CUSTOMER RELATIONSHIP

MANAGEMENT

UNIT - 1

PRESENTED BY

K.BALASRI PRASAD
B.Sc(KU), M.B.A(OU), NET(UGC), (Ph.D)(MGU)
ASSISTANT PROFESSOR IN MANAGEMENT

VISHWA VISHWANI GROUP OF INSTITUTIONS

Unit – I: EVOLUTION OF CUSTOMER
RELATIONSHIP

CRM-Definition, emergence of CRM

practice, factors responsible for CRM
growth, CRM Process, framework of
CRM, Benefits of CRM, Types of CRM,
Scope of CRM, Customer Profitability,
Future Trends in CRM, CRM and Cost-
Benefit Analysis, CRM and Relationship
Marketing
 CRM-Definition
 Customer relationship management (CRM) is a process
in which a business or other organization administers its
interactions with customers, typically using data
analysis to study large amounts of information.
 CRM systems compile data from a range of different
communication channels, including a company's
website, telephone, email, live chat, marketing materials
and more recently, social media.
 CRM allow businesses to learn more about their target
audiences and how to best cater for their needs,
thus retaining customers and driving sales growth.
 CRM may be used with past, present or potential
customers.
A CRM lets you store customer and prospect contact
information, identify sales opportunities, record
service issues, and manage marketing campaigns, all
in one central location — and make information about
every customer interaction available to anyone at your
company who might need it.
Customer relationship management is the
combination of practices, strategies and technologies
that companies use to manage and
analyze customer interactions and data throughout
the customer lifecycle.
The goal is to improve customer service
relationships and assist in customer retention and
drive sales growth.
Emergence of CRM practice
 Developing customer relationships has historical antecedents going back
into the pre-industrial era.
 Much of it was due to direct interaction between producers of agricultural
products and their consumers.
 Similarly, artisans often developed customized products for each
customer.
 Such direct interaction led to relational bonding between the producer
and the consumer.
 It was only after the advent of mass production in the industrial era and
the advent of middlemen that interaction between producers and
consumers became less frequent leading to  transaction oriented
marketing. 
 In  other words, the production and consumption functions became
separated leading to the marketing functions being performed by 
middlemen, and middlemen, in general, are oriented towards economic
aspects of buying since the largest cost is often the cost of the goods sold.
 Several factors have contributed to the rapid development
and evolution of CRM. 
 These include the growing de- intermediation process in
many industries due to the advent of sophisticated
computer and telecommunication technologies that allow
producers to directly interact with end-customers.
 For example, in many industries such as   the   airline,  
banking,  insurance,  computer  software,  or household
appliances industries and even consumables, the de-
intermediation process is fast changing the nature of
marketing and consequently making relationship
marketing more popular.
 Databases and direct marketing tools give these industries
the means to individualize their marketing efforts. 
 Since  services  are typically produced and delivered at the same
institution, it minimizes the role of middlemen.
  Between the service provider and the service user an emotional
bond also develops creating the need for maintaining and enhancing
the relationship. 
 Another  force  driving  the  adoption  of  CRM  has  been  the  total
quality movement.
 When companies embraced the Total Quality Management (TQM)
philosophy to  improve quality and reduce costs, it became necessary
to involve suppliers and customers in implementing the program at
all levels of the value chain.
 This created the need for closer working relationships with
customers, suppliers, and other members of the marketing
infrastructure.
 Thus, several companies, such as Motorola, IBM, General Motors,
Xerox, Ford, and Toyota, formed partnering relationships with
suppliers and customers to practice TQM.
 In the current era of hyper-competition, marketers are forced to be
more concerned with customer retention and loyalty.
 Retaining customers perhaps offers a  more sustainable
competitive advantage than acquiring new ones.
 What marketers are realizing is that it costs less to retain
customers than to compete for new ones.
 There is greater opportunity for cross-selling and up-selling to a
customer who is loyal and committed to the firm and its offerings.
 Customer expectations have been changing rapidly over the last
two decades.
 Consumers are less willing to make compromises or trade-offs in 
product and service quality.
 In  a  world of  ever changing customer expectations, building
cooperative and collaborative relationships with customers seems
to be the most prudent way to keep track of their changing
expectations and appropriately influencing them
Factors responsible for CRM growth
The factors are:
1. Top Management Commitment and Support 
2. Define and Communicate CRM Strategy 
3. Culture Change 
4. Inter-Departmental Integration 
5. Skillful Staff 
6. Key Information on Customers 
7. Manage IT Structure
8. Customer Involvement.
 Factor – 1: Top Management Commitment and Support
 Top management involvement in the CRM implementation plan has
been identified in almost all success factors studies as a crucial factor.
