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CRM: Migration from Suspect To Advocate


Introduction to CRM

Developing close, cooperative relationship with customers is the requirement of modern

business organizations. In the current era of intense competition and demand oriented
markets, there is paradigm shift in the marketing strategies of business organizations,
which were earlier focused on product/service called as product/service centric approach
but now it has been shifted to customer centric approach.
Due to this customer centric approach of marketing, Customer Relationship Management
(CRM) has attracted the attention of marketers in order to focus on cooperative and
collaborative relationship between the firm and its customers. This type of relationship is
necessary from both growth and customer loyalty perspective of organization. Now a
days CRM has become a globally recognized business practice

CRM means many different things to different people. It is possible to develop a greater
understanding of it by looking at its origins and the principles that drove its development.
In the marketing literature the term Customer Relationship Management is defined in
different manner by different market researchers and academicians

According to Shani and Chalasani(1992), defines Customer Relationship Management as

“an integrated effort to identify, maintain and build up a network with individual
consumers and to continuously strengthen the network for mutual benefit of both sides,
through interactive, individualized and value added contacts over a long period of time”

Another Narrow perspective of Vavra(1992), CRM is customer retention in which a

variety of after marketing tactics is used for customer bonding or staying in touch after
the sale is made.

According to Gronroos, CRM is marketing strategy to establish, maintain and enhance

relationship with customers and other partners, at a profit so that the objectives of the
parties involved are met. This is achieved by a mutual exchange and fulfillment of

We define CRM as Customer Relationship Management as a comprehensive

marketing strategy to improve marketing productivity which can be achieved by
increasing marketing efficiency and enhancing marketing effectiveness through a
process of acquiring, retaining and partnering with selective customers to create
superior mutual value for the parties involved.

As implied in the above definition, the objective of CRM is to create superior mutual
value for both the business organizations and the customers. This will help in improving
marketing productivity which is achieved by increasing marketing efficiency and by
enhancing marketing effectiveness. The aspects, marketing efficiency and effectiveness
have long term orientation for an organization as it is concerned with cooperative and
collaborative relationship between the firm and its customers and other marketing actors.

Emergence of CRM
Looking back at a snapshot history, we see the following clear developments and
progression in marketing strategies over the last four decades:

• 1960’s: Era of Mass Marketing, is market coverage strategy in which a firm

decides to ignore market segment differences and go after the whole market with one
offer. It is type of marketing of a product/service to a wider audience. The idea is to
broadcast a message that will reach the largest number of people possible. Traditionally
mass marketing has focused on radio, television and newspapers as the medium used to
reach this broad audience. By reaching the largest audience possible exposure to the
product is maximized. In theory this would directly correlate with a larger number of
sales or buy in to the product. As the name says it’s mass so your trying to get your as
many as you can.
• 1970’s: Era of Segmentation, Market segmentation divides a market for goods
or services into distinct subdivisions. It takes a vague undistinguished group of
consumers and uncovers those who have similar needs, those who make purchases or
use products or services in the same. A market segment is a subgroup of people sharing
similar consumer characteristics. And because each segment shares the same attitudes
and behaviors, they generally respond the same to a given marketing strategy.
• 1980’s: Era of Niche Marketing, is a marketing strategy where a subset of the
market in which a specific product is focused with a price range, production quality and
the demographics aimed at specific market needs thereby intended to impact.
• 1990’s: Era of Relationship Marketing, It is a strategy designed to foster
customer loyalty, interaction and long-term engagement. It is designed to develop
strong connections with customers by providing them with information directly suited
to their needs and interests and by promoting open communication. This approach often
results in increased word-of-mouth activity, repeat business and a willingness on the
customer’s part to provide information to the organization.

Year Era Apporach

1960 The Era of Mass Marketing
1970 The Era of Segmentation Transactional Marketing
1980 The Era of Niche Marketing

1990 The Era of Relationship Relationship Marketing


Table 1.1 – Evolution of CRM

As it is implicit that upto 1980’s the firms were focused towards Transactional
Marketing, which is wholly concerned about the promotion and selling of the product
with little or no concentration over customer value and satisfaction and try to make new
customers every time. But the present scenario is totally changed; there is paradigm shift
from Transactional Marketing Approach to Relationship Marketing Approach which is

all about building and maintaining the long term customer relationship, creating a sense
of loyalty by providing the value product and service for mutual benefit.

Transactional Relationship
Marketing Marketing
Approach Approach

Figure 1.1 – Migration Towards Relationship Marketing

Difference between Transactional Marketing and Relationship

Transactional Marketing Relationship Marketing
Focus on Single Sale recruitment Focus on retention of the customer
Emphasis on product features Emphasis on product benefits and
systematic solutions
It is short term oriented It is long term oriented
Little or no importance given to customer Customer service is taken as most
services important element
Limited commitment towards the Higher commitment towards the customers
Focus on product quality while production Focus on quality at all levels
Communicate to persuade Communication to make sense and
Functional, mechanistic and production More humanistic and relationship based
oriented business model business model
Goal is customer satisfaction Goal is customer delight
It Serves 4Ps of Transactional Marketing It Serves 8C’s of Relationship Marketing
1. Product 1. Customer Expectation
2. Price 2. Customer Satisfaction
3. Place 3. Customer Delight
4. Promotion 4. Customer Cooperation
5. Customer Retention
6. Customer Touchpoints
7. Customer Behaviour
8. Customer Collaboration
Table 1.2: Transactional Marketing Vs. Relationship Marketing

Paradigm Shift from 4P’s of Transactional Marketing to 8C’s

Relationship Marketing

This figure shows that 4P’s which earlier took an important place in marketing strategies
has changed to Customer Centric approach which are based upon expectation,
satisfaction, delight and cooperation etc.

4P’s Transactional Marketing 8C’s Relationship Marketing

1. Product 1. Customer Expectation

2. Price 2. Customer Satisfaction
3. Place 3. Customer Delight
4. Promotion 4. Customer Cooperation
5. Customer Retention
6. Customer TouchPoints
7. Customer Behaviour
8. Customer Collaboration

Principles of CRM

CRM in effect implies building long term relationship with customers and understanding
their needs and responding through multiple products and services through multiple
channels. CRM should finally enable “a targeted mutually beneficial profitable
relationship with individuals and groups”
Differentiate Customers
Key CRM Principles Differentiate Offerings
Keep Existing Customers
Maximize Lifetime Value
Increase Loyalty

1. Differentiating Customers: Most CRM systems allow for very little freedom to
customize to specific industry verticals. Since the customer needs emerge from
the products and offering of the industry, CRM system should respond to the
customer needs. Understandings each customer becomes particularly important.
And the same customer reactions to a cellular company operator may be quite
different as compared to a car dealer. Besides for the same product or a service
not all customers can be treated alike and CRM need to differentiate between a
high value and a low value customer.

2. Differentiate Offering: A CRM solution needs to differentiate between a low
value customer and a high value customers.
• Low value customer requiring high value customer offerings.
• Low value customer requiring with potential high value in near future.
• High value customer requiring high value service.
• High value customer requiring low value service.
3. Keep existing customers: Grading customers from very satisfied to very
disappoint shall help the organization in always improving its customer
satisfaction levels and scores. As the satisfaction level for each customer
improves so shall the customer retention with the organization.
4. Maximizing life time value: By identifying life stage and life event trigger points
by customer, marketers can maximize share of the purchase potential. Thus the
single adults shall require a new car stereo and as he grows into a married couple
his needs grow into appliances.
5. Increase Loyalty: It is an endeavor of any corporate to see that its customers are
advocate for the company and its products. Any company will like its mindshare
status to improve from being a suspect to being an advocate. Company has to
invest in terms of its product and service offerings to its customers. It has to
innovate and meet the very needs of its clients/customers so that they remain as
advocate on the loyalty curve.
Suspect →Prospect→Customer Client→Supporter→Advocate

Cost of Acquiring Customers

Acquisition is a vital stage in building customer relationship. Certain key issues
connected with customer acquisition are dealt here. The customer acquisition cost is
defined as the cost associated with convincing a consumer to buy your product or
service, including research, marketing, communication, and differentiation costs etc.
In simple words, it is the cost associated with acquiring new customers. Most
businesses focus on organic growth as the path to long term success and that means
adding new customers and growing their base.
For the purpose of customer acquisition an organization is likely to focus its attention
on the following as its major sources for providing input for acquisition.
 The suspects
 The enquiries
 The lapsed customers
 The former customers
 The competitor’s customers
 The competitor’s lapsed customers
 The competitor’s former customers
 The referrals
 The existing buyers

The suspect represents the segment of the market who have the potential to become
prospective customers. Enquiries whether they are intentional or casual provide for a

focused approach in the process of acquisition. Proper responses to enquiries are likely to
result in customer acquisition.
The lapsed customers should not be neglected. They can be booked as new customers if
the reasons for lapses are rectified suitably. The reasons for lapses are dealt under the
recovery of lapsed customers. Once a customer has purchased something to fulfill a
specific need and has then stopped buying from an organization be become a lapsed
customer and he should be encouraged to become customer again, by marketing the
organization’s new offerings to fulfill the customer’s emerging new needs and so on.
The competitor’s customers, competitor’s lapsed customers, competitor’s former
customers and competitor’s enquiries are major attractions for acquisitions. Customer
who always prefer more values for every time, are naturally inclined to opt for
alternatives. In the context the competing organizations can acquire the competitor’s
customers if the customers perceive that they would be rewarded with more value for
Referrals play a significant role and provide a strong base for new customer acquisition.
It is likely that fresh customers will rely heavily on referrals rather than the organization’s
own promotion efforts. Referrals may be from within the organizations or from anyone
outside connected to the organizations including suppliers, bankers, consultants etc.
Existing buyers may also be targeted for acquisition in the event of the organization
expanding its product line.

Process of Acquisition
The acquisition process constitutes the following stages:
1. Enquiry
2. Interaction
3. Exchange
4. Coordination
5. Adoption
In this stage, the prospective buyer undertake a detailed enquiry with regard to several
aspects pertaining to the organization, product, nature of transaction and all other
related aspects. Having stored the information he passes on to the interaction stage,
where the customer interacts with the organization and obtains additional
information, clarifies and ensures already connected information. Terms of exchange,
mode of delivery and other things related to exchange are settled at the exchange
stage. Further coordinated effort on either side would lead the customers moving to
adoption of the product or service concerned and that completes the acquisition
Influences of Acquisition
The application of the acquisition process explained above is influenced by the following:
 Type of buying
 Type of product
 Type of customer
 Economic environment
 Contextual operations

There are two different types of buying: one, the rational and the other, emotional. Rational
buying is a more systematic buying influenced by reason and logic. On the other hand, emotional

buying is influenced by the emotions of the buyer. It is likely that a customer involved in the
rational buying would move from one stage to another systematically, whereas in emotional
buying he may not do so.
Acquisition depends on the type of product, whether it is convenience, shopping or speciality
product. According, the significance of each stage of the acquisition process varies.
Further the significance depends on the type of customer whether the customer is an individual or
an organization. In contrast to the individual buyer an organization may have its own procedures
to adopt a product, policy and the related aspects. Also acquisition depends on whether the
acquisition is a first time experience or a repeated one.
The economic and environmental forces focus attention on the market conditions, the operations
of the competing forces, supply and demand, purchasing power etc. The acquisition process is
likely to differ under conditions of limited availability of product, with limited brand choice and
limited purchasing power as compared to unlimited availability of brands and purchasing power.
The context of operations refers to the prospective buyer’s intention, urgency, previous
experience, specific benefit expected, lifestyle of customer and so on. The acquisition process is
likely to differ as per the context of operation concerned.

Acquisition is the act of gaining new customers through various different methods with the
goal of turning potential customers into actual customers. This is a very difficult stage because
with so much competition around today, customers are inundated with choices meaning that
competition is fierce and customers are more informed. As a result of this people have become
more demanding as they know that they have the upper hand. However, this is a very
important step in marketing because for most businesses the only way they can grow is
through the acquisition of new customers. There are various methods of achieving this from
finding customers who weren't previously aware that the product was available to people who
may not have needed the product before maybe needing it now. For example pet food -
someone who didn't previously have a pet but then bought a cat would suddenly need to buy
cat food.

