Shailesh Kaushik

NSUT
B. F.tech.-3rd sem.Marketing

Customer Relationship Management

 Customer Relationship Management
• “The customer is king” is a fact that can be learned very quickly when doing more
business with existing customers.
• A management philosophy according to which a company’s goals can be best
achieved through identification and satisfaction of the customers’ stated and
unstated needs and wants.
• It describes the strategy that a company uses to handle customer interactions.
Savvy retailers have found that selling to existing clients is far more
profitable than spending to market to new potential customers.
• The objective of a CRM strategy is to maintain a sustainable relationship
with customer. For execution of the CRM strategy, one has to create certain
incentives and dis-incentives in order to influence customer behavior. CRM
programme such as loyalty programmes are designed for achieving the same.
 The CRM programme help businesses track customer
contact information, past purchases, items of future
interest, key dates such as birthdays and anniversaries,
and more.
 Putting this information to use empowers retailers to earn
profits by doing more business with one of their biggest
assets, their customer bases.
 CRM Systems come in all flavors, with options designed
specifically for various retail stores, sizes of companies,
and marketing channels.
 CONCEPT OF CRM
 Every business has to focus on the needs of the customer.
 CRM (Customer relationship management) is the array of processes that help a company to
understand the preferences or dislikes of individual customers in order to build lasting
relationships.
 CRM solutions help to safely store volumes of customer data in an organized easy-toaccess
manner.
 By analyzing this data businesspersons can determine individual customer behavior,
analyze preferences and provide one-to-one services to maximize customer satisfaction.
 Such a customer-centric approach helps to augment customer loyalty and increase their
value to the company.
 CRM, Customer Relationship Management is a business strategy that enables organizations
 to get closer with their customers,
 to better serve their needs,
 improve customer service,
 enhance customer satisfaction and thereby maximize customer loyalty and retention.
 The present business scenario assigns great emphasis on managing business customers.
 Organizations are quickly recognizing that in order to survive competition it is important to grab
customer attention with unique brand identity and superior service levels.
 Businesses which initially focused on finance / sales / marketing management are now shifting their
priority towards customer relationship management.
 CRM solutions are flooding the market with easy-to-use tools to manage business customers.
 The CRM is a set of internal standards and business protocols related to customer service (the type of
service you want or would want to provide for buyers).
 Quite often, to increase corporate profitability, we segment customers into several categories (for
example, with the aid of ABC analysis) and develop various methods to serve buyers depending on
which group the customer belongs to.
 It refers to the methodologies and tools that help businesses manage customer relationships in an
organized way.
 CRM, Customer Relationship Management is a business philosophy towards customers. To focus on
their needs and improve customer relationships, with a view to maximize customer satisfaction.
 It encompasses the variety of technology employed to streamline customer interaction to find,
acquire and retain customers. For small businesses, customer relationship management includes
● CRM processes that help identify and target their best customers, generate
quality sales leads, and plan and implement marketing campaigns with clear
goals and objectives;
● CRM processes that help form individualized relationships with customers (to
improve customer satisfaction) and provide the highest level of customer service
to the most profitable customers;
● CRM processes that provide employees with the information they need to know
their customers’ wants and needs, and build relationships between the company
and its customers.
 Customer relationship management tools include software and browser-based
applications that collect and organize information about customers. For
instance, as part of their CRM strategy, a business might use a database of
customer information to help construct a customer satisfaction survey, or
decide which new product their customers might be interested in.
 Need for CRM System in Retail CRM in Retail

The need for CRM system is as follow:

