CUSTOMER

RELATIONSHIP
MANAGEMENT
(CRM)
 Introduction to CRM
• Customer relationship management (CRM) is a term
applied to processes implemented by a company to
handle their contact with their customers.
• CRM software is used to support these processes,
storing information on customers and prospective
customers.
• Information in the system can be accessed and
entered by employees in different departments, such
as sales, marketing, customer service, training,
professional development, performance
management, human resource development, and
compensation.
 Introduction to CRM
• The rationale behind this approach is to improve
services provided directly to customers and to use
the information in the system for targeted marketing
and sales purposes.
• While the term is generally used to refer to a
software-based approach to handling customer
relationships, most CRM software vendors stress
that a successful CRM strategy requires a holistic
approach.
 Define CRM
• CRM is “The development and maintenance of
mutually beneficial long-term relationships with
strategically significant customers”.
• CRM is “An IT enhanced value process, which
identifies, develops, integrates and focuses the
various competencies of the firm to the ‘voice’ of
the customer in order to deliver long-term superior
customer value, at a profit to well identified existing
and potential customers”.
• CRM is an information industry term for
methodologies, software, and usually Internet
capabilities that help an enterprise manage customer
relationships in an organized and efficient manner.
 Emergence of CRM
• Looking back over period of time in marketing, we
can see the following clear development &
progression over last few decades: -
• 1960’s – Saw the era of Mass Marketing.
• 1970’s – Saw the beginning of Segmentation, Direct
Mail Campaigns & Early Telemarketing.
• 1980’s – Saw Niche marketing making millionaires
of those who were best at it.
• 1990’s – Saw Relationship Marketing, i.e. explosion
of telemarketing and call centers, all set up to
develop relationships with customers.
 Functions of CRM
•Direct functions are basic requirements of a company
that are necessary to survive in the competitive
marketplace such as Profit, Volume and Safeguard

•Indirect functions are actions necessary to convince

the customer to participate in various marketing
activities such as Innovation, Market, Scout & Access.
 Functions of CRM
Value Creation Process
Technology delivery process
•R&D
•Technology integration
Management •Efficiency, effectiveness
Decision learning
Process
Value-based
Customer sensitivity Product delivery process Strategies
•Concept to launch •Pricing
•Diversity •Manufacturing process •Communication
•Information
•Differentiated
offering Customer delivery process
•Supply chain
•Distribution
•Info mediation (distribution
of information)
 What is CRM ?
•CRM is an enterprise-wide, on-going approach to seeking best answers
to the following questions: -
• How can we identify profitable customers?
• What types of differentiated services are required to satisfy their needs?
• How shall we enhance their loyalty and retain them as long as
possible?

Traditional
Marketing
CRM
Purpose
Purpose Sales Increase Loyalty Maximization

Focus
Focus Customer Acquisition Lifecycle Management

Evaluation
Evaluation Market Share Mind Share (Loyalty)

Customer
CustomerInfo
Info Survey, Interview Behavioral Information
based on Database
Communication
Communication １ Way, promotion-oriented 2 Way, Interaction-oriented
 Purpose of CRM
•With the intensive global competition and rapidly changing
technological environments, meeting customers’ various needs and
maximizing the value of profitable customers are becoming the only
viable option for many contemporary companies

1. Global Competition 2. Low Profitability

• M&A Proliferation of Erosion of •

Matured Industry
• International Alliances Competition Monopoly •
Supply exceeding Demand
• Dramatic Global Shift

Customer
Convergence of Increased
Focused Sophistication
Technologies

3. Technology Improvement 4. Customers Needs Change

• Value for the Money
• Internet & e-Commerce • Customer Needs
• Supply Channel Interaction Diversification
• New Business Model • Demand for better
service capabilities
 Key Benefits from CRM
•Successful CRM should have a comprehensive, far-fetched impact on
the corporation in terms of: its customers, organizational composition
& competitiveness in the market

Enhanced Customer Organizational

Loyalty efficiencies
•Effective lifecycle management •Inter-departmental synergy via
•Increased retention CRM information & program sharing
•Maximum customer satisfaction Key •Efficient change management
Benefits

Maximized Revenues Strengthened leadership

and Profits in the market
•Reduced acquisition, operational costs •CRM Leaders’ roles
•Productivity enhancement via cross-sell, referral •Reduced competition & favorable
•Overall volume increase image
 Role of Sales People
The role of salespeople as relationship builders and promoters are as
follows: -
Identifying potential customers and their needs;
Approaching key decision makers in the buying firm;
Negotiating and advancing dialogue and mutual trust;
Coordinating the cooperation between the customers and
their company;
Encouraging the inter-organisational learning process;
Contributing to constructive resolution of existing conflicts;
Leading the customer relationship development team

Also sales people are the individuals in any organisation who act both
as relationship builders and as relationship promoters.
 Models of CRM
The Evans and Luskin (1994) model for effective
Relationship Marketing

Relationship Marketing Inputs

•Understanding customer expectations
•Building service partnerships
•Empowering employees
•Total quality management
Relationship Marketing Outcomes
•Customer Satisfaction
•Customer loyalty
•Quality products
•Increased profitability

Assessment State
•Customer feedback
•Integration
 Models of CRM
The Brock and Barcklay (1999) model of selling
partner relationship effectiveness

Independence

Mutual trust Selling partner

relationship
Cooperation
effectiveness

Relative influence
Managing Customer Relationships
•The global salesperson must be involved in the following activities
in order to initiate, develop and enhance the process that is aimed at
building trust and commitment with the customer.