There are several different methods of achieving customer acquisition such as mass marketing
which includes magazines and billboards and direct marketing such as telesales and through
the post.

The total cost of customer acquisition varies from situation to situation but has some of
the basic components, which includes:
1. Marketing cost
a. Online marketing cost
b. Offline marketing cost
2. Resources cost
a. Infrastructure
b. Manpower
c. Expenditure on office equipments and stationary
d. Electricity
e. Internet
3. Expenditure incurred on training and market research
Although winning new customers is extremely important customer retention is crucial
to the life of any business. As it costs considerably less to retain a customer than it does
to win new ones, focusing on a retention strategy makes perfect business sense. Studies
across a number of industries have revealed that the cost of retaining a customer is only

about 10 percent of the cost of acquiring a new one. The main aim of customer retention
is to prevent customers from swapping to competitors and to increase customer loyalty
and profitability.

Some of the many advantages of customer retention are that long - term customers are
less likely to stop using your product or switch to a competitor, they tend to be less price
sensitive, they may introduce new customers through referral, they're more likely to
purchase additional products, are less expensive to service because they are familiar with
the process and are consistent in their buying behaviour. CRM involves using software
applications that allow companies to manage every aspect of their relationship with a
customer and thus turning customer satisfaction into customer loyalty and building longer
lasting relationships.

Turning customer acquisition in to customer loyalty

Loyal customers are addressed by different name by different organizations like premium
customers, key accounts, elites and crown jewels. The term customer loyalty means
commitment or attachment to a product, brand, a store based on favorable attitudes and is
reflected purchases or recommendations to others.
Richard L Oliver has defined loyalty as “A deeply held commitment to re-buy or re-
patronize a perfect product or service consistently in future despite situational influences
and marketing efforts having the potential to cause switching behavior”
Customer loyalty can be loosely defined as the predisposition of any given customer to
purchase your goods or services over comparable ones available in the marketplace.
When speaking of products (rather than services or the broader classification which
includes both) it is often referred to as "brand loyalty." Investing time and energy in
promoting customer loyalty should be an integral component of any business' marketing
strategy. When business people think of "marketing" in general, they tend to focus on
activities targeted at attracting new customers. While expanding your business' customer
base is a crucial undertaking which you must work towards with clearly defined goals,
the importance of retaining existing customers mustn't be overlooked. Working toward
promoting customer loyalty (or brand loyalty) is critical to your goal for many reasons. A
few of the most important reasons why customer loyalty is important to your business are
outlined below.

1. Repeat Business: Loyal customers, almost by definition, will purchase your

goods or services again and again over time. Depending on what type of business
you have and what the sales cycle is like, you may end up selling more to one
loyal customer in a year than you might to even 10 first time customers.
2. Greater Volume: As you build relationships with your loyal customers, it will
become increasingly easy to sell to them in higher volumes. This may happen
naturally, or you may choose to incentivize the process for your customers. In any
case, higher volumes mean greater sales, which translates to higher overall profits.
3. Cross-selling Opportunities: Customers who exhibit brand loyalty have a
relationship with your business. They trust you to provide quality products and
customer service. This creates a great opportunity to fulfill more of your
customers' needs than the traditional ones you currently meet. What does this

mean? You can make sales to loyal customers across product lines and thus
increase your overall sales volume without needing to focus so much on attracting
new customers.
4. Protects You From the Competition: The more loyal your customers tend to be,
the safer you will be from the draw of the competition. Establishing strong brand
loyalty can make you practically immune to competitive forces. This is especially
important in places where new players enter the marketplace often.
5. Word-of-Mouth Marketing: Loyal customers can also bring you new customers.
Customers that have great relationships with businesses tend to talk about it.
Happy and satisfied customers who keep coming back to you are very likely to
refer others who may need your product and/or services.
6. Benefit of the Doubt: Let's face it; things go awry sometimes - even in the best
businesses. Sometimes we get an order wrong, don't meet a deadline, or aren't
able to deliver on promises made to customers. In today's economy, it's even
easier for little hiccups such as these an others to take place in business. These
types of mistakes can damage your business' reputation in the eyes of a new
customer. A scheduling error can make your firm seem disorganized and
unreliable. This is a very easy way to lose customers. The good news is, loyal
customers are much more likely to give you the benefit of the doubt and/or
overlook errors. If you maintain the level of customer service and quality that it
takes to achieve brand loyalty in the first place, your customers will be willing to
forgive you when bad things happen.

How to make customer loyal?

There are few tips for making our customer loyal or to get repeat business

1. Add a human touch to your customer service : It is well known that most
companies fail to provide adequate customer service. Just call nearly any 1-800
number and you will experience frustration as your call is transferred from one
automated message to another. Do not let your customer get lost in a
technological loop. Provide a means for them to contact you directly and answer
them promptly.
2. Tell the truth, even when it’s not what the customer wants to hear :
Sometimes freelancers have the mistaken impression that good customer service
means always saying “yes”. They couldn’t be more wrong! Rather than agreeing
to do something that you cannot really do, be upfront with your customer. In most
cases your honesty will enhance your situation. Saying “no” upfront is a lot better
than saying “yes” and then not delivering.
3. Being pleasant counts for a lot: My Wife and I recently ate at our favorite
restaurant. Now the city where we live has dozens of restaurants. There are even
three other restaurants located in the same mall. So why this is our favourite?
a. The owner and employees greet by name and seem glad to us.
b. They remember our preferences. “No lemon in your team mam”
c. They remember details about our lives.
d. How kids are doing?
e. The food is good and the price is reasonable

4. Become the quality provider: I once tried purchasing my children’s clothing at
the cheapest possible price. However, after one very cheap little outfit that I
purchased for my daughter fell apart after she wore it only one time. I changed my
tactic. It dawned on me that quality is more cost effective in the end.
5. Be in constant touch with your customers and associate them in important
aspects like new product development and also keep them informed of your
new products and prices.
6. Reward the customer in appropriate manner for their loyalty.
7. Get to know the customer as much as you can . Simple gestures like sending
birthday cards can emotionally bond the customer with the organization.
8. If a valuable customer suffers any disadvantage due to an transaction with
you, compensate the customer

Internet and its effect on CRM

The emergence of the Internet heralded a new opportunity for customer relationship
building. For one thing, search engines made it easier for customers to find online
merchants and interact with them. And once found, those merchants offered customer
more streamlined ways of ordering and receiving products and services. Moreover the
internet simplified bidirectional communication for the first time offering a better way for
consumers to replay information to the merchant. Instead of waiting to be mailed a from
to open an account or order a phone line, a prospective customer needed only to send an
application through cyberspace resulting in shorter delivery time, improved accuracy and
quite often a higher positive perception. Internet is an environment of zero latency,
offering real time information and often on demand product delivery.

Consider the old way. A customer needs a new set of window blinds. He goes to the
kitchen, finds the yellow pages and calls his local blind company. The representative
explains they can have someone come out and measure for the blinds a week from
Thursday. The representative arrives from the blind company, measures and shows the
customer photos of various blind styles and colors. Then the representative takes another
two days to write up and estimate. Almost two weeks later the customer has the pricing
information he needs. Now he must decide whether to get another estimate or take his
chances with the only vendor he’s contacted.

Compare that to the Web version. The customer enters mini blinds in his favourite search
engine, which returns the web sites for several catalog window treatment firms. He
chooses a company, which displays a series of blind designs and prices per inch. The
customer chooses a design he likes, enters his window measurements and receives a price
online, including tax and shipping. Before purchasing be browses a couple of other
window ware websites for additional blind designs and prices, eventually placing his
order in less than an hour.
Benefits to organizations

1. Global Reach: INTERNET expands the marketplace to national and international

markets. With minimal capital outlay, a company can easily and quickly locate

the best suppliers, more customers and the most suitable business partners
worldwide. Expanding the base of customers and suppliers enables organizations
to buy cheaper and sell more.
2. Cost Reduction: INTERNET decrease the cost of creating, processing,
distributing, storing and retrieving paper based information. High printing and
mailing costs are lowered or eliminated.
3. Supply chain improvements: Supply chain inefficiencies such as excessive
inventories and delivery delays can be minimized with INTERNET. For example
by building autos to order instead of for dealers showrooms, the automotive
industry is expecting to save tens of billions of dollars annually just from
inventory reduction.
4. Extended Hours: The business is always open on the web, with no overtime and
no other extra costs.
5. Customization: Pull type production allows for inexpensive customization of
products and services and provides a competitive advantage for companies that
implement this strategy. A well known example of pull type production is that
used by Dell.
6. New Business Models: INTERNET allows for many innovative business models
that provide strategic advantages and/or increase profits. Combining group
purchasing with reverse auctions is one example of an innovative business model.
7. Vendor’s specialization: INTERNET allows for a high degree of specialization
that is not economically feasible in the physical world. For example a store that
sells only dog toys can operate in cyberspace but in the physical world such a
store would not have enough customers (
8. Rapid time to market: INTERNET reduces the time between the inception of an
idea and its commercialization due to improved communication and collaboration.
9. Lower communication costs: INTERNET lowers telecommunication costs-the
internet is much cheaper than VANs.
10. Efficient Procurement: INTERNET enables efficient e-procurement that can
reduce administrative costs by 80 percent or more reduce purchase price by 5 to
15% and reduce cycle by more than 50%.
11. Improved customer relations: INTERNET enables companies to interact more
closely with customers, even if though intermediaries. This allows for
personalization of communication, products, and services which promotes better
CRM and increases customer loyalty.

Benefits to consumers

1. Ubiquity: INTERNET allows consumers to shop or perform other transactions

year round, 24 hrs a day from almost any location.
2. More products and services: INTERNET provides consumers with more
choices they can select from many vendors and from more products.
3. Customized products and services: Dell customizes computers and sells them at
competitive prices. Customers can get an increased number of products and
services just the way they want them.

4. Cheaper products and services: INTERNET frequently provides consumers
with less expensive products and services by allowing them to shop in many
places and conduct quick comparisons.
5. Instant delivery: In the case of digitized products, INTERNET allows for fast
6. Information Availability: Consumers can locate relevant and detailed product
information in seconds, rather than days or weeks. Also, multimedia support is
cheaper and better.
7. Participation in auctions: INTERNET makes it possible for consumers to
participate in virtual auctions. These allow sellers to sell things quickly and
buyers can locate collector’s items bargains.
8. Electronic communities: INTERNET allows customers to interact with other
customers in electronic communities and exchange ideas as well as compare
Different Terms of CRM/Types of CRM

1. eCRM: Electronic CRM concerns all forms of managing relationships with

customers making use of Information Technology (IT). eCRM is enterprises using
IT to integrate internal organization resources and external marketing strategies to
understand and fulfill their customers needs. Comparing with traditional CRM,
the integrated information for eCRM intraorganizational collaboration can be
more efficient to communicate with customers.As the internet is becoming more
and more important in business life, many companies consider it as an
opportunity to reduce customer-service costs, tighten customer relationships and
most important, further personalize marketing messages and enable mass
customization. ECRM is being adopted by companies because it increases
customer loyalty and customer retention by improving customer satisfaction, one
of the objectives of eCRM.
2. ECRM: When a company reaches a certain size, usually after management has
been assumed by a board of directors, it begins to divide up company activities
into different strategies. Some of these strategies govern marketing, or reaching
out to consumers in an effort to win new customers. Other strategies involve
CRM, or attempts by a company to hold onto customers it already has and
increase market share through good opinions and word of mouth. CRM stands for
customer relationship management. Enterprise CRM is simply a CRM strategy
that is designed to change the way the business thinks about its relationship with
customers, rather than continue with traditional approaches to customers. CRM is
designed to attract customers by increasing product value and paying attention to
personal preferences. Several "pillars" are essential to all CRM strategies,
including sales, marketing, customer service and technology. CRM sales are
designed to appeal to existing customers who can be offered better deals for their
continuing loyalty, while marketing techniques are designed to remind customers
of the benefits they get from the products or services the business offers. CRM
technology keeps track of customer habits so customer service techniques can be
adapted to each person.

