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Customer Relationship Management

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Customer Relationship
Management

ARDHARIKSA ZUKHRUF
KURNIULLAH, M.MED.KOM
Published By: Book Rivers
Website: www.bookrivers.com
Email: publish@bookrivers.com
Mobile: +91-9695375469

Place: Lucknow
First Edition: 2022

MRP: 480
ISBN: 978-93-5515-168-1

Copyright©: Authors

All Rights Reserved

No part of this publication may be reproduced, transmitted or
stored in a retrieval system, in any form or by any means,
electronic, mechanical, photocopying recording or otherwise,
without the prior permission of the author.
[Printed In India]

Page | ii
Chapter 1: Introduction to CRM 1
1.1 Introduction 1
1.2 Functions of CRM 5
1.3 Definition of CRM 6
1.4 Why CRM is needed in today‘s business environment 10
1.5 Difference between CRM and ECRM 12
1.6 CRM advantages 15
1.7 Overview of CRM and major CRM players 18
Chapter 2: Major Perspectives of CRM 22
2.1 Strategic CRM 23
2.2 Operational CRM 26
2.3 Analytical CRM 30
2.4 Collaborative CRM 31
2.5 Misunderstandings about CRM 32
2.6 Defining CRM on the basis of misunderstandings 35
2.7 CRM Constituencies 37
2.8 Commercial contexts of CRM 38
2.9 Models of CRM 40
2.10 Summary 44
Chapter 3: Managing networks for customer 45
relationship management performance
3.1 Network 46
3.2 Business networks 47
3.3 Network position 48
3.4 Business networks and CRM 50
3.5 The scope of CRM 51
3.6 Supplier networks 52
3.7 Distribution networks 54
3.8 Principles of network management 55
3.9 Management of networks 56
3.10 Management in networks 59
3.11 Research into network competence 60
3.12 Summary 60

Chapter 4: Managing investor and employee 62

relationships
4.1 Owner/investor relationships 62

Page | iii
4.2 Internal marketing 67
4.3 Empowerment 69
4.4 Employee relationship management (ERM) software 70
applications
4.5 Summary 71
Chapter 5: Information technology for customer 72
relationship management
5.1 Origins of CRM technology 72
5.2 The CRM ecosystem 74
5.3 Hardware and infrastructure vendors 76
5.4 CRM solutions 77
5.5 Sales 79
5.6 Partner relationship management (PRM) 80
5.7 CRM analytics 81
5.8 CRM architecture 84
5.9 Multichannel CRM 85
5.10 Mobile and wireless solutions 86
5.11 Integration 87
5.12 Knowledge management 91
5.13 Summary 93
Chapter 6: Sales-force automation 95
6.1 Sales-force automation 95
6.2 SFA software functionality 98
6.3 SFA adoption 105
6.4 Summary 107
Chapter 7: Developing, managing and using customer- 109
related databases
7.1 What is a customer-related database? 109
7.2 Select the database technology and hardware platform 119
7.3 Desirable data attributes 125
7.4 Data integration 127
7.5 Summary 139
Chapter 8: Customer portfolio management 140
8.1 Portfolio 140
8.2 Sales forecasting 148

Page | iv
8.3 Summary 153
Chapter 9: Customer strategy and research appr 154
9.1 The role of customer strategy 154
9.2 Research approach 156
9.3 The Relationship between Service Quality Attributes 161
and Customer Satisfaction
Chapter 10: Future development of CRM 170
10.1 Future of CRM 170
10.2 People and process metrics 173
10.3 Identifying barriers to CRM success 177
10.4 Delivering business benefits 179
Bibliography 182

Page | v
Page | vi
 CHAPTER-1
INTRODUCTION TO CRM

1.1 Introduction
Customer Relationship Management (CRM) is a method for
organizing a company's connections with its current and potential
customers (CRM). Companies leverage customers' prior contacts
with them to establish deeper commercial relationships, which in
turn increases revenue. It is critical to have CRM systems in place
that gather data from a wide range of sources, such as a company's
website and other marketing materials as well as phone and email
calls and e-mails. CRM strategies and the technology that enable
them help businesses better understand their target consumers and
how to effectively serve them. ‗CRM is used by companies to
monitor and analyze customer interactions and data throughout the
customer lifecycle, with the goal of increasing customer service
relationships, boosting customer retention, and driving sales
growth through greater sales and market share. There are several
ways that CRM systems collect information about customers.
These include phone numbers, live chats and direct mail. CRM
systems allow customer-facing employees to get access to a wide
range of client data, including personal information, purchase
history, preferences, and concerns. Businesses have learned a lot
about customer relationship management in the previous several
years (CRM). This year, businesses learned what they need to do
better and what they should avoid doing. There is no uniform
formula for maintaining customer relationship profitability, as a
result of this learning experience. Nowadays, CRM is a crucial
element of the marketing ecosystem's infrastructure. It is presented
with both worldwide difficulties and possibilities for marketing.
Firms may target individual clients for specific product or service
offers with the use of this tool. Due to a lack of focus on
Page | 1
consumers, CRM has been said to be ineffective. Competition is
predicated on how quickly a company can adapt its services and
goods to meet the needs of the market. As a result, it is impossible
to attain this goal without enhancing customer interactions (Roh et
al, 2005). Customer loyalty may be readily achieved via a good
working connection. Because of the move in marketing toward a
focus on the customer, understanding consumer behavior and
segmentation is becoming more crucial. Thus, the transfer of
power from suppliers to purchasers. As a result of accurate client
data, businesses can better understand and satisfy their consumer
base. According to a number of studies (such as Bose, 2002; Ahn
et al., 2003), organizations that want to achieve greater market
share must change from mass marketing to client orientation.
Companies must discover lucrative clients, serve them, develop
current connections, and ultimately invest in loyalty programs to
keep customers. Customers, not things, are the source of profit in
today's corporate environment. And acquiring and retaining
consumers is the only goal of every firm (for example loyalty
schemes). An organization's most valuable resource is its
customers (Reichheld & Kenny, 1990). Once a corporation
recognizes the value of creating client connections, it must identify
with which consumers a tighter relationship is needed. This can
only be accomplished if the organization values its ties with its
customers. The primary goal of valuing a connection is to use that
information to develop effective marketing plans. As a
consequence, prioritizing and focusing on the most important
connections is a need. The less valued client connections must also
be examined to determine if there are ways to increase their
profitability.
CRM is a business approach that encompasses all aspects of
your company, from the front office to the back office. Putting
clients first is a promise you make as an entrepreneur. CRM

Page | 2
strategies and solutions that are appropriate for your business may
assist you in the following ways:
 Your clients should be able to get accurate information and
tailored assistance at any time, from any location, through any
channel.
 Increase client retention and loyalty by taking advantage of
chances to up-sell and cross-sell and generating recurring
business at a reduced cost to reach a larger number of
consumers.
 When your customers have access to additional information via
self-service and assisted-service capabilities, you can increase
your company performance.
 Consider using virtualization in your company as more of your
employees and resources move outside of the office.
 Make the most of your CRM investment by balancing
advanced capabilities with speedy setup and excellent support.

Figure 1-Customer Relationship Management

Page | 3
 A broad variety of tasks are handled by Customer
Relationship Management. Following is a brief description of
some of these functions:
Obtaining & Maintaining Knowledge
It is one of CRM's most critical functions. It gathers and
saves market data about potential clients. Databases house all of
the acquired data.
This information is readily available at any time and from
any location. Businesses utilize the data they gather to better
understand the habits of the people who buy their products. This
will ultimately lead to increased customer satisfaction.
Taking Care of the customer
CRM plays a crucial role in customer management. In
accordance with their behavior and nature, it separates and
organizes all clients into several categories. Customers may be
better served by being segmented.According on the customer's
group, they will get a varied level of service. Customers'
relationships will improve as a result of this. When customers are
treated with respect and consideration, they are more likely to
return.
Promotional Policy Administration
It focuses on tailoring marketing campaigns to the needs of
individual companies. Customer-specific marketing techniques are
the primary goal of this approach. Every effort is made to increase
the number of clients. Based on the data gathered, salespeople get
the appropriate training. Marketing plans take use of any openings
that present themselves in order to attract new clients.
Increase Sales
Relationship Management strives to boost sales and profits
for the company it aids in attracting new clients as well as retaining
Page | 4
current ones. Increasing sales with current clients is a primary goal
of CRM's cross-selling and up-selling strategies..Cross-selling and
upselling are effective in expanding business with consumers after
they are pleased and contented. Customers begin to trust a certain
brand and begin to experiment with all of its offerings.
A reliable system for exchanging information
CRM plays a crucial role in providing excellent customer
service. Its mission is to provide the finest possible service to its
clients at all times. In order to address all of the concerns and
questions of consumers, a dedicated channel has been set up. A
customer's problem may be quickly and simply remedied by
contacting the operators. It is mandatory for customer service
representatives to maintain a log of all interactions with clients.
1.2 Functions of CRM.

Figure 2-Functions of CRM.

Keeping tabs on costs
One of the most difficult tasks facing any company is
reducing expenses. In order for a business to succeed, it must be
able to provide higher-quality items at a lower price point. Reduces
Page | 5
the costs of company by reducing the amount of paperwork
needed. There is a central database where all data is saved
digitally. It also decreases the need for human resources in the
workplace. Overall, it reduces costs and raises profits. Customer
Relationship Management (CRM) attempts to improve the quality
of firms' products and services. Customers' wants may be better
understood thanks to the CRM technique's use of data. This data is
then utilized to tailor the products and services that companies
provide to their clients. Products and services are tailored to meet
the specific requirements of individual customers. This contributes
to a happy and contented consumer base. It also checks to see
whether the product is fulfilling the minimal quality standard level.
1.3 Definition of CRM
Managing all of your company's connections and interactions
with clients and prospective customers is the goal of customer
relationship management (CRM). The end goal is clear: To
enhance business connections. A CRM system helps businesses
remain in touch with customers, reduce procedures, and increase
profitability. A CRM system, or customer relationship
management software, is commonly meant when the term "CRM"
is bandied around. Customers, service users, co-workers, and
suppliers can all benefit from a CRM solution because it enables
you to keep track of your interactions with each of these
individuals throughout the entire lifecycle of your business
relationship, from prospecting for new customers to winning their
business to providing ongoing support and services to existing
ones.
Evolution of CRM
Customer relationship management (CRM) uses a wide range
of technologies, but they all have the same end goal: getting to
know their consumers better so that they can give them with
consistently positive experiences.After ERP's popularity waned in
Page | 6
the 1990s due to the emergence of a more customer-centric
mindset, the term "customer relationship management" (CRM)
debuted on the market. The CRM idea aims to improve the
interaction between customers and businesses. These days, CRM
systems are seen as a necessary need and a valuable tool for
increasing profitability (Meyer, 2005).Businesses' top executives
have a hard time figuring out their return on investment (ROI)
when it comes to customer relationships, and this is a major
problem. Since its inception in the 1960s with the "Customer
Orientation Concept," the customer relationship has matured
(General Electric). A lot more goes into customer relationship
management (CRM) than just gathering consumer data,
advertising, and promoting new items. Corporations are placing
customer relationship management at the heart of their business
strategy in order to learn and understand the customer's demands,
as well as making it easy for customers to conduct business with
the firm. It's true that CRM is an assessment of relationship
marketing, but it's not all. In order to close the gap between the
firm and its customers, CRM encompasses and supports a wider
range of areas, including sales, marketing and customer service.
CRM, on the other hand, aims to better manage the acquisition,
retention, and growth in value of customers. Customer relationship
management (CRM) deployment has the following benefits:
Improving the quality of one's business ties with clients (greater
customer satisfaction, retention, and loyalty), providing and
disseminating consumer data within the company Assisting with
consumer segmentation Efficient use of resources (low expenses,
and competitive price) This has led to over $2.3 billion in CRM
software investments since 2003, and the industry is estimated to
reach $2.9 billion by 2007 (Topolinski, 2003), with a total annual
market value of about $14.5 billion by that time. The government
sector is also quickly embracing and implementing CRM concepts.
Consequently, CRM solutions are anticipated to help businesses

Page | 7
and their customers work together more effectively.A look back at
the growth of CRM systems will show exactly how critical this
issue is.
– The Start: Paper, a pen, a pad, and a file system were utilized by
the business to gather and monitor consumer data.
– 1980:
• Database Marketing started
• Businesses could now evaluate client information
• The era of Customized Communications began
• With computers entering the market, spreadsheets took over.
– 1990:
• When it came to software, things were looking up.
• The beginning of the automation of the sales force.
– 1995: The word CRM was coined in the late 1990s,
• when mobile and SaaS began to take off.
• The first mobile and SaaS solution was released into the
marketplace.
-2000s: The Age of Entrepreneurship and New Ideas
• All of a company's interactions and operations can now be
managed on a single CRM platform.
• Cloud adoption and mobile CRM were revolutions.
• The term "Social CRM" became well-known.
– 2010s: The Age of Automation, AI, ML, IoT, Blockchain
• CRM connection with BI services & communication systems
• Robust CRM tailored for diverse industry verticals, LOB, sales
process or market emphasis
Page | 8
• Improvements in data analytics reporting and visual dashboards
• Extensive usage of AI and ML

Figure 3-Evolution of CRM

Evolution of CRM
There are several ways in which a CRM system may benefit
you and your company. Here is some of a handful:
• By offering a centralized solution for tracking leads, managing
sales pipelines, and generating sales projections, it boosts sales
productivity.
• Customers' preferences, decision-makers, and more are all
provided to your sales staff via this tool.
• It helps you remain in touch with your consumers, streamlines
the sales process, and improves visibility within the sales
organization.

Page | 9
• In addition, it assists your marketing team by allowing them to
nurture prospects over time using EDMs. Drip marketing is a
whole new world to you.
• It helps you get insight into your consumers' habits and improve
your marketing efforts.
• Features like sentiment analysis, automatic ticketing, and
customer service automation help keep customers happy.
• Your customer service will improve as a result of using this tool.
1.4 Why CRM is needed in today’s business environment
CRM software gives the convenience of centralizing all of
your customer-related data, notes, KPIs, and more.With a CRM
platform, companies can target different audiences, create scores
and alerts based on the actions of specific leads or customers, work
proactively with contacts, and keep relationships strong. For the
best customer service possible, a CRM system may be used by
several departments, allowing all customer-facing workers in an
organization access to relevant data.
CRM has several advantages for a business. Six advantages
of CRM solutions apply to all users, regardless of department or
industry:
First and foremost, you can rely on us.
1. Reporting
Data from a wide range of sources, including social media,
Google Analytics, enterprise software, and CRM, is critical to the
success of businesses. Data must be sorted, cleaned, analyzed, and
interpreted before it can be put to use. Businesses of all sizes rely
on metrics produced from social media platforms. Google
Analytics is a popular tool used by many business owners to track
the number of visitors to their websites. These tools alone will not
be enough to get the job done.All of your data and analytics may
Page | 10
be studied more thoroughly when you employ a CRM system.
With the aid of your CRM software, you can assemble, tabulate,
and arrange error-free data. Reporting functions may be used to
understand this data. CRM systems have a cascade impact on the
rest of the organization because of this one feature. Because they
track who and how customers interact with your organization,
CRM solutions have an advantage over other systems for
managing customer interactions. According to a company's landing
page, someone who spotted an ad on social media and chose to
take action filled out the form. An additional tool for gaining
insight into your prospects and customers is the ability to run
reports.
2. Dashboards that Present Data in a Graphical Format
Your company's data must be manually entered or imported
into a spreadsheet before it can be analyzed and presented in a
visually appealing fashion. This is all handled via CRM. Another
CRM perk, the dashboard, is available after you've invested in the
platform. For any employee that has access to your CRM platform,
you may build up a dashboard. If you're a marketing director, for
example, you'd be particularly interested in the click-through rates
for each email campaign. They may build up a dashboard that
shows how many individuals received a certain email, how many
read it, what the click-through rate was, and more. It's important to
know how many calls are made every hour, as well as how many
of those calls result in a positive action, such as an appointment or
demo. Using dashboards, users don't have to filter, sort or run a
report to view the data that's most relevant to their processes.
3. Automated Outreach with a Greater Focus on Individuals
In both your manual and automated initiatives, you can
generate more relevant, personalized message and outreach since
you are always acquiring data and insights about your audience,
market, and industry. Dynamic content and automated messaging
Page | 11
have a major benefit here: You may create drip campaigns for
those who have a common interest, such as an interest in a niche
product. Many CRMs provide this feature, which allows you to
build up a series of automated emails that are sent only to a certain
group of recipients and are only sent in response to certain events.
Every stage of the sales process benefits from drip programs. On a
tour company's website, for example, you may start drip
campaigns for customers who construct unique itineraries for
Southeast Asia instead of sending them generic emails about
travel. You can also automate the process of removing a subscriber
from a drip campaign depending on their behavior. As an example,
your platform will immediately remove a person who had shown
interest in a vacation to Thailand from a drip campaign when they
book the itinerary.
4. Preventative Care
Like in the case of the marketing funnel, your CRM
platform's data may be used to help your sales force or customer
support enhance their capacity to serve clients. Having an
understanding of a customer's interests may help the sales team or
a support agent better serve the customer's wants and resolve
issues. For a customer care staff, this is a huge plus! There's no
need for a person to go through irrelevant data when pertinent data
is readily accessible in dashboards and cases. In addition to saving
everyone time and making your prospective and present customers
feel valued, a more proactive and informed sales and customer care
team will also enhance your bottom line.
1.5 Difference between CRM and ECRM
In today's world, everything has changed, including company
practices, processes, and management. There has been a lot of
technology innovation in the business sector as a result of the
Internet. ECRM has had a major influence on the success of
businesses since it was first introduced in the 1990s, when CRM
Page | 12
was the only option to create customer relationships and move a
company forward. Let's take a closer look at the differences
between them now.CRM is an acronym for Customer Relationship
Management, which is what this term refers to. CRM is based on
conventional methods like web-based and retail shop, telephone or
fax client interaction, but CRM incorporates procedures and
systems that allow a company to build, manage and monitor
relationships and contacts with its customers for the success of the
firm. The nature of the connection in Customer Relationship
Management (CRM) is straightforward and static.ECRM stands for
Electronic Customer Relationship Management. Customer
relationship management (CRM) has advanced thanks to its
incorporation into an E-Commerce setting and distribution over the
internet. Everything is done online, from customer service to
online purchases to customer relationship management to
collecting comments and suggestions. The nature of the connection
in E-Customer Relationship Management is complicated and
dynamic.
Table-Difference between CRM and ECRM:
CRM -CRM

CRM stands for Customer E-CRM stands for Electronic Customer

Relationship Management. Relationship Management.

CRM applies traditional tools

and standards to perform its E-CRM applies electronic/digital tools
operation. and standards to perform its operation.

Along with telephone, in E-CRM

In CRM customer contact is customer contact is initiated through
initiated through retail store, the internet, email, wireless, mobile
telephone or fax. and PDA technologies.

Page | 13
in CRM Customer service is Customer service can be provided at
time and space constraint. any time from any location.

In Customer Relationship In Electronic Customer Relationship

Management wide area Management wide area coverage
coverage is not possible. possible.

In CRM quick response is

possible through telephonic In E-CRM quick response may or
call. may not happen poor response

In CRM system is designed

around products and job In E-CRM system is designed around
function. customer needs.

Customer Relationship
Management is more In eCRM optional response limits its
effective. effectiveness.

It may or may not provide so It provides attractive options as it uses

attractive options. audio visual features, animations etc.

In CRM web based In Electronic Customer Relationship

applications needs PC clients Management no such requirement,
and also which needs to be internet is the backbone and the
downloaded separately in browser is the customers portal to e-
various platforms. CRM.

In CRM the nature of

relationship is simple and In eCRM the nature of relationship is
static. complex and dynamic.

CRM implementation is In E-CRM reduced time and cost.

Page | 14
 longer and management is System implementation and
costly as the system is expansion can be managed on one
situated at various locations location and on one server.
and on several servers.

Customization of information
is possible but requires little Customization of information for each
changes in system. person is very easy.

1.6 CRM advantages

When it comes to administering a company and its connected
interactions, customer relationship management systems have
several benefits. It is ideal that a CRM system may assist your
organization strengthen customer interactions, locate new clients,
and re-capture old consumers. Customers' information is collected,
organized, and managed using this system. Small and big
organizations alike may benefit from a CRM system as long as it's
properly deployed.
Enhances Improved Customer Care
Numerous strategic benefits are provided by CRM systems
for firms. One of these is the capacity to personalize current
customer-business interactions. The ability to handle each
customer as an individual rather than as part of a larger group may
be achieved by keeping a database of each customer's information.
Using this approach, each employee may learn about their clients'
individual demands and their transaction history. Depending on the
customer's prominence or position, the business may vary the
degree of service it provides. Better customer service derives from
increased staff response and comprehension. As a result, customers
are less irritated and more likely to recommend your company to
others. In addition, the firm will gain more from the comments of
its clients. One of the most important factors separating successful

Page | 15
companies from those that stumble along the way is the quality of
their customer service. There are several ways to assess customer
service efficiency, including the time it takes to resolve customer
complaints, as well as how many mistakes in service were made
due to misinformation. Good companies make it a point to follow
up with clients after they've made a purchase. This approach
allows a corporation to address potential issues before they become
formal complaints.
New clients may be discovered more easily
An advantage of CRM systems is their ability to locate future
clients. In order to maximize clientage returns, they maintain track
of the profiles of their current customers. The arrival of new clients
is a sign of expanding business. Although a growing company
using CRM software should experience a larger number of current
customers than new prospects each week, this is not always the
case. Growth is only necessary if current consumers are well cared
for, regardless of the addition of new customers.
Increases income for the client
Effective marketing efforts are made possible thanks to CRM
data. Customers who have previously bought a certain product
might be excluded from receiving promotional messages. In
addition, businesses may use the data to create loyalty programs
that help keep customers coming back for more. Selling the same
goods to someone who has previously purchased it is a no-no for
any company. Conflicts over consumer data are avoided thanks to
a CRM system.
Improves product cross and up selling
Cross-selling is the practice of providing consumers
complementary items based on their prior purchases. Up-selling,
on the other hand, is promoting more expensive items to existing
clients. In a few minutes of cross-checking accessible data, CRM
Page | 16
systems allow for both cross-selling and up-selling. Sales
professionals benefit from both methods of selling because they
develop a greater awareness of their clients' requirements. They've
learned to predict their customer's associated purchases over time.
Sales and marketing operations are streamlined
Improved and more efficient communication channels may
be developed with the help of a CRM system. Websites and
interactive voice response systems (IVRs) may simplify the job of
sales agents and the company as a whole. With the use of a CRM,
companies are able to provide their consumers a variety of
communication methods. Using these methods ensures that clients
get timely responses to their questions and concerns.
Improves the efficiency of call centres
CRM software makes businesses considerably simpler to
target customers since staffs have access to past orders and
customer information. The program helps the company's
employees understand how to handle each consumer based on their
previous interactions with the company. Data gathered by the
program may be accessible instantaneously from any location
inside the company.CRM also allows salespeople to spend more
time each day with their current customers. If the sales team makes
a certain number of service calls each day, this advantage may be
quantified. Alternatively, sales representatives' face-to-face
interaction with current clients might be used as a proxy.
Increases client satisfaction
Customers' loyalty can be measured more effectively using
CRM software, which is less expensive. Loyal consumers can turn
into industry advocates for the firm and the products and services it
provides. As a result, the company may use consumer testimonials
to attract new customers. Testimonials are typically more effective
than theoretical frameworks in persuading potential customers. As
Page | 17
a result, you may have a hard time attracting and retaining your
most loyal consumers using CRM.
1.7 Overview of CRM and major CRM players
To keep track of client interactions, firms utilize Customer
Relationship Management software (CRM). Customers now expect
a variety of services from a CRM system, but the most important
goal is to improve customer service, boost client retention, and
manage the sales funnel. Despite the fact that CRMs have been
around for a long time and have been used by major corporations
for many years, the introduction of several SaaS (Software as a
Service) CRMs has democratized their usage in smaller businesses
throughout the world.. The CRM industry has grown steadily over
the last decade because of its simplicity of implementation and low
initial expenditure. Global demand for CRM software was $26.3
billion in 2015, an increase of almost 12 percent over the previous
year, according to Gartner's estimates. Who Are the Biggest CRM
Vendors?
The CRM industry may be divided into two major categories:
1) The Top 5 - long-established firms; and 2) The Emerging
Players. Secondly, a lengthy tail of smaller, fragmented goodsWith
a 45 percent market share in 2015, the top five CRM suppliers,
according to Gartner, are dominating the CRM industry. After SAP
(10.1 percent), Oracle (7.1), Microsoft (4.3), and Adobe (3.6)
comprised the top 5, Salesforce emerged as the clear leader in this
category with a market share of 19.7 percent in 2015. There are
just a handful of large CRM players in the long tail that make up a
total market share of 55.4 percent. Customer relationship
management, sales, marketing, and staff monitoring are all part of
Salesforce's entire solution. On a regular basis, Salesforce
introduces new features and functionalities into its products.
Because it's cloud-based and backed by a strong developer
community, you'll never be alone when you run into problems.

Page | 18
When it comes to customer relationship management (CRM),
Salesforce is the finest. An enterprise-level CRM may be
purchased for a fraction of the cost of traditional CRM systems for
smaller businesses. Collaboration and lead management are two of
the most important aspects of the product. There are no minimum
user requirements for the program, which is designed primarily for
small firms. As the firm expands, it may be scaled up or down
according to demand. ERP integration is a strong suit. Lead
scoring, nurturing campaigns and delivery of sales-ready leads are
included in Oracle's cloud CRM platform. Easy-to-use reporting
and data warehousing and OLAP are included in this robust
Business Intelligence (BI) solution (online analytical processing).
A single or multitenant cloud hosting option is available. Third-
party plug-in solutions are just a fraction of what some of our
rivals offer in the cloud market. The reporting solution is one of
the strengths. Social insights, business analytics, and campaign
management are just a few of the many features available in
Microsoft Dynamics CRM. Cloud, on-premise, or a mix of both is
all choices for installation. For those who already use Microsoft
Office, the option to combine the program with Office 365 for
even greater productivity is a benefit. There have been several
changes since the first release in January of 2003. To establish an
ecosystem around the product, Microsoft has encouraged partners
to adopt its proprietary (.NET based) framework for customization
of Dynamics CRM, which has been marketed as an XRM platform
by the company. Strengths: Offline sales client, Microsoft office
integration Pricing Marketers can automate and execute marketing
campaigns with Adobe Campaign, Adobe Audience Manager, and
Adobe Experience Manager, while Adobe Media Optimizer (a tool
for managing ads and delivering them to specific audiences) and
Adobe Prime (a tool for managing ads and delivering them to
specific audiences) are all part of Adobe's Marketing Cloud (online
content testing and targeting). A cloud-based or on-premises

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version of Adobe Marketing Cloud is available for purchase. If
several solutions are being utilized, user requirements, and
continuous use are all taken into consideration, price is set on a
case-by-case basis. Advantages include a wide range of products
and services and an effective marketing strategy.

Top 5 players of CRM

1.8 Summary
In this chapter we have learned that the term CRM has a
range of meanings in this chapter. Strategic, operational, analytical,
and collaborative CRM have been identified. Misconceptions
concerning CRM abound. Some individuals mistakenly link
customer relationship management (CRM) with customer loyalty
programs, while others consider CRM to be an IT problem.
Despite the fact that CRM is often associated with the commercial
world, it is also used in non-profit organizations. CRM consultants,
CRM software suppliers, CRM application service providers,
CRM hardware and infrastructure manufacturers, enterprises who
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are using CRM, and their clients all have a stake in the technology.
There are a variety of CRM models available. With this definition
in hand, we can now go on with

***

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 CHAPTER-2
MAJOR PERSPECTIVES OF CRM

CRM (customer relationship management) is a relatively new

term, first appearing in business jargon in the early 1990s. As a
commercial or organizational activity that is still in its infancy,
there isn't much agreement on what constitutes CRM. Even the
three-letter acronym CRM's meaning is up for debate. Customer
relationship marketing is another term for customer relationship
management, which is more well understood by the general public.
Software systems that automate the marketing, sales, and service
tasks of enterprises are often referred to as CRM by IT firms. Here,
CRM and technology are being equated. When Tom Siebel
launched Siebel Systems, Inc. in 1993, it was the beginning of the
CRM software industry. It may be traced back to that time period
when the word CRM was first used. Technology research firm
Forrester expects global CRM investment to hit US$11 billion per
year by the end of 2010. While some argue that CRM is a
systematic strategy to building and sustaining lucrative client
relationships, others argue that technology may or may not play a
role. There are a number of distinct forms of CRM: strategic,
operational, analytical, and collaborative, as summarized in Table
below. This may explain some of the variations of view.

