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CRM Module-1

Customer Relationship Management (CRM) is a strategy for managing interactions with current and potential customers, utilizing technology to enhance sales, marketing, and customer service. It focuses on building long-term relationships to maximize customer lifetime value and includes stages from visitor engagement to customer advocacy. The document outlines the types of CRM, the importance of relationship marketing, and the factors crucial for successful CRM implementation.

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8 views21 pages

CRM Module-1

Customer Relationship Management (CRM) is a strategy for managing interactions with current and potential customers, utilizing technology to enhance sales, marketing, and customer service. It focuses on building long-term relationships to maximize customer lifetime value and includes stages from visitor engagement to customer advocacy. The document outlines the types of CRM, the importance of relationship marketing, and the factors crucial for successful CRM implementation.

Uploaded by

Ashita Savsani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Unit - I

What is CRM

Customer relationship management (CRM) is a model for


managing a company’s interactions with current and
future customers. It involves using technology to organize,
automate, and synchronize sales, marketing, customer
service, and technical support.

CRM “is a business strategy that aims to understand,


predict and manage the needs of an organisation’s current
and potential customers”
Definition of CRM

“CRM is concerned with the creation, development and


enhancement of individualised customer relationships with
carefully targeted customers and customer groups resulting
in maximizing their total customer life-time value”.
The purpose of CRM

 Help a business to keep customers.


 It helps the business to understand what it needs to do to
get more customers.
 Reduce costs by managing costly complaints and finding
out what services are useless for customers.
 Help a company figure out if its product is working and,
ultimately, increases profit.
 Prime reason is to log and manage customer relationships.
Stages of Customer Relationship

 Visitor - The online CRM is the entry portal to your


company, however the visitor finds you. Whether they visit
with your representatives at a trade show, or fill out a web
form, they enter the front door of your virtual company and
into the online CRM to be greeted with a welcome and offered
something valuable to them. WARNING: Do not skip this
important stage or your emails may be rejected later.

 Engaged Visitor - online CRM is able to engage the sales


lead and rescue your sales. The first place you engage the
visitor is in the welcome email. Be gracious and welcoming.
 Prospect

In some companies, just clicking on the link to the first offer will
convert the sales lead into a prospect. It may be time to have your
salespeople call to offer help and guide the sale.
Whatever the sales process for your product or service, an
email campaign delivered in your online CRM is the most engaging
and personal way to get them to pay attention to your message.

 Customer

Way too many companies stop courting the business after they have
become a customer. Some feel that customers are not loyal anyway,
so what’s the point? Others believe that if they concentrate their
effort on delivering good products and excellent service – it will be
enough to earn whatever loyalty is possible.
 Advocate

In an online world where customers can post their


experience with your company to be seen by anyone who
may be interested – customers have the enviable power to
make or break your business. As demonstrated by such
companies as Apple, Amazon and more, devout loyalty is
possible when customers feel important. They feel deeply
attached to the companies who make them feel valued and
heard.
Relationship Marketing

 Relationship marketing was first defined as a form of


marketing developed from direct response marketing
campaign which emphasizes customer retention and
satisfaction, rather than a dominant focus on sales
transactions.

Marketing activities that are aimed at developing and


managing trusting and long-term relationships with larger
customers.
In relationship marketing, customer profile, buying patterns,
and history of contacts are maintained in a sales database,
and an account executive is assigned to one or more major
customers to fulfill their needs and maintain the relationship.
Purpose of relationship marketing

 Satisfaction
Today’s customers face a growing range of choices in the products and services
they can buy . They are making their choice on the basis of their perceptions of
quality, service, and value. Companies need to understand the determinants of
customer value and satisfaction.

 Retention
To create customer satisfaction, companies must manage their value chain as well
as the whole value delivery system in a customer-centered way. The company’s
goal is not only to get customers, but even more importantly to retain customers.
Customer relationship marketing provides the key to retaining customers and
involves providing financial and social benefits as well as structural ties to the
customers. Companies must decide how much relationship marketing to invest in
different market segments and individual customers, from such levels as basic,
reactive, accountable, proactive, and full partnership
CRM cycle

There are four phases to the customer life cycle. The four phases include;
marketing, customer acquisition, relationship management, and loss.
Marketing
The marketing part of the customer life cycle is when messages are sent to the
target market to attract prospect customers.
Customer Acquisition
The next phases is customer acquisition which means prospects become
customers when they place an order.
Relationship Management
The third stage is relationship management. Relationship management is when
resell processes increase the value of existing customers.
Loss/Churn
The end stage of a customer life cycle is loss/churn when inevitably in time a
company may lose a customer. The company then needs to establish a win-back
process. The company then needs to decide which lost customers are of most
value and try to win back their business.
CRM cycle

A CRM system integrates all four phases of the customer life cycle into three major
processes. These processes are solicitation, lead-tracking, and relationship
management. The diagram above depicts the four phases and the three major
processes. It shows the flow of phases and what each phase means.
Types of CRM

Nowadays, three major types of customer relationship management


systems, namely operational CRM, analytical CRM and collaborative CRM
are being used in many organizations.