3. PRM: Partner relationship management (PRM) is a business strategy for
improving communication between companies and their channel partners. Web-
based PRM software applications enable companies to customize and streamline
administrative tasks by making shipping schedules and other real-time
information available to all the partners over the Internet. It allows a company to
manage its alliance partner and reseller relationships to provide customers with
the optimal sales channel while streamlining the sales process. Determining
incentives for various web referral sites based on the profitability of the customers
they send your way is one PRM tactic. Several CRM providers have incorporated
PRM features, such as Web-enabled spreadsheets shared through an extranet, in
their software applications. PRM is often compared to customer relationship
management (CRM) and there is some argument over whether the complex
relationships of channel partnerships, makes it necessary for PRM to be a separate
entity, or merely a component of CRM
4. cCRM: Collaborative CRM is an approach to customer relationship management
(CRM) in which the various departments of a company, such as sales, technical
support, and marketing, share any information they collect from interactions with
customers. For example, customer feedback gathered from a technical support
session could inform marketing staff about products and services that might be of
interest to the customer. The purpose of collaboration is to improve the quality of
customer service, and, as a result, increase customer satisfaction and loyalty.
5. SRM: Supplier relationship management is a comprehensive approach to
managing an enterprise's interactions with the organizations that supply the goods
and services it uses. The goal of supplier relationship management (SRM) is to
streamline and make more effective the processes between an enterprise and its
suppliers just as customer relationship management (CRM) is intended to
streamline and make more effective the processes between an enterprise and its
customers. SRM includes both business practices and software and is part of the
information flow component of supply chain management (SCM). SRM practices
create a common frame of reference to enable effective communication between
an enterprise and suppliers who may use quite different business practices and
terminology. As a result, SRM increases the efficiency of processes associated
with acquiring goods and services, managing inventory, and processing materials.
6. mCRM:
7. Operational CRM: According to Crosby and Johnson (2001), operational CRM
focuses on improving the efficiency of customer interactions. They mention that
operational CRM aims at combining sales, support and marketing databases into a
single repository that tracts and manages interactions with customers. It
concerned with the customer facing functions and the capturing of data generating
as a result of the interactions with the customer. The contact points from where
transactional data is usually generated include:
a. Call centre interactions with customers
b. Sales people interactions
c. Automated interactions such as websites
d. Interactions with staff such as accounts personnel

8. Analytical CRM: It is defined as the analysis of customer data for strategic or
tactical purposes to enhance both customer and firm value. It aids decision
making using various tools ranging from simple spreadsheet analyses to
sophisticated data mining. The analysis should enable insights into customer’s
CRM and Business Intelligence
Business intelligence (BI) refers to computer-based techniques used in spotting, digging-
out, and analyzing business data, such as sales revenue by products and/or departments,
or by associated costs and incomes.

BI technologies provide historical, current, and predictive views of business operations.

Common functions of business intelligence technologies are reporting, online analytical
processing, analytics, data mining, business performance management, benchmarking,
text mining, and predictive analytics.

Business intelligence aims to support better business decision-making. Thus a BI system

can be called a decision support system (DSS). Though the term business intelligence is
sometimes used as a synonym for competitive intelligence, because they both support
decision making, BI uses technologies, processes, and applications to analyze mostly
internal, structured data and business processes while competitive intelligence gathers,
analyzes and disseminates information with a topical focus on company competitors.
Business intelligence understood broadly can include the subset of competitive

CRM means many different things to different people. It is possible to develop a greater
understanding of it by looking at its origins and the principles that drove its development.
In the marketing literature the term Customer Relationship Management is defined in
different manner by different market researchers and academicians

According to Shani and Chalasani(1992), defines Customer Relationship Management as

“an integrated effort to identify, maintain and build up a network with individual
consumers and to continuously strengthen the network for mutual benefit of both sides,
through interactive, individualized and value added contacts over a long period of time”

Another Narrow perspective of Vavra(1992), CRM is customer retention in which a

variety of after marketing tactics is used for customer bonding or staying in touch after
the sale is made.

According to Gronroos, CRM is marketing strategy to establish, maintain and enhance

relationship with customers and other partners, at a profit so that the objectives of the
parties involved are met. This is achieved by a mutual exchange and fulfillment of

We define CRM as Customer Relationship Management as a comprehensive

marketing strategy to improve marketing productivity which can be achieved by
increasing marketing efficiency and enhancing marketing effectiveness through a

process of acquiring, retaining and partnering with selective customers to create
superior mutual value for the parties involved.

Organizations earlier used data processing technologies to assimilate information and

effectively distribute the same to the internal environment. Analytical CRM is a
management discipline that treats intellectual capital as managed assets; it is not
about creating a central database but to gain insight and understanding of customer
requirements in order to completely satisfy the needs of customers. Foundation of
customer knowledge rests on variety of data sources, data could be numerical, textual,
organized in tables, discrete etc. Key to leverage this data is to organize it so that it
becomes knowledge on the basis of which informed business decisions could be taken
in management institute. The key to successful customer relationship management is
personalization i.e. how to extract the knowledge that is pertinent to the user and
translate it into a format that is easily understood and is called as customer knowledge
catalogue. Analytical CRM helps in development of customer knowledge catalogue
which is utilized by the counselling people working in the management institute for
the purpose of career guidance. This career guidance is given to the prospect, the
person coming for the inquiry and which in then helps in converting them to the
advocates or loyal customers.
Analytical CRM is designed to analyze deeply the customer’s information and data
and unwrap or disclose the essential convention and intension of behaviour of
customers on which capitalization can be done by the organization. Primary goal of
analytical CRM is to develop, support and enhance the work and decision making
capability of an organization by determining strong patterns and predictions in
customer data and information which are gathered from different operational CRM

Relevant analytics capabilities are often interwoven into applications for sales, marketing,
and service. These features can be complemented and augmented with links to separate,
purpose-built applications for analytics and business intelligence. Sales analytics let
companies monitor and understand client actions and preferences, through sales
forecasting and data quality.
Marketing applications generally come with predictive analytics to improve segmentation
and targeting, and features for measuring the effectiveness of online, offline, and search
marketing campaign. Web analytics have evolved significantly from their starting point
of merely tracking mouse clicks on Web sites. By evaluating “buy signals,” marketers
can see which prospects are most likely to transact and also identify those who are
bogged down in a sales process and need assistance. Marketing and finance personnel
also use analytics to assess the value of multi-faceted programs as a whole.
These types of analytics are increasing in popularity as companies demand greater
visibility into the performance of call centers and other service and support channels, in
order to correct problems before they affect satisfaction levels. Support-focused
applications typically include dashboards similar to those for sales, plus capabilities to
measure and analyze response times, service quality, agent performance, and the
frequency of various issues
Difference Between CRM and BI
S.No CRM Business Intelligence
1 IT consist of the processes a company uses It refers to the skill, technologies,
to track and organizes its contact with its applications and practices used to
current and prospective customers help a business acquire a better
understanding of its commercial
2 Display customers most recent inbound Display the name and address of
contact on my PDA along with their current business customer
corporate address
3 Once a month for the next six month, send Display customer who visit one of
a direct mail solicitation to customers most the video store in our chain on
likely to rent next month’s new features weekly basis
who are not weekly visitors to the store
4 Contact all high value customers who have Display a list of customers who
lodged a complaint. Generate retention have lodged a complaint within the
recommendations for each customer past 30 days
5 Identify the top five purchased office Analyze the top five most popular
supplies and trial run an automated web office supplies and compare
request for quote system for limited approved vendor prices to prices of
quantities to test price improvements other potential suppliers
6 Send profitable registered customers online List the email addresses for
discounts if they fill in a form explaining registered customers who
why they abandoned their shopping carts. abandoned their shopping carts
during their last web vist.

Campaign Management

Campaign management software applications allow marketing users to segment groups of
customers (and prospective customers) into smaller groups and then specify the
interaction that should take place with those individuals. For example, consider a
marketing manager for a cellular phone company that is focusing on customer retention.
There might be a large number of reasons that a customer chooses to leave their cellular
provider, and the marketing manager is responsible for identifying ways to reduce this
problem. One group of customers might be leaving because they are experiencing
technical problems (e.g., frequent dropped calls) while another group might be leaving
because the plan they are signed up for does not match their current calling patterns (e.g.,
a local calling plan with a large number of national calls).

A user of the campaign management software would define these segments by selecting
customers in the database that have these characteristics. For the customers with technical
problems, the marketer could create a customer segment that selects those customers who
have had more than five dropped calls within the same month. The information that
drives these selections is contained in a customer data warehouse, a database that is used
to collect information about customer characteristics and activities. In the case of dropped
calls, the customer service call-center would enter information in the database when a
customer called to complain (even better would be an automated system that identified
dropped calls and automatically added them to the database without a customer

Once this segment is defined, it needs to be associated with offers that will be
communicated to the customers in order to improve retention. In the case of customers
with technical problems, the offer might be a rebate of one month's charges and a
promise to improve service quality. This offer could be communicated by a call from
customer service or via a piece of direct mail (email might be a third option, if the
customer's email address is available). The campaign management application would take
the segment and split it into two groups, half receiving a phone call and the other half
receiving a piece of direct mail (which half a customer fall into would be a random

In addition, the marketing person might want to try out a slight alternative, offering a
rebate of one-half of the most recent bill. The idea being that the less expensive offer
might be more cost effective. Data will be collected and a statistical analysis done at a
later date in order to evaluate the difference between the two offers. This test offer would
then further segment each of the two existing segments (phone call, direct mail) into to
additional groups, with most (say 90%) receiving the full-month rebate while a smaller
group (10%) receiving a half-month rebate.

Once the definition of the segmentation is complete and the marketing manager is
satisfied with the campaign, it still needs to be executed. This would be handled by a
scheduler that executes the campaign at regular intervals (e.g., monthly). Upon execution
of the campaign, the segments associated with the phone call would be passed to the call-
center software system, which would queue up the customers who are supposed to
receive the offer along with the specifics of the script that the operator is supposed to use

(full or half month rebate). The direct mail segments would likely be handled differently,
possibly by using an external vendor (a "mail shop") that would take a list of customers
and produce the actual envelopes that would be mailed. In this case, the campaign
management system would generate a file listing each of the customers, including their
address and offer type.

This process of creating segments, associating them with offers, and executing campaigns
would be repeated for each possible segment that a marketing manager might think of
(some companies define thousands of possible segments for their customers). Collisions
between segments are handled by the campaign management software, either by
excluding customers from segments (based on a set of rules) or by allowing the overlap.
Over time the effectiveness of the segments are evaluated, with refinements incorporated
continuously (this kind of marketing is sometimes referred to as "continuous customer

Campaign Management can be based upon:

1. Demographic profile i.e. the income of parents, social status, geographic location
2. Psychographic profile i.e. attitude towards usage of products
3. Which products would be needed by particular segment
4. Which products would be deemed suitable by a segment
5. Choice of variants and sizes
6. Which channel of communication is preferred by a particular segment
7. Preferred action options

The following steps to be followed for effective campaign management:

1. Take into account the needs of a segment before deciding on the offers to be made
2. Use segment characteristics to decide on communication channel, product
variants, etc that are offered.
3. Analyze the response to previous campaigns before finalizing the offers
4. Create metrics to measure the success of the campaign

Types of Campaign
Single stage campaign A one-off communication to a customer
Multi stage campaign Follow ups on earlier communication with
a defined strategy for non responders
Single channel campaign May be single/multi stage but using only
one channel for communication
Multi channel campaign A single / multi stage campaign through
multiple channels
Trigger based campaign Based on a trigger generated as a result of
the customer’s profile, purchase behaviour

Measurement metrics for campaigns: The success of campaign needs to be judged and
metrics should be used to provide correct indicators. These should include:

 Volume of communication sent and percentage of response received
 Volume of responses converted into sales
 Value of the sales
 Cost of the campaign v/s value of the sales.
CRM Marketing Initiatives

1. Cross-Selling: Cross-selling is defined by the Oxford English Dictionary as "the

action or practice of selling among or between established clients, markets,
traders, etc." or "that of selling an additional product or service to an existing
customer". In practice, businesses define cross-selling in many different ways.
Elements that might influence the definition might include:
 the size of the business
 the industry sector it operates within
 the financial motivations of those required to define the term.