 Considering the scope of CRM implementation as an enterprise-wide
strategy requires a full support by the top level of the organizational
structure.
 The role of board level is essential in backing the CRM
implementation process and securing required amount of financing
for putting CRM projects into action.
Factor - 2: Define and Communicate CRM Strategy
 A clear definition of the CRM strategy and alignment of this strategy
to the company’s strategy would facilitate the transition of changing
work structure and environment toward customer-centric approach.
 The absence of a clear CRM strategy or the lack of developing such a
plan could cause the failure of CRM implementation.
 Additionally, publishing the strategy to the staff is required to raise
their awareness of the CRM objectives, implications, and benefits.
 Factor - 3: Culture Change
 In order for CRM to succeed in realizing its objectives, organization
should develop a culture where all staff are encouraged to share and
learn from new work structure and information that is based on
customers.
 Expected resistance of new ways of conducting work tasks within the
organization’s culture should be addressed and minimized.
Factor - 4: Inter-Departmental Integration
 From s strategic perspective CRM implementation has an organization-
wide influence.
 Different functions and departments of the organization should be
integrated and connected with a structure that support the flow of
information.
 Al­though all aspects of the organization should be integrated, a special
consideration should be devoted to functions that have direct interaction
with customers such marketing, sales, and services.
 Such integration is required to deliver a unified view of the organizations
and its products to the customers.
 Factor - 5: Skillful Staff
 Employees play a key role in the success of CRM
projects.
 Issues of the nature of learning new work systems,
training programs, change resistance, willingness to
share information, and motivating staff should be taken to
consideration.
Factor - 6: Key Information on Customers
 Acquiring and analyzing the right quantity and quality
of information on customers helps to meet customer’s
needs.
 The right information is the base for designing customized
products and services.
 Factor - 7: Manage IT Structure
 Considering CRM as only a technological solution is a vital
misconception that resulted in increasing failure of CRM projects.
 Nevertheless, IT is an enabler for acquiring and managing valuable
data on customers.
 Technological aspects such as data warehouse capabilities and
software configuration in addition to the influence of the internet are
crucial for CRM successful implementation
Factor - 8: Customer Involvement
 Direct and indirect Involvement of customers in CRM designing is a
tool for strengthening practical CRM.
 Such an involvement helps the organization to analyze the customer
relationship life cycle and consequently find the areas of problems
that can be managed by CRM.
 Furthermore, customers’ acceptance and interaction with CRM
systems could be enhanced by involving those customers in building
CRM systems.
 CRM Process
 To understand the steps of the CRM process, you have to
understand the customer lifecycle.
 All the plans and activities that you have in mind to better
your business, a CRM process would help you execute those.
 The CRM process is a strategy for keeping every customer
interaction personalized and meaningful that consists of five
main steps.
 There are five key stages in the CRM cycle:
A.Reaching a potential customer
B.Customer acquisition
C.Conversion
D.Customer retention
E. Customer loyalty
 The five steps of the CRM process are a collaborative effort between marketing,
sales, and support departments. 
A. Generate brand awareness
The first step to acquiring new customers is to introduce them to your business.
The marketing team typically takes on this task through a number of measures:
1. Learning about your target audience: Marketers will conduct research to
identify their audience’s target demographics, interests, preferred channels of
communication, what messaging they respond most to, and what they care
about.
2. Segmenting your target audience: Audience profiles are created to segment
a brand’s target audience into similar groups based on similar interests or
demographics. This helps marketers identify which types of people are most
likely to become customers and whom their campaigns should target.
3. Creating marketing campaigns that speak to those target
demographics: Marketing automation can be used to identify what works and
what doesn’t, to create unique campaigns for unique customer segments and to
create strategies for lead acquisition.
 B. Acquire leads
 Introducing your brand to a potential customer is just the beginning
of the CRM process.
 You have to encourage them to learn more about your business and
engage with it.
 Depending on how your company is structured, this lead acquisition
step could be a marketing or sales team responsibility — or both.
 Your marketing team, for example, might encourage website
visitors to share their email with a newsletter signup CTA or a
social media giveaway.
 Sales, on the other hand, could use their CRM system to set up live
chat on your site.
 With this feature, your team can proactively reach out to potential
customers who land on your website.