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 Table-Type of CRM

2.1 Strategic CRM

The goal of strategic CRM is to create a company culture that
is customer-centric. For this company, gaining and maintaining
clients means providing superior value creation and delivery than
any of its rivals. Corporate myths and legends are examples of how
culture is represented in leadership behavior and formal system
design. Customers want a company's resources to be allocated in a
way that maximizes the value they get from them, their behavior is
rewarded in a way that keeps them coming back, and their data is
gathered, shared, and put to good use across the company. The
heroes of the company are also those who provide excellent value
or service to consumers, as you would anticipate. Customer-
centricity, leadership, focus, and orientation are buzzwords
employed by many companies, but few live up to the claims they
make. Many organizations of any size claim to be on a mission to
meet and exceed consumer expectations while making a profit.
There is competition between customer-centricity and other

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business logics In addition to product, manufacturing, and
marketing orientations, Philip Kotler describes three others.
Businesses that focus on goods assume that consumers will pick
items based on the quality, performance, design, or features that
they most appreciate and value. Many of these companies are
characterized by their inventive and entrepreneurial spirit. The
majority of new businesses are product-focused. Marketing, selling
and service choices are often made without input from customers
at these companies. There is very little, if any, consumer research
done. Customers' desires are based on assumptions made by
management. Sometimes, items are over-engineered or over-
specified for the market's needs and hence excessively expensive
for many consumers. There is a group of clients known as
'innovators' who are more willing to accept promises of product
superiority from companies, according to marketers.
Unfortunately, this is just a minor portion of the market,
accounting for less than a quarter of the total.Businesses focused
on production have the belief that buyers want items with lower
prices. As a result, these companies are always looking for ways to
cut expenses and find new markets. The bulk of clients, however,
have different needs. This may be suitable in emerging countries or
in the subsistence parts of industrialized economies. If BMW
drivers understood that the firm exclusively purchased inputs like
brake systems from the lowest-cost supplier, they would not be
interested in the brand.

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 Figure 4: Strategic CRM.
If a company invests enough money in advertising,
marketing, public relations (PR), and sales promotion, it believes
that consumers will be convinced by these efforts to purchase.
Following closely on the heels of a manufacturing focus is a focus
on sales. When a business develops low-cost items, it needs to
extensively market them in order to move the inventory. A
corporation that places a priority on serving the needs of its
customers is said to be customer- or market-oriented. Using data
from consumers and competitors, it develops superior value
offerings for the client. It is a customer-centric company that is
continually learning and adjusting its products and services to meet
the needs of its customers and the marketplace. There is a
substantial correlation between customer-centricity and corporate
success. Customer-centricity, according to many business leaders,
should be the standard practice for all firms. Some market or
economic growth phases, however, may be more favourable to
alternative approaches.
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2.2 Operational CRM
Customer-facing and customer-supporting business
operations are both improved and automated through operational
CRM. The marketing, selling, and customer support operations
may be automated and connected with CRM software solutions.
This section includes some of the most important operational CRM
solutions.
The use of computerized advertising or automated marketing
Automated marketing processes (MA) are a result of the use
of technology in marketing. Marketers may leverage customer-
related data in campaign management modules to create,
implement, and analyze customized messages and offers. In certain
circumstances, individual consumer targeting for campaigning
reasons is achievable, allowing for personalized messages to be
developed. Campaign management is more difficult in multi-
channel contexts. The transaction channels of certain fashion
merchants, for example, include free-standing storefronts,
department store concessions, e-tail websites, home buying
catalogs, and even television shopping channels. If they aren't
already consumers of many channels, most customers will be
multichannel prospects if they aren't already.

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 Figure 5: Operational CRM
It takes a lot of technology-assisted coordination to integrate
communication and propose plans and evaluate effectiveness
across multiple channels. When it comes to marketing, event-based
or trigger marketing refers to messages and offers being shown to
consumers at certain times. The message and offer are a result of a
specific occurrence. A customer's actions or the setting in which
the campaign is taking place might lead to an event-based
campaign. An example of a customer-initiated event is a phone call
to a contact center. Inquiring about the current interest rate on a
credit card might be seen as a sign that the consumer is considering
other options and may switch providers. It is possible that this
incident may prompt an offer to keep the consumer. A public
holiday or the births of a child are examples of contextual
occurrences. A marketing reaction is warranted as a result of both
of these indicators. In the business-to-business sector, event-based
marketing is also common. Customer-side changes of staff,
contract expiration or a request for information are all examples of
possible triggers (RFI).

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Sales-force automation
Operational CRM has its origins in sales-force automation
(SFA). SFA systems are now commonly used in business-to-
business situations and are considered as a "competitive necessity"
that provides "competitive parity". SFA is a technology-based
approach to managing a company's sales efforts. Lead generation,
lead qualifying, need identification, specification development,
proposal production, proposal presentation, resolving objections,
and completing the sale are all parts of the selling process. SFA
software may be tailored to any industry or organization's selling
process. It is common to see initiatives to standardize and enhance
the selling process tied to automation of sales operations.
Implementation of a sales process is required here. By adopting a
single language for discussing sales difficulties, the sales force and
management become more efficient and effective. Sales-force
automation software makes it possible for firms to automatically
allocate leads and monitor prospects as they advance through the
sales funnel. Using opportunity management, users may track the
status of sales possibilities from the time they become leads all the
way through to deal close and beyond. Lead management and sales
forecasting are common features of opportunity management
software. Assigning leads to the right salesperson is made easier by
lead management software. In order to provide projections of
future sales, sales forecasting software often makes use of
transactional histories and salesperson estimations. Users may
utilize contact management to keep track of their consumer
relations. Customer contact histories are stored in computerized
customer records. Automated customer dialling, the salesperson's
personal calendar, and e-mail capabilities are all common features
in contact management programs. The salesman may generate
quotes and proposals for clients using software that automates the
process. An automated price quote is generated by the software
when the salesperson inputs information such as product codes,
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quantities, the customer's name, and the date of delivery.
Customers or salespeople may develop and price bespoke items,
services, or solutions to issues using product configuration apps.
When a product is sophisticated, such as an IT system, a
configurator might be helpful. The most common rule structure
used by configurators is "if... then." 'If X is selected, then Y is
necessary or banned or legitimized or unaffected is the general
instance of this rule. As an example, if a consumer selects a certain
hard drive for a computer, then other features that are
technologically incompatible, expensive, or difficult to build are
eliminated.
The automation of services It is now possible for firms to
automate their service activities, regardless of whether they are
provided through call center, contact center, online, or face-to-face
interactions. 14 Inbound and outbound service-related
conversations may be managed and coordinated across all channels
using CRM software. By decreasing service costs, enhancing
service quality, boosting productivity, and raising customer
happiness, software manufacturers believe this helps users become
more efficient and productive. Depending on the product being
maintained, the level of service automation varies significantly.
First contact with a consumer product is usually made via a retail
location, the internet, or a phone call center. An online scripting
tool may assist you identify an issue on the first encounter via
these channels. Service automation utilizes a wide range of
technology. Incoming calls may be routed to the most suitable
party with the use of call routing software. Interactive voice
response (IVR) and other technologies allow consumers to
communicate with business computers. Key 1 for option A and key
2 for option B may be entered into an IVR system using the
telephone keypad after listening to menu instructions. First contact
issue resolution may need allowing a return of products and a
third-party service provider to fix the problem. Mobile phones and
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digital cameras may be serviced using this method For large-scale
capital equipment, service automation is a very different beast. In
most cases, this necessitates on-the-spot diagnosis and repair at the
equipment's location. An example of this sort of service is
industrial refrigeration and air conditioning systems and
equipment. There are a number of ways to automate the service
process in these circumstances. The central CRM system is then
linked with this data on a regular basis. Direct and indirect
channels are used by many firms, particularly in the sales and
service departments, to achieve their goals. Operational CRM
provides help for indirect channels by managing partner
relationships (PRM). Partners may engage with the supplier via a
portal to handle leads and sales orders, as well as product
information and incentive information.
2.3 Analytical CRM
Customers and companies a like benefit from analytic CRM
since it focuses on the collection and analysis of customer data, as
well as the distribution of that data and the use of that data for the
benefit of both parties. Customers' data is the cornerstone for
analytic CRM. Sales, financial, marketing, and customer support
data all reside in enterprise-wide repositories and may be accessed
by searching for them in search engines. For example, business
intelligence businesses may provide geo demographic and lifestyle
data that can be integrated to these internal datasets. A corporation
may then examine this data by using data mining techniques. The
answers to inquiries such, "Who are our most valued customers?"
are provided via intelligent questioning. When it comes to
consumers, which ones are the most likely to leave for a
competitor? How do you know which clients will take advantage
of a certain promotion?

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 Many CRM deployments now include analytical CRM as an
integral component. Without analytical information on clients,
operational CRM fails to realize its full potential. Many
operational CRM choices, such as: Which customers should we
target with this offer?, are based on a knowledge of client value or
purchasing propensity. Customers waiting in line should be
prioritized based on how important they are to the company.
Customer groups may need different selling strategies based on
analytic CRM. Face-to-face selling may be supplied to higher-
value consumers, while telesales may be used to reach lower-value
customers. In addition, consumer analytics may be used to adjust
the content and manner of customer communications, perhaps for a
specific group. This increases the likelihood that a consumer will
accept a certain offer. Customers would be more satisfied if
analytical CRM provides them with fast, personalized answers to
their concerns. In terms of cross-selling and up-selling, as well as
customer retention and new customer acquisition, analytical CRM
holds great promise for a company's bottom line.
2.4 Collaborative CRM
In order to discover, attract, keep, and develop consumers in
a more efficient way, the phrase "collaborative CRM" is used to
define the strategic and tactical alignment of supply chain
organizations. Making and selling consumer goods may benefit
from the coordination of their people, processes, and technology.
Some examples of the methods utilized by these firms include co-
marketing, category management, collaborative forecasting, joint
new product creation, and combined market research.
Collaborative CRM, which uses CRM technology, enables cross-
organizational interactions and transactions. However, the phrase
is more generally used to characterize more current technologies
like portals and e-business, voice over internet protocol (VoIP),
conference calls, chat rooms, online forums, and e-mail rather than
older ones like EDI and VoIP. Companies may use data and voice
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to connect with their business partners and customers using these
technologies. Different businesses may work together to provide
better service to their clients by using a collaborative CRM.
It facilitates the exchange of vital data across the supply
chain. A number of CRM technology vendors have created
applications for managing partner and channel relationships
(PRM), allowing businesses to better manage their partner and
channel ecosystems while also saving money. The management of
partner promotions is often accomplished via the use of PRM
solutions. As many as a dozen or more co-advertising programs
may be running simultaneously at the same time for a consumer
goods manufacturer. Organizations can better allocate resources,
plan marketing campaigns, and track their results with PRM. When
these technologies are applied to internal communications, such as
across sales, marketing, and service, the term "collaborative CRM"
is used.
2.5 Misunderstandings about CRM
It's understandable that many people have misconceptions
regarding CRM because of its relative youth. They're outlined
here.
Misunderstanding 1: CRM is database marketing
Building and using client databases for marketing reasons is
the focus of database marketing. Data is gathered from a variety of
sources by businesses. Computers are used to verify, clean,
integrate, and store this data, commonly in data warehouses or
data-marts. Market segmentation, targeting, offer creation, and
customer communication are just few of the marketing uses for
these data sets Many big and medium-sized organizations do
actually maintain and utilize client databases, but the scope of
CRM is considerably greater than database marketing. Database
marketing bears a strong resemblance to the analytical CRM we've

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discussed so far. Strategic, operational, and collaborative CRM, on
the other hand, show less evidence of database marketing.
Misunderstanding 2: CRM is a marketing process
CRM software systems are used in marketing for a variety of
purposes, including customer segmentation, customer acquisition,
customer retention, and customer development (including cross-
selling and up-selling). In contrast, sales and service activities are
both included in operational CRM. When CRM software is utilized
to promote a company's objective of becoming customer-centric,
customer-related data may be shared more widely throughout the
workplace. There are several ways to use client data in operations
management to provide customised products and services. People
in HR may be able to use information about customer preferences
when recruiting and training personnel for jobs that bring them in
close touch with consumers. R&D managers may utilize customer-
related data to focus new product development efforts. Customers'
data may be shared with suppliers and partners throughout the
extended firm, and it can also be used to connect various divisions
inside the company. Tesco is an example of a corporation that
interacts with suppliers to manufacture new items when it comes to
new product development. As an added bonus, Tesco and the
Royal Bank of Scotland have teamed together to provide financial
services to its customers. Tesco and its suppliers and partners need
to share customer data for each of these processes. CRM isn't only
about marketing, as is abundantly evident.
Misunderstanding 3: CRM is an IT issue
As opposed to more comprehensive strategic endeavors,
CRM implementations are frequently viewed as merely technical.
It's true that most CRM implementations necessitate the use of IT.
This, however, must not be interpreted in the wrong way. That
CRM is all about IT, like saying gardening or art are all about their
tools, is akin to saying that CRM is all about the computer. As a
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tool, IT is an enabler, an enabler. Improvements in customer
service are made possible thanks to a combination of better
processes, better people, better strategies, and better technologies
that make it possible. It's impossible to overestimate the value of
people and procedures. Processes made possible by IT are created
and implemented by people. IT can't make up for inefficient
procedures and under qualified personnel. In order for a CRM
implementation to be a success, it must be designed and
implemented by human beings. These procedures are frequently
supported by IT. As a result, most CRM strategies incorporate
some form of IT. In spite of this, not every CRM endeavour needs
IT support. Many CRM efforts aim to build and maintain long-
term connections with high-value consumers. Employees at stores,
contact centers, and salesmen may all need to adapt their behavior
in order to better serve customers. There is a chance that IT will
have no impact all.
Misunderstanding 4: CRM is about loyalty schemes
There are a number of businesses where loyalty programs are
widespread, from vehicle rental to airlines to food retail. Credits,
such as air miles, are accrued by making transactions. Then, at
some time in the future, they may be redeemed. As a rule of
thumb, new members of most loyalty programs are required to fill
out an application form. In order to improve consumer
communication and offer creation, organizations often employ
demographic data in conjunction with purchase data. Some CRM
installations are tied to loyalty programs, but not all of them are. It
is possible for loyalty programs to have both a direct and indirect
role in CRM deployments. In the beginning, they produce data that
may be utilized to steer the acquisition of customers, retention, and
growth. As a second benefit, loyalty programs may function as a
barrier to leaving. Customers who have acquired credits in a plan
may be hesitant to end their engagement with the provider.. The

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accrued credits are a reflection of the client's commitment to the
program and, by extension, the connection with that customer.
Misunderstanding 5: CRM can be implemented by any
company
Any organization may, in fact, deploy strategic CRM. Every
company may be motivated by a desire to better serve its
customers. In order to put the client at the center of the
organization, CEOs might create a purpose, vision, and define
values. CRM technology may play a part in this shift.. It's safe to
say that some businesses have a better track record than others.
Despite the widespread use of CRM in the banking sector,
customer satisfaction and retention rates vary significantly across
various institutions. Any business may attempt to put operational
CRM into practice. Automating sales, lead management, and
contact management is possible for any organization with a sales
team. Marketing and customer service operations are no different.
Services like customer relationship management (CRM) software
are useful for a wide range of tasks, including customer relations
management (CRM). Analytical CRM, on the other hand, is based
on data about actual customers. In order to determine which
consumers will be most valuable in the future and which groups
within the client base have distinct needs, it is necessary to collect
data. In order to maximize long-term value for both customers and
the organization, distinct offers must be delivered to each client
segment. Analytical CRM cannot be established if these data are
unavailable.
2.6 Defining CRM on the basis of misunderstandings
Defining CRM in light of the four kinds of CRM and the
many misconceptions about CRM is not a simple task. A definition
that serves as the foundation for the remainder of this book may be
derived from a number of basic CRM features that have been
identified. Integrating internal processes and activities with
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external networks, CRM is the foundation of a profitable company
model that produces value for targeted consumers. Information
technology and high-quality consumer data are the foundation of
this strategy. Cultivating and serving targeted clients while still
making a profit is the goal of CRM. Clearly, this indicates that
CRM is more than just IT. When it comes to CRM, corporate
processes and functions are "integrated." That is to say, it helps to
tear down the silo walls that separate departments inside a
company. Sales, marketing, and customer support departments
may keep track of one other's contacts with consumers by using
"customer-related data." Operations and financial departments in
the back office may also profit from customer-related data. When a
business's 'external network' has access to customer-related data, it
may coordinate its efforts with those of the focal company. Both
software and hardware are required to implement this strategy.
This proximity to their customers meant that the bulk of businesses
in the past had close ties with the people they served. Having
everyday face-to-face encounters with customers helped us to learn
a great deal about their wants and requirements. However, as
corporations have risen in size, they have become more
disconnected from their consumers. Geographic and cultural
isolation may contribute to a sense of distance.
A few well-known American corporations have had difficulty
comprehending their customers' needs. As a result of Disney's
failure to meet European consumers' expectations for value, the
company's original Paris theme park construction was
unsuccessful. Disney, for example, did not have a bar on-site for
tourists to enjoy alcoholic beverages. Europeans, on the other
hand, are used to sipping wine with their meals. Geographic and
cultural distances, as well as the separation of business owners and
managers from customers, mean that many companies, even small
ones, lack the intuitive knowledge and understanding of their
customers that is often found in micro-businesses, such as
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neighborhood stores and hair salons. Improved customer data is
now in high demand as a result of this, making it an essential
component of any successful CRM system. For-profit is a key part
of our concept. This definition would hold true for the non-profit
sector if terms like organization, client, and aim were used instead
of business, customer, and profit. In summary, we believe that
CRM is a technology-enabled method to managing the customer
relationship. The majority of CRM projects anticipate having an
effect on customer service expenses and income sources. The
customer's experience of transacting with and interacting with a
provider is also altered by the usage of technology. Therefore, the
customer's viewpoint is critical to this book's discussion of CRM.
For strategic reasons, CRM has a significant impact on the whole
customer journey.
2.7 CRM Constituencies
There are a number of key groups that are interested in CRM,
including:
CRM has been used by a large number of businesses. A
number of significant European and American corporations have
already jumped on board the blockchain bandwagon. Businesses of
this scale are following suit. More small businesses, public sector
organizations and new company start-ups might benefit from
CRM's message of customer relationship management (CRM).In
addition, the consumers and business partners of organizations that
have implemented CRM are a significant constituency. CRM has a
direct effect on customer satisfaction and customer loyalty because
of its influence on the customer experience. Vendors of CRM
software include companies like Oracle, SAP and SAS as well as
smaller ones like KANA and Microsoft. Recent years have seen a
significant amount of CRM provider consolidation. Oracle
presently owns PeopleSoft and Siebel, two pioneering CRM
companies. Software vendors offer licenses to businesses, and then
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either directly or via system integrators install CRM software on
the servers of those businesses. The client's employees are taught
how to utilize the program.
In addition, firms deploying CRM may also choose to use
hosted CRM suppliers like salesforce.com, Entellium, RightNow,
and NetSuite, which provide subscription-based CRM features.
Customers use web browsers to communicate with the host's
servers and upload their customer data. It is possible for ASP
suppliers to distribute apps and other services through the Internet
to a large number of people at once. SaaS (software as a service)
(Software as a Service). CRM functions may be accessed in much
the same manner as eBay or Amazon.com. Vendors of CRM
hardware and infrastructure: these companies supply the
technology infrastructure for CRM deployments. For example,
they provide hardware and software for contact centers and
telephony systems as well as servers, laptops, and portable devices.
It's important to note that management consultants provide a wide
variety of CRM-related skills to their customers. Systems
integration, vendor selection, implementation planning, and project
management may all be handled by consultants to aid firms in their
CRM rollouts. System integration, data quality enhancement,
market segmentation, process engineering, and cultural change are
just a few of the many minor initiatives that often go into a CRM
installation. Consultancy firms such as Accenture and McKinsey
are among those who provide CRM services. Smaller businesses
may be able to provide specialized services. Peppers and Rogers
are a strategic consulting firm that provides services. It is well
renowned for DunnHumby's ability to mine data for segmentation
purposes.
2.8 Commercial contexts of CRM
There are several business settings in which CRM is used,
each with its own unique set of customer relationship management
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challenges. Banks, vehicle manufacturers, high-tech businesses,
and producers of consumer items will all be examined. Banks have
to deal with a huge number of small business owners and their
clients every day.
In order to better control customer attrition and increase
cross-selling, banks want CRM's analytical capabilities. With the
use of data mining tools, it's possible to figure out which customers
are at risk of defecting, what steps may be taken to regain their
business, and which consumers might be good candidates for
cross-selling. Customers' financial service spending is a big
priority for banks. In order to save costs, several banks have
moved customer service to call centers and the internet, despite
strong opposition from various client sectors. Distributor/dealer
networks are used by automobile manufacturers to distribute their
products. Fewer than 1% of their time is spent in direct interaction
with the end-users. Their distribution networks benefit from
CRM's capacity to help companies build stronger and more
lucrative connections with their customers. Due to the fact that
they are physically separated from the drivers, they have created
websites via which they may communicate with these end-users.
As a result, they now have a better understanding of what their
clients need. Their ultimate goal is to get a larger proportion of
end-user spending on automobile purchases, maintenance, and
replacement via the use of CRM. High-tech enterprises produce
sophisticated goods that are often marketed via their partners.As an
example, tiny creative software developers have usually teamed up
with IBM in order to get distribution and sales channels. However,
corporations like as Dell have developed new distribution methods.
direct-to-consumer: (DTC). DTC firms may gather consumer
information, segment their client base, automate their sales
operations using product configurator software, and give customer
care online thanks to CRM systems. Automated partnerships with
suppliers allow them to maintain little or no inventories, which are
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routinely refilled in response to orders as they are received.
Manufacturers of consumer products are involved in the retail
sector.CRM is a tool they utilize to cultivate long-term business
partnerships with merchants. Cost-to-serve and customer
profitability are two metrics that may be analyzed using CRM
tools. Key account management methods are used to handle key
clients. The precision of stock replenishment improves with the use
of IT-enabled buying procedures. CRM-enabled marketing
strategies may save manufacturers money.
2.9 Models of CRM
There have been a slew of extensive CRM models developed.
Five of them are discussed in this section.
1. IDIC as a conceptual framework
It was designed by the consulting company, Peppers and
Rogers, and has been included in many of their publications. When
it comes to creating more one-on-one relationships with customers,
the IDIC model recommends four steps: identifying your target
audience, getting to know them intimately, differentiating your
customers, and engaging them in conversation. You should also
engage your customers in conversation so that you can learn about
their expectations and their relationships with other vendors.

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 Figure 6: The QCi customer management model
2. The QCi model
Consultancy firms are also responsible for the QCi model
seen in Figure. Instead of using the word' relationship', the model's
creators prefer to use the term customer management. At its core,
the model depicts a set of actions that businesses must carry out in
order to obtain and keep consumers The model depicts individuals
going about their daily routines while being assisted by
technology.
3. The CRM value chain
A recent book focused on Francis Buttle's model. To achieve
increased customer profitability, the model's five core steps and
four supporting conditions are shown in Figure. As a firm grows its
network of suppliers, partners, and workers to produce value
propositions that attract and keep consumers, it must go through a
series of key phases that include portfolio analysis, intimacy,
networking, value proposition creation, and customer lifecycle
management. The CRM strategy works successfully and efficiently
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because of the enabling factors of leadership and culture, data and
IT, people and procedures.

Figure 7: CRM value chain

4. Payne’s five-process model
By Adrian Payne, Adrian Payne came up with another
complete model. There are five primary CRM processes that are
clearly defined in this model: strategy formulation; value
generation; multi-channel integration; performance evaluation; and
data management. Multichannel integration and information
management are both examples of operational CRM, whereas the
first two constitute strategic CRM.

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 Figure 8: Payne’s model of CRM
5. The Gartner competency model
Gartner Inc. provides the ultimate complete CRM model.
CRM research is important to Gartner Inc., a renowned IT research
and consultancy firm with 1200 researchers and consultants
working in 75 countries. Gartner's CRM competence model is
shown in Figure.

Figure 9: Gartner’s CRM model

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 Companies are expected to have expertise in eight areas in
order to succeed in CRM. There are several aspects to consider
when implementing a customer relationship management (CRM)
strategy, including setting a vision, developing CRM strategies and
creating value-added customer experiences.
2.10 Summary
CRM may signify many different things, as you've
discovered in this chapter. We've discovered four distinct flavors
of customer relationship management (CRM): strategic,
operational, analytical, and collaborative. Many people have
misconceptions regarding CRM. CRM is often misunderstood as a
kind of customer loyalty programs, although it is really more of an
information technology (IT) problem. It's common to think of
CRM as a corporate technique, but it's also used in non-profit
organizations. Customers of CRM consultants, software
manufacturers, application service providers, hardware and
infrastructure suppliers, and enterprises using CRM are just a few
of the many groups interested in CRM. CRM has seen several
iterations throughout the years. Finally, a definition that serves as a
foundation for the remainder of this work has been developed.
Core business strategy that connects internal processes and
functions, and external networks, to produce and provide value to
targeted consumers at a profit is CRM. Technology has made it
possible by using a solid foundation of high-quality customer-
related data.

***

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 CHAPTER-3
MANAGING NETWORKS FOR
CUSTOMER RELATIONSHIP
MANAGEMENT PERFORMANCE

CRM is the subject of this chapter, as is the function of

networks in it. You can't be alone in the world. How effectively a
firm interacts with its network has a significant impact on whether
or not it succeeds. CRM is more effective when the network's
resources are integrated and coordinated with those of the target
company's customers. We recognize the importance of the business
network in obtaining CRM outcomes while using the following
definition of CRM. Basic business approach for producing and
providing value to targeted consumers at a profit is CRM
(Customer Relationship Management), which integrates internal
processes and activities as well as external networks. As a result of
technological improvements, this method relies on high-quality
customer information. Competition for the customer's dollar is
growing more fierce. Independent businesses used to face off
against one other. There is a growing competition between
networks in today's world. An excellent illustration of this may be
seen in the car industry. Aside from the vehicle plants that Ford
built in the early 1920s, the company also had a number of other
businesses like as coal mines and steamships, as well as rubber
plantations, sheep ranches and rail lines. Companies were
encouraged to own and control as many of the manufacturing
processes they could. This is a new chapter altogether. Ford
produced half as many cars in 2000 as they did then. Relatives and
subcontractors were used to complete the rest of the work.
According to Ford's strategy group, GM contributes for 70% of the
value of Ford automobiles, Chrysler 30%, and Toyota just 20%.

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Traditional business networks have generally been dominated by
manufacturers and service providers because to the power of their
brands. International Business Machines, General Electric, United
Parcel Service, and Australian Mutual Provident are just a few of
the companies that spring to mind. This is starting to shift.
Suppliers may have so much clout that they are able to influence
the ultimate outcome. Because of how significantly Intel and
Microsoft affected that computer. Manufacturers like Dell,
Toshiba, and Compaq face serious risks if their finished products
are missing critical components. It's possible that customers have
significant influence. Some retail industries rely heavily on retailer
brands to generate income (own brands). In both Wal-Mart and
Tesco, the producers of their own brands must meet very rigorous
standards. There may be a role for manufacturers, but it is
ultimately up to stores to make the final decision. Numerous
merchants have enough influence to compel big-name
manufacturers of products to comply with their demands. You
can't escape the effect of these firms even if you work for Procter
& Gamble or Unilever or even if you work for General Foods.
3.1 Network
It is possible to think of the word "network" in generic terms
as a structure made up of nodes linked together by threads. Figure
10.1 depicts the nodes and threads of a simple social network,
which is to say, a collection of friends and acquaintances. The
ovals represent the nodes, while the threads connect them. Nodes
(letters A to L) represent individuals, and the threads represent the
social connections they have with one other. Person A's point of
view was used to construct this network. She has a wide range of
professional and personal contacts. People B to I all have a direct
link to A. Person K is one step away from person A. There are two
people A knows who know K, but she doesn't know them
personally. K is acquainted with L, a third-degree relative of A. At
what point does A's network come to an end? The obvious answer
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is "not near the diagram's edge." People A's friends and
acquaintances are related to have ties with that are not shown in
this diagram. People may build relationships with each other in an
endless cycle. In theory, Person A's network includes all of her
immediate connections, as well as all of their direct connections,
and so on and so forth. In order to make networks more accessible
for examination, network researchers like to create borders around
them.