The objectives of cross-selling can be either to increase the income derived from
the client or clients or to protect the relationship with the client or clients. The
approach to the process of cross-selling can be varied.
Unlike the acquiring of new business, cross-selling involves an element of risk
that existing relationships with the client could be disrupted. For this reason, it is
important to ensure that the additional product or service, being sold to the client
or clients, enhances the value the client or clients get from the organization.
2. Up-Selling: Upselling (sometimes 'up-selling') is a sales technique whereby a
saleperson induces the customer to purchase more expensive items, upgrades, or
other add-ons in an attempt to make a more profitable sale. Upselling usually
involves marketing more profitable services or products, but upselling can also be
simply exposing the customer to other options he or she may not have considered
previously. Upselling implies selling something that is more profitable or
otherwise preferable for the seller instead of, or in addition to, the original sale. A
different technique is cross-selling in which a seller tries to sell something else.
Some examples of upsales include:

o suggesting a premium brand of alcohol when a brand is not

specified by a customer, such as if a customer simply requests a
"rum and Coke").
o selling an extended service contract for an appliance
o suggesting a customer purchase more RAM or a larger hard drive
when servicing his or her computer
o selling luxury finishing on a vehicle
o suggesting a brand of watch that the customer hasn't previously
heard of as an alternative to the one being considered.
o suggesting a customer purchase a more extensive car wash
In practice, large businesses usually combine up-selling and cross-selling
techniques to enhance the value that the client or clients get from the organization
in addition to maximizing the profit that the business gets from the client. In

doing so, the organization must ensure that the relationship with the client is not

3. Customer Retention: Customer Retention is the activity that a selling

organisation undertakes in order to reduce customer defections. Successful
customer retention starts with the first contact an organisation has with a customer
and continues throughout the entire lifetime of a relationship. A company’s ability
to attract and retain new customers, is not only related to its product or services,
but strongly related to the way it services its existing customers and the reputation
it creates within and across the marketplace.
Customer retention is more than giving the customer what they expect, it’s about
exceeding their expectations so that they become loyal advocates for your brand.
Creating customer loyalty puts ‘customer value rather than maximizing profits
and shareholder value at the center of business strategy’. The key differentiator in
a competitive environment is more often than not the delivery of a consistently
high standard of customer service.
Customer retention has a direct impact on profitability. Research by John Fleming
and Jim Asplund indicates that engaged customers generate 1.7 times more
revenue than normal customers, while having engaged employees and engaged
customers returns a revenue gain of 3.4 times the norm.
4. Behaviour Prediction: It helps marketing departments determine what customers
are likely to do in the future. Using sophisticated modeling and data mining
techniques behaviour prediction uses historical customer data to foresee future
behaviour. This analysis includes several variations:
 Propensity to buy analysis: Understanding which products a particular
customer is likely to purchase.
 Next sequential purchase: Predicting what product or service a customer
is likely to buy next.
 Product affinity analysis: Understanding which products will be
purchased with other products.
 Price elasticity modeling and dynamic pricing: Determining the optimal
price for a given product often for a given customer or customer
5. Personalization: Personalized marketing (also called personalization, and
sometimes called one-to-one marketing) is an extreme form of product
differentiation. Whereas product differentiation tries to differentiate a product
from competing ones, personalization tries to make a unique product offering for
each customer.
Personalized marketing had been most practical in interactive media such as the
internet. A web site can track a customer's interests and make suggestions for the
future. Many sites help customers make choices by organizing information and
prioritizing it based on the individual's liking. In some cases, the product itself can
be customized using a configuration system.
More recently, personalized marketing has become practical with bricks and
mortar retailers. The market size, an order of magnitude greater than that of the
Internet, demanded a different technological approach now available and in use.

Many retailers attract customers to the physical store by offering discounted items
which are automatically selected to appeal to the individual recipient. The
interactivity occurs through the offer redemptions recorded by the point of sale
systems, which can then update each model of the individual shopper.
Personalization can be more accurate when based solely upon individual
purchasing records because of the simplified and repetitive nature of some bricks
and mortar retail purchasing, for example grocery superstores.
6. Channel Optimization: The goal of marketing automation is to offer the right
message to the right customer and at the right time. With the advent of the
Internet many firms are appending through the right channel as customer’s
interaction preference evolve. For instance a new customer whose use of online
banking services has steadily increased might prefer to be emailed a new offer
along with regular statement. Understanding the channels through which specific
customers prefer to interact with your company is only a slice of the pie.
Company must also decide how best to communicate with customers. Because a
valuable customer prefer his work to be done online and in an effective manner.
Channel management means optimization of inbound and outbound means of
customer interaction and knowing how to choose the best approach for each.
7. Contact Management: Business contacts in customer organizations are people
whom the sales personnel contact initially for say sale. They may be at various
levels in the hierarchy customer organization. Some may be simply contact
persons while others may be decision maker, whose opinion go a long way in
finalizing the deal. Previously the sales representatives would maintain business
cards of these key contacts in transparent vinyl folders. These formed the life
blood as far as providing information with the key contact was concerned.
However, many important characteristics about contacts are lost especially if they
are present at a tacit level with the sales representative. If a different sales
representative is assigned to this territory, he will not have the advantage of such
information and will have to start fresh. Contact management provide critical
information about each customer contact is stored in the system and is available
easily. Sales representatives can access such information through their mobile
PDAs or laptops anywhere, while on the move and accordingly tone their sales

Marketing Automation
The name given to software platforms designed for marketing departments and
organizations to simplify processes by automating repetitive tasks is Marketing
Automation. Marketing departments, consultants and part-time marketing employees
benefit by specifying criteria and outcomes for tasks and processes which are then
interpreted, stored and executed by software, which increases efficiency and reduces
human error.
Today’s business world is incredibly competitive and many companies look for ways to
make their marketing campaigns more effective. Often, advertising dollars are limited
and companies seek to avoid investing in marketing strategies that may not produce
satisfactory results. As such, many companies find it advantageous to develop methods
for managing and tracking marketing campaigns in order to provide greater

understanding of customer profiles and profitability. Marketing automation can be
effective for keeping track of the campaign strategies that work versus those that fail to
produce good results. At the same time, marketing automation can make it easier to use
campaign results in developing improved campaigns for the future.

To many, marketing automation involves the use of specially designed software.

Marketing automation software allows businesses to automate important marketing
processes. This type of software can help businesses in accomplishing varied tasks such
as defining, scheduling, and tracking campaign goals and creating and implementing
marketing campaigns. Marketing automation software can also help businesses in market
segmentation and identifying target markets, as well as the collection of pertinent market
information and response. Collected response information is fed back into the system.

Some types of marketing automation software make it possible to manage campaigns that
encompass many different marketing methods. For example, such software may be used
with print, Internet, radio, television, and e-mail marketing campaigns. However, the
capabilities of marketing automation software may vary widely depending on the
particular software.

For some, marketing automation doesn’t mean a particular program or group of

applications at all. Instead, it means varied tools used for analysis and profiling. Such
tools can include everything from web measurement to those intended for personalizing
campaign strategies. These tools are used to improve communications with customers
and obtain valuable insight into a company’s marketing target.
For other companies, marketing automation is not simply software. Instead, it is an entire
system focused on the management of high-volume marketing campaigns. Often, such
high-volume campaigns focus on offline marketing strategies, such as those that are
direct mail or telephone-based.

Regardless of the type of marketing automation a company chooses to implement, there

is always a common denominator. That common denominator is the use of technology to
ensure better communication with customers and more targeted and effective marketing
campaigns. Frequently, the type of marketing automation path chosen is directly linked to
company size and sales volume.
There are three categories of software:
1. Marketing Intelligence uses tracking codes in social media, email and webpages
to track the behavior of anyone interested in a product or service to gain a
measure of intent. It can record which social media group or thread they followed,
which link was clicked on in an email or which search term was used to access a
website. Multiple link analysis can then track buyer behavior - following links
and multiple threads related to product A but not B will show an interest only in
A. This allows more accurately targeted response and the development of a
nurturing program specifically targeted towards their interest and vertical market.
Due to its interactive nature this has been described as Marketing Automation 2.0.
2. Marketing Automation has a focus on lead generation with targeted marketing
programs to drive awareness and interest in a company's products and/or services

and nurture leads from first interest through to sale. Commonly used in business-
to-business(B2B), business-to-government(B2G), or longer sales cycle business-
to-consumer(B2C) sales cycles, Marketing Automation involves multiple areas of
marketing and is really the marriage of email marketing technology coupled with
a structured sales process as delineated by a CRM program.
3. Marketing Workflow Automation encompasses automation of internal
marketing processes. These includes budgeting and planning, workflow and
approvals, the marketing calendar, internal collaboration, digital asset creation
and management and essentially everything that supports the operational
efficiency of the internal marketing function. Typically these systems require a
CRM or COM administrator to set up a complex series of rules to trigger action
items for internal sales and marketing professionals to manually process
(designing files, sending letters, sending email campaigns). This type of system
increases marketers ability to deliver relevant content to relevant individuals at
relevant times. Limitations may apply, based on the human resource capacity of
an organization and their level of commitment to the tasks as they are assigned.

Call Centre and Customer Care

A call centre is a group of agents and/or automated voice response units that support
customer contact functions over the telephone. They are assisted by computers. A call
centre must anticipate and accommodate customers needs by delivering the right
information, at the right time, in the right way, with right quality.

Objectives of call centre

 Offer a high quality of customer service

 Have contractual agreements met
 Quicker and more reliable response to service requests
 Consistent service
 Increase communication with the organization
 Improve customer satisfaction
 Enhance knowledge circulation
 Increase employee productivity
 Decrease costs
 Differentiate against competition
 Increase sales revenue

Call Centre Features and their functionalities

 Contact Management: Improve the quality of customer service by
providing the information instantly on the agent’s screen. Deliver prompt,
refined and knowledgeable service that does not require callers to repeat
their questions as they are routed through the organization. Maintain a
database of all customer contact persons with details as part of knowledge
 Opportunity Management
 Campaign management

 Target efforts at a particular segment of contacts or prospects
 Get new business from existing customers
 Measure returns from campaign and media
 Increase revenues resulting from cross selling and up selling
 Improve your reach
o Activity Management: Streamline activities to track from start to completion.
Reduce the reliance on slow, cumbersome paperwork. Increase productivity
either by reducing head counts or by increasing the level of services without
adding incremental staff. Shorten the learning curve, reduce the amount of
agent training time required each time a new product or service is offered, or
when a new computer system, peripheral or application comes online.
o Customer management: Provide single contact point for any customer query.
Identify and track loyal customers based on pre defined parameters and focus
on profitable customers, attract new customers, nurture and retain them for
high profitability.
o Workflow management: Efficient enforcing of key business practices to
increase communication across the organization: automation of business
processes based on events. Facilitate complex business functions by providing
the necessary automated business workflow and message based routing and
querying functions.
In an economy of converging technologies, morphing markets and web paced
communications, customers get ready access to an unprecedented amount of information
from anywhere in the globe and at any time of day or night. In response, a host of new
products and services emerges to serve these customers. In a competitive environment,
the one idea that is likely to succeed will be the customer centric model, where the
organization builds long term strategic relationships with its customers.