 With customer data, you can personalize your outreach with the
lead to start the relationship off on the right note.
 C. Convert leads into customers
You’ve successfully engaged with your leads, and
they’re interested. Now it’s time to turn those leads
into customers.
To do so, sales persons must be skilled at identifying
how interested leads are and, specifically, whether
they’re interested enough to make a purchase.
The historical data from past successful sales can be
used to identify lead-qualification criteria.
If leads do seem likely to make a purchase, sales
people must then be able to nurture them further and
build their trust enough to convert and follow up to
ensure that no opportunities are missed.
 D. Provide superior customer service
 You’ve successfully converted your lead into a customer. But the
CRM process doesn’t end when a customer converts. In order to
grow as a company, you need to retain customers.
 Customer service is the biggest factor that determines a
consumer’s loyalty to a brand. Conversely, poor customer service
can cost you customers and negatively impact your reputation.
Support teams must be able to deliver superior support whenever,
wherever, and however their customers expect it.
 Forty-nine percent of customers say being able to resolve their
issue quickly is the most important aspect of a good customer
service experience. Support agents can access the historical
customer information they need to resolve a issue quickly.
 Fifty-seven percent of customers expect to have a choice of
channels when reaching out to customer support.
 E. Drive upsells
 When we think of a returning customer, we imagine a shopper
continually coming back to the same business to buy the products they
know and love. But there is another key way existing customers provide
value — by upgrading to more expensive products.
 Personalized recommendations via email are a great place to start.
Organize customers into smart lists based on similar purchase histories.
 Create custom email templates that send relevant product releases to
entire lists of customers at once. This way, you can be sure the
promotional deals or releases you send are reaching the people most
likely to buy them.
 If the business is service-based, find upsell opportunities through check-
in calls, regularly reach out to repeat customers to ask how they’re doing
and whether there is any way you could improve your service.
 Their needs may very well have changed since their last visit and they
may be ready for an upsell.
 Benefits of CRM
 A CRM system can benefit your business by helping you
centralize, optimize and streamline your communications with
customers, and become better in these 6 areas.
1. Better knowledge of customers
All information stored on each contact in one place makes
CRM a super powerful communication tool.
CRM system gives your sales, marketing and customer service
teams a competitive advantage.
Not only do they know a contact’s full name, email address,
telephone number, postal address, website and social media
accounts, but also such critical business facts as a contact’s
position in the company, his/her relations to other contacts in
your database, the language they speak, and even their
birthdays.
2. Better segmentation
You can do it by segmenting contacts (customers and
prospects) into target audiences.
CRM allows you to break down data by categories
and criteria, making it easy to create focused lists. 
Segmented lists allow you to run specific customer
marketing campaigns and analyze your sales
process and lead pool.
3. Better customer retention
 CRM is also a great tool for keeping your existing customers
happy.
 CRM can also prompt you to reach out to those customers who
have not been contacted in while, and perhaps feel neglected.
 Keeping an existing customer is 6 or 7 times cheaper that
getting a new one.
 To sustain your customers’ interest, a CRM system can also
help you coordinate your marketing activities.
4. Better anticipation of needs
 It’s easier to cross-sell or upsell a customer when you’ve
been tracking their buying habits.
 CRM system help salespeople sell more and sell faster.
 The access to interaction history makes it easy to offer
timely customer service.
5. Better and speedier communication
 Making your customers wait by quickly replying to their
requests is a sign of professionalism.
 90% of companies do not use auto-responders to
acknowledge they have received a customer service email.
 A CRM system can also help you draft SMS and emails and
schedule their dispatch weeks or months in advance.
6. Better protection of data privacy
 A CRM system can help you obtain and document your
contacts’ permission to store and use their personal details
(consents), send automatic notifications to all new contacts
informing that you would like to store their data, manage your
customers’ subscription to email communication preferences,
and even set up rules to update personal details for groups of
contacts.
Types of CRM
 Strategic CRM
 Strategic CRM is focused upon the development of a
customer-centric business culture which is dedicated to
winning and keeping customers by creating and delivering
value better than competitors.
 Philip Kotler identifies three other major business orientations:
product, production, and selling.
 Product-oriented businesses believe that customers choose
products with the best quality, performance, design or
features.
 Production-oriented businesses believe that customers choose
low price products.
 Sales-oriented businesses make the assumption that if they
invest enough in advertising, selling, public relations (PR)
and sales promotion, customers will be persuaded to buy.
