branches

12
 Basic Principles
• Vertical flow of information vs. horizontal flow
• Process view
• Centralized data base
• Data entry at source
• Managing cross-departmental workflows
• Accountability at the process level by having a clear process owner
• Checks at inter-departmental level
• Performance measurement/ metrics at process level
 Examples of some Key Business Processes in CRM

• Opportunity to Order -CRM

• Request to Repair -CRM
Comparison of Functional & Process Measures
Department or Typical departmental Typical process
function measures measures

Sales department  Cost of sales  Timeliness &

 Revenue accuracy of orders
 Order processing
cost
 So, How it Happens?
 Information is entered at a single point in the process and

 updates a single, shared database for all functions that directly or indirectly
depend on this information.

 This integration should take place in real-time, not after processing in the
module through which it entered the system.

 Once placed into the system, the information should be available in all the
necessary forms through which it may be accessed, throughout the system.
 Basic Principles

• Treat each customer as one single person irrespective of how

he interacts with you
– Addressing multiple touch points (channels of communication)-in
person, on phone (home delivery), web site etc.
– Addressing different departments: the restaurant section and
delivery section are integrated.
– Addressing different geographical locations
 Basic Principles
• CRM is a business process an organization goes through in order to
identify, select, acquire, develop and retain its most profitable
customers to serve them better.
• It involves
– Segregating the best customers from the rest and remembering the likes and
dislikes of each.
 But isn’t this old hat…??
Maybe something practiced at the neighborhood Kiryana shop…

Yes, its old hat but the scale, size, volume and complexity of business is different.
The Touch points are more (telephone, fax, e-mail, Internet etc)
Therefore, the only way you can realistically manage to store, track, analyze and act
on information is by using IT.
• CRM is not just a piece of software
• CRM is the way good businesses manage their customers. However, in
today’s complex business environment, they just have to use special
CRM technologies to do this-which includes both hardware and
software.
The cost of acquiring customers
and the need for CRM
• Studies show:
– It costs a company six times more to sell a product to a new
customer than it does to sell to an existing one
– One dissatisfied customer will tell 8-10 others of his experience
– By increasing the customer retention rate by 5% profits would
increase by 85%
– There is a 50% chance of making a sale to an existing customer and
only 15% of selling to a new customer
– 70% of the customers will do business with a company again if their
complaint is successfully resolved
– Companies need integration of sales and service to support online
marketing and e-commerce. 70% companies do not have this
integration.
• Discern the best customers and motivate them to stay that way
 Customer Relationship Management Definition
Value ( $ )

ns hip
Re latio
he
of t
Va lue
The Duration of Customer Relationship

Targeting Acquisition Retention Expansion

• Who Do we target
• What segments are most
profitable
• What segments match our Value
Proposition
• What is the best segmentation
strategy for us / our industry
• What is the best channel for each
segment
• What is the acquisition cost for a
channel / segment
• Do certain channels deliver certain
types of customers
• Cost effective acquisition
• How can we improve retention
• What is our average customer
relationship length
• How can we hold customer for
as long as possible
• What is the most cost effective
method of retention
• How many products does our
average customer buy
• How can we induce our current
base to buy more products
• Who are the prime targets for
expansion
• What is the cost of expansion

Customer
Customer Relationship
Relationship Management
Management can
can be
be simply
simply defined
defined as
as everything
everything involved
involved with
with managing
managing the
the customer
customer
relationship.
relationship.
 CHALLENGE FOR COMPANY: BALANCE PLUMMETING COST OF CUSTOMER SATISFACTION

SATISFIED CUSTOMER
DISSATISFIED CUSTOMERS (FB post;
Whatsapp viral video………)

Viral marketing can work for or against you!!

On an average, an unhappy customer tells eight other potential customers about his negative experience (1:8)

The good part-A lot of customers demand just basics-good manners; basic politeness!
A few customers demand more.

A CRM system can help identify individual preferences………….

Targeting Acquisition Retention Expansion

How IT can help in Relationship Management??

 What is CRM for a Restaurant?

How IT can help in Relationship Management??

WKY vs. GD Restaurant
 Restaurant 1: WKY (We know You!!)
• Knows menu preference, seat preference
• Has installed a software in the restaurant, which keeps track of each customer-his
likes, dislikes, seating preferences etc
• This information is stored in a database
• When a customer contacts, his details are picked up from the database and made
available on the PC screen.
• This software is called the CRM software..!!
• What else……??
 Restaurant 2: GD (Give a Damn!!)
• Indifferent and does everything wrong
• The restaurant section and home delivery is not integrated
• What else………..??
 Customer Relationship Management

Every Company’s Big Unknown ... Customer Value

bi ip
Full Potential

ita sh
y
lit
of on
Pr lati
Re
Number of Relationships

Current
Current
Customer
Value

Current

Relationship Duration

31
Customer Relationship Management and Shareholder Value
Annual Cash Flow

Service/Usage Revenue

Acquisition
Cost

Duration of
Relationship
Cost of Service

Customer Life Time Value (LTV) is defined by a customer’s Life Time

worth to the firm and is measured by the net present value (NPV)
of the cash flows generated over the Life Time of the relationship.
Successful
Successful Customer
Customer Relationship
Relationship Management
Management can
can generate
generate positive
positive shareholder
shareholder value.
value.
 How do you define Customer Loyalty
Is a deeply held commitment to rebuy or repatronize (sell a companies
products to other customers) a preferred product or service
consistently in the future, despite situational influences and
marketing efforts having the potential to cause switching behavior
Harley Davidson sells less as a ‘means of transportation’ and
more as a ‘way of life’
Serving customers unspoken needs!
CRM SYSTEMS
 CRM Systems & Technologies
• CRM systems is the infrastructure that enables the identification of and increase
in customer value and motivates the customers to remain loyal
• CRM systems have the potential to CHANGE a customers relationship with a
company and increase revenues
• Its more than Technology
– CRM=Technology + Strategy
• Technology supports strategy for marketing initiatives such as for
– New customer acquisition
– Web based marketing
– Cross sell
– Up sell
– Personalization etc
• This requires recognize and treat each customer as an individual
• Therefore, is CRM a software product?
– Siebel, Salesforce……………..