It is CRM that encapsulates this view better than other concepts and technologies like
BPR, TQM, SCM and ERP. Now CRM is embedded into every Call Center (CC). A CC
is an arrangement where the division of an organization or its intermediary acts as a link
with their customers. The typical CC is an area where specially trained employees called
as Customer Services Representatives (CSR) or Customer Care Executives (CCE) are
available and these people handle queries on products and services. The CC is a single
function unit limited to customer care and support and sometimes sales. The CC helps in
Customer Care through various touchpoints such as:
 Phones
 Email
 Touchscreen kiosk
 Fax
 Internet Char
The CCE of the contact center is an active salesman, not a passive middleman routing
queries. He uses a bank of telephones that is supplemented by computer terminals and
high-end CRM software. The most basic customer interactions like enquiries are
automated and the CCE gets more time for customer service with personalized care.
Typical CC software would link telecom hardware to IT databases at the backend and

communicate automated information to the callers in the form of interactive voice
response (IVR), and screen pop-ups layers through the CSR. New CC systems
incorporate internet technologies and be web-enabled, allowing more interactivity for
their callers, while keeping the basic model for customer interaction unchanged.
Customer service applications at the CC includes:
 help desks,
 technical support,
 product information,
 service calls,
 scheduling,
 catalogue services,
 and reservations.

Components of Call Center for customer care

The CC system has three entities

 Caller: The caller communicates with the PBX linked to the IVR, where
he selects an option that relates to his need. The trigger in the CTI
N(customer telephone interaction) for the screen popup’s could be either
caller’s telephone number or his account number and this may be
supported by a unique telephone number.
 The CCE: The focus of the CCE should be threefold:
 Get new customers
 Retain customers
 Grow profitable customers
o The ACD(Automated Call Distributor) , is a computerized system that
responds to the caller with voice menu and connects the call to next
available CSR.

CC delivers gains for any industry that needs a customer interface and where the success
of transactions is based entirely on information availability. CC can drive focused direct
marketing campaigns using captive data supported by technology such as predictive
dialers. CC cuts effort, time and costs for their customers, for more value to them. Quick
and consistent services delivered whenever desired by the customers can help to retain
existing customers. Promotion campaign stands a better chance of success. CC can
increase customer satisfaction and allow products and services providers to operate on an
24x7x365 global scale. CC builds relationships with prospective and current customers
by managing information, and delivers products and services at speeds that facilitate
customer retention and creation.

Automating the contact center

Contact centers have evolved quickly from a group of local workers answering phones
during business hours to a dedicated organizations providing on demand global support
and sales through several different channels. Companies are realizing increasingly that
their customer relationships are only as good as the quality of their support and are

adopting customer telephony integration that automates various communication

ACD (automated call distributor) is a computerized phone system that responds to the
caller with a voice menu and connects the call to next available CSR.

1. Call Routing: A company’s customer support “help desk” might actually made
up of several or many geographically dispersed contact centers. These contact
centers might be segregated based on:
a. The location of the company’s regional offices.
b. Staff expertise or product specialization.
c. Proximity to key research and development activities
d. The location of the firm outsourcing the company’s contact center
e. Various escalation levels for trouble tickets.
Because performance remains the central metric of contact center success,
minimizing the time a customer waits on hold for CSR stays a top priority. To
further minimize customer wait times “load balancing” is a critical objective.
Network routers monitor operator availability while keeping track of incoming
calls in the queue, using switch technology to allocate calls appropriately.
The automatic call distribution not only reduces the time a customer stays on hold
by efficiently routing calls to available agents but it can also apply intelligence
about the customer to its decision about where to route a call. For instance by
using caller identification, a call center system can route a call from a
multicultural city such as Los Angeles to a bilingual CSR. Automated call
distribution also called as precision call distribution, facilitates calls to be routed
to agents who have access to specific information or with particular areas of
2. Contact Center Sales Support: Your customer has just purchase a diamond
solitaire necklace and would like to know if there are matching earrings. Such an
interaction could be just another customer inquiry or an opportunity to generate
additional revenue. With the right information often displayed via a little window
called a screen popup on the customer service representative, a representative can
gauge an incoming call to determine whether the customer on the other hand of
the phone line is good candidate for another product or service. The call center as
point of sale is a relatively new practice that requires a combination of robust
customer data and CSR finesse, because the CSR needs to transcend his
traditional role of answering questions, landing smack in the middle of revenue
generation. To optimize the customer’s experience with call center sales support,
companies must have the right information about the customer.
3. Web based self service: It provides companies with a means to conduct
interactive, personalized and relevant communication with customers across both
electronic and traditional channels. It empowers customers to decide when and
how to communicate with the company through which channel and at what
frequency. It adheres to permission based practices, respecting individuals
preferences regarding how and whether they wish to communicate with you and it

focuses on understanding how the economics of customer relationships affect the
4. Customer Satisfaction Measurement: The customer satisfaction has significant
implication for the economic performance of firms. Customer satisfaction has an
impact on customer complaints while having a positive impact on customer
loyalty. Increase customer loyalty may have the following benefits:
a. Increase usage levels
b. Secure future revenues
c. Minimize the likelihood of customer defections
The customer satisfaction may be measured the usage of key performance
 Average value of call (for turnover generating call centers) to be
calculated as the total turnover divided by number of calls.
 Availability
 Schedule discipline
 Percentage of abandonment: the number of people who hang up,
callers who get the busy signal
 Average handling time: the sum of the average conversation time
and the average completion time
 Costs per call
5. Call Scripting: As customer contact centers become more automated, the
infrastructure improves. Customer databases become richer and customer
behavior and preferences can actually be predicted by comparing them to the
behavior of similar customers over time. Because of this increase customer
intelligence, the capability to provide CSRs with the situational scripts is
emerging as a must have for many contacts centers. Such scripts eliminate agent
guesswork by providing the CSR with a logical series of talking points and
guiding her through a dialog with the customer based on such factors as
a. The reason for the contact
b. The customer’s value
c. Cross selling opportunities and propensity to buy data
d. Current product promotions or discounts
e. Past due bills or accounts payable issues
6. Cyberagents: cyberagents attempt to pull together the best of both
personalization and advanced technology. On the one hand, the cyberagent is a
personality complete with voice and facial expressions often communicating with
the web visitor by her first name. The vision for the cyberagent is to go from
providing information to actually making decisions based on a combination of the
customer’s request, heterogeneous and detailed information about the customer
and complex rules based logic to guide the cyberagent in making
recommendations. Cyberagents are emerging as a viable means of providing basic
customer support.
7. Workforce Management: Workforce management tools specialize in staff
planning and optimization, and several products are specific to contact center
staffing. Optimizing staff around high call volumes, different communication
channels, and customer types is the surest means of guaranteeing that the right

customers receive the appropriate levels of support. Such products can combine
operational contact center desks, such as call routing with planning function
a. Ability to forecast contact volumes to predict busy periods
b. Recommendations for the optimal number of CSRs for certain peak
c. Performance tracking by customer value, customer satisfaction, priority
level or other metrics
d. Employee scheduling based on skills, tenure or preferred work hours
e. Global monitoring of multiple contact centers, with the ability to combine
findings into single reports for staff or fine-tuning

Checklist for customer support success

1. Choose technologies carefully

2. Provide CSRs with everything they need to known about customers
3. Establish processes for call center staff.
4. Agree on success metrics
5. Understand the issue of service recovery
6. Ensure that your contact center reps are properly trained
7. Staff the contact center at appropriate levels
8. Share key Learnings
9. Improve CSR compensation
10. Your company has not already determined its corporate personality


Sales Force Automation

Sales force automation is a technique of using software to automate the business tasks of
sales, including order processing, contact management, information sharing, inventory
monitoring and control, order tracking, customer management, sales forecast analysis and
employee performance evaluation. Sales force automation (SFA) software is a type of
program that automates business tasks such as inventory control, sales processing, and
tracking of customer interactions, as well as analyzing sales forecasts and performance.
Businesses may have a custom version developed specifically for their needs, or choose
from among the increasing number of sales automation software products, such as
Interact Commerce's ACT! and GoldMine Software's GoldMine. Sales automation
software is sometimes called sales automation software, and sometimes called customer
relations management ( CRM ) software.

SFA packages typically include a Web-ready database, an e-mail package, and

customizable template s. A three-tiered architecture is typically used to separate the
database, server, and application to reduce programming demands on clients. A module-
based design is generally used, to allow users to customize the package to suit their

In August 2000, Oracle released a free CRM software package,
which makes information - such as contacts, schedules, and performance tracking -
available online through the included database program. The package is designed for
medium-to-large enterprises with mobile work forces. All data and storage are based at
an Oracle facility, similar to the application service provider ( ASP ) model, which means
that data can be accessed from any Internet connection and that the client doesn't need
special hardware or software. The Oracle package also includes online staff training.

Sales force automation, or SFA, is a term that refers at its most basic to automating
critical sales functions like lead and account management.

Sales force automation uses software to automate sales tasks like order processing, lead
generation, information sharing, contact management, customer management, and
employee evaluation.

It also keeps track of customer preferences, buying habits, demographics, and

performance management. Sales force automation tools improve field sales productivity
and open whole new realms of possibility for companies. With an on-demand

architecture that allows effective sales force management and CRM, managing sales
information is easy on even the largest scales. Essentially, customers and sales employees
can manage and share any type of information.
The objectives of undertaking sales force automation are as follows:

1. Comprehensive picture of the sales situation: The collation of the sales data
through the automation process should offer a comprehensive picture of the total
sales situation at any given point of time. They should include the various aspects
like current prospects, salesperson-wise sales situation, future projections from
customers etc.
2. Enabling sales with the power of automation: Sales is a process that can be aided
through automation. The sales force could be helped with mobile devices that
enable it to access company information that can help in a sales situation. These
a. Current inventory position
b. Order status
c. Credit position etc
3. Sales Analysis: Real time analysis of the sales situation is a necessary input for
sales manager. The sales force automation should enable a variety of analysis to
be available on anytime anywhere basis. This means that remote access should be
provided to salespeople on the field. The methods used include: PDAs with
internet access which enable accessing the servers, laptops that are connected to
servers offering the desired analysis. By enabling real time access, they are upto
4. Comprehensive Access to All desired materials: Salespeople seek a variety of
materials to enable them in the sales process. These include:
a. Product brochures
b. Comparisons sheets
c. Sales incentive schemes
d. Quotation formats
e. Order formats
f. Sales report formats
All these necessary documents should be made available on a system that is
readily accessible by the sales person even from remote locations.

There are a number of benefits and features that come with sales force automation
technology, and these features comprise the backbone of the SFA system. They include:

1. Lead management

Lead management allows companies to keep better track of leads by ensuring they
don't get cold. This can reduce or eliminate the need for manual routing and lead
assignment duplication, clearly defines opportunity assignments, and is able to
automatically assign leads to the correct individual based on territory, product
expertise or user-defined rules. Thus SFA allows for automatic load leveling
across sales territories, and better relationships between team members.

For example, with automatic lead management, you can set security controls that
ensure teams or partners can access only their own leads, increase lead conversion
rates and improve sales response times.

2. Opportunity management

Opportunity management allows sales teams to work better as units by

standardizing sales methods and systems, identifying bottlenecks, and tracking
deal closures. It also allows employees to focus their resources on strengthening
key partnerships and dominating key competitors instead of competing with each
other. More organized sales teams allow managers to delegate tasks and set up
automatic reminder emails for themselves and their team.

Most importantly, the opportunity management feature allows companies to

centrally track custom information like partner and customer communications and
milestones while simultaneously monitoring myriad sales processes like sales
channels, service effectiveness or product lines.

3. Account management

An account management system ensures that your company is able to attain full
knowledge of your customer accounts. Accurate knowledge of customer account
equals better collaboration amongst your sales teams and retains lasting customer
relationships. Additionally, account management allows a company to defines and
evaluate all those involved with the account, from the project manager to the
executive sponsor.

With account management, you can set up online access to all customer account
information, like organization charts and current partners-across the entire
company. No one is left in the dark and everyone knows the account status and

4. Territory Management

On-demand, advanced territory management capabilities allow you to adjust to

rapid changes within your company. An easy point-and-click interface ensures
your company can automatically route accounts and opportunities to the correct

A solid territory management system also decreases lag time in lead assignments
by ensuring a lead never gets cold; lead assignments are easily queued and
automatically sent to the correct territory. In essence, territory management allows
companies to easily monitor, set up, gather, transfer, assign, re-assign, and change
accounts across territories.

5. Contract Management

Contract management is another integral feature in sales force automation.