Operational CRM

It provides support to front-office business processes that involve direct


interaction with customers through any communication channel, such as
phone, fax, e-mail, etc. The details of every interaction with customers,
including their requirements, preferences, topics of discussion etc., are
stored in the customers’ contact history and can be retrieved by the
organization’s staff whenever required.
Thus, it presents a unified view of customers across the organization and
across all communication channels. Examples of operational CRM
applications are sales force automation (SFA), customer service and
support (CSS), enterprise marketing automation (EMA),etc.
Analytical CRM

It enables to analyze customer data generated by


operational CRM applications, understand the customers’
behavior, and derive their true value to the organization.
This helps to approach the customers with related
information and proposals that satisfy their needs. The
analytical customer relationship management applications
use analytical marketing tools like data mining to extract
meaningful information like the buying patterns of the
customers, target market, profitable and unprofitable
customers, etc., that help to improve performance of the
business.
Collaborative CRM

It allows easier collaboration with customers, suppliers,


and business partners and, thus, enhances sales and
customer services across all the marketing channels. The
major goal of collaborative customer relationship
management applications is to improve the quality of
services provided to the customers, thereby increasing the
customers loyalty. Examples of collaborative CRM
applications are partner relationship management (PRM),
customer self-service and feedback, etc.
Success Factors In CRM

 Evaluate current customers’ impact on business. CRM


must start with determining what kind of customer
information the company is looking for and what it intends
to do with the information.

 Evaluate business environment to understand how current


customer relationships impact business retention and
growth.

 Develop a strategy that is well expressed to give clear


direction and value to all employees
 Evaluate and update the strategy
 The goal is to lock customers into a mutually beneficial long-
term relationship. The CRM strategy aligns an entire
organization toward customers in a way that benefits
partners, suppliers and improves the financial bottom line
Facts of CRM

CRM is methodology to achieve global excellence through


customer satisfaction. it tracks customer history, need and
co-ordinates company’s multi-pronged interaction with its
customer for business excellence.CRM tentacles every area
of business. These are.—

 Customer Needs
 Customer Response
 Customer Satisfaction
 Customer Loyalty
 Reclaiming Lost Customer
 Customer Complaint
 Customer service
Importance of CRM

CRM helps the organization to identify customer needs and re-focus its
strategy to serve his better. It helps the company to archive business
growth through development edge and excellence. Some of the major
issue it address are:

 Identify customer needs.


 Helps in rediscovering the customer and understanding him.
 Identify untapped business potential.
 Identify strong and weak points of supplier.
 Provide feedback to the supplier on his total operation.
 Provide feedback and new information on competitors.
 Action plan to make organization customer – centric.
Stakeholders in CRM

Firms also use relationship marketing techniques to build mutually


supportive bonds with stakeholders other than consumers.
The 4 stakeholder groups most affected by CRM are:

Employees.
Difficult to convince buyers when employees are not happy.
Employee relationship building is handled by human resources departments.
Employees are instrumental in building relationships with customers = they have
to be trained + to have access to data & systems used for relationship
management.

Business customers in the supply chain.


Business customers (the B2B market): uses Internet technologies to work with
numerous wholesale and retail intermediaries.
Firm’s suppliers: uses the Internet to receive bids from its suppliers (lowers
transaction costs + enhances competition + speeds order fulfillment).
Stakeholders

3. Lateral partners.
 Other businesses that join with the firm for some common goal but not
for transactions with each other (not-for-profit organizations, or
governments).

4. Consumers.
 The individuals who are end users of products and services.
 Marketers must differentiate between business customers and final
consumers because different tactics are often employed in the B2C and
B2B markets.
CRM Implementation

•Customer Segmentation Based on Customer Life time value


•Customer Profiling
•Offer Customization
•Matching Service Cost and Revenue
•Employee Participation in CRM Design
•Motivating Employees for Effective Implementation
•Making CRM an Enterprize wide Activity
•Adequate technology Support for CRM Implementation
•Consistency testing of CRM Programs
•CRM Practice Evaluation Form

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