• CRM is not just a software product

• It is business processes, People, Management behavior,
Organizational culture and Strategy…………….
• The software product enables the CRM strategy.
Support sales and CRM SYSTEMS HAVE Enable customers to interact
marketing staff 2 FACETS with client organization
(employees)
 Customer Relationship Management Systems
• Knowing the customer
In large businesses, too many customers and too many ways customers interact
with firm (touch points)

• B2B vs. B2C: What’s the essential difference ? Volume/ value

• Customers managed individually as against Aggregates

Technology deployed
How the Technology is deployed
 Application of Technology in CRM
A CRM system helps in Customer Life Cycle Management
THE CRM ARCHITECTURE
Client Server Systems

Is a subset of distributed Computing systems where Data Management, application logic and
presentation functions are separated by pre-defined interfaces that enable them to be
distributed and operate in real-time as if they were a single program on a single computer.

CLIENT SERVER

UI Process Data

Presentation & CRM Oracle

Functions Application Logic

Client is the user point of entry, whereas the server provides communication
among the clients,
 processes and stores shared data,
 serves up web pages,
 or manages network activities.
ARCHITECTURE OF THE CRM SYSTEM
THIN CLIENT WEB-ENABLED CRM ARCHITECTURE Web Enabled
Customers

CRM (Siebel
Oracle, SAP, Peoplesoft
SalesLogix )

Call
Center

Database Web Server/

Server Application
Server
Enterprise Marketing
Automation
Sales Force Automation Customer Facing Employee (Salesman
Marketing Executive
Customer Support Executive)
THIN CLIENT WEB-ENABLED CRM ARCHITECTURE
Web Enabled
CRM (Siebel Customers
Oracle, SAP, Peoplesoft
SalesLogix )

Call
Center

Web Server/
Application Server

Operational CRM Database

ERP and other OLTP systems

Customer/ Employees
Analytical CRM
Datawarehouse
(OLAP software/ Customer Facing Employee (Salesman Marketing
Executive
Data Mining) Databases from OLTP and
Customer Support Executive)
Management other ERP systems
CRM Applications

*Source: Patricia Seybold Group

Integrated CRM Systems
 Enterprise Applications: New Opportunities and Challenges

ORDER-TO-CASH SERVICE

Order-to-cash is a composite
process that integrates data from
individual enterprise systems and
legacy financial applications. The
process must be modeled and
translated into a software system
using application integration tools.

FIGURE 9-11
TYPES OF CRM SYSTEMS
 Customer Relationship Management Systems

• CRM packages typically include tools for:

Sales force automation (SFA)
 E.g. sales prospect and contact information, and sales quote generation capabilities
Customer service
 E.g. assigning and managing customer service requests; Web-based self-service
capabilities
Marketing
 E.g. capturing prospect and customer data, scheduling and tracking direct-marketing
mailings or e-mail
 Operational & Analytical CRM
• Operational CRM
– Front office CRM
– Involves touch points where direct customer contact occurs
– The focus is on smoothly running the operations of the organization
– Where you look at individual transactions, one sale, one complaint, one prospect.
– It does not involve optimizing operations but only transactions
 Operational & Analytical CRM
• Analytical CRM
– Back office CRM/ aggregate analysis/ strategic CRM
– Understand and analyze the activities that occurred
in front office
– When the management tries and analyses large
chunks of historical data, and comes to the
conclusion as to
• Which customers are likely to stick with the company
• Which customers are likely to leave
• Which ones should leave
• Which product has maximum complaints
• Which customers grumble but will stick by you
– Involves Technology to analyze the data and suggest
refinements in front office/ business actions for
better customer centricity & experience/ reduce
the gaps/ missing links in interaction.
MANAGING RELATIONSHIPS THROUGH IMPLEMENTATION AND
ANALYSIS OF CUSTOMER DATABASES

MARKETING SALES SUPPORT

OPERATIONAL
CRM
CRM SYSTEM

RELATIONSHIP MANAGEMENT

SHARED ANALYTICAL MANAGEMENT

DATABASE CRM
Unlock the Mysteries of Your Customer Relationships
By Jill Avery et al, 2014, HBR

Session 1.1
 Managing Relationship Expectation
• Analytics is allowing companies to personalize and manage
customer relationships
• The challenge is people now expect companies to understand
what type of relationships they want & respond appropriately
• Despite implementing CRM software, companies are poor in
relationship intelligence
– Understanding variety of relationships customers have with a firm
– They do not know how to reinforce or change those connections
– Meeting relation expectations is important!
• Companies are collecting data such as demographics data and matching with
purchasing information for segmentation leading to cross sell/ up sell.
• Customers have different kind of relationships with brands
• The paper identifies 29 distinct type of relationships such as buddies, enemies, one-
night stands, marriage partners, master-slave etc
• Discusses characteristics/ treatment for each type
• These relationships are unique to an industry (fashion, consumer technology, social
media and gaming) / organization
• Understand the types of relationships of the customer with your brand using surveys/
interviews, web crawling tools, data mining techniques;
– Find what the customers desire; and which relationship profile is most profitable
– Keep shifting the relationships.
THANK YOU