Essentially, it allows companies to manage a contract's lifespan by shortening
approval cycles for contracts, renewing contracts sooner, and reducing
administrative costs.

This SFA feature improves tracking and management of contract information,

such as value, conditions, terms, evaluations, and more.

6. Knowledge Management
As field salespeople know all the information related to products and services.
Customer data is necessary for selling; and the more information available the
better. Organization have surplus of information. Accessing internal documents
can provide the sales force with the information it needs to understand a variety of
components in the sales life cycle. Such information might include:
 Corporate policy handbooks
 Sales presentation slides
 Company phone list
 Proposal templates
 Contact boilterplate
 Expense report forms etc

Traditionally, most companies have had to build, buy and sustain an IT software system
all on their own; however, this leads to extremely high maintenance fees and myriad
other costs. Today, the advent of automated sales force technology allows businesses to
subscribe to already built, on-demand, customizable services that provide everything a
traditional IT software does and more.

The architecture of sales force automation allows for a decrease in the total cost of
ownership, reduction of risk factors, a decrease in wasted time, and a new focus on
business and management rather than technology.

Sales Force Automation and Mobile CRM

Keep your sales team selling! Mobile puts CRM and other enterprise system data in the
palm of your hand, giving sales professionals the information they need to visit customers
with confidence. SMART Field Sales extends customer, product, warranty, order and
billing information so you can more effectively interface with your customers and deliver
superior service at the point of sale. Throughout the entire sales cycle - from providing a
quote to issuing an invoice - SMART Field Sales offers real-time visibility and
management of sales accounts, leads, contacts, tasks and opportunities regardless of
Mobile CRM is on the rise in the world of CRM and demand is growing as companies
and employees are demanding access to crucial information in real time. Allowing for a
more versatile, mobile workforce and faster access to information, mobile CRM is here to

stay. Here are the top ten reasons your company should consider implementing a mobile
CRM system.
 Provide immediate, knowledgeable customer service

 Access to enterprise system(s) including order status, service requests

and customer data

 Coordinate internal resources to address customer needs in a timely


 Improve fulfillment response with full views of inventory and on-the-

spot ordering

 Accelerate the sales process – from quoting to sales and fulfillment to

final billing

1. Mobility Keeps Sales Aligned From Anywhere
Superior Customer Service: Customers expect an instant, accurate
response – arm your sales reps with detailed customer data including order
status, history, pricing, inventory and billing status.
2. Sales Cycle Visibility
Get a real-time, accurate view of your sales organization at all times from
pipeline to year-end review. More data means better management across
the supply chain.
3. Accelerate Sales Cycles
From checking inventory availability to placing on-the-spot orders to
capturing a signature to close the deal, SMART speeds the sales cycle
from quote to billing.
4. Faster access to data
Sales professionals can access data in real-time, so it is always the most
current, up-to-date information available. If you need to know about a
client or lead, you can find what you need to know immediately via phone,
laptop, PDA, or other mobile device.
5. Central data center
A central data center allows you to access all the information all the time.
No one person has longer access to a file or case; you can look at it
simultaneously without slowing anything down. And if a client id shifted
to you suddenly, you have access to all their information in a matter of
minutes. Thus, mobile CRM is an extremely effective, efficient ancillary
to your normal CRM system.
6. Leads stay hot and glide down the pipeline
Leads don''t get cold because there will always be someone to pick up the
slack. Mobile CRM also makes it easier to ensure the lead gets nudged
down the pipeline gently but effectively and ends up in the correct place.

7. Access to critical information anytime, anywhere
Mobile CRM allows you to access information in the central database
from anywhere in the world at any time, provided you have access to a
mobile device that works.
8. Easy to use
Mobile CRM is amazingly easy to use and takes much of the stress off of
professional sales people. It allows them to stay in touch and get new
9. Ideal for travel
Mobile CRM is especially conducive to sales professionals who travel a
large part of the time. Because you can use any mobile device, traveling
isn''t difficult, and it''s far less stressful. If you suddenly remember
something you have to find or look up, forget a client''s information, or
any other number of scenarios, mobile CRM can be the way you solve the
10. Usable online and offline
Mobile CRM can be used online and offline. If the internet doesn''t work
or the connection has failed, you can get on your mobile device; if you
lose your phone but have your laptop or PDA, you''re covered. Thus it
provides an almost fail safe way to get the information you need, when
you want it.
11. Competitive advantage
Mobile CRM offers a competitive advantage because it offers a way to
reach more customers than just using a traditional CRM system. It is
quickly growing to be one of the de facto methods of CRM outside of the
12. Reasonably priced
Once priced ridiculously high, mobile CRM systems are now more
reasonably priced, and this has added to their growth in popularity.
13. Allows for a highly mobile work force
Professionals are no longer confined to the office; they can leave for an
appointment or business trip and still remain totally connected to the
workplace and their clients.
Most critical Factors for the successful implementation of Mobile CRM

1. Off-line functionality is key. Sales professionals will use a mobile

application only if they can reliably depend on it -- every time. To ensure
that the mobile application and CRM data is always available when they
need it, mobile applications must support off-line functionality. Contrary
to what many in the industry would have you believe, wireless coverage
isn't ubiquitous, nor is "broadband wireless" a possibility with current
technology. Mobile CRM applications must be designed with the ability to
intelligently use a wireless connection when it's available, but to not be
dependent on it.
2. Open standards aid integration. Field professionals don't just need
access to customer information in the field; they also need information on

promotions, products, competitors, service requests or order status. So
selecting a platform based on open standards that can integrate with a
variety of back-end systems -- ERP, intranet, legacy, database and e-mail
-- is imperative. In addition, support for open standards also ensures that
your application can support a wide variety of platforms and is flexible
enough to keep up with the rapidly changing device landscape.
3. Security is crucial. Mobile CRM applications typically contain your field
service and sales organization's lifeblood: customer contact information.
Handheld applications should be able to provide enterprise-caliber security
through authentication, encryption and central, policy-based control
4. Ease-of-use should be top of mind: Mobile application performance and
ease of use are vital for field professional effectiveness and adoption.
Unlike desktop or laptop applications, field professionals use handheld
applications in small time increments of one to 10 minutes. This means
that users in the field will quickly stop using a system that's slow or
difficult to use. To be effective, mobile CRM systems must be instant-on,
easy to navigate and require little or no training. Just as important is a user
interface that is configurable to each organization's unique workflow and
sales process. The right interface can make all the difference to your end
5. Timely information is critical. Features such as server-pushed alerts and
scheduled synchronization will simulate an always-connected experience
by delivering information to the user as soon as possible given the wireless
coverage in a particular area. Mobile applications should accelerate
communication, decision-making and customer responsiveness by keeping
users in touch.

Field Force Automation

Mobile CRM is on the rise in the world of CRM and demand is growing as companies
and employees are demanding access to crucial information in real time. Allowing for a
more versatile, mobile workforce and faster access to information, mobile CRM is here to
stay. Here are the top ten reasons your company should consider implementing a mobile
CRM system.

Field Force Automation refers to the use of technology to capture field sales (or service)
information in real time. This involves use of technology, typically handheld PDAs,
wireless devices or mobile phones to capture data. The captured data is transferred
immediately to back end systems (ERP, CRM or accounting systems) through Wifi, 3G
or GPRS connection. This instant capture of information reduces time delays, avoids
manual data errors and enhances field force productivity. From an operations perspective,
availability of field information in near real time allows to plan delivery schedules,
reduce inventory and monitor & control the field sales team. The biggest challenge in
Field Force Automation is in developing a simple, but usable, user interface for the hand
held device/ mobile and connectivity at the location of information capture. Connectivity
can be overcome by having a system which can retain the information captured in the
device cache and later synchronize with back end systems.

Some examples of Field Force Automation systems include Nokia Tej from Nokia,
Mobile Field Service from BlackBerry, etc.

In simple words Field Force Automation implies part’s customer service in that field
service implies the service or repair of customer equipment on the customer’s premises.
It began in the 1980s in manufacturing organizations, who regularly dispatched
technicians to remote sites to test and repair equipment. The classic process of
dispatching a technician involved an unwieldy, paper intensive set of instructions that
took days or weeks as various staff members became involved to register, communicate,
analyse, diagnose, monitor, close and review the problem.

1. Now customer can use wireless technology to report problem from any where and
anytime via his cell phone to the field service officers.
2. The CSR can actually enlist the support of product specialist or field service
engineers by sending a message to their wireless devices.
3. With the right analysis capabilities, the CSR can rate the severity of a customer
problem then determine whether a field service representative should be
dispatched based on either her particular skill set or her current distance from
customer’s site. In this way the CSR can dispatch the technician most likely to fix
the problem the fastest.
4. Field technicians not only receive dispatch order via their wireless devices; they
can even make use of these devices during the actual repair. The ability to pop a
CD into a CD-ROM or insert a memory card containing installation instructions,
repair guidelines or equipment specifications provide the technician with the
information he needs while at the customer site and frees him from lugging
around bulky how-to manuals

5. Improve the quality of reliability data by reducing voice communications
necessary and establishing a single point of data by central dispatchers.
6. Increase customer satisfaction due to more timely updates of restoration status

Components of Field Force Automation

The three major components within the core package of FFA are:

• Resource planning that lays the building blocks for effective scheduling:
– Stores individual and crew employee calendars, start/end work location,
organizational structure, skill set, wages, preferences, and equipment held
– Models workforce shift/rotation, holiday, illness, training, and overtime
– Analysis of company policies and collective agreements affecting staff
– Full support for multi-person crews and individuals required for a specific task
• Optimized scheduling differentiates FFA by combining resource intelligence,
planning, and modeling with advanced street level routing:
– Schedules resources using manual, automatic, and semi-automatic modes with
heuristic algorithms
– Automatic, optimal selection of materials and workers based on complex
resource analysis, including advanced real-time analysis such as proximity and
equipment of currently deployed crews
– Optimized routing, beyond point-to-point distances, with street level
information, such as:
- One-ways
- Average speed
- Traffic signals
- Real-time information (if available) such as traffic flow, accidents,
closures, etc.
• Dispatch management delivers optimized crew deployment with these abilities:
– Web-based dispatch board and Gantt chart—dispatcher has full control from
calendar management to technician login/logoff
– Track employee tasks on dispatch board with map-based dispatching and
GPS/AVL updates
– View overall operations or detail on work and mobile workers
– Alert dispatchers to priority events
– Automated work status updates

eCRM (Electronic Customer Relationship Management)

eCRM Electronic CRM concerns all forms of managing relationships with customers
making use of Information Technology (IT). eCRM is enterprises using IT to integrate
internal organization resources and external marketing strategies to understand and fulfill
their customers needs. Comparing with traditional CRM, the integrated information for
eCRM intraorganizational collaboration can be more efficient to communicate with

The concept of relationship marketing was first coined by Leonard Berry in 1983. He
considered it to consist of attracting, maintaining and enhancing customer relationships
within organizations. In the years that followed, companies were engaging more and
more in a meaningful dialogue with individual customers. In doing so, new
organizational forms as well as technologies were used, eventually resulting in what we
know as Customer Relationship Management (CRM).

The main difference between RM and CRM is that the first does not acknowledge the use
of technology, where the latter uses Information Technology (IT) in implementing RM
As the internet is becoming more and more important in business life, many companies
consider it as an opportunity to reduce customer-service costs, tighten customer
relationships and most important, further personalize marketing messages and enable
mass customization.] ECRM is being adopted by companies because it increases
customer loyalty and customer retention by improving customer satisfaction, one of the
objectives of eCRM. E-loyalty results in long-term profits for online retailers because
they incur less costs of recruiting new customers, plus they have an increase in customer
retention. Together with the creation of Sales Force Automation (SFA), where electronic
methods were used to gather data and analyze customer information, the trend of the
upcoming Internet can be seen as the foundation of what we know as eCRM today.