Figure 10: A network

3.2 Business networks
There are business networks. They cannot be avoided. Even
if they aren't, they are a part of doing business, whether or not they
are planned out. It is possible to define a business network as
follows: Nodal enterprises, organizations, and people make form a
business network, as do the ties that bind them. Suppliers,
manufacturers, distributors and partners, regulators and contractors
are only a few examples of these nodes in the context of the
commercial market. Actor ties, activity linkages, and resource ties
represent the ties that connect these divisions. This material was
introduced in Chapter 2 and summarized here as "actor bonds,"
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"activity links," and "resources," respectively. Actor bonds are the
interpersonal contacts between people in network-related firms,
while activity links refer to connections formed between
companies as a result of their interactions in the realms of
commercialism, law, and administration. A network's inter- and
intra-company ties combine to build an intricate social structure.
Various mechanisms are at work here. The ownership and
influence structures of corporations are made more complicated by
equity interests. Neither business A nor company B has a majority
ownership in the other two. Companies A and D are subsidiaries of
C. Directors may serve on the boards of many different network
firms. Branch meetings of professional organizations are a place
where marketers may connect with one other. Social gatherings for
important account holders are organized by salespeople. Close or
distant, friendly or adversarial, open or closed, a business
relationship's climate is influenced by personal connections. A
person's ability to form new interpersonal connections is both
aided and hindered by those already in place. Any company is a
member of a variety of ties, and the companies it works with have
their own networks of connections. As a result, each company has
a specific place in the network. Network members are likely to
have significantly diverse views on the network than other network
members. In order to guarantee that production inputs are
accessible and consumer demand is steady, each company strives
to exercise some control over important elements of its network.
According to some studies, a typical company has 10 such
strategic network links.
3.3 Network position
Every organization has a place in the network. Positions on a
network are a result of the activities of the past and present of an
organization. Because the company was established to perform
what it did, these ties and interactions were and are necessary.
Network members each have a unique position in regard to the rest
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of their peers. According to the following definition, a network's
position may be defined: These linkages and the activity links,
resources and actor bonds that they include form a company's
complete network position. These relationships both constrain and
enable what that firm can do in the future. A shipbuilding firm that
already has all the connections it needs to succeed as a financial
institution can't do so without establishing new ones. Relationships
have the potential to provide more fruitful outcomes. It's possible
for a supplier to refer a company to one of its clients so they may
collaborate on a mutually beneficial endeavor. Instead, a supplier
may decide to sever their connection with a client in order to
preserve their relationship with a larger, more lucrative one.
Competitor advantage may be gained through taking use of the
company's network position. Companies are able to produce and
provide value to their consumers because networks provide the
resources and undertake the activities necessary to do so. Positions
on the network might change at any time. Members adjust their
places in the network to secure their own survival and success.
They're always on the lookout for ways to profit. Relationships that
may be exploited to boost sales or cut expenses, for example, are
high on their priority list. In the automotive business, Avon Rubber
makes engine mounts and considers Ford as a crucial client. In
order to get business from Saab and to demonstrate its credentials
to other automobile manufacturers, it used its connection with this
reference client. There is little doubt that certain network positions
are more powerful than others. As an example, a network member
may be positioned to act as a gatekeeper to opportunities that other
network members are eager to access. The provider of a vehicle's
braking system, for example, has tremendous network ability to
enable or disable component suppliers' access to the car maker.
Whether or whether a company reaches a targeted network
position is at least in part decided by its network competency. As a
result, the firm's capacity to acquire and/or apply the essential

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information and skills to effectively manage network interactions
is a key factor. 2 An organization's network position may provide a
number of advantages when it is well-managed. Toyota leverages
its position in the network to improve the dependability, efficiency,
and design of its vehicles. In order to keep costs down and product
quality high, Toyota collaborates with and via its network
members. Relational commitments and limitations among network
members govern any company's network standing. As an example,
tier one suppliers are expected to cultivate and deepen their ties
with tier two suppliers to guarantee that Toyota receives the quality
they want. Tier two suppliers demand that Toyota's tier one
suppliers maintain a strong connection with Toyota to guarantee
that they have access to a key client. There is a good chance that
not all of the competitive advantages that a network has to offer are
currently being taken advantage of. It's possible that network
members aren't aware of the potential for collaboration and
rationalization that exist between them. With the help of one
member of the network, another has manufacturing knowledge,
and the third has marketing know-how, a successful new product
may be created and launched. In certain cases, it may be possible
to work out cooperative purchase deals. It's feasible that some
redundant procedures can be axed. Quality assurance programs
may be put in place by suppliers; their customers may not require a
quality control program based on their examination of the
supplier's goods.
3.4 Business networks and CRM
Because they supply the raw materials, services, money,
human capital, technological resources, and knowledge required to
generate value propositions for the business's customers, networks
are very important in strategic CRM efforts at the firm level.
Advertising, logistics, and distribution are just a few of the many
services they provide. In order to provide their customers financial
products like mortgages and credit cards, several retailers have
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entered into arrangements with banks. Tesco and the Royal Bank
of Scotland are partners in the United Kingdom, whereas
Woolworths and the Commonwealth Bank of Australia are
partners in Australia. both banks. In this set-up, traditional
customer impressions of the shop and the bank are muddled.
Understanding one other, exchanging information about customers
and coordinating technology are all essential to a successful
relationship like this. Without a well-managed relationship
between retailers and banks, they cannot develop or provide value
to their customers. Non-customer network connections, such as
those with suppliers and distributors, financial institutions, and so
on, must also be properly managed by enterprises. Collaborative,
or extra-enterprise, CRM systems are becoming more common in
modern CRM systems. Relationship management systems (CRM)
are becoming more complex, with apps for managing relationships
with partners (PRM), websites for investor relations (IR),
employee relations (ERM), and, through ERP connection, the
administration of suppliers.
3.5 The scope of CRM
A focus organization's network is made up of four primary
groupings. Suppliers, owners/investors, partners, and employees all
fall within this category. Customers of the central company are
shown in this figure, along with the four constituencies that
surround them. In order to remember all of the network's many
elements, use the term SCOPE: In the core of the network are O
owners/investors, P partners, and E workers: S suppliers, C
customers of the target company. The arrowhead in the outer
wheel points in the direction of assisting the focus company
produce and deliver value for, and from, their targeted customers.
The firm's suppliers, owners/investors, and partners are all
outsiders. A good illustration of this may be seen in the workplace.
In fact, its internal constituency may be seen as a network unto
itself. A company's reporting structure or cross-functional teams
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are two examples of how co-workers are connected formally. In
addition, they have informal relationships outside of work.
Vendors, business partners, and co-workers will be the subject of
future chapters. It is common for most firms to function via
supplier and distribution networks. Each of the following
subsections provides a brief summary of the topic at hand.
3.6 Supplier networks
Toyota only makes roughly 20% of the value of their
automobiles, as you may have read before. Approximately 50 000
supplier connections are used to produce and deliver the inputs
necessary for automobile manufacturing. However, this does not
imply that Toyota is trying to handle 50 000 connections at a time.
In order to manufacture and supply what Toyota requires, the firm
has a number of crucial partnerships with tier one suppliers. These
suppliers, in turn, have a number of significant ties of their own.
As a result of their connections with other businesses, they are able
to satisfy the demands of their clients and so on.

Figure 11: Toyota’s supplier network

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 Toyota refers to these tier one suppliers as'system suppliers.'
As a result, they're not only accountable for providing their own
components, but they're also in charge of managing the
contributions of lower-tier suppliers, as well. Like the idea of a
"category captain," this is quite similar in principle. Large
supermarkets have selected "category captains" to work with them
on the development of profitable product categories. Items like
shaving cream, hosiery, and ice cream, to name a few, may all be
classified as categories. As a category captain, the retailer's
responsibility is to construct a supply chain that effectively
complements lower-tier suppliers. Numerous features of networks
may be gleaned from such a demonstration. More than one
supplier-customer connection makes up an organization's network,
as opposed to a single direct link. Make sure you plan everything
meticulously to get the most out of them. Tier one suppliers must
know exactly what Toyota expects and when it expects it, or else
they will not be able to meet Toyota's needs. Many of these tier-
one suppliers utilize their own CRM systems to maintain track of
their contacts with Toyota. Tier one also needs to collaborate with
tier two to get things done. Collaboration between suppliers at
every tier is possible... In the case of Toyota, for example, the tier
one suspension subassembly maker may need to connect with the
tier one brake subassembly manufacturer. If a major company is
present, its effect on the structure and performance of the network
may be substantial. There's a chance Toyota may require specific
quality standards from suppliers in layers two, three, and four of
the supply chain. A tier three supplier may have to stop purchasing
from a tier four supplier if that provider also supplies a competitor.
As far out as three tiers away from its own, Toyota does make an
attempt to persuade suppliers. It is possible to build global
networks. Due to the increased concentration of manufacturing and
the globalization of brands, businesses must now acquire inputs
that satisfy a common quality, regardless of whether the ultimate

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customer is in the United States, Azerbaijan, Sydney, or Shanghai..
As a result, Kodak has categorized its suppliers into three
categories: global, preferred, and specialized. As a result, Kodak's
top executives feel more secure about making acquisitions.
3.7 Distribution networks
Almost every business has some kind of distribution system
in place. This phrase "demand chain" is often used to define the
chain of customers that begins with a company's customers and
continues until it reaches the end user. A closer look, however,
reveals that they are not linear chains, but rather network
configurations. In this diagram, you can see IBM's demand
network moving computers to end consumers in Italy, as shown.

Figure 12: IBM’s distribution network in Italy

Business networks may be shown in a variety of ways, and
this one does just that. These several organizations all contribute in
unique ways to the overall success or failure of a networked
company. In a network, companies provide a variety of skills,
resources and connections, as well as a variety of management
styles and histories. Even if each business may have been founded
for a distinct reason and may be working toward goals that
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contradict with those of the focus firm, it is possible. The
connection between customers and the focus company may be
tense at times. Clients of IBM's first-tier customers are not given
the chance to create their own connections with catalogue firms in
this image. It might be difficult to keep track of all the people in
your network. Customers may need a variety of ways to get in
touch with the organization at the center of their attention. A key
account management team may be necessary for some, while a
portal may be preferable for others. Depending on the profitability
of the client or other factors, the focus firm may or may not be able
to satisfy these needs.
3.8 Principles of network management
Here, we'll go over a few key ideas in network
administration. Single company cannot control networks. No
network has a senior management team in charge of overseeing
operations. Every network is a self-regulatory, adaptable, and
sophisticated system. As organizations connect with one another
and jostle for position, networks develop as individuals act and
respond according to their own preferences. However, single
corporations may have a major impact on business networks, even
if they do not have complete control. Regardless of whether a
company is a little player or a major player, it is also true that all
organizations want to influence crucial network ties in order to
strengthen and defend their competitive positions. One's ability to
influence or be affected by other members of a network depends
on the degree of dependency between network members. It is
possible for firm B to exert control over the connection if A relies
heavily on it. To put it another way, if A and B are both reliant on
one other, then the power dynamics are more likely to be balanced
and handled as a partnership. There may be no connection to
manage if neither partner is reliant on the other. Clearly, network
management is more about being manageable than it is about
managing. The term "network competency" was coined by Thomas
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Ritter and his colleagues to define a company's ability to manage
both its networks and the connections between its employees. If a
corporation has high network competence, it not only possesses the
essential abilities to manage connections at both the network and
individual levels, but it also employs those talents effectively. This
shows that there is a significant difference between network
management and network management.
3.9 Management of networks
Business networks may be significantly affected by the
actions of single corporations, especially in highly concentrated
sectors For instance, you may have already heard about the Toyota
debacle. This impact may be detected in different settings. Retail
giants like Wal-Mart and Tesco control the food supply chain. In
order to ensure the success of its franchisees, franchisors set strict
guidelines and regulations for their franchisees to follow. Senior
executives at the focal company may consider themselves to be the
network hub or channel captain in these instances. There is a
strategic emphasis on the network's performance. New firms often
face the challenge of building a network from scratch. To build and
offer the essential value proposition and customer experience, they
must make new relationships since they lack current ones, putting
them in the same predicament as those in charge of strategic CRM.
Finding out what you need from the network and learning how to
use it are the two biggest challenges. In order to produce and
provide value to and from customers, companies must specify the
business activities that network members must do. This might be a
multi-party effort. Some of these may be required for value
creation and delivery, while others may not. Network knowledge
acquisition begins with the identification of current members and
the evaluation of whether they have the requisite resources and
desire to participate. If the present infrastructure is inadequate to
handle the activities that must be carried out, then network
expansion is required. Through the utilization of the creation of
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new actor connections at the organizational or interpersonal level,
they will have the ability to improve network performance. The
entire amount of resources spent in inter-firm links throughout the
network is known as the network's resource constellation.
Resource underutilization and resource shortages are almost
unavoidable in a complex network. How might the network's
resources be better utilized? Network members may have
additional capacity in logistics, but it's not obvious whether the
focal company has to manage its own fleet. How much of a retail
sales force is necessary by the focal business to perform the same
function as another network member?In order to properly manage
network performance, network members must be educated about
the target company's customers and their role in delivering value to
them. There may be a need to establish and maintain quality
standards, or appoint employees to serve in an oversight or
mentoring capacity. A list of requirements might be prepared.
CRM systems may be used. Companies will have to keep an eye
on how their present network is working and look for ways to
improve it. Both effective contributions and efficient network
contributions may be improved upon. Members of the CRM
network may support in a number of ways, including the
following: Because of this, the target company may be more
equipped to comprehend its customers. Woolworth's and
Commonwealth Bank in Australia formed a joint venture that
enabled the bank to have access to Woolworth's transaction data,
which allowed the bank to learn a lot more about its customers.
Value creation for the focal company or its customers by
enhancing product quality, reducing costs in meeting standards, or
discovering new opportunities. The dangers of over-detailing
network connections cannot be overstated. Marks & Spencer, for
example, kept a close eye on supplier relations. It was in charge of
drafting specifications and maintaining tight quality and design
standards. ‖ One of the outcomes was the suffocation of fresh

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perspectives. Suppliers were unable to realize their full potential
due to a lack of effort. There are a variety of administrative
responsibilities involved in maintaining business networks.
To accomplish a certain goal, the architect of the network
develops a specific network. For example, this person may be the
head of a multinational joint venture in which a number of firms
are involved. Senior managers with strategic responsibilities are
often the ones who serve as network architects. According to a
recent report from the Information Technology Infrastructure
Library (ITIL), the role of network architect in the implementation
of CRM systems is often played by a senior manager. System
integrators, CRM software suppliers, data analytics firms, and so
on may all play a role in a network partner's function, as may the
architect. These firms or people are introduced to the network by
the network leader.

Figure 13: Technology partners for CRM implementations

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 It is possible that the caregiver suggests methods in which the
network resources may be more effectively used.
3.10 Management in networks
There is no one-size-fits-all approach to networking. When it
comes to networking, there is a lot of variability, which makes the
task much more difficult. The relevance, intensity, intimacy,
strength, adaptability, commitment, and power distribution of a
network's connections varies. Relationships aren't all created equal.
Some have a greater impact on the production or destruction of
value than others. Some relationships are vital because they
eliminate value, even if they are difficult and expensive to
maintain. A connection with an important client, on the other hand,
is important because it provides value. The intensity of a
relationship may be measured by the quantity, frequency, and
intensity of interactions between the two parties. There would be a
lot of information exchange, mutual issue solving, and resource
commitment by both parties in a long-term partnership. When two
people are in close proximity, it doesn't always mean there is no
conflict. Conflict and collaboration are not mutually incompatible
in solid partnerships. The social and structural ties that bind
weaker partnerships may survive the strength of stronger ones. As
you saw earlier, the power distribution in a network may have a
considerable influence on the management of those links.
Individual ties and clusters of interactions are both part of the
management challenge in networks. Manufacturers of consumer
products, for example, tend to classify their clients into two distinct
categories: retail multiples and independently owned stores.
Different approaches are used for each. Independents are viewed as
a homogeneous cluster and handled by independent wholesalers
whereas retail multiples are treated as significant individual clients
and may be allocated specialized account managers, category
experts, merchandising teams and logistics specialists.

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3.11 Research into network competence
A new study by Thomas Ritter and his colleagues
investigates the impact of network competency on the performance
of focused organizations. – In a study including 308 German
mechanical and electrical engineering firms, researchers
discovered that a company's product and process innovation
success is strongly influenced by its network competency.
Additionally, 149 university spin-offs, founded to market
technology developed by publicly financed research institutes,
were the subject of a performance analysis in another research
project Many performance factors, including sales growth, sales
per employee, profit and long-term survival were shown to be
impacted by the spinoff's network competency. Management might
expect to benefit from the findings of early-stage research.
3.12 Summary
You've just read about the significance of business networks
in CRM success in this chapter. In today's corporate world,
networks are a need. This is a system that is always evolving and is
made up of many different interconnected parts. The full amount
of a company's network connections, as well as the activity
linkages, resource ties, and actor bonds that these interactions
comprise, constitutes its network position. The acronym SCOPE
stands for suppliers, customers, owners, partners, and employees,
all of whom are members of a network. CRM places a high value
on two of these factors in particular. Materials, services, finance,
people and technology are provided by the network members to
help the focal company's clients come up with value propositions,
and the demand chain members play a role in distributing and
selling goods to those consumers. Despite the fact that no one
corporation has complete control over a network, every
organization tries to strengthen its network's position by exerting
influence over its other members. Managers at the highest levels
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should be proficient in both managing networks and managing
inside networks. An important part of network management is
identifying and coordinating and managing the actors and
resources that are most appropriate for completing the tasks
necessary for firms to generate value for their customers. These
may be within to a business, but more often than not, they'll be
external to the organization. To manage a network effectively, you
must be able to manage both groups of network members (like
consumer segments) as well as individuals (like ad agencies or
logistical partners).

***

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 CHAPTER-4
MANAGING INVESTOR AND EMPLOYEE
RELATIONSHIPS

Suppliers and partners played an important role in achieving

CRM objectives, which we discussed in the previous section. In
this chapter, we'll take a closer look at the role that company
owners and workers play in CRM success. Owners and investors
may be crucial sources of capital since they expect to see an
increase in the company's value in exchange for their
contributions. Because CRM doesn't always provide quick results,
their expectations may need to be moderated. The effectiveness of
CRM implementation depends on the involvement of employees.
CRM strategies are developed and implemented by people, who
also use technology in a tactical manner. CRM will not be a
success unless individuals are willing to utilize the CRM toolbox
and remain committed to the CRM vision, strategy, and goals.
4.1 Owner/investor relationships
The owners and investors of a company are important
stakeholders. A major source of funding for enterprises, they hope
the value of their money to increase in exchange for their
investment. In other words, they're looking for ways to increase
profits for the company's shareholders. If a company's return on
investment exceeds the weighted average cost of capital put in the
company, then shareholder value is produced (WACC). There has
been a considerable gain in shareholder value if the WACC (the
weighted average cost of equity and borrowings) is 10% and that
money is invested in the firm that is producing a return of 20%.
Stock markets throughout the globe use dividends and gains in a
company's share price to determine its shareholder value. If you
purchase a share for $40, and the price increases to $50, and you
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get a dividend of $5, the value of the share has increased by $15
over the course of the year. He argues that managers are agents
who must act in the interest of their principals, those shareholders
who have financial control over the company.. He argues that the
fundamental role of managers is to maximize long-term
shareholder value. What, therefore, is the relationship between
CRM and the value of shareholders? It is the present value of all
future profit margins that a firm might expect to collect from its
consumers. This concept of client lifetime value has been brought
up in previous chapters of this book (LTV). The LTV created by a
company's clients is directly proportional to the company's overall
worth. This means that CRM may have a significant influence on
the value of a company's stock. It does this by establishing and
maintaining lucrative customer connections.
Several CRM competencies have a direct impact on
shareholder value:
 The desirability of different target markets varies. Margins are
under pressure when demand is either declining or stable, or
when there is significant competition. This has a negative
impact on shareholder value. For investors, the best markets
are those that show indicators of both profitability and
expansion.
 There are several ways in which a company may cut down on
acquisition expenses while increasing its ability to gain new
consumers.
 Keeping key customers and maximizing their lifetime value is
the goal of customer retention that is targeted and successful.
 Increasing the share of wallet and the value of retained
consumers may be achieved via successful cross-selling and
up-selling strategies.

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 One of the most important aspects of strategic CRM is
developing value propositions that consumers prefer over rivals
and desire to purchase.
 As a result of CRM systems, organizations are able to better
manage their customers' lifecycles. With the help of Salesforce
automation, it's easy to find, monitor, and close off prospects.
Campaigns and events benefit from increased efficiency thanks
to marketing automation. Customers' service needs may be met
more cost-effectively via service automation.
 There are a number of ways to increase customer value and
thereby shareholder value via the use of intangible assets likes
customer data. In order to be successful, CRM software
programs require a steady stream of high-quality data.
 Successful firms are adept at recognizing and creating
connections with partners that can assist generate and deliver
consumer value. The value provided by CRM skills for the
benefit of shareholders. The left and center of the graphic
depict the core CRM disciplines of controlling the value of
existing and new clients. The establishment of new enterprises
is a third source of growth that may contribute to shareholder
value on the right side. In order to increase shareholder value
via present customers, you may either increase sales or cut the
cost-to-serve your consumers.

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 Figure 14: Shareholder value through CRM
There will be no influence on shareholder value from cost
reductions if sales and service channels aren't completely
revamped (for example, from branch networks to an online
presence). Existing customers' revenue may be expanded
significantly. One of the key ways to increase customer retention is
to increase the amount of money customers spend in a certain
category (share of wallet). The acquisition of new customers may
lead to further revenue growth. In this article, "new" may refer to
both new to the industry and new to the company. This is the third
CRM-related technique for enhancing shareholder value, either via
organic expansion, partnerships or acquisitions. As a consequence
of rising shareholder value, investors and shareholders alike expect
dividends and stock prices to climb. Short-term thinking is
prevalent among most Western investors, both institutional and
private. Investors are hoping to get back their money quickly if not
immediately. Short-termism has resulted in a rush of money from
hot investment opportunities to the next. Depending on the
characteristics of the CRM being utilized, the time it takes for a
CRM deployment to provide a return on investment varies. A
comprehensive CRM deployment requires investments in
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technology, processes, and human resources. It may take three to
five years to see a return on a major shift in business culture and
the restructuring of the company around certain clientele. Financial
metrics that suggest a profit may not be the ones that investors
choose. Strategic CRM performance may be measured by
customer satisfaction and retention, as well as a bigger proportion
of customer spend. Perhaps the company's customer data
collection, sharing, and use has improved, or perhaps the staff's
views toward customers have changed. Over the period of three to
five years, it may be difficult to establish any changes in sales or
profits that can be attributed to CRM or another program.
Companies' performance is influenced by a variety of variables,
many of which they cannot influence, such as the state of the
global economy, currency rates, international relations,
government regulations, and the activities of competing companies
and technological breakthroughs.
If these characteristics alter during a three- to five-year
period, the CRM program may be affected in a favorable, negative,
or neutral way. An operational CRM project, such as sales-force
automation, may result in a profit within 12 to 24 months after
implementation. It is necessary to replicate the selling process and
transfer current data to the new system before any computer
hardware or software is introduced. The new method must then be
taught to the sales staff. An increase in the number of calls,
proposals, and enquiries that the sales staff is able to manage may
be the effect of such an investment. Customers' support was moved
to online self-service as part of a 3Com operational CRM effort.
The Palm portable computers are made by 3Com. 3Com saved
$16.8 million over a two-year period by reducing call volume, talk
time, call transfers, and training costs. In terms of customer
satisfaction, there's no word on the matter. An analytical CRM
system may show results very immediately if the relevant kind of
customer-related data is available for campaign execution.
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 There may be an increase in revenue after the first year of a
more involved project that incorporates data from many databases
and is supplemented with external data. A new data warehouse, on
the other hand, may take considerably longer to return. A catalog
company in the United Kingdom made use of CRM analytics to
better target potential customers for a mailing campaign.
Traditional direct marketing methods were put to the test, as well
as those using CRM. There were fewer catalogs delivered,
customer acquisition costs were lower and two-year revenues and
margins were higher under the CRM approach. Several tests on
subsets of customers may be performed to show the benefit of
CRM investment. Customer acquisition costs, sales per customer,
client retention rates, and customer tenure may all be used to
highlight the value of CRMs.. It may take two or more years before
the benefits of a collaborative CRM effort become apparent. Prior
to implementing portal-based self-service, customers must be
persuaded of the advantages. New service paradigms may be
opposed by customers who prefer face-to-face sales representatives
and telesales. There is a danger of significant delays if two or more
organizations work jointly to implement a CRM system. Fred
Reichheld thinks that investors are equally as vital as customers
and labor. For the average investor, it is not the greatest idea to put
money into companies whose primary goal is client retention and
long-term increase of shareholder value. There are four ways you
may create a foundation of long-term investors even if your
company is publicly listed. There should be more education for
current investors and a change in the makeup of investors to
institutions that have a lower turnover.
4.2 Internal marketing
Using marketing-like tactics to manage people has been
around since the 1980s, when Len Berry stated that it made sense.
6 It was considered that attracting and retaining excellent workers
was similar to attracting and retaining good consumers. Moreover,
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you were instructed to promote your CRM approach to your staff
as if it were a product that they were supposed to purchase. An
example of internal marketing: In order to successfully execute
corporate and functional plans, internal marketing is a deliberate
effort to overcome organizational opposition to change and align,
motivate and integrate people. Internal marketing plans seldom
follow the same format as their external counterparts, but the same
architecture may be used to think systematically about how you
can get your coworkers on board with your CRM approach.
Marketing goals, market segmentation and targeting, market
positioning, and marketing mix are some of the main concerns
addressed in most marketing strategies. In the context of internal
marketing, we'll go through them briefly.
 This includes broad qualitative goals, such as gaining
employee support for the CRM strategy, encouraging them to
embrace new work methods, or creating a company culture
where the customer's voice is at the center. Marketing
objectives Similarly, measurable goals, such as teaching all
staff to comprehend the notion of client lifetime value, are
possible.
 For example, you may divide up the internal market into
homogeneous subsets to target each group with a particular
marketing mix. You may, for example, divide your employees
into groups based on how much time they spend with
customers. A European train operating business was in charge
of executing this task for us. In order to better understand the
impact that workers have on the customer experience, they
categorized them into four distinct groups.
 Positioning is connected with how you want each internal
market group to view CRM. This is a good strategic move for
senior management, but for others it may be about job
enrichment, work happiness, process simplicity, or any other

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 value that is important to the segment. Not every market can be
served by a single positioning strategy.
 The marketing mix is a collection of strategies and tactics used
by companies to achieve their goals in certain markets.
Communication and networking are essential components of
the internal marketing mix.
4.3 Empowerment
When it comes to CRM installations, many emphasize the
need of building an environment where customers' opinions are
respected and acted upon. Consequently, they provide more
autonomy to their customer service representatives to meet and
even exceed the needs of their clients' customers. Employees that
have "gone the additional mile" are hero-made in certain firms.
When it comes to customer service, it's not enough to just inform
staff that they're now accountable for maintaining the connection
with the client. To empower an employee, you need to provide
them the tools they need to perform at a high level. If, for example,
a client complains about an unjustifiable issue, they need to know
how to handle it positively. This may include pre-writing the
discussion, supplying data from a knowledge base on previously
encountered issues and recommendations for how to fix them, or
offering diagnostics tools. An employee's level of empowerment
may be as broad or as narrow as they like, ranging from unlimited
control over their actions to a more restricted level of autonomy.
Limits may be set in terms of money (e.g., no more than $200 per
client) or products (e.g. domestic appliances but not financial
services). Employees who feel trusted and appreciated at work are
more likely to remain loyal to the company, which in turn leads to
higher levels of customer satisfaction and retention. However,
empowerment isn't always a good idea. Successful firms,
according to Michael Treacey and Fred Wiersema, thrive in one of
three fundamental value-delivery disciplines: operational
excellence, product leadership, and customer intimacy. With an
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emphasis on operational excellence, empowering employees
should be restricted. If too much autonomy is granted, the
operational procedures that lead to excellence may be hindered.
When it comes to customer service, empowerment is a better fit.
4.4 Employee relationship management (ERM) software
applications
ERM components are available from a number of top CRM
program providers. Human capital management and talent
management are also known as ERM. The internal market, i.e. the
employees, is targeted using CRM-like ideas, procedures, tools,
and technology. ERM is described in the following way in an
Oracle white paper. Workforce productivity and customer
satisfaction may both be improved via the use of employee
relationship management (ERM) tools, information, and services.
It is becoming more common for businesses to see the value in
giving their staff with access to a single, complete picture of their
clients, such as is given by customer relationship management
(CRM) systems. Similarly to CRM, ERM aims to cultivate long-
term connections with its valued personnel, much as CRM does.
Employees and supervisors make up the bulk of ERM's internal
user base. People management responsibilities like as recruiting,
training, performance management, and pay may all benefit from
the usage of ERM. Executive Resource Management (ERM) helps
managers interact with their teams, align personnel with the
company's overall objectives as well as exchange information and
establish a shared understanding. Another way that ERM aids staff
is via the use of workflow modeling, which shows how activities
should be carried out and provides relevant information, as well as
communication with co-workers. Employee portals are a
significant component in many ERM solutions. An employee
portal is a one-stop shop for all the resources an employee, whether
a manager or a report, needs to accomplish his or her work well
and efficiently. In the same vein as many commercial websites,
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portals enable workers to design their own homepages so that role-
specific information is easily available.
4.5 Summary
We studied the significance of managing relationships with
owners/investors and workers in this chapter. Owners and
investors are essential sources of money, and they anticipate a rise
in shareholder value in return. Any expectations that customers
would see a quick return on their CRM investment may need to be
tempered, as strategic CRM installations may take three to five
years to pay off, while operational CRM implementations may take
one to two years. Companies with high levels of investor churn due
to dissatisfaction with CRM investment returns can use one or
more of the following four strategies to build a stable group of
long-term investors: educate current investors, shift the investor
mix to institutions that avoid investor churn, attract the right kind
of core owner, and operate as a privately owned company.

