Customer Relationship Management

with AMLAN BHATTACHARYA

 CRM

A business philosophy and set of

strategies, programs, and systems that
focus on identifying and building
loyalty with a retailer’s most valuable
customers
 Customer Loyalty

Committed to purchasing merchandise and

services from a retailer
Resist efforts of competitors to attract the
loyal customer
Emotional attachment to retailer
Example: The Doctor who knows you for last 10
years; The lawyer who handles all your legal
issues; The Vegetable seller who claims he gives
you the best always
 CRM Process Cycle
Analyzing Customer
Collecting
Learning Data and Identifying
Customer Data Target Customers

Implementing Developing CRM

CRM Program Action Program
 Collecting Customer Data
Types of Information in the Customer
Database
Approaches for Collecting Information
Privacy Concerns
Example: Often we fill up feedback forms and
give away our e-mail ID, age, income group,
frequency of flying, why we like a particular
airlines or hotel, etc.
Information in Each Customer Data

History of purchases
Customer contacts by retailer (touch points)
Customer preferences
Descriptive information about customer
Customer’s responses to promotions
 Approaches for Collecting
Information
Need to connection contacts with a specific
customer identifier
Ask for identifying information
Encourage use of frequent shopper cards
Link checking account number and/or third
party credit cards to customer
 Privacy Concerns
Control over Collection
Do customers know what information is being
collected?
Do customers feel they can decide on the
amount and type of information collected by
retailers?
Control over Use
Do customers know how the information will be
used by the retailer?
Will the retailer share the information with third
parties?
 Concerns When Using Electronic
Channels

Information
collected without
the awareness of
customers
Collecting click
stream data using
cookies
 Fair Information Practices
Notice and awareness
Comprehensive statement about information storage,
manipulation, and dissemination
Choice/consent
Opt-in and Opt-out options

Access/participation
Customer able to confirm accuracy

Integrity/security
Controls for theft and tampering

Enforcement/redress
Mechanism to insure compliance
 Analyzing Customer Data
Data Mining –
technique used to
identify patterns in data.
Market Basket Analysis
Identifying Market
Segments
Identifying Best
Customers
The Customer Pyramid

Most Profitable
Customers
Platinum

Gold

Iron

Lead
Least Profitable
Customers
 RFM Analysis
Recency, Frequency and Monetary Analysis
RFM Target Strategies
Recency
Frequency Monetary (Rs) 0-2 m 3-4m 5-6m >6m
1-2 <1000 First-time Low-value
1-2 >1000 customers customers
3-4 <3000 Early repeat Defectors
3-4 >3000 customers
5-6 <5000 High-value Core
5-6 >5000 customers defectors
>6 <10000
>6 >10000
 Customer Retention Programs

Frequent Shopper
Programs
Special Customer
Services
Personalization
Community
 Effective Frequent Shopper
Programs
Tier Based on Customer Value
Offer Choices of Rewards
Reward all Transactions
Transparent and Simple
Issues:
Expenses to be justified
Impact on loyalty questionable
Easily duplicated – difficulty to get
competitive advantage
 Implementing CRM Programs
Need systems and data bases

+
Close coordination between departments –
marketing, MIS, store operations, HR
Shift in orientation from:
Product Centric to Customer Centric
Thanks