As we implement eCRM process, there are three steps life cycle:

Data Collection: About customers preference information for actively (answer

knowledge) and passively (surfing record) ways via website, email, questionnaire.
Data Aggregation: Filter and analysis for firm’s specific needs to fulfill their customers.
Customer Interaction: According to customer’s need, company provide the proper
feedback them.
We can define eCRM as activities to manage customer relationships by using the
Internet, web browsers or other electronic touch points. The challenge hereby is to
offer communication and information on the right topic, in the right amount, and at
the right time that fits the customer’s specific needs.

eCRM strategy components

When enterprises integrate their customer information, there are three eCRM strategy

1. Operational: Because of sharing information, the processes in business should

make customer’s need as first and seamlessly implement. This avoids multiple
times to bother customers and redundant process.
2. Analytical: Analysis helps company maintain a long-term relationship with
3. Collaborative: Due to improved communication technology, different
departments in company implement (intraorganizational) or work with business
partners (interorganizational) more efficiently by sharing information.
Basis CRM eCRM

Customer contacts Contact with customer All of the traditional
made through the retail methods are used in
store, phone, and fax. addition to Internet, email,
wireless, and PDA
System interface Implements the use of ERP Geared more toward front
systems, emphasis is on the end, which interacts with
back-end. the back-end through use of
ERP systems, data
warehouses, and data marts.
System overhead (client The client must download Does not have these
computers) various applications to view requirements because the
the web-enabled client uses the browser.
applications. They would
have to be rewritten for
different platform.
Customization and Views differ based on the Personalized individual
personalization of audience, and personalized views based on purchase
information views are not available. history and preferences.
Individual personalization Individual has ability to
requires program changes. customize view.
System focus System (created for internal System (created for external
use) designed based on job use) designed based on
function and products. Web customer needs. Web
applications designed for a application designed for
single department or enterprise-wide use.
business unit.
System maintenance and More time involved in Reduction in time and cost.
modification implementation and Implementation and
maintenance is more maintenance can take place
expensive because the at one location and on one
system exists at different server.
locations and on various

The scope of eCRM

1. Foundational services:
This includes the minimum necessary services such as web site effectiveness and
responsiveness as well as order fulfillment.

2. Customer-centered services:
These services include order tracking, product configuration and customization as
well as security/trust.

3. Value-added services:

These are extra services such as online auctions and online training and education.

4. Self-services are becoming increasingly important in CRM activities. The rise of

the Internet and eCRM has boosted the options for self-service activities. A
critical success factor is the integration of such activities into traditional channels.
An example was Ford’s plan to sell cars directly to customers via its Web Site,
which provoked an outcry among its dealers network.CRM activities are mainly
of two different types. Reactive service is where the customer has a problem and
contacts the company. Proactive service is where the manager has decided not to
wait for the customer to contact the firm, but to be aggressive and contact the
customer himself in order to establish a dialogue and solve problems.

The Need to adopt eCRM

The need to adopt eCRM emerges from the following:
 Optimize the value of inter-active relationships.
 Enable business to extend its personalized messaging to the web and
 Coordinate marketing initiatives across all customer channels.
 Leverage customer information for more effective eMarketing and
 Focus business on improving customer relationships, and earning a
greater share of each customer’s business through consistent
measurement, assessment and actionable customer contact strategies.

ERP (Enterprise Resource Planning)

Enterprise resource planning (ERP) integrates internal and external management
information across an entire organization, embracing finance/accounting, manufacturing,
sales and service, etc. ERP systems automate this activity with an integrated software
application. Its purpose is to facilitate the flow of information between all business
functions inside the boundaries of the organization and manage the connections to outside
ERP, which is an abbreviation for Enterprise Resource Planning, is principally an
integration of business management practices and modern technology. Information
Technology (IT) integrates with the core business processes of a corporate house to
streamline and accomplish specific business objectives. Consequently, ERP is an
amalgamation of three most important components; Business Management Practices,
Information Technology and Specific Business Objectives.

In simpler words, an ERP is a massive software architecture that supports the streaming
and distribution of geographically scattered enterprise wide information across all the
functional units of a business house. It provides the business management executives
with a comprehensive overview of the complete business execution which in turn
influences their decisions in a productive way.

At the core of ERP is a well managed centralized data repository which acquires
information from and supply information into the fragmented applications operating on a
universal computing platform.

Information in large business organizations is accumulated on various servers across

many functional units and sometimes separated by geographical boundaries. Such
information islands can possibly service individual organizational units but fail to
enhance enterprise wide performance, speed and competence.

The term ERP originally referred to the way a large organization planned to use its
organizational wide resources. Formerly, ERP systems were used in larger and more
industrial types of companies. However, the use of ERP has changed radically over a
period of few years. Today the term can be applied to any type of company, operating in
any kind of field and of any magnitude.

Today’s ERP software architecture can possibly envelop a broad range of enterprise wide
functions and integrate them into a single unified database repository. For instance,
functions such as Human Resources, Supply Chain Management, Customer Relationship
Management, Finance, Manufacturing Warehouse Management and Logistics were all
previously stand alone software applications, generally housed with their own
applications, database and network, but today, they can all work under a single umbrella
– the ERP architecture.

In order for a software system to be considered ERP, it must provide a business with
wide collection of functionalities supported by features like flexibility, modularity &
openness, widespread, finest business processes and global focus.

ERP systems can run on a variety of hardware and network configurations, typically
employing a database to store data.

ERP systems typically include the following characteristics:

 An integrated system that operates in (next to) real time, without relying
on periodic updates.
 A common database, that supports all applications.
 A consistent look and feel throughout each module.
 Installation of the system without elaborate application/data integration
by the Information Technology (IT) department
The Ideal ERP System
An ERP system would qualify as the best model for enterprise wide solution architecture,
if it chains all the below organizational processes together with a central database
repository and a fused computing platform.


Engineering, resource & capacity planning, material planning, workflow management,

shop floor management, quality control, bills of material, manufacturing process, etc.


Accounts payable, accounts receivable, fixed assets, general ledger, cash management,
and billing (contract/service)

Human Resource

Recruitment, benefits, compensations, training, payroll, time and attendance, labour rules,
people management

Supply Chain Management

Inventory management, supply chain planning, supplier scheduling, claim processing,

sales order administration, procurement planning, transportation and distribution


Costing, billing, activity management, time and expense

Customer Relationship Management

Sales and marketing, service, commissions, customer contact and after sales support

Data Warehouse

Generally, this is an information storehouse that can be accessed by organizations,

customers, suppliers and employees for their learning and orientation

Advantages of ERP Systems

There are many advantages of implementing an EPR system. A few of them are listed

 A perfectly integrated system chaining all the functional areas together

 The capability to streamline different organizational processes and
 The ability to effortlessly communicate information across various
 Improved efficiency, performance and productivity levels
 Enhanced tracking and forecasting
 Improved customer service and satisfaction

Disadvantages of ERP Systems

 The scope of customization is limited in several circumstances

 The present business processes have to be rethought to make them
synchronize with the ERP
 ERP systems can be extremely expensive to implement
 There could be lack of continuous technical support
 ERP systems may be too rigid for specific organizations that are either
new or want to move in a new direction in the near future

Supply Chain Management (SCM)

Supply chain management (SCM) is the management of a network of interconnected
businesses involved in the ultimate provision of product and service packages required by
end customers. Supply chain management spans all movement and storage of raw
materials, work-in-process inventory, and finished goods from point of origin to point of
consumption (supply chain).

Another definition is provided by the APICS Dictionary when it defines SCM as the
"design, planning, execution, control, and monitoring of supply chain activities with the
objective of creating net value, building a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply with demand and measuring performance

More common and accepted definitions of supply chain management are:

 Supply chain management is the systemic, strategic coordination of the

traditional business functions and the tactics across these business
functions within a particular company and across businesses within the
supply chain, for the purposes of improving the long-term performance
of the individual companies and the supply chain as a whole (Mentzer et
al., 2001).
 A customer focused definition is given by Hines "Supply chain
strategies require a total systems view of the linkages in the chain that
work together efficiently to create customer satisfaction at the end point
of delivery to the consumer. As a consequence costs must be lowered
throughout the chain by driving out unnecessary costs and focusing
attention on adding value. Throughput efficiency must be increased,
bottlenecks removed and performance measurement must focus on total
systems efficiency and equitable reward distribution to those in the
supply chain adding value. The supply chain system must be responsive
to customer requirements."
 Global supply chain forum - supply chain management is the integration
of key business processes across the supply chain for the purpose of
creating value for customers and stakeholders (Lambert, 2008).
 According to the Council of Supply Chain Management Professionals
(CSCMP), supply chain management encompasses the planning and
management of all activities involved in sourcing, procurement,
conversion, and logistics management. It also includes the crucial
components of coordination and collaboration with channel partners,
which can be suppliers, intermediaries, third-party service providers, and
customers. In essence, supply chain management integrates supply and
demand management within and across companies. More recently, the
loosely coupled, self-organizing network of businesses that cooperate to
provide product and service offerings has been called the Extended
Supply chain management must address the following problems:

 Distribution Network Configuration: number, location and network

missions of suppliers, production facilities, distribution centers,
warehouses, cross-docks and customers.
 Distribution Strategy: questions of operating control (centralized,
decentralized or shared); delivery scheme, e.g., direct shipment, pool
point shipping, cross docking, DSD (direct store delivery), closed loop
shipping; mode of transportation, e.g., motor carrier, including truckload,
LTL, parcel; railroad; intermodal transport, including TOFC (trailer on
flatcar) and COFC (container on flatcar); ocean freight; airfreight;
replenishment strategy (e.g., pull, push or hybrid); and transportation

control (e.g., owner-operated, private carrier, common carrier, contract
carrier, or 3PL).
 Trade-Offs in Logistical Activities: The above activities must be well
coordinated in order to achieve the lowest total logistics cost. Trade-offs
may increase the total cost if only one of the activities is optimized. For
example, full truckload (FTL) rates are more economical on a cost per
pallet basis than less than truckload (LTL) shipments. If, however, a full
truckload of a product is ordered to reduce transportation costs, there will
be an increase in inventory holding costs which may increase total
logistics costs. It is therefore imperative to take a systems approach when
planning logistical activities. These trade-offs are key to developing the
most efficient and effective Logistics and SCM strategy.
 Information: Integration of processes through the supply chain to share
valuable information, including demand signals, forecasts, inventory,
transportation, potential collaboration, etc.
 Inventory Management: Quantity and location of inventory, including
raw materials, work-in-progress (WIP) and finished goods.
 Cash-Flow: Arranging the payment terms and methodologies for
exchanging funds across entities within the supply chain.
Functions of SCM
Strategic level
 Strategic network optimization, including the number, location, and size
of warehousing, distribution centers, and facilities.
 Strategic partnerships with suppliers, distributors, and customers,
creating communication channels for critical information and operational
improvements such as cross docking, direct shipping, and third-party
 Product life cycle management, so that new and existing products can be
optimally integrated into the supply chain and capacity management
 Information technology chain operations.
 Where-to-make and make-buy decisions.
 Aligning overall organizational strategy with supply strategy.
 It is for long term and needs resource commitment.
Tactical level
 Sourcing contracts and other purchasing decisions.
 Production decisions, including contracting, scheduling, and planning
process definition.
 Inventory decisions, including quantity, location, and quality of
 Transportation strategy, including frequency, routes, and contracting.
 Benchmarking of all operations against competitors and implementation
of best practices throughout the enterprise.
 Milestone payments.
 Focus on customer demand and Habits.
Operational level

 Daily production and distribution planning, including all nodes in the
supply chain.
 Production scheduling for each manufacturing facility in the supply chain
(minute by minute).
 Demand planning and forecasting, coordinating the demand forecast of
all customers and sharing the forecast with all suppliers.
 Sourcing planning, including current inventory and forecast demand, in
collaboration with all suppliers.
 Inbound operations, including transportation from suppliers and
receiving inventory.
 Production operations, including the consumption of materials and flow
of finished goods.
 Outbound operations, including all fulfillment activities, warehousing
and transportation to customers.
 Order promising, accounting for all constraints in the supply chain,
including all suppliers, manufacturing facilities, distribution centers, and
other customers.
 From production level to supply level accounting all transit damage cases
& arrange to settlement at customer level by maintaining company loss
through insurance company.