***

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 CHAPTER-5
INFORMATION TECHNOLOGY FOR
CUSTOMER RELATIONSHIP
MANAGEMENT

CRM, as defined by us, is a technology-enabled method of

managing the customer interaction. In this chapter, we introduce
CRM technology. For a deeper dive into the many aspects of these
three areas, the following chapters will be of interest.
5.1 Origins of CRM technology
Building blocks for customer relationship management
(CRM) have been in place for many years. CRM has been
influenced by call centers, sales force automation systems, and
customer information files (CIFs) dating back to the 1970s and
earlier. Several organizations in the late 1980s attempted to
integrate some of these disparate technologies. In the insurance and
banking industry, CIFs (Customer Information Files), which were
critical, were considered as a marketing tool rather than an actual
account record. Customer upsells began to be made via phone
rather than inbound support calls in the early 1990s. Customer-
facing departments started to see customers as a single entity, and
the notion of a "single view of the customers" was established.
Because of a shift in consumer expectations, CRM systems have
been developed. Consumers took new expectations with them as
they joined a new industry. "My airline remembers me," for
example, was a common phrase they used. My electricity supplier
owes me a thank you for all my hard work. CRM swiftly spread to
other industries, like as consumer goods and healthcare, after it
was originally used in banking and telecommunications. It became
more clear that firms needed to focus more on the value of their
customers in order to stay competitive.
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 Figure 15: A single view of the customer for front office
applications.
It was more customary for organizations to focus on
improving internal procedures than on bettering the customer
experience in the early days of consolidating the consumer
viewpoint. Ultimately, the project's ultimate aim was to implement
multichannel CRM, which combined all customer contact points
and communication medium (such as face-to-face meetings, voice
telephone, email and wireless) into a single picture of the customer
across all touchpoints and media. Customers expect a regular and
consistent exchange of information, despite the fact that businesses
have a plethora of systems and divisions. Here, the idea is to
provide a "single view for the customer." Customer service across
several channels is a major technology challenge. The technology
requirements of a large, high-volume contact center are
considerably different from those of a far-off field salesman.
It was technologically impossible for one system to manage
all of the client channels. The effective deployment of operational
CRM is a precondition for focusing on a single perspective of the
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customer. It has become more important in recent years to improve
the value of each customer encounter by better understanding the
customer's value. An increasing trend is toward analytic CRM
rather than operational CRM because of this. Additionally, online
technology has a major impact on the development of a broader
knowledge of CRM (customers, channel partners, investors). These
extra-enterprise CRM capabilities, such as customer self-service,
partner portals, and investor portals, didn't need the installation of
specialized software on their own PCs since external users could
access and share information through web browsers.
Since CRM systems are more than just a collection of
applications, they are more than just software. Customer
relationship management (CRM) must be flexible enough to suit
the demands of a continually evolving audience (the customer).
Different industries have different needs, and it's important to take
that into consideration. Sales representatives and other out-of-the-
office workers, for example, need mobile access through their cell
phones and tablets. It must integrate with other systems and
function across all communication channels in order to provide a
unified view of and for the customer. Since many of CRM's
objectives cannot be realized only via technology methods, its
implementation must also take appropriate work practices and
abilities into consideration.
5.2 The CRM ecosystem
The CRM ecosystem is made up of three major groups: CRM
solutions providers, hardware and infrastructure vendors, and
service providers.

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 Figure 16: The CRM ecosystem
CRM solutions providers
CRM solution providers are among the ecosystem's most
well-known participants. Some well-known examples include
Oracle, SAP, salesforce.com, Microsoft, and E.piphany. Revenue
from CRM solution providers reached $8.4 billion in 2006,
according to Forrester, an independent research company, and is
forecasted to reach $10.9 billion by 2010. There are three main
types of CRM solutions:
CRM suites aimed at large enterprises with more than $1
billion in annual sales and/or more than 1000 workers are included
in this category. CRM suppliers specializing in enterprise-level
companies often provide a comprehensive set of features, have the
ability to grow to service huge user bases, and support a wide
number of sectors, languages, and currencies in addition to the US
dollar. Traditional on-premise licensing is the primary method
through which they distribute their goods. Some of the most
prominent companies now provide hosted or SaaS deployment

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alternatives. Small and medium-sized enterprises (SMBs) with
annual sales under $1 billion and/or less than 1,000 workers fall
under the Midmarket CRM suites category. Similarly, CRM
providers in this category offer a wide range of CRM functionality,
although they frequently have more restricted capabilities in
certain areas and are easier to use than systems developed for the
big business market. For large-scale worldwide installations, these
suppliers are not the best. On-premise licensing and SaaS
alternatives are also available from this group of vendors. Vendors
in the CRM specialized tools category provide solutions with a
small functional scope but strong specialization capabilities for
large and mid-sized companies alike. Marketing automation, sales
force automation (SFA), customer care, partner channel
management and collaboration, customer analytics, and customer
data management are some of the speciality CRM products
available. However, the CRM solution providers make up a minor
part of the entire CRM ecosystem. Hardware platforms such as
Unix or Intel-based computers and communications infrastructure
like as telephony for contact centers, web, and email systems must
be integrated with CRM software to ensure that it can be used
effectively. As a result, hardware and infrastructure providers are
equally critical to the CRM ecosystem.
5.3 Hardware and infrastructure vendors
An focus on technology and infrastructure may be necessary
to meet CRM objectives. There must be a close connection
between the desktop software of the customer care representative
and ACD or switch hardware in contact centers, for example. CRM
indicators, such as customer value or the customer's tendency to
churn, may dictate how calls are prioritized and routed. The central
CRM database must be linked with the handheld devices used by
salespeople to keep track of leads and customers. IBM, Blackberry,
Dell, and Hewlett-Packard offer a wide variety of hardware

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solutions, while Avaya, Genesys, and Siemens provide
infrastructure solutions for telephony and CRM.
Service providers
The CRM ecosystem's services component is the biggest and
most ambiguous. When it comes to CRM implementations, the
usage of third-party service providers is often a deciding element
in the final outcome. Good external advise and execution may be
the difference between success and failure while embarking on the
CRM journey since it entails a lot of changes to strategy, business
processes, organizational structures, personnel, and technology.
Furthermore, the call center is one example of a front office
function that may be outsourced in both a technological and a
business process sense.

Figure 17: CRM service providers

5.4 CRM solutions
There are a wide range of CRM systems available to
businesses of all sizes, from large corporations to small businesses,
and they all have a common set of core functions: marketing, sales,
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and customer support. Some CRM solutions, on the other hand,
don't fit well into either of these two functional categories. The
operational activities of marketing, sales, and service divisions
may be overlooked by certain CRM modules, for example. The
sales, marketing, and customer care departments may all benefit
from customer and product management software's many features
and modules. A common CRM module, PRM (partner relationship
management) helps companies who rely on channel partners to
promote, sell, or support their products. There are a number of
providers and solutions for CRM analytics, which are frequently
seen as a different set of apps. The key components of each of
these application areas are described in the following sections.
There are considerably more capabilities and functionalities in
modern CRM programs than can be effectively shown here.
Management of customers and products
It is possible to include customer and product management
apps into a wider CRM program, or to build them into an
application that focuses on sales, service or marketing. The
database must be able to identify significant characteristics of
consumers and items, as well as the links between them. When it
comes to B2B enterprises, for example, there is no one-size-fits-all
solution. In the same way, not all goods are the same either. Off-
the-shelf retail items have a unique identification number, making
them easier to identify and comprehend, but things that may be
customized, such as vehicles or computers, are more difficult. It's
common for management systems for companies and products to
be industry- or company-specific.
Marketing
Segmenting clients or prospects, creating lists, running
campaigns, and assessing leads are all possible when CRMs are
used for marketing objectives. CRM may also be used by
marketers to build marketing strategies, manage marketing budgets
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and loyalty programs, introduce new goods, and administrate
channel partner relationships.. E-mail, newsletters, telemarketing,
traditional direct mail, and online marketing are just a few of the
communication channels that may be incorporated into a marketing
program. Customer relationship management (CRM) relies on
sophisticated underlying programs and readily available customer-
related data in order to enable targeted marketing campaigns.
5.5 Sales
It is common for CRM sales software to accommodate a
wide range of selling methods, from complicated B2B sales to
B2C telesales and browser-enabled self-service. These various
selling methods may need a team of people, channel partners,
particular sales procedures, and area management. What matters
most is how an opportunity is handled from the moment it is
discovered all the way through to its completion. It is now possible
to create bids, orders, and projections from a single point of entry
with the help of opportunity management systems. A sales
technique is often used in tandem with the introduction of sales-
force automation technologies. Because each salesperson will
approach the system in their own way, it will be impossible to
manage sales and prioritize resources if there isn't a technique in
place. For example, certain CRM systems offer pre-integrated sales
techniques. Selling via the internet also has its own set of
difficulties. For this, you'll need things like shopping carts,
storefronts, visual cataloguing tools, and safe checkout processes.
Complex items may now be sold online thanks to the advent of
product configurators. To help salespeople better understand the
effect of closing a sale on their remuneration, the CRM program
can replicate complicated incentive and commission systems. As a
last piece of technology to enhance sales operations, mobile
synchronization or wireless enables salespeople to access the CRM
system when on the road and away from the office.

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Service and support
A wide range of options are available for CRM's service and
support modules. Complex industrial items need field service
engineers, while consumer complaints necessitate the use of an
online knowledge base and current service technicians. Trouble
tickets are at the heart of any CRM-enabled customer support. You
may use this to keep track of the whole service event, from order
placement through problem resolution. Similarly to sales force
automation, field service needs mobile devices. The usage of
dispatch and scheduling software in service is possible, though. In
a teleservice application, scripts may be used to assist operators
offer a consistent client interaction (much like in marketing and
sales).
5.6 Partner relationship management (PRM)
Many firms use channel members or service providers to
promote and sell their products and services. Collaborative CRM is
the term for this approach. If channel members and partners are to
effectively manage their interactions with end customers, they will
need assistance. As previously mentioned, managing a partner
relationship necessitates not only the aforementioned sales,
marketing, and service functions, but also specialized functionality
such as partner qualification and registration, joint business plans
and objectives, performance measurement, partner training,
marketing funds and rebates administration, and specialized
partner incentive schemes.

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 Figure 18: CRM components – partner relationship
management
A gateway is often required for PRM in order to provide
partners with safe, regulated access to the CRM system while yet
allowing for teamwork to guarantee that rival partners can't view
one other's data and prospects, as well as to allow individual
partners via the portal to govern their own users.
5.7 CRM analytics
The value of CRM analytics has increased in recent years.
Streamlining customer-facing activities in sales, marketing, and
service is no longer adequate for organizations. Customer value,
customer happiness, and churn propensity may all be analyzed
using analytics to get a better understanding of your customers.
Today's CRM systems include three degrees of analysis:
conventional reporting, online analytical processing (OLAP), and
data mining.
Standard reporting
An efficient CRM system relies heavily on reporting. CRM is
built on the basis of customer comprehension and distinctiveness,
both of which are reliant on accurate customer-related data. Basic
reports on major accounts and yearly sales are one kind of

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reporting; more complex reports on specific performance measures
are another. There are two types of reporting: standardization
(defined) and query-based (ad hoc). CRM software commonly
includes standard reports, but they must often be customized to
meet the specific requirements of the firm. When the report is run,
some customizability may be achieved by choosing choices or
filtering criteria, but the final outcome is constrained to what the
report's creators had in mind. Certain reports are required by law or
by authorities in particular businesses. In certain cases, the design
and creation of a bespoke report might be costly. On the other
hand, query-based reporting gives the user with a variety of tools
that may be used to build a particular report. As a result of the time
necessary to set up a new request for information, this method
cannot be used on a frequent basis. The appropriate user may
request particular reports, such as: "Show me all clients in my zone
whose maintenance agreements have expired and who have yearly
sales exceeding $50000." CRM's regular transactional data may
not be formatted well enough to provide the best results when
analysis demands increase. As a consequence, OLAP has become a
vital CRM component.
Online analytical processing (OLAP)
OLAP technologies make it possible to do ad hoc analyses on
data that has been stored in a database. One or more star schemas
are used to hold warehoused data, letting users to delve into graphs
and tables to analyze how a given figure or issue may have
developed. Because it has a core fact table that is surrounded by
numerous dimension tables, it is referred to as a "star schema."
Customers, opportunities, service requests, activities, and the like
are all structured around one core fact table in a data warehouse's
star schemas. There may be information in the customer schema
such as customer income statistics, sales volumes and profit
margins, as well as discounts and promotional expenses. A query
may be answered using one or more OLAP schemas. Ad hoc
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analysis is made possible by the schema format, which enables
users to go deeper into summarized data to uncover more specific
information. Oracle's Express Server and Hyperion's Essbase are
the two most used OLAP systems. Some suppliers choose to use
the term "business intelligence" rather than "OLAP" in their
marketing materials. Many CRM users benefit from OLAP since
they have a wide variety of queries to ask about the warehoused
data. In order to measure revenue and profitability, salespeople
might examine their region. Call response times and rates may be
analyzed by customer service personnel. Marketing fund approvals
may be compared to income earned by partners to determine how
well a partner is doing. It is also possible to use OLAP
technologies to make real-time judgments. While the consumer is
on the phone, for example, propensity-to-buy measurements may
be sent to the contact center employee. This enables for a more
personalized offer to be offered to the consumer, which is more
likely to be accepted. In the end, a real-time CRM strategy
recommended by E.piphany comes out. In CRM analytics, the
method of delivering information is critical. A web browser
interface with a graphical style and drill-down functionality may
provide information to a user's computer's desktop. There is a
search involved in this method. Setting trigger points is another
way to convey a message (e.g. when a customer logs more than a
certain number of service calls in a month). After that, the
analytics tool notifies the user with the relevant data through email
or some other notification system. One of the most effective
management tools is 'publish and subscribe,' or P&S.
Data mining
In certain businesses, data mining gives a significant amount
of CRM analytical capability that is highly sought after. It is very
difficult to analyze massive amounts of customer data without data
mining in the banking, telecom, insurance, public sector, retail and
utility sectors. The data mining method uses selection, exploration,
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and modelling to uncover patterns and correlations in the data.
Scores for things like possibility of a client defecting, fraud
proclivity or credit risk, customer value and marketing efficacy are
all possible outcomes. Advanced analytics and data mining
solutions are offered by a number of CRM companies. 'Intelligence
Architecture,' for example, is marketed by SAS Institute and has
the following components: 'data warehousing' (data mining,
predictive modelling, forecasting, simulation and
optimization).CRM necessitates the use of analytical tools like
these. When it comes to metrics like customer profitability, it's
only possible to utilize them if they can be quantified. Performance
against this KPI may be evaluated using data mining and an
activity-based costing system. As part of the customer interaction,
operational CRM software may make use of customer value or
churn ratings to aid in the targeting and prioritization of offer.
5.8 CRM architecture
One of the most important aspects of a successful CRM
strategy is the system's architecture, or how it is built. CRM
systems must be able to work in the office, out of the office, and
via the web, unlike exclusively internal systems. Multiple
communication channels, each using a different technology (web,
email, telephone), must be linked together in order for them to
work properly and be flexible enough to meet the needs of an ever-
changing and possibly expanding community of users. The vast
majority of CRM solutions are connected with other in-house
systems, including back-office systems, and are seldom
freestanding. As a result, the CRM architecture faces major
difficulties. It is possible for CRM architecture to become a
substantial impediment to the achievement of desired results. A
CRM project manager must be aware of architectural
considerations, since changing the system's design after it has been
established may be very complex, expensive, and even impossible.

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5.9 Multichannel CRM
The recent decade has seen the development of two
viewpoints on multichannel CRM: There are several ways to
communicate, both technologically and organizationally. For
example, clients may visit your website, e-mail or phone you to
inquire about prices – and want the same level of consistency in
each communication. An improved customer experience, including
a sense of familiarity and consistency of service across all channels
and contact points, need multichannel CRM technology.
Multiple communication technology channels
When you use CRM technology, you can develop and
manage an ongoing dialogue with your customers that reflects their
worth regardless of how they interact with your company. Priority
treatment is expected regardless of the communication mode used
by strategic customers. Prioritization is expected for incoming
phone calls and emails. When emails from high-value customers
take priority over calls from lower-value customers, a CRM
database and a technology known as universal queuing are needed.
There is a single queue for all messages regardless of origin or
technology channel, and answers are prioritized depending on
customer value or some other attribute. In order for universal
queuing to be effective, the CRM software must be coupled with
the communications infrastructure (phone, email, and internet
platforms) (source of customer value metrics).
Multiple organizational touchpoints
Customers communicate with your company via a variety of
channels, including social media, email, and phone calls. Sales
personnel phone customers to discuss terms, and customers contact
the support desk for help. Marketing offers must be accessible for
the customer support worker in order to properly handle the
consumer. More so if the service desk is to serve a dual purpose

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and cross-sell an offer to customers at the conclusion of a service
call. Finally, channel partners must be kept in the loop if they are
to prevent channel disputes over pricing, leads, and commissions.
Customers and external partners have access to online portals, as
well as a common knowledge base for goods, pricing and customer
activity, as part of the technological solution for numerous
communication channels. There are considerable technological
hurdles to overcome here, but it is frequently the adoption of
business procedures across departments and outside that is the
most challenging component of many interaction channels.
5.10 Mobile and wireless solutions
Customers' homes and workplaces are frequent destinations
for sales representatives, merchandisers, meter readers, and other
service professionals. Providing a positive client experience is
dependent on the efforts of these individuals. Unless they have
access to the most recent customer, product, and technical
information, they will be unable to accomplish their jobs
effectively. Mobile (synchronized) and wireless technology are
two of the most common ways to enable mobile workers (online).
● With mobile synchronized CRM systems, an individual's CRM
information is replicated on a handheld or laptop device with a tiny
resident database. Rather than relying on a network or constant
connectivity, these systems use very complex synchronization
technology to filter the data that is sent to the relatively tiny
portable device. Prior to departing for work, home or a depot in the
morning, the user may synchronize the gadget. A major benefit of
these systems is that they may be used everywhere there isn't a
reliable connection, including in airplanes, rural locations, and
even basements. CRM customers on the go may be just as
productive as those based in the office. It is a downside of mobile
because certain vendor solutions may not scale well to large
numbers of users since the synchronization process might be
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complicated and unreliable. It's possible that the mobile client uses
a different set of technologies than the connected client, making it
less useful. Another drawback is that data is only as up-to-date as
the last time it was synced with a central server. Mobile
synchronized solutions are now the most widely used and accepted
among mobile professionals.
It is also common for wireless internet solutions to include a
portable device. Wireless data is used to link this item to the main
system. A better wireless internet experience is now possible
thanks to advancements in 3G, 4G, and Bluetooth. In urban
regions, modern wireless broadband networks have virtually
eliminated the cost and performance penalties that were formerly
associated with wireless internet solutions. Continuous
connectivity and the associated advantages of data currency may
outweigh the very slight variations in connection and data cost.
5.11 Integration
An important IT subject in and of itself is integration. Large-
scale, complicated CRM projects rely heavily on specialist
integration middleware vendors, such as Webmethods and IBM. 12
Some CRM integrations, on the other hand, aren't as involved as
others. The complexity of the applications environment and the
necessity for timely information transmission are the primary
factors in the integration problem. Batch and real-time integration
are the results of this. Processing in batches is less taxing on the
system's resources than real-time processing. Once the information
is stored in a file or batch, it is moved across the interface into a
new location. Delays in transporting the data, on the other hand,
might be expensive in terms of revenue loss and a poor customer
experience. This means that the data in the destination system is
always a day out of date. Companies that do business across time
zones have a more difficult job since batch processing must be
coordinated with local night time. In general, batch integration is
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better for transmitting information that does not change often, such
as component number data, since it is faster and more accurate.
Instantaneous real-time integration occurs. As an example, when
one system updates a customer record, the change is
instantaneously reflected in the destination system. Real-time
integration is required in certain cases (for example, telephone
integration), as customers are using their phones while integration
takes place. CRM systems confront four common integration
issues, regardless of whether they are batch or real-time.
Application integration
CRM and other business systems, such as accounting, billing,
inventory, and human resources, are connected via application
integration. For example, if all records are updated at the end of the
day (for example), this form of integration may be batch (for
example, all records are changed at the end of the day) (when an
order comes in, it is put through to the warehouse immediately).
CRM and other system suppliers might include application
integration as part of their usual offerings. In many circumstances,
this standard integration will need to be tweaked in order to work.
However, the expense of hand-built integration increases with
time, since each software change necessitates a new interface
between systems. Integration middleware solutions are often
needed in cases where there are multiple applications that need to
be integrated, and where the flow of information or messages
between the apps is critical. Typically, these solutions use
conventional system connections for the most frequent
applications.
Integration of telephony
Calls may be automatically routed and outbound calls made
from a call center's desktop via telephony integration, which links
the CRM program with a telephone system. Customers who
haven't used their credit card in the previous two months at
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financial services company Capital One are diverted to a client
retention expert. All other inquiries are sent to general customer
support at Qantas Airlines, save those that come from customers
who have just placed a reservation. To be successful, big call
centers must have a strong telephone integration solution. The
contact handling process may be further refined by using
technologies such as universal queuing and predictive dialing. The
goal of predictive dialing systems is to increase the efficiency of
contact center agents. Using this data, they may estimate how long
it will take an agent to finish the current call. In order to minimize
wasted time, the system will then dial the number of the following
call, expecting a client pickup at the same moment that an agent
completes the current conversation. Call rates might be raised, but
only if the quality and efficacy of client interactions are properly
regulated so that employees are not overloaded to the point of
exhaustion.
E-mail integration
As with telephone integration, this simplifies communi-
cations with the consumer. It's like that. It usually necessitates the
use of quite a few distinct technologies. Integration of e-mail might
include the automatic creation of email messages as a consequence
of internal workflow processes (for example, once an order is
ready for shipping, automatically email the customer to inform
them of delivery information) as well as automated email routing
and response. It's no secret that email response software has
evolved quite a bit over the years. Automated responses to
incoming e-mails, such as notifying the service desk that the e-mail
has been received and providing the service request tracking
number, are examples of simple applications. As technology
advances, more complex systems may be built to automatically
reply to incoming e-mails based on key terms or patterns. A system
like this may become smarter with time. However, if the consumer

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gets a response that does not solve their concern, they might have a
negative impact on the customer experience.
Web integration
The integration of the internet with CRM is a major difficulty
for many firms. Today, almost every firm operates an online
presence that is mirrored in its customer relationship management
(CRM) database (customer registration details, solution knowledge
base, product information, price lists, etc). Integration technologies
or a web application that is a component of the CRM system are
appropriate places for this information to be drawn from. For
example, if the client's contact center tells them a different price
than the one on the website, this might lead to mistakes and more
effort as well as a poor customer experience. Additionally, online
integration may also include web chat or web collaboration With
the use of these tools, a company may provide assistance to a
consumer while they are still on the company's website. Customer-
provided phone numbers can be used for simple callbacks over a
telephone line; customers and agents can converse via web text
chat in chat windows; and agents can take control of a customer's
mouse pointer to assist the customer in filling out a form or
locating a document, among other examples.
Web browsers
Modern CRM systems rely heavily on web browser
technology since customers and channel partners may access them
from anywhere. CRM software must be installed on the customer
or partner's PC in order for traditional client/server technologies to
work. As a business grows, it can no longer anticipate or support
huge numbers of customers installing and maintaining the firm's
CRM system. However, browser-based solutions, on the other
hand, merely need a browser (of a specific version level) to be
installed on the client PC. The CRM application commonly
connects with the web browser using HTML (hypertext markup
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language) or DHTML (dynamic hypertext markup language)
(dynamic HTML).Other advantages of browser technology are
critical for CRM. Because most customer-facing conversations are
unstructured, the hyperlink-driven user interface works well. It is
also quite simple for users to understand how to use an application
because of the widespread nature of the web. For apps that interact
directly with customers and business partners, this is especially
crucial to keep in mind. Integration and mobile solutions both
benefit greatly from the use of web technology. An extensible
markup language known as XML (extensible markup language) is
becoming a common language for integrating applications. XML
may be used to communicate between the CRM and accounting
systems. WML (a small, wireless variant of HTML) is also used as
a way of exchanging information between mobile devices and web
servers.
5.12 Knowledge management
Keeping and using client data is a key component of a
successful CRM strategy. Keep an eye out for the phrase
"customer-related" here. We're not only referring to consumer
knowledge here. Customers' letters and faxes, as well as notes
taken during phone calls, are examples of unstructured data that
may be used to get insight into their habits and preferences. Many
more forms of information that may be used to promote, sell, and
service the consumer can be found inside the customer-related data
set. There is a wide variety of topics covered here, from product
features and advantages to price lists and rivals' offers. An example
of knowledge management is as follows: "Knowledge
Management" refers to an organization's practice of intentionally
acquiring information and keeping it in an organized manner so
that it may be used for the organization's goals. CRM's success is
heavily reliant on the efficiency with which information is put to
use when it comes in contact with customers. In Chapter 4, you
learned about the STARTS mnemonic, which stands for
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"shareable, transportable, accurate, relevant, timely, and secure"
and describes six characteristics of high-quality data. The
touchpoint information must meet the same six requirements. If
several users need access to the same data at the same time, such as
in the case of product specifications, then information must be
shared. User-to-user transportability of data is also essential. Both
on the website and on the laptop of the service technician, data
must be readily accessible to users at all times. In addition, data
must be accurate. Although market-related data such as industry
sales predictions may be 12 months out of date, price lists and
transaction histories must be current. At each point of contact,
users should have access to the most up-to-date information. There
is no need for sales reps to sift through a sea of useless material to
get what they are looking for. Knowledge that is relevant at the
time it is required is readily accessible. Knowledge that is critical
to a company's success must be safeguarded. IT-based knowledge
management systems that can capture, store, organize, analyze
(using data-mining techniques), and distribute information to users
at customer touchpoints have been developed by numerous firms
to achieve marketing, sales, and service goals. Ad hoc enquiries
need rapid and easy access to knowledge sources. It is possible for
service workers to solve a problem but not communicate this
information with their co-worker‘s without a searchable, editable,
and shared knowledge base. One of the most important aspects of
being able to resolve future client concerns is the ability to store
and analyze service requests in order to separate symptoms from
remedies. In the future, service agents, partners, and customers will
be able to access this knowledge base through an intranet or
extranet to find solutions and resolve issues.
Automated workflow
Modern CRM solutions make it possible to pre-define and
automate many customer-related operations, reducing the need for
human management of business rules essential to the success of
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sales, marketing, and service. It is also possible to design
workflows that can be monitored for preset criteria. As a result,
they react to these circumstances in a way that is both predictable
and satisfying. CRM processes that may benefit from automated
workflow engineering include:
Email response: When customers in the southern area send an
email, the following answer should be sent: 'It's been 20 hours
since the last time I spoke to you about this issue and it's still
unresolved. Please phone me. As soon as a lead comes in from the
internet, I check at my salespeople's workloads and allocate the
lead to the best individual. Lead assignment In the event that a
client rings in, prompt the contact center agent with a pre-recorded
greeting script. To help the agent, record the customer's reaction
and then select the best line of action. To enhance the chances of
upselling the consumer, keep repeating this approach. It's
recommended that if the consumer does not provide their
password, the user be sent directly to a customer identification
page. When a client places a confirmed order, the fulfilment
system should automatically send it to the fulfilment system for
review and shipment. Enterprise and midmarket CRM programs,
as well as specialty CRM applications like sales, marketing, and
service automation, often have workflow capability.
5.13 Summary
In this chapter of the book, you learned about the technology
that allows CRM. A large portion of the separate technologies that
make up today's CRM system date back to at least the 1970s and
even earlier. Ever since the '80s, there have been several efforts to
incorporate all of these different technologies into an unified CRM
solution. Hardware and infrastructure manufacturers as well as
service providers make up the CRM eco-component system's parts.
CRM systems, whether corporate, mid-market, or speciality, are
often tied to the front-office duties of marketing, sales, and service.