a) Background
i) Retailers find it increasingly difficult to maintain records of their rapidly growing number of
consumers.
ii) Analysis of data from multiple systems for campaigns, sales, service and communications is
unavailable on a single interface.
iii) Forecasting demand, buying habits and expenditure are time consuming and often inaccurate.
iv) Memberships, rules, accruals, profiling and segmentation for loyalty programme is often scattered
and not available at a centralized location.
b) b) Challenges
i) Managing customer data so that there is optimal visibility for profiles, communications, services and
analytics.
ii) Tracking request, queries, feedback, complaints and surveys from customers across multiple
geographies.
iii) Centralized data on stores and their specific campaigns.
iv) Calculating marketing ROI and related reports for analyzing critical data.
v) Acquisition management for franchisees.
vi) Keeping track of suppliers and purchase orders
 Deployment Strategies Best-of-breed CRM systems such as Microsoft Dynamics CRM, Sage ACT, and
Salesforce.com can be implemented as standalone systems to track customer information.
 However, many retailers will choose to implement CRM programmes as part of an integrated suite of
modules for point of sale (POS) and inventory control.
 The decision as to how to implement software will be based on the size of the company and the
extensiveness of the buyer’s needs. Typically these requirements generally vary by the scale of operation
of the retailers and his customer orientation. These requirements can be broadly categorized under the
following types:-
 ● Small buyers: Small retailers with fewer than five locations will find that their CRM needs are often
met sufficiently by POS software that includes modules for customer information tracking. These POS
systems integrate sales, inventory, and customer data into one system. It makes easy for small businesses
to market to a smaller user base.
 ● Best-of-breed buyers: These buyers typically work for larger retail businesses. They have much larger
customer bases than small businesses and have a lot more to gain. Their marketing needs are typically
more robust due to promotions, new product offerings, and the size of their customer databases.
 ● Multi-channel retailers: These buyers work for organizations that do extensive sales across numerous
channels including websites, brick and mortar locations, and special events. They are collecting
customer information from a wide variety of sources and marketing to customers via email, phone, and
print campaigns
Trends in Retail CRM Systems The primary trends impacting retail CRM systems include
the following:
 Social Media: This is perhaps the biggest trend impacting how retailers and consumers
interact. Social media includes the various online technology tools that enable people to
communicate easily via the internet to share information and resources. It includes
web-based and mobile technologies used to turn communication into interactive
dialogue between organizations, communities, and individuals.
 Many CRM providers are beginning to offer integration with Face book and Twitter,
enabling retailers to reach prospects and build brand awareness.
 Group buying sites such as Groffr provide an additional channel to reach new buyers
and market accordingly. Retailers should consider their CRM vendor’s strategy and
offering when it comes to embracing social media.
 Outsourced CRM Solutions: Increasingly retailer are turning to outsourcing providers
for hosted enterprise IT systems and Software as a Service (SaaS) CRM delivery
options. These solution come out-of-box with the possibility of customization. The
major benefit is that they can be implemented faster.
  POS and ERP vendors as CRM vendors:
 Best-of-breed CRM vendors such as Salesforce.com are finding the market
increasingly crowded by POS and ERP vendors offering competitive CRM
systems.
 Due to the complementary nature of POS for small businesses and ERP for
larger businesses, many retailers are turning to them for CRM solutions.
 Lead nurturing & scoring: As buyers conduct more and more research via
the web, they become empowered in the buying process. They want
contact on their own terms and at their own pace.
 Therefore, CRM vendors have developed marketing automation tools to
enable vendors to nurture these prospects and score them based on
demographics, buying intent, decision-making timeframe, past purchases,
and more criteria. Automated email, mail, print, and phone campaigns can
be conducted based on lead scores, enabling retailers to deliver the right
message to prospects at the right time.
Considerations while Implementing a Retail CRM System Following points need to be considered while
implementing a Retail CRM System
● Evaluate the Need: The retailer needs to formulate a deployment strategy based on the needs and target
customers.
● Basic Characteristics of a Retail CRM System: In order to be effective the Retail CRM system should:
i) Have the ability to recognise a customer with unique ID
ii) Should be integrated with POS System
iii) May be card based or card less
iv) Ability to run communication campaign
v) Ability to study customer behaviour and divide into segments based on various parameters.
● SaaS Model: Implementing a CRM System can be an expensive proposition. It makes sense to consider
Software-as-a-Service applications where they are typically priced on a monthly basis. The retailer can discontinue
any time if they are not getting a return on their investment (ROI).
● Integrated CRM System: POS applications that include CRM in the suite typically CRM in Retail offer
inventory control and sales management functionality that retailers will require anyways. This integrated solution
can bring in better focus and can reduce duplication of data. This in turn would bring greater efficiency to the
overall business of the retailer. However this should be considered after evaluating the current and future
requirements of a business.
● Hidden Cost of CRM Implementation: The costs of executing marketing campaigns (postage and mail supplies,
bulk email software, and employee time) can be hidden costs that need to be factored in when considering the total
cost of retail CRM system.
Integration with other office functions: To truly accomplish the customer experience, along
with the CRM System, the retailer must address the back-office, integrating multiple
technologies such as point-of-sale, accounting, inventory, human resources, and marketing,
with mobile and social media, among others.
● Benefits of Implementing a CRM System: A strong CRM system should benefit
organizations in various ways. Most retailers should expect to note the following benefits
when properly using a CRM system.
● Efficiency: Good programmes will help retailers automate the cumbersome tasks of
assembling prospect lists, sending bulk physical mail or email campaigns, and tracking
campaign performance. Systems can also provide automated reminders for key dates such
as birthdays, anniversaries, and holidays.
● Customer retention: Keeping in regular contact with customers enables retailers to build
relationships with customers and keep their repeat business. Systems can also prompt
retailers to contact customers at regular intervals after sales are complete.
● Increased margins: By using CRM systems effectively, retailers should be attuned to
customers’ preferences and be able to offer more of what they want, leading to increased
sales and fewer purchases of unsold items. Retailers should find that implementing a CRM
system is fairly low-risk
SOCIAL CRM - is a strategy of moving targeted individuals from fan and
followers to customers and advocates.