 Operational CRM
 Operational CRM automates and improves customer-
facing and customer supporting business processes.
 CRM software applications enable the marketing, selling
and service functions to be automated and integrated.
Marketing automation:
 Campaign management modules allow marketers to use
customer-related data in order to develop, execute and
evaluate targeted communications and offers.
 In multichannel environments, campaign management is
particularly challenging.
 Event-based campaigns can be initiated by customer
behaviors or contextual conditions.
Sales-force automation:
 Widely adopted in business-to-business environments.
 SFA applies technology to the management of a company’s selling
activities. The selling process can be categorized into a number of
stages, such as
 lead generation
 lead qualification
 needs identification
 development of specifications
 proposal generation
 proposal presentation
 handling objections and closing the sale.
 SFA software can be configured so that it is modeled on the selling
process of any industry or organization.
 Sales-force automation software enables companies automatically to
assign leads and track opportunities as they progress through the
sales pipeline towards closure.
 Opportunity management software contains lead management
and sales forecasting applications.
 Lead management applications enable companies to qualify
leads and assign them to the appropriate salesperson.
 Contact management lets companies manage their
communications programme with customers.
Service automation
 CRM software enables companies to handle and coordinate their
service related inbound and outbound communications across
all channels.
 Enables companies to become more efficient and effective by
reducing service costs, improving service quality, lifting
productivity and increasing customer satisfaction.
 Call routing software can be used to direct inbound calls to the
most appropriate handler.
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.
 Analytical CRM can lead companies to decide that selling approaches
should differ between customer groups.
 From the customer’s point of view, analytical CRM can deliver timely,
customized, solutions to the customer’s problems, thereby enhancing
customer satisfaction.
 From the company’s point of view, analytical CRM offers the prospect of
more powerful cross-selling and up-selling programmes, and more
effective customer retention and customer acquisition programmes.
Collaborative CRM
 Describes the strategic and tactical 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.
 Collaborative CRM enables separate organizations to align
their efforts to service customers more effectively.
 Scope of CRM
 CRM, or customer relationship management, is concerned with
the development and maintenance of mutually beneficial
relationships with strategically significant partners.
 Its focus is the creation of long-term value, and not just short-
term profits, for the company and all it works with.
 Four main constituencies of a focal organization’s network are
Suppliers, Owners/Investors, Partners and Employees.
Mnemonics of SCOPE:
S - Suppliers,
C - the focal firm’s customers who are at the hub of the
network,
O - Owners/Investors,
P - Partners and
E – Employees.
 The direction of the arrowhead in the outer wheel is meant to
indicate that they are all aligned to the common goal of helping
the focal firm create and deliver value for, and from, their chosen
customers.
The Suppliers
 Suppliers provide input, such as raw materials, technologies,
components, investment, human resources and expertise, to the
company’s value chain.
 Enhanced performance can result from improved
communication and coordination with this set of suppliers.
 Purchasing costs can be reduced due to elimination of the need
to constantly seek cheaper sources.
 With fewer vendors, increased cooperation between the
remaining parties in the form of management information system
alignment and customer-information sharing becomes possible.
Toyota’s Supplier’s network
 The Customer
The customer is of key importance because only
relationships with customers generate revenues for a
company.
 Establishing a good long-term relationship with
customers can take the form of the provision of
benefits such as special prices and preferential
treatment.
Doing so can bring about drastic increases in value
due to frequent sales from satisfied customers,
positive word of mouth, a reduced need for product
sampling and advertising, and increased possibility
of cross-selling or purchasing of other products.
 The Owners
 Companies may remain private for the duration of their
lifespan, remaining the property of single proprietors or
many owners.
 Other companies may start out that way, but at certain points
may elect to go public and sell shares in order to spread
liability or raise funds for future expansion.
 Whichever category a company may fall under, it is
paramount for its management to establish productive
relationships with its owners and create value for them in the
form of enduring company and stock value in the long run.
 A poor long-term relationship can result in investors selling
out and in drops in stock value, or in changes of ownership
if the company is sold.
 Other Partners
Establishing a partnering relationship with another
company, such as a strategic alliance or joint
venture, is done through sharing complementary
strengths such as technological expertise, market
reach, supplier networks, customer data and
customer bases.
Partnering with another firm can thus support the
creation and delivery of value through increasing
efficiency, sharing product development, marketing
and distribution costs, and sharing key resources.
 The Employees
Employees are central to CRM practitioners.
Many businessmen claim that their employees or
“internal customers” are their most important
constituency.