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In recent years, the usefulness of CRM analytics has grown.
Analytics may help companies better understand their customers'
worth, happiness, and propensity to defect. Traditional reporting
formats, online analytical processing (OLAP), and data mining
may all be used to generate a range of management reports in most
CRM systems. The success of a CRM system relies heavily on the
system's architecture. This requires the ability to work both inside
and outside the office and link various communication channels,
such as e-mail, fax, and phone calls in order to be really
productive. Only a small percentage of CRM implementations are
self-contained; most are interconnected with other systems in the
company, such as those in the back office. In today's CRM
software, workflow technologies are utilized to pre-define and
automate various marketing, sales, and customer support
processes. Customer-related data may be stored and used in an
effective CRM system, as well. Thus, many companies have made
substantial expenditures in knowledge management systems.
Consistent customer contact across different channels of
communication, as well as customer knowledge management and
analytics, process automation via workflow technologies and
connection with other systems and technology are all part of CRM
information technology. Depending on the industry, any or all of
these features may be tailored or pre-configured.

***

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 CHAPTER-6
SALES-FORCE AUTOMATION

This is the first in a three-part series on customer relationship

management (CRM) technology. In this chapter, we'll look at the
tools salesmen and their supervisors utilize every day. Marketing
and service automation are discussed in the following chapters.
Since the beginning of the 1990s, sales-force automation (SFA)
has provided salespeople and managers with technical help. SFA
has become a 'competitive necessity' that provides 'competitive
parity' in business-to-business contexts. To put it another way,
SFA is a common occurrence in the world of sales. Salespeople
may be found in a wide range of settings, from the field to the
office, from the street to the home, and even in the office itself.
SFA is used in all of these sales settings. SFA solution providers,
hardware and infrastructure manufacturers, and service providers
make up the SFA ecosystem. Companies may now gather, store,
analyze, disseminate, and exploit customer-related data for
marketing reasons thanks to technological advancements. This
kind of customer-related data is essential for a company's ability to
focus on and build long-term connections with its clients. A wide
range of SFA software solutions are available to help sales reps
and their managers monitor leads, manage pipelines, and configure
goods. Sales people and supervisors may also access reports
generated by SFA software. First, the field is defined and the SFA
environment is identified.
6.1 Sales-force automation
When we talk about "sales-force automation," we mean the
use of automated technology to assist salespeople and sales
management in achieving their daily goals. SFA relies heavily on
computer hardware and software. Handheld devices and contact or
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call center telephone technologies are all included in the hardware.
Integrated software solutions provide several features in addition to
'point' solutions that focus on a specific aspect of sales or sales
management. Marketing, customer service, and sales may all be
included in a single integrated package, or they can be part of a
more complete CRM suite. In order to help salespeople and sales
managers achieve their goals more effectively, every SFA software
is built to acquire, store, analyze, and disseminate relevant
customer-related data.
The SFA ecosystem
SFA solution providers, hardware and infrastructure
suppliers, and service providers make up the SFA ecosystem.
Providers of SFA services Many SFA solutions providers may be
categorized in a variety of ways. The majority of these people are
SFA experts. CRM suites including SFA modules, as well as
enterprise suites that encompass supply chain management (SCM),
enterprise resource planning (ERP), and customer relationship
management (CRM), compete against them (CRM). Several
instances are provided in the following table.
Table-Classification of SFA vendors

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 Some SFA experts specialize on a specific aspect of SFA.
Custom configurators are a specialty of Selectica. Companies may
use a configurator to design and build more complicated goods and
services based on a set of rules. Occasionally, clients are able to
engage directly with the configurator. Personal computers may be
built from scratch by consumers on Dell Computer's website
(PCs). Using a configurator makes it easy for customers to specify
exactly what they want, and only genuine choices and features are
shown to them along the way. Customers, salespeople, and
management may all profit from this. It is possible for customers to
design and develop their own bespoke solutions, which reduces
costs and meets requirements. It's no longer necessary for
salespeople to know all the nitty-gritty details of a product or
service since they are incorporated into the engine. As a result,
salespeople's training expenses are cut in half. The risk of
misunderstanding a customer's needs is reduced. Many of the
companies that provide SFA as part of larger CRM suites, such as
Siebel and salesforce.com, began out as SFA experts. These
companies now provide a broad variety of marketing, customer
care, and sales automation solutions.
Hardware and infrastructure vendors
With their high-performance demands, SFA applications may
place a burden on both hardware and technical infrastructure. In
the field, Microsoft-based Windows Pocket PC, Palm Pilot or
Blackberry may be preferred over desktop or laptop PCs by office-
bound salespeople and management. SFA systems must be able to
function both in and out of the office if a firm uses outside
salespeople. There is a need for mobile or wireless solutions since
portable device data must be synchronized with the central
database on a frequent basis. SFA applications must be able to
interact in a variety of ways, and they must be able to
communicate with one other (e.g. web, e-mail or telephone). SFA

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applications must be supported by technology and infrastructure
that can handle a growing number of users.
Services
In the SFA eco-system, there are several different services. A
sales-force automation project's servicing costs might jack up the
overall project's cost significantly. SFA project directors may
employ service providers that re-engineer selling processes,
manage projects, educate salespeople, or advise on organizational
structure. There may be a significant influence on the costs and
success of SFA programs from service providers. Equipment and
software might account for between 10% and 50% of the entire
cost of a sales force automation project. The rest of the money
comes from the costs of offering the service. A return on
investment (ROI) may take anywhere from 12 to 24 months
depending on the project complexity, even though some software
vendor case studies claim that payback can be reached within days.
Users must practice for at least 100 hours before they can say
they've mastered the system, which may take up to 21 months to
implement.
6.2 SFA software functionality
SFA applications have a wide variety of features, as seen in
the following table. There are certain solutions that don't have all
of the features you need for sales. Here, in the following
paragraphs, we'll explain this feature in further depth.

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 Table-Functionality offered by SFA software

Management of a company's finances

Salespeople and managers have access to a full picture of the
customer relationship, including contacts, contact history,
completed transactions, current orders, shipments, queries, service
history, and quotations. Sales professionals may keep track of all
their tasks for each account for which they are responsible,
whether it is a closed opportunity, an order or a service query.
You'll be able to access information about your accounts, contacts,
opportunities, and activities, as well as any outstanding service
issues.
Controlling the flow of events
Activity management helps salespeople and managers stay up
to date on all activities related to an account, contact, or
opportunity, whether finished or ongoing, by generating to-do lists,
defining priorities, tracking progress, and setting up notifications.
Such example of an activity might be to prepare an estimate,
organize a sales call, or follow up on an inquiry.

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Maintaining a contact list
Contact management features include the ability to create,
share, and update contact lists, as well as the ability to schedule
appointments, manage time, and keep track of tasks, events, and
contacts. Contact list data includes information such as names,
phone numbers, addresses, preferences, and e-mail addresses for
both people and corporations.
Management of contracts
Establish, track, expedite, monitor and control contracts with
customers using the contract management features available to
representatives and managers. Contract management reduces
contract approval times, enables earlier contract renewals, and
lowers administrative costs throughout the lifespan of a contract.
The software may utilize security measures to ensure that only
those who have been granted access to contracts are able to do so.
Management of documents
Companies create and utilize a variety of papers while selling
to consumers, such as brochures, product specifications, pricing
lists, comparative comparisons, and quote templates. Companies
may use document management software to handle these papers,
maintain them up to date, and make sure they're accessible to reps
and managers when they need them. Some systems enable all
papers to be 'connected' to an account or contact, allowing for a
quicker and more thorough recollection of previous encounters.
Software for event planning
Events like as conferences, seminars, trade shows, displays
and webinars may all be managed using this tool by representatives
and managers in partnership with customers or other partners and
can be planned, executed, controlled and analyzed. Many people
are engaged in events like conferences, from sponsors to exhibitors
to security partners to police to lodging partners to transportation
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and food partners to lighting and sound contractors to speakers to
invitees to the general public. Consider the Olympics or the FIFA
World Cup to get a feel of the enormity of certain important events
that are planned years in advance. For events attended by clients
and essential business partners to be perceived as professional it is
imperative that they proceed without a hitch, even if there are no
other sales-related events of the same complexity. Event
management software, which contains a number of functions, may
be beneficial to sales managers and anybody else in charge of
events. We've got everything from a schedule of events to online
registration and partner management tools to event reporting and
analytics to badge production to exhibitor activity listings and
venue management tools.
Management of incentives
Sales managers that employ commissions to motivate,
instruct, and reward sales staff have a problem with incentive
management. Many businesses use independent spreadsheets to
compute commissions. Incentive management, when used as part
of a sales-force automation system, removes the need to re-enter or
transfer data from spreadsheets, resulting in improved visibility,
accuracy, and productivity. Back-office payroll software may be
integrated to incentive management programs to automate
payment.
Managerial leadership
Companies may use lead management to develop, allocate,
and monitor sales leads. Leads either get stale or become
qualifying opportunities. Leads may be assigned to representatives
and account managers based on their function, region, product
knowledge, and other criteria using user-defined rules. Lead
management ensures that salespeople only have access to their
own leads and provides for more equal job sharing throughout a
sales team.
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Management of opportunities
When a potential sale or other income-generating event is
recorded, it is known as an opportunity. Using opportunity
management software, sales representatives and managers may
create an opportunity record in the database and monitor progress
against a predetermined selling procedure. As though running
through a checklist, salespeople follow the processes to make
certain that every opportunity is handled consistently. It is possible
for sales representatives to access their own prospects, which are
linked to a variety of additional pieces of information such as the
names and contact information of other sales reps, activities and
products, as well as quotes from competitors and information about
expected revenue, sales costs, and the likelihood of a sale closing.
When it comes to estimating future bonuses and commissions,
sales representatives may make use of the opportunity management
tool. In this way, managers can get a clear picture of how prospects
are developing as they reach the end of the sales cycle. Keep an
eye on the selling model in the left-hand window at the bottom of
your screen, as well as the likelihood of completing the deal at the
top.
Keeping track of customer orders
Once a customer has made a purchasing decision, the ability
to handle orders helps sales representatives transform bids and
estimates into orders with correct pricing. If the customer is there,
the order may be placed into production or picked from a
warehouse more quickly. Order management software may include
a quotation engine, pricing module, and product configurator, for
example. With the use of a portal, the customer, salesperson, and
management all have access to the same order information. It's all
about managing pipelines, from identifying prospects to evaluating
sales potential, to following up on leads, to making revenue
predictions, to cultivating client relationships and keeping them

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going strong. Based on genuine, up-to-date data, it determines the
possible scope and timing of each opportunity. Missed
opportunities and sales process failures may be reduced with a
well-defined sales funnel.
Encyclopaedias of products
A searchable computerized product library including product
names, stock numbers, photos, and specs is known as a product
encyclopaedia. These may be saved on the computers of
salespeople and/or made accessible to clients over the internet.
Configuration of the product Product configuration software allow
salespeople or consumers to create and price bespoke items,
services, or solutions automatically. When the product is especially
sophisticated or when customisation is a significant component of
the value proposition, configurers come in handy.
Visualization of the product
Salespeople and clients may use product visualization
software to create realistic pictures of things before they are
created. When used in conjunction with a product configurator,
this is a very valuable tool. The picture may be a simulated
photograph, a three-dimensional model, or a technical design, and
it could also incorporate other associated documents like specs or
costs.
Generating proposals
This enables users to generate customer-specific bids. Cover
page and letter, introduction, objectives, products, product features,
services, prices, specifications, pictures, drawings, people,
experience, resumes, references, approach, schedule, organization,
scope of work, and appendices are just a few of the parts that users
draw from a database of information to create proposals.

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Management of quotations
Representatives and managers may quote for opportunities
using quotation management software. This might be part of a
larger order management system. Users may use the program to
rapidly and accurately design, revise, approve, and produce costed,
customized proposals. Users may develop multimedia proposals
including music, animation, and video using certain providers'
tools. According to one study, proposals written using software
had a substantially greater success rate (46%) than those written by
hand (26 per cent).
Forecasting sales
Sales forecasting software provides sales reps and
management with a variety of qualitative and quantitative
methodologies for predicting sales income and closure rates. Sales
team estimations are among the qualitative approaches, while time-
series analysis and regression models are among the quantitative
methods. Accurate sales predictions aid resource allocation
throughout the organization.
Managing a territory
Territory management software enables sales managers to
design, update, and balance sales territory so that sales reps have
comparable workloads and/or possibilities. Some territory
management software has a territory management approach that
customers may utilize to create sales regions. Some apps include
links to geodemographic or geographic mapping tools. Companies
may use the program to match sales coverage to market potential,
construct sales territory hierarchies (e.g. cities, states, and regions),
and save selling costs by lowering travel time. The program is
often used to facilitate call cycle scheduling, calendaring, and lead
management.

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Engineering of work flows
Workflow engineering software may be used to develop
sales-related processes including lead management and event
management. It may also be used to create the selling process
itself, which is the sequence of actions that a sales person must do
to move a prospect from first awareness to sealing the purchase.
SFA software is built for context-specific applications, despite the
fact that we've only examined a general set of sales-related features
thus far. Sales agents selling liquor to a retail shop, for example,
could use software that advises planograms, optimizes retail
display space allocation, analyzes inventory levels, proposes
pricing, and manages cooperative promotional assistance.
Graphics, video, and sound support are vital in particular
situations. Some SFA providers include features tailored to
salespeople in certain sectors. For example, Siebel provides
tailored solutions for more than a dozen distinct sectors, including
aerospace and defense, as well as transportation. SAP has
preconfigured apps for more than two dozen different industries.
Salesforce.com, for example, provides over 50 basic reports as
well as the ability to create custom reports using wizards. These
send charts, tables, text, and other visuals to the devices of the
recipients. Dashboards provide executives with real-time sales data
that can be updated with a single click. People get reports that are
tailored to their jobs and responsibilities thanks to customized
dashboards. Drill down features allow users to go further into the
causes behind the findings in dashboard reports. In addition,
dashboards may be combined with third-party data to provide a
more detailed view of sales success and issues.
6.3 SFA adoption
In most cases, a company's decision to implement SFA is
made in two steps. First, top management makes the decision to
invest in SFA, and then sales reps and their supervisors make the
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decision to adopt SFA. SFA will be expected to provide
advantages to both senior management and users, and unless those
benefits are provided, SFA may be abandoned. SFA's Advantages
SFA implementation is said to provide accelerated cash flow,
shorter sales cycles leading to faster inventory turnover, improved
customer relations, improved salesperson productivity, increased
sales revenue, market share growth, higher win rates, lower cost of
sales, more closing opportunities, and improved profitability,
according to vendors and consultants. These advantages appeal to a
variety of SFA stakeholders: Shorter sales cycles, greater closing
chances, and improved win rates for salespeople Sales managers
benefit from increased salesperson productivity, greater customer
relationships, accurate reporting, and lower sales costs.faster
cashflow, greater sales revenue, market share expansion, and better
profitability, according to top management. There may be other
advantages, such as fewer rework, more timely information, and
higher-quality management reports, in addition to these measured
results. Case histories of SFA installations from software vendors
serve as testimonies to the benefits of SFAs. According to
independent research, the major incentive for adopting SFA is to
increase efficiency, despite the fact that not every SFA deployment
has specific formal aims.
How SFA changes sales performance
When a potential sale or other income-generating event is
recorded, it is known as an opportunity. Using opportunity
management software, sales representatives and managers may
create an opportunity record in the database and monitor progress
against a predetermined selling procedure. As though running
through a checklist, salespeople follow the processes to make
certain that every opportunity is handled consistently. It is possible
for sales representatives to access their own prospects, which are
linked to a variety of additional pieces of information such as the
names and contact information of other sales reps, activities and
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products, as well as quotes from competitors and information about
expected revenue, sales costs, and the likelihood of a sale closing.
When it comes to estimating future bonuses and commissions,
sales representatives may make use of the opportunity management
tool. In this way, managers can get a clear picture of how prospects
are developing as they reach the end of the sales cycle. Keep an
eye on the selling model in the left-hand window at the bottom of
your screen, as well as the likelihood of completing the deal at the
top.
Keeping track of customer orders
Once a customer has made a purchasing decision, the ability
to handle orders helps sales representatives transform bids and
estimates into orders with correct pricing. If the customer is there,
the order may be placed into production or picked from a
warehouse more quickly. Order management software may include
a quotation engine, pricing module, and product configurator, for
example. With the use of a portal, the customer, salesperson, and
management all have access to the same order information. It's all
about managing pipelines, from identifying prospects to evaluating
sales potential, to following up on leads, to making revenue
predictions, to cultivating client relationships and keeping them
going strong. Based on genuine, up-to-date data, it determines the
possible scope and timing of each opportunity. Missed
opportunities and sales process failures may be reduced with a
well-defined sales funnel.
6.4 Summary
Competition necessitates the use of technology to help
salesmen and their managers. In general, sales force automation
(SFA) improves the efficiency and productivity of sales teams. The
SFA ecosystem is comprised of a wide range of software,
hardware, infrastructure, and service providers. Many features are
available in SFA's product encyclopedias. These include features
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for managing client accounts and activities; generating proposals;
managing quotations; forecasting sales and managing territories.
SFA also includes features for managing incentive programs;
managing opportunities; managing orders; managing pipelines.
SFA also includes features for managing incentive programs. In
order to reap the benefits of SFA deployment, salespeople, sales
managers, and senior management are all parties with a stake in the
outcome being successful. There are several ways to measure a
salesperson's progress, including increased commissions and more
time to focus on selling. A sales manager's success may be
described as "better management of failing salespeople," according
to this definition. Senior management might consider themselves
successful if they see an increase in market share and a decrease in
cost-to-serve. In the absence of these benefits, salespeople will not
benefit from the technology. Adoption is more likely if salespeople
find the technology useful and straightforward to use, as well as if
they get enough training.

***

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 CHAPTER-7
DEVELOPING, MANAGING AND USING
CUSTOMER-RELATED DATABASES

This chapter discusses the importance of getting to know and

understand your customers on a personal level. CRM success
depends on it. Targeting and winning lucrative consumers is the
goal of strategic CRM, which analyzes customer data to identify
which customers to pursue and keep. Operations CRM, which
automates activities like as sales, marketing, and customer support
with a direct emphasis on customers, needs customer-related data
to provide exceptional service, execute efficient marketing
campaigns, and keep tabs on sales prospects. Analytical CRM
mines customer-related data for strategic or tactical purposes. As a
result of this exchange, the value of the business, its partners, and
its consumers will all be enhanced. The foundation of CRM
strategy execution is based on customer-related data. To be
successful in CRM, you must be able to obtain, improve, store,
distribute, and apply customer-related data.
7.1 What is a customer-related database?
As you may have seen, this chapter is not about customer
databases. Instead, customer-related databases are the focus of this
discussion. Why? Although many companies like to maintain a
single client database, this isn't always possible. There might be up
to 20 client systems in a large organization, such as a financial
services firm, each with its own database. Customers' information
is gathered from a number of sources in these databases. Databases
relating to customers may be held in a range of departments—sales
and marketing; service; logistics; and accounting—each with its
own set of operational needs. A wide range of customer-related
data may be stored in these databases, including information on
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possibilities for marketing and enquiries from customers. Channel
managers like company-owned shops, third-party retailers or
online retailers may also maintain customer-related information.
Product managers may also maintain track of their own clients'
information in a similar fashion. Depending on your point of view,
it's possible to look at customer data from the past, present, or
future, with an eye on the present moment, historical sales, or
future possibilities. Customer-related data may be used to
individual customers, customer cohorts, customer segments,
market segments, or the whole market. All kinds of customer-
related data may be found in them, including product information,
competitors' information, regulatory data, and more.
Developing a customerrelated database
Most databases have a consistent structure for organizing
their data (also called tables, rows and columns). Single-topic files
include, but are not limited to, customer information, product
information, transaction information, and service requests (tables).
Each fi le (table) has a certain amount of records (rows). Each
record contains a variety of data elements (row). The fields in this
table are arranged in similar categories to facilitate navigation
(columns). This has resulted in a spreadsheet-like client database.
Creating a client database is a six-step procedure shown in the
following figure.

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 Figure 19: Building a customer related database.
Define the database functions
The strategic, operational, analytical, and collaborative
functions of CRM are all supported by databases. Customer
acquisition, retention, and development are all based on a
company's ability to identify which customers are worth pursuing
and which customers are worth retaining. A collaborative CRM
system may use operational and analytical data as shown below in
order to help partners in distribution channels work together to
serve consumers. For both operational and analytical CRM goals,
customer data is critical to collecting and analyzing. The everyday
operations of a company may be made more efficient via the use of
operational CRM. customer service representatives (CSR) and
hotel staff alike need access to a customer record in order to book
the desired kind of lodging (smoking or non-smoking, standard or
de-luxe) for a client.

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 If a customer's credit limit has been exceeded, a salesperson
must check the customer's payment history. Marketing, sales, and
service decisions are all guided by analytical CRM, which uses
customer-related data to make better choices for customers and for
the company as a whole. Customers who have expressed interest in
moving to a rival provider may be targeted with a retention offer
from the telecom company; hotel customers who have expressed
joy in previous customer satisfaction surveys may be targeted with
a weekend stay promotion from the hotel company; and sales
managers may want to calculate the profitability of their sales
representatives' clients based on the level of service they are
providing. Data relating to customers is generally broken down
into two categories: operational and analytical. OLTP (online
transaction processing) databases store operational data, whereas
OLAP (online analytical processing) databases store analytical
data. There are many different types of data that may be found in
the database, but the OLAP database typically contains just the
most relevant information for analytic purposes. A number of
internal and external data sources might potentially be used to
populate the database's analytical functions. There must be no
discrepancies in OLTP data. Attempting to explain to a client what
the usual invoice for a customer in her postcode is is of little value
to a customer service representative (CSR). The customer wants
information that is specific, exact, and up-to-date. With less current
data, OLAP databases can still work well.
Define the information requirements
For sales, marketing, and service purposes, and for making
strategic CRM decisions, the best people to answer the question
"what information is needed?" are those who interact with
consumers. New e-mail campaigns may benefit from knowing
previous campaigns' open and click-through rates as well as their
CTRs for certain target markets and offers, in order to design their
next campaign more effectively. Email addresses and preferences
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(HTML or plain text), as well as a preferred greeting (first name?),
are all things to keep in mind when sending a message. Customer-
related databases are determined by operational and analytical
needs, too, Mr. or Ms., she wonders. A different set of data is
needed for senior executives who are evaluating your company's
strategic CRM options. They may be interested in the following.
Which products are most popular? What are the current
demographics of our customers?? What products do they buy? Is
there anybody else they buy from except us? What are our
customers' requirements, expectations, and preferences in terms of
the value proposition? Since packaged CRM systems became
popular, the majority of database design work has been outsourced
to software firms. With industry-specific CRM software and its
accompanying industry-specific data models, a company's data
needs are better met. Out-of-the-box functionality for operational
and analytic CRM systems is dependent on the database design
phase taking into account deviations from the standard industry
model. When migrating data from OLTP to OLAP, many CRM
providers provide standard methods, but the client is likely to have
to modify and adjust these processes.
For consumers to inquire about, these fields
Most CRM systems have pre-populated fields in their
different modules, whether they are used for sales, marketing, or
customer service. Contact information, contact history,
transactional history, current pipeline, and future prospects are
included in this section. Additionally, products and communication
preferences may be found in these categories (columns).
Information on how to get in touch
Is there a main contact (name) and a secondary contact
(names)? No, I don't think so. Identifying the individuals who can
make or ruin a project is critical. All of your clients' addresses,
phone numbers, fax numbers, and e-mail addresses are critical.
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Friends and family members
Which companies have interacted with the customer, when,
about what, via what medium, and with what end effect, and who
is responsible? All transactions are recorded in a database.
At what point in time has the customer bought something?
What has been presented to the customer but not purchased. Cycle
time for new products in the present industry What are the current
sales prospects? How much is each opportunity worth to you? How
probable is it that we'll shut down? ' Is there a 10%, 20%, 30%,
40%, 60%, 80%, 90% chance of making a sale here? According to
how probable it is that a sale will go well, CRM systems provide
salespeople the ability to color-code their odds of success.
Opportunities
'Opportunity' focuses on the future, while 'transactional
history' focuses on the past. There are prospects here that have not
yet been addressed or opened up.
Products
Do you know what the customer has? Exactly how long have
these items been in use? Is there any history of problems with these
products?
Preferences when it comes to communication
Do you like to communicate through mail, phone, e-mail, or
face-to-face? Is it better to use plain text or html for email?
Approaching someone correctly might be tricky. Do you have a
preferred time and location for contacting me? Some consumers
may prefer to be contacted by phone, letter, or email rather than
face-to-face for certain messages (such as an urgent product
recall), while others prefer to be contacted by phone, letter, or
email (e.g. news about new products). These preferences may
change over time. If you choose the manner of communication that

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your consumers prefer, you demonstrate that you are interested in
listening to them. Customers are regularly given the option to opt
out of different forms of communication. It's possible that a
customer's preferences may change. Six types of material are
available for selection on Amazon.com: terms and conditions for
Amazon purchases, information from and about partners, special
deals, and so on.
Determine the origins of your information.
Internal or external sources may be used to build databases of
customer-related information. In order to find out what data the
company already has, an audit must be conducted. Internal data is
primarily relied upon by CRM systems, however the amount of
customer information available depends on the degree of
involvement the company has with the particular client. Because of
this, some companies depend on third parties to help them market
and sell their goods; although they may not have a thorough grasp
of the demand chain. Functions like as marketing, sales, and
customer service all have access to internal data. Market size,
market segmentation, customers, customer profiles, customer
acquisition methods, marketing campaigns, product registrations,
and product information requests are all examples of data that
marketing could have. Some companies may keep track of
customer purchasing history including the frequency and value of
their purchases; buyers' names; contact information; account
numbers; SIC codes; important buying criteria; terms of trade such
as discounts and payment periods; potential customers (prospects);
responses to proposals; competitor products and pricing; and
customer requirements or preferences. It is possible to keep track
of service history, customer satisfaction, customer complaints,
resolved and unsolved problems, and inquiries, as well as
participation in a reward program. Data on credit scores,
receivables, and payments may be in the hands of finance, while
your webmaster may have access to click-stream data.
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Adding value to the information
Marketing databases and market research firms are two
examples of external data sources that may be utilized to
supplement the company's own data. The Claritas Behaviour Bank
and Lifestyle Selector databases, for example, are available to
customers of the business intelligence firm. Many millions of
completed surveys have been used to fill these databases. Another
intelligence firm, Experian, offers its customers access to geo
demographic data. Three types of external data are available:
1. a list of data
data from the 2010 census
3. modelled data.
a list of data
Individual-level data compiled by list bureaux or list vendors
is known as compiled list data. Personal, home, and business-
related information is used to compile their lists. They may consult
tax records, questionnaire responses, warranty card registrations, or
yearly reports that have been made public by firms in the area. You
may either buy a list entirely, or you can rent it for a certain
duration. If the list or the permission to use it has expired, it must
be deleted from the system. In the event that you are a shop
looking to expand into the dancewear market but lack relevant
client data, you may consider purchasing or renting data from an
outside source. The bureau or vendor may have gathered data from
a variety of sources, including: dance school memberships; student
enrollments in dance courses at school and college; recent
purchases of dance equipment; respondents to lifestyle
questionnaires who mention dance as an interest; subscribers to
dance magazines; and purchasers of dance and musical theatre
tickets.