 Social CRM is first a strategy that is often supported by various tools and
technologies. The strategy is based around customer engagement and
interactions, with transactions being a byproduct.
 Social CRM is still about CRM (but evolved), meaning a back-end process
and system for managing customer relationships and data in an efficient and
processcentric way.
 Social CRM mean different things to different organizations. The key is
being able to understand the business challenge you are looking to solve, and
then solving it.
 Social CRM is one component of developing a social or collaborative
business, both internally and externally
In figure 8.2, you can see many of the same elements as in CRM; however, there are a few
differences.
 PR now has a very active role in social CRM (in fact, PR typically owns budgetary control
and authority of social initiatives ahead of every other department).
 In most organizations, PR departments manage the social presence of brands and handle the
customer engagement.
 The next change we can see is that advocacy and experience are crucial components of
social CRM, which all revolve around the customer.
 In the first CRM image above, you will see that the customer is not really a part of CRM—
there is no collaboration, no relationship.
 In social CRM, that has completely changed. The customer is actually the focal point of how
an organization operates.
 Instead of marketing or pushing messages to customers, brands now talk to and
collaborate with customers to solve business problems, empower customers to shape
their own experiences and build customer relationships, which will hopefully turn into
customer advocates. It is very important to keep in mind that social CRM is not a new
“thing” that replaces CRM, it is simply an evolution of what CRM has always been
 building fan pages on Face book, Twitter streams, keeping in touch with exciting new
services like group purchases, building capabilities to monitor and participate in
discussions in forums, creating loyalty programmes, and so on.
 Look at figure 8.3 which shows evolution of social CRM.
 Another main challenge is that fending off possibly disruptive attacks and staying in the
minds of customers is a costly exercise – and retailers often run on slim margins.
 This means that activities need to be organized and efficient while making sure that the
customer experience is consistent across all channels or touch points, like radio, TV,
store, point of sale, web site, general marketing collateral, apart from Face book, blog
sites, Twitter, and so on and so forth.
 The key word here is consistent; the experience does not need to be the same. This is
because there is a vast difference between radio and TV or between Face book and
Twitter as medias. The current buzzword for achieving and maintaining this
consistency is customer experience management
 Implementing Social commerce and F-Commerce (e-commerce via Face
book) is thus about keeping the organization in the minds of customers.
 Social CRM needs to be also integrated CRM, loyalty management,
mobile and ecommerce along with support from the back end systems.
 There are tools and technologies to support social web, from (community)
platforms via monitoring and listening tools.
 It is also important that other business processes such as marketing,
sales and service should be well integrated with CRM.
 Having said this, Social CRM is an extension of CRM. Thus, it is
important the retailer first implement, manage and maintain a CRM
and then take to Social CRM as its logical extension. This can be easily
done by adapting to the needs and demands of these new social customers,
thereby ensuring success of the initiative
 Customer Relationship Management is a customer-focused business strategy designed to optimize
revenue, profitability, and customer loyalty.
 By implementing a CRM strategy, an organization can improve the business processes and
technology solutions around selling, marketing and servicing functions across all customer touch-
points. A primary objective of CRM is to provide the entire organization with a complete, 360-
degree view of the customer, no matter where the information resides or where the customer
touchpoint occurred.
 Trends in CRM are: Social media, Outsourced CRM Solutions, POS and ERP vendors as CRM
vendors and lead nurturing and scoring.
 A strong CRM system should benefit organizations in various ways such as efficiency, customer
retention and increased margin etc. Following points need to be considered while implementing a
Retail CRM System: evaluate the need, Basic Characteristics of a Retail CRM System, SaaS
Model, Integrated CRM System, hidden cost of CRM implementation,Integration with other office
functions. Social CRM is different from CRM and is defined as “a process to monitor, engage
and manage conversations and relationships with prospective and existing customers and
influencers across the internet, social networks and digital channels”. “Loyalty is a positive
belief, generated over the course of multiple interactions, in the value that a company and its
products and/or services provide, which leads to continued interactions and purchases over
time
KEY WORDS
 CRM : A management philosophy according to which a company’s goals can be best
achieved through identification and satisfaction of the customers’ stated and unstated needs
and wants.
 Social CRM : It is one component of developing a social or collaborative business, both
internally and externally.
 Social Media : It includes the various online technology tools that enable people to
communicate easily via the internet to share information and resources.
 Multi-channel Retailers : These buyers work for organizations that do extensive sales
across numerous channels including websites, brick and mortar locations, and special
events.
 Best-of-breed buyers : These buyers typically work for larger retail businesses. They have
much larger customer bases than small businesses and have a lot more to gain.
 Point of Sale (POS) : The physical location at which goods are sold to customers. The point
of sale is often more specific than the general building or store where something is sold,
typically indicating the piece of technology which is used to finalize the transaction