Should employees be satisfied and happy with their
jobs, they will be more apt to provide noteworthy
service to the company’s external customers.
In short, employee satisfaction drives customer
satisfaction.
A positive climate for service is less rule-driven, more
customer-orientated, and more supportive of personal
initiatives.
 Customer Profitability
Customer Profitability Analysis is a
managerial accounting method that allows
businesses to determine the overall profit a
customer generates.
A profitable customer is someone who
generates a revenue stream greater than the
cost of their acquisition, selling, and serving.
CPA allows companies to evaluate their
customers and know how beneficial it is for
them to keep the customers. 
Customer Profitability Formula
 To calculate CPA, you need the annual profit per customer, and the
total duration a customer stays with your business.
 Annual profit = (Total revenue generated by the customer in a
year) – (Total expenses incurred to serve the customer in a year)
 The total revenue can be generated by the following sources that you
need to include:
 Recurring revenue
 Upgrades to the higher plans
 Cross-buying of relevant products
 Expenses can be incurred from the following sources which also you
need to consider:
 Cost of customer service
 Maintaining a customer service team
 Loyalty perks
 Operational cost
How to do Customer profitability analysis
 The key is to segment the customer base, determine revenues,
attribute costs and also have an activity-based costing approach. 
Segmenting customers
 The base for a profitability analysis is customer segmentation.
 This will differ across industries and companies.
 It can be demographic based on customer age, income, area, etc.
 It can also be psychographic that is based on customer needs,
behaviours, values, interests, and attitude.
Revenue Attribution
 Once segmentation is done, you need to calculate revenue for
each segment.
 The annual revenue is a sum of all segments.
 Adjustments like discounts, fees, service charges must be
included and adjusted accordingly.
Cost attribution
 Calculate the annual cost per segment.
 This will be customer costs, service costs, product costs,
sales, marketing, and distribution costs.
 These costs are usually hidden and need to be added to
determine the cost attribute.
Analysis – Profit, Less profitable, unprofitable
 Profitable customer segmenting also requires analysis of
segments.
 Classifying those segments that have better revenues over
costs is necessary.
 It must include calculating profitability over the lifetime
of customers.
Develop strategies to maximize profits based on focus on specific
segments
 The next step is to create strategies that increase revenues, create long term
relationships, and enhance customer retention and loyalty programs.
 Strategies can include elimination of least profitable aspects, re-
engineering customer groups into profitable ones by increasing revenue
and decreasing costs.
Review the Impact
 Any new strategy or practice needs to be implemented and worked up
accordingly.
 This needs to be reviewed after appropriate periods of time to understand
impact on customers.
Wrapping Up
 Companies most often do not have the right resources to accurately
calculate the CPA.
 The activity-based costing, and hence customer profitability analysis, is
not easy to calculate because the cost of resources is often blurry for each
activity.
 Future Trends in CRM
Integrating Data from Multiple Channels
 The CRM solution provides on moving social media data to more
secure communication channel.
 Integrating unstructured data coming from multiple channels such as
Email and mobile smart phones.
Handling Big Data
 As the data is penetrating from multiple channels with high volume,
velocity, and variety, the CRM solution providers are exploring how
this big data can be managed well to be able to use effectively.
Shifting to Cloud-based CRM
 The businesses are preferring cloud-based CRM software to
overcome the problems with on premise CRM software, in which
every new feature development requires an expensive upgrade.
 The cloud-based CRM also lessens the burden of business for
investing in infrastructure.
Social CRM
 The customers are into the practice of reading reviews,
recommendations, and judging the product or service before
deciding to purchase.
 The businesses are keen to employ social CRM tools in their CRM
software as the social media can bring an insight of customer
preferences and behavior.
The Mobile CRM is Expected to be Powerful
 Today’s CRM solution providers are investing a handsome amount
to bring more rigor in the mobile platforms of CRM applications.
Using CRM data effectively
 The historical and current data of the customers is so huge that
the CRM users spend more time in entering the same in the system
than using it effectively for beneficial purpose.
 CRM solution providers are also working on providing simpler and
easier ways of handling customer data using mobile devices.
CRM Software Systems with Wearables
 It is the next big revolution in the development of CRM software
systems.
 Wearable are the devices worn by the consumers to track their
health and fitness information.
 If CRM applications are integrated with wearable computing devices,
then the businesses can get benefited by having real time
information of customers and access to their account data.
 The businesses can then engage with their customers effectively and
discover opportunities of selling and enhancing customer
relationships.