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statistics from the 2010 U.S. Census
Government census records are used to gather census data.
There is a wide range of knowledge accessible in various places of
the globe. Some censuses are untrustworthy, while others don't
provide enough data for nongovernmental organizations to make
informed decisions. Unlike in many other countries, you can get
aggregate geo demographic data like zip code, census tract, and
block group in the United States since the census is only done
every 10 years there. Subdivisions of counties are census tracts. In
the United States, census tracts are divided into "block groups,"
each of which has a street as its boundary. There are over 225 000
block groups in the United States, each containing an average of
over 1000 people. The following are examples of geo demographic
census data:
● median income
● average household size
● average home value
● average monthly mortgage
● percentage ethnic breakdown
● marital status
● percentage college educated.
There are 155,000 census enumeration districts in the United
Kingdom, with an average of 150 homes and 10 postcodes each.
More than half of all geo demographic information may be found
in enumeration districts. A person's behavior may be predicted
more accurately from data collected at the individual level than
from aggregated geo demographic data. It's possible that census
data may be your sole alternative if you lack individual-level data.
The median income and average family size from the most recent

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census might be used by a vehicle dealer to identify potential
customers for special offers.
Data that has been simulated
It is possible for third parties to develop modelled data by
assembling information from various sources. Rather than
purchasing raw data, these providers allow you to purchase
processed data. Clustering methods have often been used to the
data. Claritas, for example, has created a system for classifying
customers called PRIZM. Postcodes in Great Britain are referred to
by the acronym PRIZM, which defines the lifestyles of the people
who live there. 72 separate clusters are created based on the
answers to several lifestyle and demographic questionnaires, and
each postcode is allocated to one of these groups. Most of the data
utilized for clustering was collected during the last three years.
Twickenham, a London suburb, has a unique PRIZM profile for
everyone of its people. About one-third of one percent of homes in
the United States are allocated the PRIZM code A101. The figure
shows their employment position, housing, automobile ownership,
vacation plans, and media consumption..
An external data source must get a copy of your internal data
before it can be used to improve the data it receives. Using an
algorithm that detects the equivalence of the fi les, the source will
compare its fi les with yours (often using names and addresses).
The data is subsequently returned to you together with your files
by the source.
Secondary and primary information
Data pertaining to a customer's account might be classified as
secondary or main data. Secondary data is information that has
previously been gathered for a different reason from the one for
which it was originally obtained. There are two types of data:
primary data and secondary data. It is exceedingly costly to gather

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primary data using conventional methods, such as surveys, because
of the time and resources required. As a result, businesses have had
to come up with low-cost methods of collecting core client data for
CRM solutions. In terms of data-building strategies, the following
are some examples: Customers are encouraged to participate in
contests of skill or chance, such as raffles. Personal information is
given up when they fill out the entry forms.In order to get a
newsletter or magazine, consumers may be asked to provide their
email address and other personal information.Customers are
encouraged to record their purchases. This might be for the
purpose of keeping them up to speed on product changes.
It's common for firms to have loyalty programs. These allow
organizations to relate individual consumers and groups to their
purchase habits. Personal, demographic, and even lifestyle
information is collected from clients when they sign up for a
program.
7.2 Select the database technology and hardware platform
Customer-related data can be stored in a database in a
number of different ways.
1. hierarchical
2. network
3. relational.
Between the 1960s and 1980s, hierarchical and network
databases were the most frequent. Because it's the first database
design, hierarchical databases aren't well-suited for most CRM use
cases. Rather of a family tree with multiple branches, think of the
hierarchical model as an organizational chart with a single branch
representing the hierarchy of a company. Starting at the top and
working your way down is the only way to get to the lower levels.
In a hierarchical data structure, you may have to go through
numerous levels of higher-level data in order to get the data you
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want. There are usually hierarchical databases in product
databases, as well. This process will continue until all versions of a
product have their own record in a key category. Children may
have one, no, or more than one biological parent in the network
database, to continue the idea of a family tree The relational
database overtook the network database before it had a chance to
become widespread, finally becoming an ANSI standard in 1971.
Relational database management systems
CRM software currently relies almost exclusively on
relational databases as its underlying data model. Using two-
dimensional tables, relational databases hold data in rows and
columns. Each record in a relational database is uniquely identified
by one or more fields. The main key is the name given to this. A
unique number is often issued to each client in the first column of a
sales database. Because of this, each row has a unique id. Other
databases are used for marketing, service, inventory, payments,
and so on, as well as for other purposes. Linking databases is made
possible thanks to the customer's unique identification number. A
consumer of an online business is shown here. Your name,
address, selected method of delivery and credit card information
are required when you purchase a book from an online store. The
'Customer'database is populated with a record for you, with a
unique identifier. Your purchase and desired delivery method are
saved in a "Orders received" database. An 'Inventory'database
shows that the item you ordered has been out of stock for some
time. Re-ordering may be initiated when inventory levels approach
critical levels. A 'Payment 'database keeps track of your credit-card
transactions. Your customer record will be linked to all of these
other databases one-to-many. Oracle and SAP's business suites
have made it possible for all of these databases to be reintegrated
into a single system. Hardware platform selection depends on a
variety of factors, including:

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 The database size is a major consideration. Large volumes of
client data may be stored on even the most basic desktop PCs.
However, this data cannot be readily shared across several users
because of the way they are built.
2. Current technology. There is a good chance that your company
already has a database system in place.
3. The number of users and their location. Despite the simplicity of
many CRM software, the hardware may need careful selection
and frequent assessment in an increasingly global industry. For
example, the hardware may need to be able to support a
multilingual, geographically scattered user group that needs
access to data for both analytical and operational objectives.
Relational database management system (RDBMS)
An RDBMS is a relational database management system.
Relational database management systems (RDBMS) enable users
to build, edit, and administer relational databases using a computer
application. Many technology companies provide relational
database management systems (RDBMS) suitable for CRM
applications. Oracle, IBM's DB2, and Microsoft's SQL server are
the leading RDBMS products. Accessing, updating, and querying
data in an RDBMS is often accomplished using SQL. The
following phase in this process, the selection of CRM apps, may be
done in tandem with the selection of the CRM database. Modern
database apps have their own database schema, which sets the
tables and columns in the database structure before the program is
ever installed on a computer. As a result, several databases, such as
Oracle and SQL server, are supported by various CRM vendors. A
complete platform, including hardware, operating system (OS),
database, and CRM apps, may be purchased. Platforms like as
UNIX, Microsoft, and IBM are the most popular. It is possible to
use UNIX on a wide range of hardware/OS/database combinations,
such as HP hardware, Digital UNIX operating system, and Oracle
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database software. DB2/400, an IBM database, runs on top of the
OS/400 operating system. Because of how easily they can be
scaled and extended, Microsoft NT servers are becoming more
attractive for CRM systems.
Get the database up and running
It's now time to gather the necessary data, which includes
determining the database's and hardware's specifications. CRM
software relies on data that is accurate to the best of its ability. This
is why we say 'appropriately' since the amount of accuracy varies
depending on the database's intended usage. As previously stated,
operational CRM solutions often need more up-to-date data than
analytical CRM programs. It's possible that you've seen the effects
of bad data firsthand. To become a contributor to a charity, you
may have gotten a letter in the mail from that organization. It is
possible that the organization purchased a prospecting list that was
not validated against its existing donor database. You may have
been referred to as Mrs. even if you want to be referred to as Ms.
You may be experiencing this issue because your communication
preferences have either not been collected or the firm has not acted
or checked. The most common problem with consumer data isn't
really wrong data at all, but rather data that's just not there. Even
the most basic consumer information, such as e-mail addresses and
preferences, is difficult to collect for many firms. The following
are the primary processes to ensure that the database is filled with
correct data:
1. source the data
2. verify the data
3. validate the data
4. de-duplicate the data
5. merge and purge data from two or more sources.

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 Obtaining information from consumers, such as at the time of
initial sign-up or at the conclusion of a service call, necessitates the
development of clear protocols. Customers' goodwill cannot be
relied upon by organizations; data must be gathered at every point
of contact. Checking to verify that the data submitted is precisely
what was found in the original source. This may be a time-
consuming operation since the computer is designed to detect any
discrepancies in the data. A visual comparison of the data
submitted and the data at the main source is an option. Data
validation is the process of verifying that the information entered is
correct. For example, spelling mistakes, erroneous title
designations, and improper salutations are all frequent occurrences
in the name and address boxes. Data accuracy may be improved
via a variety of methods. Validation of whether or not an input is
inside a field's permissible range. When it comes to missing
values, the computer can look in any column. It is possible to
verify postcodes against an authorized external list from the postal
service. Reduction in the number of duplicate copies: sometimes
referred to as de-duping. When a corporation sends out similar
emails, customers are made aware that their information is being
stored in many databases. Internal and external data may not be
cross-checked, or many internal lists may be used, or clients may
have more than one address in their database. Despite the fact that
de-duplication does cost money, it might seem wasteful and
unprofessional from the customer's standpoint. The procedure may
be sped considerably by using de-duplication tools. There are two
categories of errors that must be considered throughout the de-
duplication process:The removal of an important document. It
would be a mistake to presume duplication and remove data if, for
example, a property is split into unnumbered flats and you have
transactions with more than one resident. The same family name or
initials may be used by many customers in the same household.

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 Disposing of an unnecessary record. An example of this
would be keeping distinct records for a client with various titles
such as Mr. and Dr. It's called merge–purge: merging two or more
databases necessitates this procedure. To merge an external
database into an internal database, two internal databases (such as
marketing and customer service databases) may be combined, or
two external lists (such as a campaign) may be purchased and
combined to meet the needs of the organization. When duplicates
are removed from the merged lists, marketing efforts may save a
lot of money.
Maintain the database
In order to remain valuable, customer databases must be
updated on a regular basis. An average year in the UK sees 5% of
postcodes change, while in western countries, 1.2% of the
population dies and over 40 million people in the United States
move every year. These are just a few examples from the world of
business, so it's important to keep these numbers in mind. For
databases to begin to decay, it doesn't take long at all. Data
integrity may be maintained in a variety of ways by businesses.
The database should be updated as soon as new transactions,
campaigns, or messages are received. Creating and enforcing rules
will be a necessary part of your job responsibilities.
De-duplicate databases on a regular basis.
An annual subset of the files is audited. Take a look at how
much damage has been done. Are there any specific data sources
or fields to blame? After a specific amount of time, delete accounts
that have been inactive. For things that are often purchased, the
dormant period might be as short as six months. The time duration
will be extended for items with a longer repurchase cycle. A good
dormancy time is not always evident. There are some people who
use several credit cards in various currencies. Having a year of
inactivity does not mean that the owner has not been to a nation in
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the past 12 months. The owner expects to travel a lot in the future
months and years. Drop the database into place. A fresh or updated
piece of information may be gleaned from every interaction with a
consumer. Customers should be encouraged to update their own
records. Online purchases from Amazon require consumers to
verify or change their invoice and shipping information before they
may proceed. If the client requests it, remove the customer's
information from the database. Decoy records may be added in
step 8. An external agency may administer the database, and you
may test their performance by putting fake entries into the system.
This indicates that you may be dealing with a service provider that
isn't meeting expectations. Admins have the ability to make
changes to records. It is also possible to update and maintain a
database via the use of a query language. Common programming
languages include SQL and QBE (Quick Basic for Execution)
(Query By Example). UPDATE, INSERT, and DELETE
commands are among the maintenance queries available in SQL.
Update customer-related data using the available commands. New
records may be added to the database by using INSERT.
7.3 Desirable data attributes
By keeping the database up to date, users can be sure that the
information they're looking for is correct and up to date. When it
comes to sharing, transporting, and storing data, accuracy and
relevance are two of the six ideal criteria that have been identified.
6 The STARTS mnemonic may help you recall these desired data
characteristics. Because several people may need access to the
same data at the same time, data must be shared. It may be
necessary to provide customer support representatives in many
locations with comprehensive data on the consumers who
purchased yearly travel insurance as a result of a marketing effort
at the same time. Data must be portable from the point of storage
to the point of use. We need to make data accessible to consumers
whenever they want it. There are a variety of scenarios in which
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the user may be a customer care agent, a delivery driver, an
independent mortgage counsellor or a salesman. International firms
now confront especially difficult data transportation issues because
of their internationally spread clients, diverse product portfolios
spanning various categories, and multiple routes to market.
Today's organizations need electronic databases and supporting
technologies like data synchronization, wireless communications
and web browsers to ensure that the data can be accessed from any
location. Accuracy is a major problem. In a perfect world, we
would all be able to rely on 100% correct information. Data
accuracy, on the other hand, comes at a significant price. At
different points along the process, data is collected, input,
integrated, and analyzed. Inaccuracy may be caused by any one or
all of these steps. Inaccuracies in data input may be caused by
keystroke mistakes.
It is possible for faulty conclusions to be reached when
analytical methods are used incorrectly. Customer relationship
management (CRM) systems are plagued with inaccurate data,
which may lead to wasteful marketing efforts as well as improper
prospecting by salespeople. It also damages customer confidence
in the CRM system, resulting in decreased use. This results in a
further decrease in the quality of the data. To prevent this, it is
important to keep an eye on consumption and data quality. De-
duplication, user buy-in, and other data quality procedures need to
be implemented to ensure that data is recorded at the source rather
than secondhand. WH Smith and News of the World credit their
CRM-enabled direct marketing response rates to the correctness of
their database. The response rate to a free copy of Delia Smith's
How to Cook book was 8 percent. This was far higher than the
previous standard before they executed their data quality initiative.
A specific aim necessitates the use of relevant data. You'll need a
customer's transaction and payment history, as well as their current
job and income, to check on their creditworthiness. You'll need
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their propensity-to-buy ratings if you want to target fl ag
consumers for a cross-sell campaign. Relevance is a crucial
consideration when developing a data management system to
support a CRM strategy. Be aware of the decision-making process,
as well as the relevant facts that will help you do so effectively.
Timely data refers to data that may be accessed at any given time
and in any given location. After a choice has been taken, data that
has been obtained is of no use. Data does not want to burden
decision-makers before the need is felt in the same way. Bank
tellers must have information on a customer's propensity to
purchase on hand at all times. The safety of company data is a top
priority for the majority of businesses. Customer data, in particular,
is a valuable resource and a source of competitive advantage for
every organization. Better solutions may be delivered to clients as
a result. Data must be safeguarded from tampering, destruction,
and loss. Many businesses take frequent backups of their
information. Physical and technological barriers, such as firewalls,
improve security. Because competing partners are logged into the
same CRM system via the same portal, data security in a partner
environment is especially difficult to manage because it is
necessary that they cannot view each other's sales leads and
opportunity information.
7.4 Data integration
There are several customer-related databases in most firms,
each managed by a separate department or channel. In addition to
product and production databases and contact centers and websites,
client data may also be found there. There may be a requirement to
combine data from other sources, such as suppliers and business
partners, franchisees, and so on. Inefficiency, duplication, and
strained business connections may all result from a failure to
integrate databases. It is a sign of poor integration if you purchase
an item online, only to be offered the same thing at a later date via
a different channel of the same firm. It is critical to standardize
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customer data across all databases in order to integrate consumer
information. When Dun & Bradstreet combined data from several
sources, it calculated that there are 113 different AT & T entries.
Examples of such companies are ATT, ATT, and AT&T, among
others. Businesses have a frequent challenge when it comes to
integrating data from several sources into a single view of a
customer. Marketing, sales, and customer service may be difficult
to accomplish using CRM software for certain projects. Two of the
most well-known on-premise CRM vendors, Oracle and SAP,
provide solutions for this problem. Master Data Management, for
example, is a feature of SAP's NetWeaver business connectivity
platform. This approach may be used to merge data from several
sources into a single database. For companies with older
mainframe (legacy) systems, newer systems with a central
database that can accept real-time inputs from several sources are
another alternative. But if you have a lot of outdated systems and a
lot of records, this could not be cost-effective. In outdated systems,
batch processing is widespread. Real-time data, on the other hand,
will not be allowed. Companies have developed software and
solutions that assist corporations integrate data from many
outdated systems. The development of middleware is sometimes
required for the integration of data from many sources. As the
name suggests, "middleware" refers to software that allows several
parts of a system to communicate with one another. For data to be
sent from one system to another, middleware must be used
between the two systems. Networks are known as "the glue"
because of their role in bringing people together.
Data warehousing
As corporations have grown in size, they have become more
isolated from their consumers and marketplaces. Across addition to
the United States, Disney has activities in Europe, Asia, and
Australasia. Fashion giant Benetton has operations on five
continents. It has approximately 7000 retail outlets and
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concessions to its name. A lot of data is generated by companies
like these, and it has to be processed into information that can be
utilized for both operational and analytical reasons There is a
solution to this issue in the form of the data warehouse.
Repositories of vast volumes of operational, historical and other
customer-related data are what data warehouses are actually all
about. It is possible to store 2 bytes of data in a terabyte. A
warehouse is a place where data from other databases may be
stored. These analytical methods are attached to a front end in the
warehouse that processes the data. Early users of data warehouses
include retailers, home shopping firms, and banks. a data
warehouse is described by Watson as follows: Instead than
focusing on specific applications like inventory management or
order processing, the warehouse is subject-oriented, arranging data
around the most important aspects of the company (customers and
items).
integrated: the extraction and transformation of data from several
sources is done in a consistent manner. M stands for male and F
stands for female in the world of code.
Data are arranged in time-variant fashion (e.g. months).
Because the warehouse database isn't updated on a regular
basis, it's considered non-volatile. The mass uploading of
transactional and other data occurs on a regular basis. In this way,
the data is less susceptible to short-term fluctuations. The process
of constructing a warehouse involves several phases and
procedures. The first step is to locate the essential data. In certain
cases, this might be difficult. Customer information was scattered
over over 80 different systems when the Commonwealth Bank
decided to use CRM in its retail banking division. Second, data
must be retrieved from these platforms and entered into our
database. In theory, these systems may not have been designed to
work with each other. The data must then be standardized,
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consistent, and clean before it can be used. It's possible that data in
various systems has been saved in various formats. Furthermore,
the quality of data originating from various departments within the
company may differ. Salespeople's behavior may be heavily
influenced by their ability to meet quarterly quotas. It may be
difficult to get sales people to keep their customers' files. The vast
majority of their knowledge is likely to be stored in their minds.
For their part, direct marketers are likely to put great effort into
maintaining the quality of their customer data. The data must then
be posted into the warehouse once it has been transformed.
Archival data that isn't necessary for current operations may be
archived or uploaded only if there is enough storage space. Most
likely, the most recent operational and transactional data from
multiple functions, channels, and touchpoints will be prioritized for
uploading at this phase. It's critical to keep the warehouse's data
current. Depending on how quickly the company and its
surroundings change, this might be done on a daily or weekly
basis.
Data marts
When a smaller subset of the data warehouse is needed for a
certain business function or division, it is called a data mart. A
separate data mart for marketing and sales allows them to perform
their own studies and make strategic and tactical choices. This may
take years to execute, with nothing to show for it in terms of ROI.
Most data warehouse initiatives will fall short of their stated goals,
according to Gartner Inc. According to the Meta Group, 20% of
projects are a complete failure while 50% fall short of goals.
Reduced storage capacity, a limited user count, and a more narrow
emphasis on the company all contribute to cheaper data mart
project costs. In terms of technology, things have become easier.

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Interrogation of and access to data
User interaction with customer-related datasets is possible via
CRM apps. Call center CSRs register incoming calls to customers,
and online brochures are updated when product specs change by
sales reps who add data to client records. In addition, CRM users
seek to analyze data or get management reports from the system.
Standard reporting, database queries, and data mining are all viable
options.
A typical report
The CRM system generates standard reports on a regular
basis. As an example, sales managers get monthly reports on the
activities and results of sales representatives in relation to sales
targets and daily updates on the call center's operations. It's
possible to delve down into a screen's data rather than a flat,
predetermined report. OLAP technologies make this possible.
Starting with regional sales data, a sales manager may dig down
into data on individual sales representatives and their clients in
order to identify the root causes of underperformance in the sales
process. Ad hoc queries of a database, data warehouse, or data
mart may also create special reports. The ability to generate reports
is a standard feature in most databases.
Database searches
There are a variety of options for CRM users when it comes
to raising a database query. Graphical interfaces let users choose
and choose the data they want, and then dig down to the
granularity they need. SQL, the standard query language for
relational databases, may be preferred by database administrators.
Standard SQL statements like as SELECT, INSERT, DELETE and
UPDATE, CREATE and DROP may be used to get to the data you
need in a timely manner.

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Data mining
It may be characterized as follows in the CRM context:
Marketing, sales, and customer service may all benefit from data
mining, which combines descriptive and predictive analytics.
Aside from operational databases, the more stable datasets in data
marts or warehouses are the most widely used for data mining.
Better software and faster processing rates have made data mining
more appealing and cost-effective. Data mining may be used to
answer strategic and operational CRM-related issues. For instance:
Our customers and market may be split in several ways.
What are the most valued customers?
Which of your current clients has the most potential for growth in
the future?
What are the demographics of the people that purchase our
products? Or what if you decide not to buy?
Is there a commonality in our consumer base's buying habits?
If so, how much should we charge each of these groups?
What are the characteristics of clients that do not pay their bills on
time?
How much does it cost to get a new customer?
Which kind of customers should be sought out for the purpose of
acquiring new ones?
Is there a way to boost the value of certain consumer groups?
Which consumers should be the focus of client retention efforts?
What are the best ways to keep customers? CRM may benefit
from data mining in a variety of ways. Associating data is one of
its many capabilities. Customers who purchase low-fat sweets may
also purchase herbal health and beauty aids or attend live theater

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shows, according to the statistics. One Wal-Mart retailer's analyst
noticed a high Friday association between diaper sales and alcohol
purchases. Finding that dads were purchasing diapers and a six
pack at the same time, he investigated deeper. Due to this
information being provided, the firm moved these goods closer
together. Both sales increased significantly. Data mining often
yields sequential patterns. Customer behavior is examined by data
analysts in search of "if...then" rules. The consumer is 50% more
likely to churn if they phone a contact center to inquire about loan
rates, for example, or a rule like "If a customer buys walking shoes
in November, then 40% of the chance that they would purchase
rainwear within the following six months." As a result, CRM users
are able to execute timely approaches thanks to these rules. Cross-
selling is possible in the first instance. Second, there may be a way
to save the customer's bacon. Classifying data is also a method of
data-mining. Customers may be grouped into distinct subsets that
are mutually exclusive. Segmenting your current clients into
groups based on the value they provide to your business is an
example of this. Each group may then be profiled. For each new
consumer, you may determine what kind of customer they are most
like. To get a sense of the prospect's prospective worth, you may
do this. If you want to know more about your clients' past
purchasing habits, such as how often and how much they spend,
you may divide them up into quintiles or deciles. RFM analysis is
the technical term for what we're doing here. Experiment with a
variety of treatment options and communication methods to choose
cells of the RFM matrix to see what works best. Customers that
have recently purchased, often purchased, or spent the most with
you are likely to be the most receptive. As a data mining approach,
clustering is often utilized by CRM practitioners to categorize
customers into various groups. In general, the purpose of clustering
is to diminish the differences between members of a cluster, while
concurrently increasing the disparities across the clusters.

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Clustering techniques need a certain collection of variables in
order to be effective. All transaction data may be used to establish
customer segments. The occult clusters may be found using
methods such as cluster analysis. After they've been generated,
statistical clusters must be understood. Lifestyle market segments
are discovered via the use of cluster analysis on massive datasets.
Sometimes, to convey the essence of the clusters being discussed,
we utilize descriptive terms like "Young working families" or
"Wealthy suburbanites."Finally, data mining may be used to
forecast future occurrences, which can aid with CRM. It is possible
to predict customers' future spending patterns and lifetime value
based on their previous buying behaviors. A wide variety of data
mining strategies may be created by combining these five
fundamental approaches. When it comes to segmenting customers,
you may use clustering to create customer groups and then use
transactional data to predict future purchases and customer lifetime
value for each segment. According to Gartner Inc., the industry
leaders SAS and SPSS provide substantial data mining solutions
that are adequate for most market needs. It's also possible to look
around for a better deal. Those CRM analytics providers who are
effective provide the following: Strong data mining statistical
methods like cluster analysis, decision trees, and neural networks
may enable access to data from a variety of sources, including data
warehouses and data marts, contact centers, electronic commerce,
and web tracker systems, as well as third-party sources.
Confidentiality is a concern
Worldwide, legislators have privacy and data protection on
their minds. Customers are getting more worried about how
commercial businesses use their personal information. Customers,
on the other hand, are unaware of the wealth of data that firms
have at their disposal. To better understand what you're doing on
the Internet, a little piece of software known as a cookie is installed
on your computer when you visit a site for the first time. Before
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downloading anything, just a small percentage of websites seek for
permission from their users. Customer concerns regarding privacy
led to two contrasting responses from the company. First,
corporations and organizations self-regulate; the second form is
self-regulation by individuals. Some companies, for example,
make a point of disclosing their privacy policies on their websites
as a sign of their commitment to transparency. Codes of conduct
for direct marketing, advertising, and market research businesses
have been created. Secondly, there was the option of enacting
legislation. Principles developed by the Organization for Economic
Co-operation and Development (OECD) in 1980 have influenced
personal data protection legislation across the world since that
time. To protect individuals from data collecting abuses, member
nations may apply these principles as voluntary recommendations
when creating law. The following are some of the most important
considerations:
● Purpose specification: At the time of data collection, the
consumer should be provided with a clear statement of the
purposes for which the data is being collected.
● Data collection processes: Data should be collected only by fair
and lawful means.
● Limited application: Data should be used only for valid
business purposes.
● Data quality: Personal data should be relevant for the purposes
used and kept accurate, complete and up to date.
● Use limitation: Personal data should not be disclosed, sold,
made available or otherwise used for purposes than as specified at
the time of collection unless the consumer gives consent or as
required by law. Consumer consent can be obtained either through
an opt-in or opt-out process. Opt-in means than consumers agree

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that their data may be used for a particular purpose. Opt-out means
that consumers prohibit use for that purpose.
● Openness: consumers should be able to receive information
about developments, practices and policies with regard to their
personal data. They should be able to find out what data has been
collected and the uses to which it has been put. Consumers should
have access to the data controller.
● Access: consumers should be able to access their data in
readable form, to challenge the data and, if the challenge is
successful, have the data erased, corrected or completed.
● Data security: personal data should be protected against risks
such as loss, unauthorized access, destruction, use, modification or
disclosure.
● Accountability: a data controller should be accountable for
compliance with these measures. Legislation has been enacted at a
number of levels. In 1995, the Council of the European Union
issued Directive 95/46/EC on the ‗ Protection of Individuals with
Regard to the Processing of Personal Data and on the Free
Movement of Such Data ‘ . This applies to all forms of data and
information processing including e-commerce. It required all
member states to upgrade their legislation to a common standard
by 1998. Companies are now only allowed to process personal data
where the individual has given consent or where, for legal or
contractual reasons, processing is necessary. EU countries are not
allowed to export personal data to countries where such exacting
standards do not apply. Legislation guarantees certain rights to
citizens of the EU:
● notification : individuals are to be advised without delay about
what information is being collected, and the origins of that data, if
not from the individual

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● explanation of the logic behind the results of automated
decisions based on customer data (e.g. why a credit application
was rejected)
● correction/deleting/blocking of data that do not comply with
legislation
● objection: individuals can object to the way in which their data
are processed (opt-out). Where the objection is justified, the data
controller must no longer process the information.
Data controllers are also required to comply with certain
obligations, including:
● Only collect and process data for legitimate and explicit
purposes.
● Only collect personal data when individual consent has been
granted, or is required to enter into or fulfil a contract, or is
required by law.
● Ensure the data is accurate and up to date.
● At the point of data collection, to advise the individual of the
identity of the collector, the reason for data collection, the
recipients of the data, and the individual‘s rights in respect of data
access, correction and deletion.
● Ensure that the data is kept secure and safe from unauthorized
access and disclosure.
A set of 'Safe Harbor' guidelines has been created by the
Commerce Department of the United States to allow US
corporations to do business with EU entities. It is believed that US
firms participating in Safe Harbor would comply to seven
principles: notification (as described above), choice, forward
transfer (disclosure to third parties), security, data integrity, access
and enforcement (accountability). By proving that they conform to
these standards, US corporations are granted Safe Harbor
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protection. This makes it possible to send data to the United States.
EU Directive and Safe Harbor principles vary in the areas of
access and enforcement. The language of the Safe Harbor for
access is more lax. People must have reasonable access to the
personal information that an organization has on them and the
ability to update or change the information when it is incorrect, as
stipulated by Safe Harbor. Sanctions for a corporation that violates
the norm are not specified in the enforcement principle, and
government authorities are barred from enforcing the requirement.
Self-regulation is more common in the United States than state or
federal law, despite the fact that self-regulation is a legal
requirement. When it comes to e-commerce privacy, the World
Wide Web Consortium (W3C) has produced a standard called
Platform for Privacy Preferences (P3P). Three important
components are involved in this: One of the most important aspects
of an Internet user's personal profile is the collection of personal
data and the regulations governing how it may be used.
Demographic, lifestyle, choice, and click-stream data are all
examples of personally identifiable information. For example, opt-
in or opt-out regulations and third-party disclosure are examples of
privacy rules that the user sets. On the user's computer, the
encrypted profile is saved on the user's hard drive and may be
changed at any moment. If a user's personal information has been
obtained and utilized by a website, the website's privacy policies
are made public.
These protocols enable either the user or the user's agent (say
the web browser) to automatically guarantee that personal profile
and privacy standards are being met with, allowing for a more
efficient use of user data. Users will be able to access websites
with confidence if regulatory compliance is ensured. As a result,
new law is being put in place that is more strict than before. State
and federal governments in Australia have passed laws protecting
individuals' privacy rights.
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7.5 Summary
Customer-related databases have been discussed extensively
in this chapter. CRM will not be able to deliver on its promises
unless it has access to the right kinds of customer data. For
strategic, operational, analytical, and collaborative CRM reasons,
information about customers is gathered and utilized in this way.
In order to build customer-related databases, it is essential that the
applications for which the data will be used be crystal clear in
mind. CRM strategy creation and execution are covered by these
apps. You may utilize customer-related data, such as demographic
information, to answer both strategic and operational queries. For
example: "Who are our ideal customers?" and "What is the best
day to engage with a certain customer?" An excellent customer-
related database may be developed in six steps that include
defining the tasks of the database, setting information needs,
finding information sources, choosing database technology and
hardware platform and filling and maintaining database Data
from collected lists, census data, and modelled data may be
incorporated into company-maintained databases to enrich the
fundamental information that is already accessible. The inability to
achieve intended CRM results is often attributed to the difficulty of
integrating data from various sources. Many databases include data
mining technologies attached to the front end that enable users to
make sense of the information. Finally, we took a look at data
centers, data warehouses, and privacy concerns.