Initiating the relationship

Engage in strategic prospecting and qualifying;
Gather and study pre-call information;
Identify buying influences;
Plan the initial sales call;
Demonstrate an understanding of the customer’s needs;
Identify opportunities to build a relationship; and
Illustrate the value of a relationship with the customer
Managing Customer Relationships
•The global salesperson must be involved in the following activities
in order to initiate, develop and enhance the process that is aimed at
building trust and commitment with the customer.
Developing the relationship
Select an appropriate offering;
Customise the relationship;
Link the solutions with the customer’s needs;
Discuss customer concerns;
Summarize the solution to confirm benefits; and
Secure commitment.
Managing Customer Relationships

The global salesperson must be involved in the following activities

in order to initiate, develop and enhance the process that is aimed at
building trust and commitment with the customer.

Enhancing the relationship

Assess customer satisfaction;
Take action to ensure satisfaction;
Maintain open, two-way communication; and
Work to add value and enhance mutual opportunities.
 CREATING VALUE THROUGH
CUSTOMERS
• Customer Relationship Management (CRM) is about how
organisations use IT to help manage their relationships with
customers in order to maximise value creation both for the customer
and the company. The objective of CRM is thus to identify, satisfy
and retain the company’s best customers.
 CRM In Services
• Taj Air Caterers & Singapore Airlines
Taj actively participates in product designs and
influences service design, wherever necessary. This has
evolved after getting an insight into Singapore Airlines’
customer profile and their needs. The product is
designed to reflect their passengers’ preferences, which
are quite different in Delhi and Mumbai, and on
different sectors ex-Mumbai. TAJ Chefs conduct an
annual workshop on Indian Cuisine for Singapore
Airlines that caterers worldwide. Taj staff gets trained at
Singapore Airlines’ catering subsidiary (SATS). Taj
Caterers share a lot of information and can access
technology issues with Singapore Airlines.
• Taj Air Caterers & GE Capital Services
There is e-mail connectivity between the service
provider i.e. Taj and GE (for canteen and food supply).
Taj Customer Relations responds within a stipulated
time frame directly to GE employees and analyze their
satisfaction. Also on cards is a ‘Fitness Program’ where
Taj’s experts will share information of food nutrition,
exercise, etc with GE staff. Similarly, a Loyalty
Program is being designed wherein for purchases of
snacks and confectionery, GE employees can obtain
attractive discounts at Taj outlets/hotels. With another
company Taj is involved in cafeteria design and
selection of equipment.
• Titan Watch Repair Services

• The Titan Signet CRM initiative was undertaken in May

1995 to provide that ‘extra’ touch to its special
customers at the exclusive World of Titan stores. Its
mission was to create a sense of belonging of the
customer to the store and vice versa by:
• Building a special relationship with high life time
value Titan customers
• Recognizing and rewarding his/her loyalty to Titan
• Providing a platform for direct feedback from these
valued customers to the company
• It initially started in 6 showrooms in Banglore. Today
the Titan Signet has been extended to 102 World of
Titan showrooms across 59 cities all over India.
• While the program has taken customer bonding one step
further in Titan, there are many behind-the-scene activities
that ensure that the program is run efficiently, effectively
and with the level of enthusiastic participation. These are as
follows: -
• Showroom Personnel are trained not only in the operations
of the program at the showroom but also in the finer details
of CRM.
• Enrolments in the program are tracked on a monthly basis
for each showroom, along with data on purchases made by
Signet members who have returned to the showroom to buy
again.
• Signet operations form a part of the quarterly appraisal for
their showrooms, thereby ensuring that they earn more
marks on their efficient and effective performance.
• A grievance redressal system is in place to ensure that our
valued customers are responded to within stipulated time.
 To Summarize: -
• CRM is a new business philosophy based on trust and value;

• The core function of CRM is the value creation process;

• Customer Relationships develops over time;

• The role of global salespeople in the process is that of both

relationship builders and relationship promoters; and

• The basic premise of CRM is to offer superior value to customers in an

effort to turn prospects into customers, customers into loyal customers,
and loyal customers into partners.

• CRM is an organisational process which includes people,

infrastructure, performance measure, organisational alignment to the
environment and the new strategic patterns.