Creating Best Customer Experiences
 The customers remember business products and services by
associating with best and worst experiences.
 The businesses using CRM are placing the activities related to
making their customers feel good in their list of top priorities.
 CRM to XRM
 XRM is evolved CRM.
 There is little limitation in the word CRM which depicts
Customer Relationship Management.
 XRM is eXtreme Relationship Management, or Any
(replace X with any value) Relationship Management.
 The scope of XRM is different and larger than the scope of
CRM.

 For example, a business is managing contracts, grievances,

policies, building assets, parking violations, property taxes,
etc. The list is near to endless. This all management is
catered by XRM, a business can manage the relationship of
anything within itself.
 CRM and Cost-Benefit Analysis
 In order to establish a business case for pre-project planning, and
post-project success measurement, we must assess
implementation costs, benefits, and risk.
1.Implementation Costs:
 Basically, implementation costs should include CRM
software licensing and maintenance or support contracts;
EDI, database, operating system and other software licensing
and maintenance or support contracts; hardware purchases and
maintenance or support contracts including servers, storage and
network upgrades (as required); software integration and
customization, including design, development, test and ongoing
maintenance; implementation labor; ongoing administration
and support labor; planning and requirements meetings; user
training and learning time; and process change management.
 2. Tangible and Intangible Benefits:
 Benefits typically include increases in staff productivity, cost
avoidance, increased revenue and margin, and reduced
inventory through the elimination of errors. Benefits could be
divided into tangible and intangible benefits.
i) Tangible Net Benefits: A clear and precise cost-benefit analysis
which tallies all of the planned project costs quantifies each of the
tangible benefits and calculates key financial performance metrics
such as ROI, NPV, and payback period.
ii) Intangible Benefits: A total of the expected intangible benefits
should include key performance indicators (KPI) that will be used
to measure success or shortfalls of CRM project. These are a handful
of areas of improvement that should be considered.
3) Risk Assessment: Risk Assessment is also essential for CRM
project success, because the evaluating the risks of people,
process, and technology can proactively mitigate their
probability and manage their impact on project success.
CRM and Relationship Marketing
 Relationship Marketing is being spoken of as one key Business
Philosophies of the progressive Organizations who are
Customer Oriented or Customer Centric.
 Companies have realized that to be successful on the long term
path of successful business, they need to be closer to the market,
get under he skin of the Customer, anticipate customer needs and
engineer products and services to satisfy the customer and engage
their loyalty.
 As competition is increasing, product innovation is definitely one
of the key important elements that the Organizations need to
depend upon to steer themselves ahead in the market.
 Along with the technical leadership the companies necessarily
need to know how to reach out to the Customer.
 Engaging the Customer, understanding the Customer and
building relationship has become the need of the day.
 One of the outcomes of the evolution of Relationship
Marketing has been the birth of CRM solutions.
 Besides CRM we have also seen the birth of new
departments and disciplines in Organizations namely
Customer Service Department as well as Key Account
Management.
 Relationship Management forms part of the vision and
business ethics that the Company envisages to imbibe as its
core value system.
 When an Organization chooses to build its business blocks
around Relationship Management, the Organization is
connecting its Profit Making goal with Customer
Relationship to build a synergy by which all the divisions
as well as the functions of the Organization look at their
function and business through the RM lens.
 CRM on the other hand can best be described as an enabler of RM in
any Organization.
 CRM involves process including software and hardware components
that automates and helps manage customer engagement.
 While RM works at a strategy level, CRM helps implement the
Strategy.
 Relationship marketing has been defined more popularly with a
focus on individual or one-to-one relationship with customers,
integrating database knowledge with long term customer retention
and growth strategy.
 The core of CRM and relationship marketing is the focus of co-
operative and collaborative relationships between the firm and its
customers and for other marketing factors.
 It must, however, be noted that CRM programs now visualize a wider
spectrum of efforts other than data-based one-to-one relationship
with customers, which characterizes relationship marketing.
 Relationship marketing is emerging as the core marketing
activity for businesses operating in fiercely competitive
environments.
 The practice of relationship marketing also has the potential to
improve marketing productivity through improved
marketing efficiencies and effectiveness.
 Important Questions
1. Define CRM. Discuss the factors responsible
for CRM growth?
2. Explain CRM Process and Elucidate on
benefits of CRM?
3. Discuss different Types of CRM? Explain the
Future Trends in CRM?
4. Discuss the Cost-Benefit Analysis of CRM?