***

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 CHAPTER- 8
CUSTOMER PORTFOLIO MANAGEMENT

8.1 Portfolio
"Portfolio" is a common term used to describe a person's or
company's financial investment assets. Depending on the owner's
overall investment strategy, each asset is treated accordingly. The
word "portfolio" has a similar sense in the context of customers.
Client portfolios may look something like this: A customer
portfolio is a collection of mutually exclusive customer groups that
represents a company's entire customer base. Because of one or
more strategical causes, the clients in a company's client portfolio
are grouped together. Each customer in the portfolio is assigned to
a certain cluster. One of the two ways to treat customers is to treat
them all the same, or to treat them individually. Between these two
extremes, most firms lie somewhere in between. When it comes to
CRM, not all clients can or should be handled in the same manner,
unless it makes strategic sense to do so. Customer demands,
interests, and expectations vary, as do their income and expense
profiles, which need varied approaches to management. Some B2B
clients may get customized products and in-person account
management, while others may receive standard products and web-
based self-service. If the second group receives the same degree of
product and service alternatives as the first, they may become
value destroyers rather than value producers for the organization.
When it comes to optimizing company performance, customer
portfolio management (CPM) tries to do so across the board. This
includes sales growth, customer profitability, or any other measure
of business success. The way it does this is by catering to distinct
consumer groups with a variety of value offers. NatWest Bank, for
example, handles its corporate clients on a portfolio basis in the
United Kingdom. A customer's size, lifetime value, and
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creditworthiness have all been taken into account while dividing
them into three groups. The value proposition for each cluster in
the portfolio is distinct. There are a lot of unknowns when it comes
to providing tiers of service. Should the tiering be based on the
existing or future worth of a client's customers? What are the
differences in sales and service assistance at different levels? In
order to prevent the issue of low-tier consumers resenting not
being supplied high-tier service, how may customer expectations
be managed? When moving clients up and down the food chain,
how should they be evaluated? Final question: Does handling this
increased complexity pay off in terms of improved customer
retention or financial outcomes such as higher sales and profit
margins?
Who is the customer?
Customers in the business-to-consumer sector are distinct
from those in the consumer sector. An person or a family is a
business-to-consumer (B2C) client. The B2B client is a business
entity, such as a corporation or a government agency (not-for-profi
t or government body). There are significant differences between
CPM techniques in the B2B and B2C environments. B2B and B2C
contexts vary in a number of respects. To begin with, business is
down. There are barely one million registered enterprises in
Australia, despite a population of twenty million people. It's no
secret that businesses tend to spend far more than individuals do.
Because business consumers and suppliers tend to have a more
intimate connection, this is a third factor to consider. Chapter 2
goes into further depth on this. Reciprocal trade is common in
commercial interactions. Both companies A and B purchase from
each other. Small and medium-sized businesses are the most likely
to suffer from this problem. Input products and services demand is
generated from end user demand, which is the fourth factor. The
need for flour in the workplace is fueled by consumer demand for
bread. Fifth, purchasing inside a company is done so in a
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professional manner. Procurement officers at businesses, in
contrast to average consumers, often have degrees and
certifications in their fields of expertise. When purchasing crucial
products and services, a decision-making unit of interested parties
may be created to define needs, seek for suppliers, analyze bids,
and make a sourcing choice. When it comes to large-scale
infrastructure projects, the cost of building a bridge, a power plant,
or an airline may easily exceed the annual income of most people.
A large portion of B2B transactions is also done directly.
Furthermore, providers sell directly to clients without the need of
channel middlemen. The CPM process is extremely different in the
two environments because of these distinctions.. Customers are
assigned to strategic clusters in the B2B environment by using
company-specific data, such as sales volume and cost-to-serve,
since suppliers have access to much more customer-specific
information. Individual-level data is not commonly accessible in
the B2C scenario. It's fairly uncommon to get clustering data that
doesn't include information about individual clients. Instead,
clustering is performed using data on groupings of clients, such as
geographic market segments.
For CPM, these are the fundamentals.
For the purposes of CPM, you'll learn about a number of
fundamental disciplines. Data mining, customer lifecycle value
estimate, activity-based pricing, and market segmentation are just a
few examples.
Market segmentation
Using market segmentation, CPM may take advantage of a
marketing management practice. The following are some examples
of market segmentation: A market may be segmented into smaller,
more or less homogeneous groups for which distinct value
propositions can be developed. It's up to the corporation to pick
which market segments it wishes to target. Depending on the
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company's needs, each sector might be serviced and handled in a
different manner. In the context of CPM, market segmentation
techniques may be employed in two ways. Segmenting future
markets to determine which consumers to target and clustering
present customers may both be accomplished via the use of
customer segmentation tools. We'll concentrate on the use of
market segmentation procedures in this talk to discover which
clients to acquire. It is this emphasis on customer value that
separates market segmentation in this CRM context from other
approaches. There should be a determination of each segment's
value potential as a result of the procedure If a firm wants to make
money in the future, it has to identify and target clients that it and
its network can better service and please than their rivals. It's not
uncommon for corporations to segment the market based on how it
makes the most sense to do so. Based on their knowledge and
expertise, the marketing team will create consumer profiles. Using
this information, marketing plans may be developed for each of the
many market categories, as well. CRM market segmentation relies
heavily on data. The data may be created internally or obtained
from a third-party source. Often, data from other sources, such as
marketing research agencies, partner organizations in the
company's network, and data experts, is supplemented with data
from internal records.
Market segmentation may be divided into many stages:
Identify the kind of company you're in and the essential
segmentation factors you need to know about before you begin
segmentation. These characteristics may be used to analyze the
market. The worth of market segments should be evaluated
Determine which customers to target.

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Identify the business you are in
The majority of organizations, but not all, have an answer to
this critical strategic issue. "Marketing Myopia" by Ted Levitt was
a famous paper warning firms against focusing just about product
solutions. He referred to a buggy-whip manufacturing enterprise
from the 1800s that he wrote about. It hasn't made it this far.
Consider the customer's perspective while deciding what to say.
Are companies like Blockbuster in the video-rental sector or,
instead, in home entertainment or retail? Is a kitchen cabinet maker
in the wood processing or home improvement industries? Using a
customer-centric approach to answering the question may help
firms better understand the limits of the market they serve, as well
as the advantages they want and the rivals they face. What if we
suppose that the kitchen furniture firm has defined its business as a
service to its customers from the beginning? It thinks it's in the
business of increasing the value of your property. Using research,
the company has discovered that its clients purchase its items for
one primary reason: to increase the value of their homes. It's
possible for the firm to identify its markets and rivals at three
different levels:
Competitors: other firms that provide the same advantage to
clients as the referred to above. Window replacement, heating and
air-conditioning, and bathroom remodelling firms are all examples
of these businesses.
The competition: other firms selling kitchens to clients looking
for similar advantages. Benefit and product rivals operating in the
same geographic region are referred to as "geographic
competitors."

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Identify relevant segmentation variables and analyse the
market
It is possible to segment both consumer and business markets
using a wide range of characteristics. Innovations in market
segmentation may help companies gain a competitive edge. As an
example, prior to Häagen-Dazs, ice-cream was recognized as a
seasonal product that appealed mostly to kids. In contrast, Häagen-
Dazs appealed to adults with a premium product and year-round
purchase opportunity. First, we'll take a look at the market for
consumer goods.
Markets for consumers
Customers might be grouped together based on many factors.
These may be broken down into user and use aspects.
Demographic variables have traditionally been used to categorize
consumer markets, although this has changed in recent years.
There has been a worry that the demographic variety within each
cluster is too great to treat all individuals of the segment as more or
less interchangeable. At the same time, there are those 30 to 40-
year-olds who have children, mortgage their houses and spend
their weekends at the club. There are traditionalists and
progressives in every religious community.
The concept of the family lifecycle (FLC) is especially under
jeopardy. In the FLC, a person's life progresses from single to
married with children, to married with children, to married with
children, to married with children of all ages, to married with
children of all ages, to married with children of all ages. A lot of
individuals, if not most, don't live their lives this way. It ignores
the wide range of life choices that individuals make, such as not
getting married at all, getting married later in life, having children,
being homosexual or lesbian, having large families, being a single
parent, and going through a divorce. A look at some of the factors
that may be utilized to segment the market is necessary.
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Classifying persons according to their occupation is a common
practice in the United States. Every country has its own unique
system. The JICNARS social grading system is used in the United
Kingdom. Based on the head of the home's occupation, each
household is placed in one of six groups (A, B, C1, C2, D, and E).
It's A for managers and E for low-skilled people in the labor
market. The JICNARS scale is often used by media owners to
analyze their target audiences. There are a variety of geo
demographic categorization systems that have been established by
data analysis firms. The CACI has created ACORN, which
categorizes people, households, and postcodes into one of five
categories, as well as an additional 17 groupings and 56 different
sorts of people, homes, and codes. According to statistics from
ACORN, families who live in close proximity to one other tend to
shop together. Based on data from over 400 different
characteristics, including internet behavior and dwelling type,
education, and family structure, this clustering result has been
produced. In the 1980s, the field of lifestyle research began to gain
traction. Rather of relying on demographics to categorize clients, it
employs multivariate analysis to cluster customers instead..
People's activities, interests, and views are gathered by lifestyle
analysts. Depending on the number of questions, a lifestyle survey
may take several hours to complete. Factor analysis and cluster
analysis may be used to create lifestyle or psychographic profiles
for the researchers. The claim is made that we purchase items
because they fit our lives. Many nations have conducted lifestyle
research, as well as research that crosses national lines. It is not
uncommon for corporations to perform lifestyle study for profit
and offer the findings to customers. CRM may benefit greatly from
the use of use characteristics. Marketing managers use
segmentation as a routine practice.

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 Customers don't buy things because they're great, but rather
because of the benefits they provide. Anyone who has ever bought
a 5 mm drill bit has done so because they desired one. They buy
the drill bit because they want a 5 mm hole. Professionals in CRM
that are successful must have a solid grasp of the market's
objectives. Benefit categories, such as those found in toothpaste,
enable it to be categorized. Having white teeth, fresh breath, and
healthy teeth and gums are all perks of good oral health. Consider
the volume consumed and the proportion of category spending
when examining CRM data because of the relevance of benefit
segmentation in generating value offers for targeted customers. It
is not uncommon to classify customers based on the volume of
business they produce. Although McDonald's USA aims to be the
world's favorite family restaurant, 77% of their sales come from
males between the ages of 18 and 34 who eat at McDonald's three
to five times a week, despite this being the company's primary
target demographic.. A firm can't afford to lose these customers
even if their contributions aren't quite equal. Because of the
volume they provide, the company is able to operate at a very low
cost. Organization of customers into tiers based on volume may
allow firms to devise customer migration techniques to move
lower volume customers from new to recurring, majority, loyal,
and champion status. Only if there is a potential for low-volume
clientele does this make sense. Whether or not they buy from other
companies in the same sector is the most significant consideration
to make. Customer Jones, for instance, buys five pairs of shoes a
year from the same retailer's website. Shoes4less is the only
retailer she visits for shoes. Shoes4less customer Smith only buys
two pairs of shoes a year from the company, and he does so
entirely. Shoes4less has the potential to make four more sales from
Jones, but not from Smith. Jones isn't necessarily more valuable
than Smith, though. The result of additional investigations will
have a bearing on the answer to that question. Keeping Smith as a

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client and moving Jones to a new shoe store will both cost money.
And last but not least, how much money do you earn from these
customers? To try to persuade Jones to transfer providers may be
futile if she has a long-standing connection with her present
supplier. If Smith purchases high-margin footwear and Jones
purchases low-margin footwear, Smith has a bigger opportunity for
sales. There are a large number of variables used in segmentation
programs. As an example, a bar chain's customers may be
categorized depending on their location, age, and music
preferences. Using this two-variate market segmentation, we may
classify the market into four broad groups.
8.2 Sales forecasting
There are two other disciplines that may be utilized in
combination with CPM: sales forecasting and budgeting CPM
providers have a huge challenge in categorizing clients since the
data given is either outdated or current at best. The data identifies
customers who have been or are critical to sales, profit, or other
strategic goals. If management believes the future will be the same
as the past, this isn't a big deal. This may be problematic in an
ever-changing business environment. Sales forecasting may be
used to identify key customers in the near future. There are others
who believe that sales forecasting is pointless since the business
environment is always shifting and uncertain. Terrorist attacks,
war, famine, or market-based developments such as new products
from competitors or high-profile advertising activities will render
any sales predictions useless. CPM may benefit from a variety of
different sales forecasting approaches that might be put to use.
There are a variety of situations in which each of these three types
of methods might be applicable.

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The following are some examples of qualitative research
methods:
Methods based on time series data: moving average
smoothing using the exponential method – breakdown of time
series Leading indicators and regression models are examples of
causal approaches. The majority of forecasts are made using
qualitative approaches. A customer survey asks customers or
buying officers to predict what they will purchase in the
forecasting period.. When people plan their purchases in advance,
this makes sense. Inserting a question into a customer satisfaction
survey might provide valuable information. "Are you likely to
purchase more, the same or less from us in the next six months
than you did in the present period?" 'And, 'How much do you
anticipate to purchase from us?' Organizations like the Chamber of
Commerce or the Institute of Directors, which are cross-industry
organizations, may gather data on future purchasing intentions or
proxy measures of intention, such as business confidence. When a
sales team has formed a deep connection with its customers, sales
team estimations might be valuable.The members of a major
account management team may be in a good position to develop
many individual projections. These may be weighted or averaged
in a manner that represents the proximity of the estimator to the
client. When it comes to the mining and quarrying sectors, Dyno
Nobel account managers are so close to their clients that they can
accurately anticipate sales two to three years in the future. Sales
team estimates are supported by operational CRM systems in the
qualitative sales forecasting approaches, such as sales team
forecasts. Sales value, closing likelihood, and time to close are all
factors considered by the CRM system. To account for salespeople
who may be unduly optimistic or pessimistic, several CRM
systems enable managers to change the estimations of their sales
teams. A linear or curved trend may be extrapolated from previous
data using time-series techniques. When historical sales data is
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available and the assumption can be made that the future will
mirror the past, this technique makes sense. The simplest of them
is the moving average approach. This averages sales from a
number of prior periods. Random variation is reduced or
eliminated throughout the averaging process. The moving average
is calculated by averaging the data from the previous period over
the previous period. When calculating moving averages based on
historical data, moving averages based on multiple periods might
be used. A different approach is to give greater weight to recent
history. The reasoning for this is that data from more recent time
periods is more reliable. In order to arrive at an estimate for 2009,
one may weight the sales performance of the preceding four years
by 0.4, 0.3, 0.2, and 0.1, respectively. The resulting prediction
would be 5461. Exponential smoothing is the name given to this
technique. When historical data shows cyclical or seasonal trends,
the decomposition approach is used. The approach aims to isolate
the trend, cyclical, seasonal, and random components of the time
series. It is the long-term direction of the trend that is left behind
after the other three variables are taken into consideration. Cyclic
factors are long-term affects on sales that occur on a regular basis,
and seasonal influences are most common.Using leading
indications, it is occasionally feasible to anticipate sales. A leading
indication is a current action or occurrence that signals what will
happen in the future. Housing starts, for example, are reliable
indicators of future sales of kitchen furniture on a macro level.
Customers that phone in to inquire about interest rates are a
significant predictor that they may switch credit card providers in
the future, on a micro level. To anticipate demand, regression
models use data from a variety of predictor factors. The dependent
variable is the one that is being predicted, whereas the independent
variables are the ones that are being utilized as predictors. Data on
population size, average disposable income, average vehicle price,
and average fuel price may be used to anticipate demand for

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automobiles (the dependent variable) (the independent variables).
Before it is used, the regression equation may be checked and
validated using historical data. To check whether new predictor
variables may enhance the prediction, they can be swapped or
added. Using this method, you may anticipate demand from a
certain sector.
Activity-based costing
Revenues may be traced back to clients in a B2B scenario by
many firms. Customer-specific billing systems or membership
programs like a store card or a loyalty program are the most
common ways to link income to specific consumers in B2C
environments. In a B2B scenario, sales and accounts data may be
used to measure revenues. The issue of costs is altogether another.
Because the purpose of CPM is to group customers based on their
strategic worth, it is important to know which customers are or will
be lucrative. Clearly, a corporation must be able to connect
expenses and revenues back to customers if it hopes to
comprehend customer profitability. Customers' experiences with
prices do differ. In terms of acquisition and service costs, certain
clients are prohibitively expensive, while for others, it is not.
Within a number of cost categories, there may be a wide range of
variation across customers In order to move prospects from
prospects to first-time customers, some businesses must put in a lot
of sales effort. This means making more sales calls, visiting
reference customers' sites, offering free samples, and providing
engineering advice. It also means providing guarantees that the
vendor's terms of trade will cover the switching costs.
Customer service costs: answering inquiries, claims, and
complaints, demands on salespeople and contact centers, small
order volumes, high frequency of orders, just-in-time delivery, part-
load shipments, and breaking bulk for distribution to different
locations.

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Working capital costs: the cost of credit, the expense of keeping
inventories for the client. Companies cannot predict client
profitability using traditional product-based or general ledger
costing methods, which do not give this level of information. It is
common practice for product costing systems to compare the
actual cost of a product to the standard cost. Customers-facing
tasks like as marketing, sales, and customer support are not
included. Overall cost tracking is done by general ledger costing
systems, however this is usually too aggregated to determine which
customers or sectors generate these expenses.
There are two types of costs in activity-based costing (ABC):
order-related costs and volume-based costs. Volume-based
(product-related) expenses vary depending on the order amount,
but per unit they remain the same regardless of the order quantity
or client. Costs of materials and labor are two examples. Each
customer's product and process needs influence the order-related
(customer-related) expenses. Retail consumers who buy the same
amount of merchandise from a manufacturer are shown in this
scenario. A product or process requirement is not made by
Customer 1. The merchant has a $1,000 profit margin on sales of
$5000. Customer 2 has a unique set of requirements: a bespoke
product, special overprinted outer packaging, just-in-time delivery
to three locations, supply of point-of-sale literature, sale or return
restrictions, and a reduced pricing. Not only that, but the salesman
for Customer 2 has had to phone three times before sealing the
deal, which takes a lot of time for the customer. The vendor keeps
$250 of the $5000 in sales income after deducting the expenses of
the products and processes necessary to suit the needs of this
specific client. Customer 1 is worth four times as much as
Customer 2 if everything else is equal. ABC, unlike traditional cost
accounting procedures, focuses on what the money was used for
rather than how much was spent. The ABC method to costing is
different from the traditional general ledger technique in that it
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focuses on what was being done at the time the expenses were
spent.
8.3 Summary
Customer portfolio management has been covered in this
chapter. Strategic CRM relies heavily on CPM. According to
CPM, consumer groups may be identified via data analysis and
then targeted with tailored value propositions and customer service
methods. Estimating the present and future worth of each client
group, taking into consideration the revenues and expenditures
associated with gaining and servicing those consumers, is one way
to achieve this goal. Customers' lifetime value assessment, activity-
based costing, market segmentation, and sales forecasting are some
of the fundamental disciplines behind the CPM process. It's
important that marketing managers using market segmentation for
CPM keep an eye on the value their customers get out of it. A
variety of sales forecasting methods may also be used to predict
what consumers will purchase in the future. An activity-based
costing system may help a company better understand the expenses
of marketing and selling to clients, and hence the profitability of
these customers. Analysis of historical customer data is especially
beneficial for identifying patterns and linkages that may indicate
future customer value to a business, and customer lifetime value
estimate models are a good starting point. Business-to-to-business
and business-to-to-consumer CPM processes are quite different.
Furthermore, a number of portfolio analysis tools tailored
exclusively for B2B settings have been created, and activity-based
pricing is more simply implemented in B2B contexts than data
mining. As a result, separate value propositions and relationship
management methods may be designed for each category of
prospective and present clients. Finally, we outline seven key
customer management tactics that may be applied selectively to a
company's whole customer base.

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 CHAPTER- 9
CUSTOMER STRATEGY AND RESEARCH
APPROACH

The other half of the strategic equation is deciding which

customers the business wants most to attract and to keep and which
customers it would prefer to be without. The significance of being
clear on who the target customer base is (and who is not) is that
every organization possesses weaknesses as well as strengths. In an
environment of increasing competition, few firms can successfully
be ‗all things to all people‘. Thus determining a distinctive
customer strategy and directing all efforts to maintain and develop
it is the only way for a business to survive and indeed thrive.
9.1 The role of customer strategy
In contrast to the CEO's, board's, and strategy director's
responsibilities for corporate strategy, marketing is normally in
charge of consumer strategy. However, as we noted in Chapter 1,
in order to be really successful, marketing and CRM both need a
cross-functional or company-wide strategy. In truth, functional
marketing departments are still the norm in most companies when
it comes to marketing. However, as we'll see in Chapter 7, a
growing number of companies are beginning to take a pan-
company approach to CRM, which is something we'll cover in
further detail there. However, all businesses should pay particular
attention to the alignment of the two areas of strategy creation
when separate departments are participating in both areas of
strategy development. Prior analysis of company strategy is critical
in arriving at a wide consumer focus point of view. Organizations,
on the other hand, must narrow down their target audience and the
traits that define them. That's what customer strategy is all about.

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 Developing a customer strategy entails analyzing your
current and future clients and determining which segmentation
methods are most suited for your business. An organization's
clients and customer segments must be identified. A large amount
of consumer data may be required for this research, which has a
substantial impact on the collecting and management of this data in
suitable repositories, such as a data warehouse. Segment
granularity, the degree to which large consumer categories may be
subdivided into smaller ones, is an important consideration for the
business in this process. Decisions must be made on whether a
global, micro, or one-to-one segmentation strategy is most suited.
The importance of market segmentation in determining
customer preferences and qualities It's critical to remember that
every client is unique, and that each of your interactions with them
will need a unique approach. CRM relies heavily on this idea.
CRM's goal is to develop relationship strategies that enhance the
value of existing connections by refining and redefining them.
Rethinking the way consumers are contacted and segmented and
the allocation and use of resources is often necessary to gain a
competitive edge via customer relationship management. This
degree of refinement necessitates a thoughtful selection of
segmentation levels. The nature of the 'client' must first be
considered.
Market segmentation
In both B2B and B2C businesses, market segmentation is
vital for the formulation of a customer strategy. Companies may
better serve their consumers by identifying the unique qualities of
each of their market groups. Segmentation at the distributor,
intermediary, and end customer levels is typically necessary in
enterprises that are intermediated, as the preceding section shows.
A entire market (or market segment) is broken down into a series
of submarkets (or submarkets) depending on the characteristics of
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individual customers. The following are the stages involved in a
market segmentation exercise:
To begin with, finding the appropriate market to be
addressed; setting the criteria for market segment viability;
examining the different basis for segmentation; and last, selecting
particular segments to concentrate on. Segment granularity, or the
degree of segment disaggregation, must be decided as part of this
procedure.
9.2 Research approach
In this section the reasons how the study was approached will
be explained. Firstly, it will be discussed if an inductive or a
deductive research should be used, and secondly, it will be argued
if a qualitative or a quantitative research should be applied.
Inductive vs. deductive research
Inductive and deductive investigations are two distinct
techniques to doing research, although both may provide helpful
and accurate results. At first glance, the concept of inductive
inquiry demonstrates the link between facts and theory.. In other
words, the researcher will collect data and then use the theory to
derive conclusions (Bryman and Bell, 2011). Therefore, it is a
theory-building strategy that begins by examining individual
occurrences and then seeks to generalize about the subject under
investigation (Kenneth, 2000).
Deductive research, on the other hand, demonstrates the link
between theory and investigation. Researchers that rely on pre-
existing hypotheses do it in a way that might be described as
deductive (Bryman and Bell, 2011). Deductive research is hence
theory testing, which begins with an established theory and
examines if it can be applied to a given situation (Kenneth, 2000).
The deductive method of research was used in the writing of this

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work. In these investigations, ideas and models already in
existence were applied to a particular scenario.
Qualitative vs. quantitative research
Researchers argued if there should be a distinction between
qualitative and quantitative research. In the following table the
main differences are described (Bryman and Bell, 2011).
Table-quantitative and qualitative.

The gathering and analyzing of data may be seen as a kind of

quantitative research. With regard to the collecting of numerical
data, quantitative research has a preference for a naturalistic
approach and an understanding of social reality (Bryman and Bell,
2011). For the sake of this discussion, quantitative research serves
the purpose of making a generalization and does not pay attention
to the specific (Kenneth, 2000). Qualitative research, on the other
hand, focuses more on the collecting and analysis of information
than quantitative research does (Bryman and Bell, 2011). The
results of qualitative research are based on the data. Qualitative
research also aims to discover the relationships between various

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notions. Researchers may conduct in-depth studies of a certain
phenomenon using this strategy (Kenneth, 2000). In light of the
previous debate, this book was written using qualitative research
methods. We did this because we wanted to have a better grasp on
the important elements associated with CRM adoption. For this
study, precise and accurate information was critical. To put it
another way, we focused on a small group of people to get a better
grasp on the subject matter.
Research Design
Developing a research design is the first step in conducting a
scientific investigation. There are certain objectives for the
research as well as the methods and processes that must be
authorized in order to meet those goals. This is the plan for the
gathering and analysis of data, which is the study design. As a
further example, research design is the process of planning,
organizing, and executing a study in order to discover the answers
to research questions (2010). Figure depicts a variety of study
designs that may be applied in a variety of ways. Descriptive
methods were followed by cross-sectional and multicross sectional
designs for our book. To begin, exploratory research focuses on
topics that the researcher is unfamiliar with or has just a limited
understanding of. The primary objective of this study is to generate
new ideas in a certain field of study. Typically, a pilot study is
used. It's proper to think of exploratory research as the first step of
a three-part process that includes exploration, description, and
experimentation (Krishnaswami and Satyaprasad, 2010). To
quantify the influence of some factors on an event, experimental
research plans to keep the other variables constant or controlled.
Variables are examined in relation to one another using this kind of
study. In statistics, a dependent variable is a variable that has an
effect on other variables, while independent variables are those
variables that have no effect on the dependent variable
(Krishnaswami and Satyaprasad, 2010). Thirdly, descriptive
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research is a fact-finding technique that allows for considerable
room for interpreting results. The simplest kind of investigation,
this is what it is called. Because it focuses on a specific component
or dimension of the subject being examined, descriptive research is
more exact than exploratory research. The primary goal of this
study is to gather descriptive data that may be used in the
development of more advanced studies. Observation, interviewing,
and postal questionnaires are some of the methods used to gather
data (Krishnaswami and Satyaprasad, 2010). There are two ways
to do descriptive research: longitudinal and cross-sectional. The
term "longitudinal research" refers to studies in which a sample is
polled once, and then polled again at a later date. A longitudinal
study's purpose is to see whether there are any changes over time.
As a second benefit of using a cross-sectional design, data is
collected from several subjects at one time, allowing researchers to
gain quantitative or measurable information on multiple factors.
These variables are then analyzed in order to identify any patterns
of correlation (Bryman and Bell, 2011). A descriptive research
approach was utilized in this study because we intended to define a
specific research topic, which is how crucial aspects affect CRM
implementation. In addition, since cross-sectional research gives
data from many examples, we employed it for our book.
Data sources
There are two categories of data sources: primary and
secondary, both of which may be utilized to gather data
(Krishnaswami and Satyaprasad, 2010). The term "secondary data"
refers to information that has already been gathered from other
researchers. Study conducted on data that was not collected by the
researchers who conducted the research is known as secondary
data analysis (Bryman and Bell, 2011). Bryman and Bell (2011)
outline the pros and downsides of utilizing secondary data in a
table that can be seen here.

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Table-advantages and disadvantages.

Secondarily, it's a problem that the data come from someone

else. There will be some discrepancies in data collection and study
outcomes. In general, secondary data collecting needs less
resources than data collection via other methods. Secondary data,
on the other hand, is more plentiful. Researchers benefit from the
abundance of secondary data by being able to conduct analyses
with more statistical power (Rabinovich and Cheon, 2011).
Primary data, on the other hand, refers to data that was acquired for
a particular reason. There are several ways to gather primary data,
including observation, interviews, and mailings. These sources are
regarded to be primary data. Good news: researchers may gather
data according to their own study requirements at any moment, as
long as it's convenient for them (Krishnaswami and Satyaprasad,
2010). Researchers must ensure that the data they collect is
relevant, accurate, current, and impartial at all times (Armstrong et
al., 2009). Primary data are those created by the researcher for the
sole aim of solving a study topic, according to Malhotra (2004).
With primary data, the acquisition of data is expensive and time-
consuming, which is a drawback (Krishnaswami and Satyaprasad,
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2010 and Saunders et al., 2009). Due to the nature of our study, we
relied mostly on primary sources for data collecting in our BOOK.
Secondary sources, which were given by the corporations, were
also used into the investigation.
The research plan
Experiment, survey, archival analysis, history, and case study
are some of the methods used by Yin (2009) to do research. Three
factors must be met before researchers may choose which research
approach to use:
a clear indication of the sort of inquiry posed
2. The degree of control an investigator has over the actual
occurrence of a behavior. A greater emphasis on current events
than historical ones the preceding five research methodologies are
shown in connection to these three requirements in the following
table (Yin, 2009).
9.3 The Relationship between Service Quality Attributes and
Customer Satisfaction
According to marketing literature, there is a strong and direct
relationship between service quality and customer satisfaction
(Storbacka and Luukinen, 1994; Strandvik and Liljander, 1994a,
1994b). The current customer satisfaction concepts rely on
customers‟ perception of quality (Storbacka et al., 1994).
However, there has been some discussion whether customer
satisfaction and service quality can be evaluated at a relationship
level. In other words, perceived service quality would, according to
Liljander and Strandvik (1994), refer to an outsider perspective, a
cognitive judgment of a service. Quality therefore, does not
necessarily need to be experienced first time. It can be achieved
through customer referral (word of mouth) or advertising. In
contrast customer satisfaction is the outcome of direct evaluation
through customer experience (Liljander and Strandvik, 1994).
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Research on customer satisfaction management has been going on
for decades. A number of methods have been proposed to identify
the different categories of service/product attributes such as the
critical incident technique (CIT), a special questionnaire by Kano
(1984), importance-performance analysis (IPA), and the analysis
of complaints and compliments. Some early studies (Swan and
Combs, 1976; Maddox, 1981; Cadotte and Turgeon, 1988;
Johnston and Silvestro, 1990) reported two factors: satisfiers and
dissatisfiers. These findings were originally based on Herzberg‟s
model (two-factor or Motivator-Hygiene theory). However, later
studies added the third factor which accounts for both
dissatisfaction and satisfaction (Brandt 1987; Bitner et al., 1990;
Stauss and Hentschel, 1992; Anderson and Mittal, 2000).
Kano et al. (1984) argue that service attributes do not
contribute to the overall customer satisfaction and dissatisfaction
with equal weight. There are significant difference between the key
drivers of customer satisfaction and dissatisfaction (Shiba et al.,
1993; Dutka, 1993; Gale, 1994; Oliver, 1997). The unpleasant
experience that creates dissatisfaction is not the same as the
pleasant experience that creates satisfaction. Service quality
attributes can therefore be classified into three types (Three-factor
theory): (1) basic, (2) performance, and (3) excitement (Anderson
and Mittal, 2000; Matzler et al., 2004; Oliver, 1997). The original
classification of attributes was proposed in Kano‟s questionnaire.
The questionnaire follows two scenarios: first the respondents are
asked to state their feeling if a product or service has a certain
attribute, and second where it does not have that attribute (Kano et
al., 1984; Berger et al., 1993).
(1) Basic attributes or dissatisfies. These are the basic
functionalities that customers expect from a service or product.
Their absence would be unacceptable, while their presence in no
way generates any satisfaction or delight (Solomon and Corbit,
1974; Solomon, 1980; Kano et al., 1984). For example, the
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punctuality and safety are considered to be the basic attributes for
airline services.
(2) Performance or One-dimensional attributes. These attributes
tend to have linear relationship with overall customer satisfaction.
For example, petrol consumption of a car is considered to be a
performance attribute.
(3) Exciting attributes or satisfiers. These attributes are the
unexpected attributes and contribute to increased customer
satisfaction levels when presented but cause no dissatisfaction if
they do not exist. High performance on these attributes has a
greater impact on overall customer satisfaction rather than low
performance. For example, promotional offers such as extra
features come with mobile phones (e.g., games, radio, dictionary
and etc.) can be considered as an exciting factor for some
customers. The three different types of service attributes influence
the relationship between service quality attributes and customer
satisfaction. They imply an asymmetric and nonlinear relationship
between service quality attributes (performance) and customer
satisfaction. However, there is still no universal consensus amongst
researchers and practitioners regarding the nature of this
relationship. Moreover, the classification of service attributes may
be influenced by customer expectations and may vary between
industries (Matzler and Renzl, 2007). The three-factor theory
(Kano‟s model of customer satisfaction) is also supported by
different research methodologies including critical incident
technique (CIT) (Stauss and Hentschel, 1992; Bitner et al., 1990;
Swan and Combs, 1976), a content analysis of complaints and
compliments (Cadotte and Turgeon, 1988), a rank order of service
attributes for good and bad service (Mersha and Adlakha, 1992),
and regression analysis techniques (Anderson and Mittal, 2000).

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 More importantly, the three-factor theory has some
significant implications for service quality improvement and
customer satisfaction management. As a rule of thumb, basic
factors (minimum requirements) must be identified and well
performed. If they are presented at a satisfactory level, however,
improving their performance does not create or increase
satisfaction-level. Performance factors (one-dimensional) typically
represent customer requirements (Matzler and Sauerwein, 2002).
Therefore, companies should be competitive with respect to these
attributes. Finally, exciting attributes are not expected, so they may
surprise the customer. So, it is therefore not prudent for a service
provider to compete on these attributes with other service
providers. Research, however, on customer satisfaction has
emphasised the need to account for the non-linear and asymmetric
relationship between service quality attributes and customer
satisfaction. There are a number of methods to differentiate
between the type of service attributes. They include the critical
incident technique (CIT), importance grid, Kano‟s questionnaire,
regression analysis with dummy variables and the analysis of
complaints and complements. Next section discusses the
relationship between service attribute and customer satisfaction
based on two factors of service attributes: importance and
performance.
The Relationship between Attribute Performance and
Importance
According to several experts, marketing managers need to be
aware of the link between service quality features and client
pleasure. Operatingly, it is critical to use viable analytic to aid
them optimize resource allocation for improving attribute
performance in the interest of customer pleasure (Mittal et al.,
1998; Anderson and Mittal, 2000; Bruno and Padula, 2005). When
looking at the link between customer contentment and service
quality from the perspective of a straight line, researchers have
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found evidence of resource misallocation (Anderson and Mittal,
2000). The underlying premise is that an attribute's performance
may be altered without impacting the attribute's significance
(Martilla and James, 1977; Oliver, 1997; Bacon, 2003). A
corporation conducting a survey to gauge customer satisfaction is
most concerned with a characteristic that has a low performance
level but a high significance level. But this strategy may not
improve the degree of customer satisfaction (Mittal et al., 2001;
Matzler et al., 2003). The link between service attribute
performance and significance is suggested to be dynamic (non-
linear and asymmetric). To put it another way, the relevance of an
attribute must be seen in relation to the performance of that
characteristic (Matzler and Sauerwein, 2002; Matzler et al., 2003).
Several research have shown that as performance levels fluctuate,
the type and amplitude of the link between the relevance of service
characteristic and customer happiness may alter (Mittal et al.,
1999; Matzler et al., 2003 and 2004; Bacon, 2003). As a result,
researchers and practitioners have begun to dispute the validity of
making this assumption, arguing that the connection is more
nuanced and that other assumptions have been made instead
(Varva, 1997). It is believed that direct approaches (customer self-
stated importance) may not evaluate important values accurately
since consumers consider the present degree of service attribute
performance when determining their significance.
The relationship between Customer Satisfaction and Future
intention
Keeping customers happy is critical to a company's
profitability. It's simpler and less costly to acquire a new
consumer, according to marketing literature. According to Brown
(2004), it costs eight times more to acquire a new client in the
wireless business than to keep an existing one. In addition, selling
more services and goods increases profit during the customer
lifetime cycle (cross-selling, up-selling). Customers in the mobile
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telecommunications business, for example, contribute to revenues
by buying additional services such as broadband internet,
insurance, and music. Client satisfaction and customer retention
have been studied extensively in various businesses (Kumar 1998;
Bolton 1998). For every one percent improvement in client
retention, Gupta and colleagues (2004) found that profitability rose
five percent. A one-unit change in customer satisfaction, according
to Ralston (1996), increases the chance of customer retention by 6
percent. There was a general assumption in most of this research
that there was a straight connection between employee satisfaction
and retention. It doesn't seem like this is the case everywhere.
Customer satisfaction is assumed to be higher than customer
dissatisfaction as a primary determinant of future purchasing
decisions (Srinivasan and Ratchford, 1991). Switching behavior or
switching intention may be employed as the dependent variable,
according to Anderson and Mittal (2000). Automotive industry
satisfaction switching behavior and intention were also shown to
vary significantly. Retention of customers is thought to be an
intention to switch or churning risk in the conceptual model.
Asymmetry patterns that stray from the norm may be seen in a
variety of sectors. A higher churning percentage would be
expected for industries like telephony, where clients may readily
transfer providers. According to Chun and his colleagues, client
retention is critical to business success. He says that on average, a
service provider loses 4% of its consumers per month, according to
him. In the cellular sector, moving customers costs more than $4
billion a year (Anderson Consulting, 2000). Client happiness and
switching costs are identified in service marketing literature as two
aspects that drive customer retention (Kim et al., 2004). When it
comes to client defection, businesses must be able to estimate the
likelihood and danger of a customer's departure at a given moment.
The ability to predict client behavior more accurately may help the
sector respond more effectively. According to this study, a

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company's switching rate refers to the proportion of consumers that
discontinue doing business with it after a certain amount of time
has passed. The retention rate may be calculated as one less than
the switching rate if this assumption is correct.
In other words, R = 1-S
Experiments in evaluating consumer switching intention
across sectors are lacking, according to our current study. Research
on consumer behavior and switching intentions has mostly relied
on real customer transactions and billing records (Mozer et al.,
2000; Ng and Liu, 2000; Wei and Liu, 2002; Drew et al., 2001;
Weerahandi and Moitra, 1995). Mobile telecommunications
researchers have used forecasting approaches to anticipate the
likelihood of customers switching plans based on their use
patterns, call frequency, delinquent bills, and plan type (Ahn et al.,
2006). Using such models, managers may not be able to enhance
firm operations, such as service quality and customer happiness,
since they are more predictive rather than descriptive. Customers'
behavior cannot be accurately monitored and improved by
financial statements, as the author argued in Chapter 2. (Peppers
and Rogers, 2008). The author goes on to analyze the impact of
switching obstacles on the likelihood of customers leaving.
Switching Barriers
Academics and practitioners alike agree that consumer
happiness does not always translate into customer loyalty.
According to a retail banking research, 65 to 85% of clients who
transfer providers are pleased or very satisfied with their old
supplier (Reichheld, 1993). Customer dissatisfaction continues to
be hindered by the high cost of switching providers (Grönhaug and
Gilly, 1991). When looking at switching obstacles from the
standpoint of the client, it is possible to distinguish between
financial, psychological, and social switching barriers (Storbacka
et al., 1994). Transaction, learning, and artificial costs are three
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types of expenses that might be categorized as switching costs
(Klemperer, 1987). However, there are several classifications, such
as search costs, learning costs, and emotional costs, which may all
be categorized (Storbacka et al., 1994). When a client moves to a
new supplier, transaction expenses are incurred. For example, costs
for joining or launching a new service. A customer's learning costs
are the time and effort it takes to become used to a new product or
service at the same level of comfort and ease as they did with their
previous one (Seo et al., 2008). Withdrawal fines and loyalty
rewards are two examples of contractual charges that service
providers impose on their clients to urge them to stay with them.
Perceived switching cost refers to the variation between actual and
perceived switching costs. Phenomenal switching costs, on the
other hand, may exclude expenditures other than pecuniary.
According to Shin and Kim (2007), "consumer switching intention
and market result are affected by perceived switching cost rather
than real switching cost." In order to keep clients, companies rely
on perceived switching costs. Simply said, consumers may have a
favorable, negative, or neutral attitude about their intended future
behavior (e.g. switching or repurchase).
Switching prices and restrictions may keep a dissatisfied
client from abandoning his or her habitual purchases. This also
suggests that long-term partnerships do not need a good attitude
and dedication from consumers in order to keep clients. Customers'
willingness to transfer service providers is strongly influenced by
the switching costs (such as penalties) associated with mobile
telecommunications services. Because of this, clients have been
categorized based on the extent of switching expenses they face.
"Informal counsel shared between consumers," according to East
et al. Via Keaveney (1995), 50% of service provider replacements
were identified by word of mouth. Customer happiness, customer
retention, and customer loyalty have a solid theoretical foundation,
according to recent studies. Negative word of mouth from unhappy
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consumers hurts a company's image whereas positive word of
mouth from loyal, delighted customers lowers the cost of obtaining
new clients (Danaher and Rust, 1996). Customer satisfaction,
customer retention, and customer loyalty seem to have a limited
number of empirical studies in service management and marketing
literature (Hallowell 1996; Storbacka et al., 1994). Customers'
propensity to spread the word about a company is used to gauge
their level of brand loyalty. A consumer's inclination to suggest a
service provider to his or her friends and family is a measure of
customer loyalty, in other words.

***

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 CHAPTER-10
FUTURE DEVELOPMENT OF CRM

10.1 Future of CRM

The future of Customer Relationship Marketing is uncertain.
Reported results have been disappointing with respect to campaign
management, call center management and marketing analytics.
According to a recent McKinsey Study, only 35% of the managers
responsible for those operations were satisfied with attainment of
objectives. In fact, while most IT based initiatives don‘t garner
CEO visibility, CRM initiative must begin at the top levels of a
corporation to be successful. CRM initiatives are extremely
expensive, time consuming and require an organizational
commitment to be successful.
A typical CRM initiative within a major corporation can cost
well over $80 million and take 3 years to complete. The size of
investment alone warrants senior management involvement; but it
is the revenue opportunity for CRM programming that truly
requires senior management direction. The shortcomings in
implementing CRM programs have become abundantly clear.
Targeted revenue goals, for example, are not often achieved. Most
initiatives expect at least a 10% improvement in revenue, but
corporations in the U.S. are experiencing half that result. In
addition, budgeted costs are generally exceeded and timetables are
not met. Budget overruns can exceed estimated amounts by 300%.
Failure to achieve revenue forecasts, budget overruns and
poor performance of CRM can lead employees to stop using the
system, further eroding performance. This was the case at a leading
computer wholesaler and retailer where telephone sales
representatives, upset with system performance, stopped entering
data. Some companies have abandoned CRM initiatives as a result
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of such problems. Will CRM survive? The answer will be found in
an organization‘s ability to stay the course and remain committed
to the objectives of their programs. What is required is dedication
to CRM principles by senior management and technical support
personnel. Success will be gained by a team approach across
disciplines. Cross-functional resources are necessary because the
CRM effort requires technical skill to identify problems and the
authority to resolve them.
The start of any CRM turnaround entails the revision and
refinement of objectives. Goals must be re-evaluated, clearly
articulated and clearly prioritized to ensure that resources will be
properly allocated to meet the most important goals of a company.
For example, how should an organization prioritize the following
goals?
• increase customer base,
• increase revenue from existing customers,
• convert competitive customers,
• decrease turnover of profitable customers?
These goals all have varying rates of return. Each must be
considered in terms of ROI. Only after determining which
objectives provide maximum return can strategy provide a clear
vision as to how business improvement is to be accomplished. An
organization‘s strategy will determine the requirements of the
system and which tactical activities should be employed to achieve
intended results. In fact, only after the strategic possibilities are
addressed and tactics determined can organizational requirements
for the initiative are addressed. The involvement and commitment
of the entire organization is critical for a CRM strategy to work
given the large number of consumer touch points that cut across
many departments. It is important to know who will do the work
and what work will be required. One example is sufficient to
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illustrate the point. Consider a customer service representative who
has no incentives for entering data which will benefit
manufacturing. Without understanding the importance of the
information or the reason for its use, valuable information may be
lost.
The technological basis for CRM programming is most often
an integrated suite from suppliers like Oracle, PeopleSoft, SAP,
Siebel Systems or IBM. These suites are meant to be all
encompassing solutions that are mutually exclusive. One system
will satisfy the needs of the entire company. While these powerful
solutions can work effectively, they may be too far reaching for the
needs of a company and provide features that may not be
employed until much later in a CRM initiative. It is important to
evaluate products based on need and stage in a company‘s
relationship marketing efforts to ensure that the proper product is
purchased. What are the key lessons that practitioners have learned
regarding CRM to date?
• Use your current customer database more effectively. One
industry where this is particularly important is auto insurance.
Companies like GEICO and Progressive Insurance are experts at
using segmentation to direct policy offerings. CRM efforts allow
GEICO to direct offerings to low risk motorists, while Progressive
segments and effectively targets products to the high-risk motorist
segment.
• Identify the value of market segments. Most industries have
key factors that represent customer leverage points. In the credit
card industry, for example, those factors would be monthly margin
of a customer, longevity of a customer and customer acquisition
costs. Capital One has learned that encouraging existing customers
to increase their charge volume produces higher returns than
attracting new customers. Consequently, the real focus for the

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industry is customer lifetime value or the profitability of purchases
over time.
• Build customer relationships. Too often we focus our attention
on the size of customer databases. Consider the database for
frequent shoppers for the Safeway grocery chain. It exceeds 28
million households in size. Nonetheless, Safeway‘s promotional
efforts tend to be transaction focused and not relationship oriented.
• Segmentation is a means to discriminate. If you have the
information to differentiate offers, do it! Consider United Airlines
Mileage Plus Program. They have the flight history of each
passenger at their disposal and therefore offer incentives to their
best customers accordingly. They differentiate based on miles
flown and revenue earned per customer.
We believe the future for CRM is bright. To achieve success
we must focus the resources of a corporation specifically on the
task at hand. Senior management and users of the system must
work together establishing objectives, strategies and tactics that
will be understood and agreed to by all within the company.
Technology must be selected for a particular environment with
consideration for the appropriate scope of the initiative. CRM must
be exercised with good business judgment and within the
personality of an industry. Success in CRM can and will be
attained through leadership, teamwork, initiative and an
appreciation for the complexity of the undertaking.
10.2 People and process metrics
People and process metrics focus on how well the
organization‘s resources are managed to optimize CRM at an
operational level. People metrics are concerned with standards
used to monitor the skills and motivation of employees in
delivering the customer experience. Process metrics reflect the
efficiency of the organization in delivering CRM, including cost

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savings secured through process enhancement. People metrics are
used to measure:
1. employee performance against customer service standards
2. employee satisfaction
3. employee attitudes and motivation
4. employee productivity
5. staff absenteeism
6. employee retention and employee tenure
7. recruitment costs.
Process metrics are used to measure:
1. customer service levels
2. order fulfilment
3. supplier performance targets
4. variation within key customer processes
5. new product/service development targets
6. time to market
7. process improvement targets.
Strategic metrics
Strategic metrics measure the organization‘s success in
achieving its business objectives within the strategic approach to
CRM that has been adopted. They measure, for example, the extent
to which the business strategies meet the required shareholder
value targets and strengthen the organization‘s position in the
marketplace. Strategic metrics are used to measure:
1. shareholder value added/market value added
2. profitability and cash flow
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3. returns on net assets, sales, CRM investments, etc.
4. growth rates
5. expense ratios
6. market positioning
7. innovation
8. brand equity
9. specific targets for other stakeholders
Output and comparative metrics
Output and comparative metrics measure the output of the
organization‘s CRM strategy, especially in relation to competitor
activity and recognized best practice. These comparative measures
are frequently more important than absolute measures. Sole
reliance on internal metrics can be dangerous for they provide an
isolated and insular view of the situation. For example, a market
share of 20 per cent may be advantageous if the largest competitor
has a market share of 10 per cent; however, it may be risky if the
two largest competitors have market shares of 30 per cent each.
Similarly, high levels of service quality and customer satisfaction
are generally only beneficial if they are higher than those of the
competition. Output and comparative metrics are used to measure:
1. relative profitability
2. relative market share
3. relative customer satisfaction
4. relative customer retention
5. relative employee retention and satisfaction
6. relative product or service quality
7. cost reduction

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8. Improvements in employee value (in terms of employee
retention and satisfaction)
9. increased competitive differentiation.
Special metrics
Special metrics are sometimes used in conjunction with the
four main categories of metrics outlined above. For example,
companies with intermediaries may need to implement customer
performance measures at different channel levels. Businesses with
a strong e-commerce component may need to address the different
characteristics of an Internet channel by developing specific e-
metrics. Interestingly, despite the availability of data from web
channels, relatively few companies use these data to measure and
monitor the effectiveness of their e-CRM activities. Special e-
metrics are used to measure:
1. stickiness (the web site‘s ability to hold visitors‘ attention and to
get them to become repeat users of the site)
2. Focus (the scope and intensity of site visitor behaviour)
3. Personalization index (how well the e-business uses personal
customer data captured during site visits)
4. Lifetime value (the contribution to company profits over the
duration of the customer relationship. Measuring lifetime value is
particularly important as less valuable customers using other
channels can be moved to improved levels of profitability through
using the web channel)
5. Loyalty value (this includes visitor frequency, visit duration,
number of pages viewed per visit, time elapsed between the user‘s
first visit and most recent visit)
6. Freshness factor (how often content on a web site is reviewed
and renewed versus how frequently users visit the site).

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10.3 Identifying barriers to CRM success
When reviewing CRM readiness it is useful for companies to
consider the barriers typically faced by other organizations in
developing their CRM programmes. Our research has identified a
number of common barriers to CRM success. Interestingly, the
problems of existing legacy systems, which executives might
expect to be a main source of difficulties and delays, appear to be
less common than problems associated with internal attitudes and
organizational structure.
Lack of skills
Lack of skills in building and using the new IT-based CRM
system are a major barrier to the implementation of CRM. One
CRM manager referred to a ‗chronic technological skill shortage‘.
The organization for which he works was unable to recruit enough
technically skilled people for a large-scale CRM implementation
project. Other executives also highlighted the need for skills in
operating the new system and several said that they relied on
vendor training to meet this need, which was not always available
quickly and was not of a uniform standard. Analytical skills in
asking the right questions of the CRM system, was identified as
being of special importance in making the most of the CRM
investment.
Inadequate investment
Gaining adequate funding for CRM requirements is an
important issue for organizations, particularly as many of the
projects expanded dramatically in cost and sometimes in scope.
Some organizations had overcome the problem of funding by
adopting what was referred to as a ‗quick wins‘ approach. By
structuring their CRM implementation projects to deliver quick
wins and visible benefits at incremental stages, such as
improvements in customer service or higher response rates to

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campaigns, they were able to demonstrate immediate progress and
returns. This helped to improve internal buy-in and motivate other
parts of the business to extend the CRM systems within their own
areas.
Poor data quality and quantity
Organizations at different stages of CRM development
experience different issues with respect to data quality and data
quantity. For companies at an early stage of CRM development
data quality is a key issue. The extent of data quality problems and
the amount of work necessary to remedy them surprised many
managers. More advanced companies tend to have undertaken data
cleansing and de-duplicating; for these organizations data quantity
is a greater problem than data quality.
Failure to understand the business benefits
Low initial awareness of the benefits of a marketing database
among senior management is also a barrier for companies less
advanced in CRM implementation. This problem tends to be
overcome as the data warehouse goes live and begins to deliver
results. CRM managers point out that the data warehouse is
perceived as a high cost and senior management often failed to
understand the potential financial benefits in the earlier stages of
the CRM project.
Functional boundaries
Managers at the functional or business unit level may be
reluctant or unwilling to cooperate at the early stages of the CRM
project. It may require considerable organizational effort to make
functional and business unit managers aware of the benefits of
greater company-wide operations and cross-functional working.
This is a change management issue that we examine later in this
chapter.

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Lack of leadership and top management involvement
A lack of top management involvement and leadership of
CRM activities is a further barrier to CRM success. Enlightened
CEOs should view themselves as ‗chief customer officer‘ also.
Their role is to ensure a high level executive, ideally at Board
level, acts as a sponsor and champion for the company‘s CRM
activities and that the importance of transforming the company‘s
relationships with customers through CRM is understood and
shared by the Board and senior management. Leadership
represents one of the key issues in change management and CRM
sponsorship is discussed in more detail later in this chapter.
Inadequate measurement systems
CRM managers often point out how poor or inappropriate
measurement and reward systems can hinder the initiation and
fulfilment of CRM projects. Measures used to determine the
success of CRM performance are often considered inadequate.
Sometimes, the problem is that the organization is not clear about
its goals or does not communicate its goals to its people. Issues of
measurement were discussed in Chapter 6. There are, of course,
other issues that will impede successful CRM implementation,
some of which are addressed later in this chapter. Any company
undertaking CRM needs to understand these common barriers to
CRM success and any more specific potential problem areas
relevant to their particular business and consider the implications
for their organization in advance of the introduction of customer
management initiatives.
10.4 Delivering business benefits
Large-scale CRM projects need to be managed so as to
deliver benefits to the business, not just to deliver a CRM system
on time and budget. A strategic project management tool has
recently been developed which helps manage the delivery of

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business benefits. The Benefits Dependency Network (BDN)
works backwards from the project‘s objectives to ensure that all
necessary business changes are made, as well as CRM technology
solutions implemented. The BDN approach has the following
steps:
1. Define business drivers: The drivers of the project are defined,
based on the nature of the opportunity in relation to the strategy
from the application portfolio. A driver is a view by top managers
as to what is important for the business, such that the business
needs to change in response to that driver, e.g. the need to achieve
a greater return on shareholder funds.
2. Determine investment objectives: The investment objectives
are a statement of how the project will contribute to achieving
changes in relation to one or more of the drivers. Investment
objectives may include increase in sales turnover, increase in
market share, better targeting of most profitable customers, etc.
3. Establish business benefits: In order to achieve the investment
objectives, some benefits will need to be delivered to the enterprise
and/or its customers. These business benefits need to be explicitly
identified and quantified. They may include increasing stockturn,
better response from campaign management, improving customer
service, etc.
4. Identify business changes: In order to achieve the benefits, it is
necessary for the enterprise and its employees to work in different
and more effective ways. These changes are identified at this stage
in the BDN. Business changes may include online provision of
sales and stock information to the field sales force, changes in
channel structure, using the data warehouse to improve customer
targeting, etc.
5. Identify enabling changes: These are other one-off changes
that may also be needed before the technology can be

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implemented, for example to define new processes which are
needed and to establish new skill requirements, e.g. refining
customer segmentation, design of new customer service processes,
introducing a new account management process.
6. Determine CRM technology requirements and enablers: It is
only when this analysis of the objectives and benefits has been
undertaken and the necessary changes to realize them have been
identified, that the specific role that the CRM technology will play
in the project‘s objectives can be defined in detail. These
technology changes represent information systems and information
technology (IS/IT) enablers that will lead to the realization of the
business benefits. They include items such as extensions to the
company‘s data repository, a new or improved web site, a sales
force automation system, new mobile devices for field sales force,
etc.
The Benefits Dependency Network represents a useful tool
for identifying the business changes that are needed to make the
new use of CRM technology effective. Managers wishing to use
this tool may find it useful to examine worked examples from
other industries. Such examples are documented in the research
relating to the BDN and are listed in the references to this chapter.
A BDN framework can usually be agreed within two to three half-
day workshops, however, detailed scoping of the CRM technology
requirements may not be achieved within this timescale for more
complex projects.

***

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