Multichannel CRM
Multichannel CRM have developed over the last decade. It means managing CRM through
multiple communication technological channels and multiple organizational touchpoints. It is
necessary in order to deliver an enhanced customer experience, including a feeling of recognition
and consistency of service across all service channels and touchpoints. These channel aims at
giving customer as many choices as possible in order to put power in the customer’s hands. Web
enabled self service allow customers to use vendor sites to change their own addresses and track
their own orders and many are powerful search engines and other features to keep customer on
their sites and keep them coming back. For example Petco( offers pet lovers a
community centre where they can chat with animal behaviour experts and access a range of
articles. The site also features an online “pet yellow pages” where visitors can find a range of pet
related services available near their home and even provides a way to donate money to the
ASPCA online.

Multiple communication technological channels

Whether the customer chooses to communicate with your organization by telephone,

email, chat, face to face. CRM technology lets you create and track a consistent dialogue
that reflects the value of the customer. Strategically significant customers may expect to
get priority irrespective of the communication channel they choose. They expect their
inbound telephone calls and emails to goto the top of the list. To achieve this in
particular where email from high value customers take priority over telephone calls from
lower value customers requires a central CRM database and a technology called universal
queuing. Universal queuing lists all communications in a single queue irrespective of
their origin or technology medium and prioritize response based on customer value. In

order to be effectively implemented universal queuing requires the integration of
communication infrastructure (email, web systems, telephone) with the CRM application.

Multiple organizational touchpoints

The communications with the customer take place not only in different technology
channels, but also with different peoples with in your organizations. Marketing sending
out customer offers, sales representative calls to negotiate terms and the customer calls
the service desk for assistance. The marketing offer should be visible in order for the
customer service agent to treat customer agent correctly. This is even more important if
the service desk is to perform a blended function and cross sell the customer an offer at
the end of service calls. Finally channel partners must be included in the communication
loop if the channel conflicts over pricing, leads and commissions are to be avoided. The
technology solution for multiple contact channels includes integrated suite of applications
from all departments, customer and external web portals, universal implementation across
the organization, synchronization technology and a central knowledge base for products,
pricing and customer activity. While the technology challenges here are significant , the
most difficult aspect of multiple contact channels is often the implementation of business
processes across the departments, and externally to allow a consistent customer dialogue

CRM in B2B Markets

Buying and selling of goods and services not only takes place between a consumer and a
firm but also between two firms or businesses. A firm may buy raw material from the
other firm or business to process it further or it may buy finished goods or even services
to sell them to the consumers under its brand name. For example, Britannia Industries
Limited buys flour from many flour mills to make biscuits, which are finally sold in the
consumer as well as institutional markets. The business market comprises of all the
organizations that buy goods and services for use in the production of other products and
services that acquire end goods for the purpose of reselling or renting them to others at a
profit. In the business buying process, business buyers determine which products and
services their organizations need to purchase and then find, evaluate and choose among
alternative suppliers and brands. Fundamentally business markets also involve the same
factors as consumer markets do, there are some characteristics that make them unique.
These include:

1. Market structure and demand: In a consumer market, there are usually many
buyers i.e. individuals or households. However these buyers buy in less quantity.
On the other hand, a business market contains a few but large buyers who buy in
bulk. This increases the influence of these buyers on the market. For instance,
business markets are more geographically concentrated depending on where the
big buyers lie. To cite an example, chemical manufacturers are more concentrated
in the western part of India.
2. Nature of the buying unit: A business purchase usually involves more buyers
involved in the decision making process and a more professional purchasing
effort. There are many purchasing agents whose entire professional life is

dedicated towards buying in the business context. As the quantity of purchase and
its value increases, the number of people involved in the purchase also tends to
increase dramatically. The key players involved include technical experts,
management and business markets and finally well trained sales persons.
3. Type of decisions and the decision process: Business buyers have to make more
complex decisions than consumer buyers. This is because the volume and the
value of the purchases are quite high and they have to make complex economic
and technical considerations. In the buyer’s organization, interactions
continuously take place among many people across different levels with respect to
the purchase decisions. The business buying process is more formalized than the
consumer buying process because of the complexity involved. Decisions may be
made after due considerations of all the factors and this may involve considerable
time for deliberation. Finally in the business buying process, the buyer and the
seller are much more dependent on each other. Therefore, many a time the
business sellers directly work with their counterparts in the buying organizations.
They help them make decisions by identifying and defining the problem,
providing more information on the related products and informing them about the
customization that could be made.
4. Major Types of Buying situations in B2B contexts: There are many types of
buying situations in B2B context. They differ from each other with respect to the
kind of complexity associated with the decision making process. The amount of
work that the buyer needs to put in before considering these purchases also varies.
At one end of the spectrum is what is called the straight re-buy. This involves
the buyer reordering something from its past supplier without any modifications.
In modified re-buy, the buyer wants to modify the product specifications, prices,
terms or suppliers. This process involves more decision making efforts. When a
firm buys a service or a product for the first time then it is referred to as a new
task situation. In this case, the cost or risk associated with the concerned
purchase is more than the usual. In many situations, buyers prefer to a packaged
solution from a single supplier instead of buying the component from various
suppliers and then integrating them and are called as systems buying.
5. Participants in the business buying process: In business organizations, major
buying decisions are made by users, influencers, buyers, deciders, gatekeepers.
6. The Business buying process: It is much more complex than the consumer
buying process. It usually consists of eight stages starting from problem
recognition, general need description, product specification, supplier search,
proposal solicitation, performance review before making any purchase.

Importance of CRM in B2B markets

1. Focusing on key customers and building strong relationship with them

2. Proactively generate high levels of customer satisfaction with every interaction
with the customer
3. Anticipate customer’s need by careful study of the environment, customer
processes and their behaviour. The firm then responds to these needs even before
the competition becomes aware of it.

4. Finally, creating a value perception for the customer. The customer must see the
relationship with the vendor as something that brings value and adds to their
competitive advantage. Otherwise the customer will take the business elsewhere.

CRM Strategies in B2B markets

Key Account Management (KAM) is one of the most popular and successful
approaches for customer retention and development. It has been recognized as an
important part of the customer relationship management in B2B marketing. A key
account can be defined as a customer in B2B market identified by a selling firm as of
strategic importance. It tends to be used interchangeably with other terms such as
national accounts and major accounts. It typically focuses upon the geographical
spread and size of customers, emphasizing criteria such as sales turnover,
profitability, centralized planning systems etc. According to Millman national
account can be classified as a subcategory of key accounts. Some sellers and vendors
consider some customers as key accounts not because of their profitability which may
be low but because of other issue such as prestige or reference value or because they
permit access to new markets and technologies. Therefore these accounts are
considered to be of strategic importance by seller. In KAM, Customers are segmented
into different groups to identify the value placed on long term relationships with
particular customers or customer groups. This is from the perspective of the
customers and this exercise allows the setting up of KAM systems and the tailoring of
customer retention strategies. This brings about stability to the company’s operation
and the organization is able to capitalize upon the potential key accounts and use it to
increase the share of profitable customers.

Partner Relationship Management

As suppliers companies have realized the need to foster more productive between
themselves and their channel partners, dealers and resellers. As with SRM, the Web
provides these partners with automated access to centralized information and support
resources, enabling them to deliver more accurate product information and better
services to their customers.

Partner relationship management is a subset of CRM that allows companies to ensure

partner satisfaction. This usually means providing sales partners and resellers with the
tools and information they need to
• Access up-to-date product information, including release dates, defect data
and marketing materials.
• Communicate with support resources and offer online assistance with
products and services
• Reduce paperwork by obtaining online knowledge management resources
such pricing revisions and sales contracts
• Access a company’s supply chain network to check inventory, outstanding
shipments and other order details.

• Download customizable sales presentations and other product marketing

Some PRM products also help companies qualify and recruit new sales partners. Products
like these help companies establish desirable partner attributes and allow them to assign
partner categories that might limit partners to specific product assignments or sales
strategies. PRM tools also provide partner profiles that enable a company not only to
understand a business partner’s characteristics from their head quarters address to which
competitive products the partner might be selling but also to track the partner’s overall
success and contribution. Companies can use this information to further improve their
partner relationships with additional training or joint marketing activities. Perhaps the
highest impact use of PRM is its facility for automating lead distribution to the best
partner. By providing analysis and reporting capabilities, companies can match partners
with key sales leads based on their skills, geography, or areas of specialty. When a
company’s marketing department receives a lead it can use a PRM tool to score the lead,
allocate the lead to the best partner and subsequently track the lead through to its close.
This results in efficiencies, lowering costs, triggering down towards pricing and higher
customer profitability thereby giving rise to faster time to market having higher degree of
customer satisfaction at the end of line.


Analytical CRM
The Case for Integrated Data

A customer becomes savvier shoppers; they will continue to blend their purchasing and
service habits. A busy executive who buys a video game for her child online while at the
office might nevertheless check the status of her order from her Handspring palmtop
while en route to the mall for a new set of golf clubs.

Likewise a customer support agent needs to understand who’s at the other end when he
picks up the headset for or initiates a live chat. The customer calling a toll-free 1800
number to make a purchase doesn’t care that your systems are at integrated-she assumes
your company knows she’s made past purchases on your web site. In short, she expects
you to know who she is.

An e-tailer’s customer service department is using another vendor’s CRM tool for call
center automation. Information about specific calls is loaded from the call center system
into a database used by an analyst in the customer service department to evaluate trouble
ticket resolutions. The analyst then gathers post facto customer feedback by sending
customer satisfaction mailing to customers who have registered a certain type of

Although both CRM environments have resulted in improvements in their respective
departments the scenario as whole is actually risky. Bother marketing and customer
support are well intentioned in their efforts to improve one to one communications with
their respective customers. But what is the customer happens to be the same person?
The risk here is that the marketing department might not recognized when customers
within its targeted segment have contacted the call center with problems about a popular
product and whether those customers are currently unhappy with the company.

In such circumstances, cross-selling another product might do more harm than good.
Conversely, the CSR responding to a complaint might not recognize that the customer on
the telephone has made several purchases in the part week and falls into the company’s
“GOLDEN CIRCLE” segment. Failure to escalate this customer’s complaint could mean
losing a high value customer.

Indeed applying the same rules to each customer is not only risky; it will put this
company behind its competitors who are striving to differentiate customers and their
treatment of them.

Understanding the most recent interaction or touchpoint with the company-whether or not
it was with the call center-can help the CSR determine how to best meet that customer’s
needs. Even more important is the knowledge that the customer has a rich, multiyear
purchase history. Purchase history can combine with other information such as whether
the customer has recently moved, has college-age children, eats out often, and rates high

on the customer value scale. Such information can be summarized as a customer profile
on the CSR’s screen or displayed as screen popup as soon as the call center system
recognizes the customer’s incoming phone number.

This scenario is a growing problem for companies deploying CRM. In their haste to
adopt customer loyalty programs and increase retention rates, marketing departments are
acquiring CRM tools without touching base with other areas of the company. Likewise
customer support centers whose existing call center platforms might include
supplementary CRM capabilities and who are likely to have already established customer
communication procedures-might not account for the needs of their counterpart in sales
or marketing before formalizing their own CRM initiatives.

This problem is often due to company politics but more often due to diverse logical and
infrastructure problems that mandate greater levels of customer knowledge and fast. The
flaw with such a “stovepipe” approach to CRM is that the relationship with the customer
is understood to be based on a subset of the customer’s actual interactions with the
company. The company deploys CRM and bases decisions on a subset of these
interactions. The resulting decisions-for instance, Marketing sending out a satisfaction
survey a few weeks after the customer support survey is released could end alienating the
customer rather than instilling loyalty.

Multiple overlapping tools within a single company involve duplicate effort in

technology acquisition, systems integration, installation, deployment and training not to
mention multiple and often redundant investments. Likewise the lack of single CSR
interface for customer data forces the CSR to access multiple systems to aggregate
different information about the customer sometimes while the customer waits.

After all, the majority of CRM products started out as so-called point solutions, designed
to solve specific business functions such as sales force automation. Each of these
products typically used a local database to store current customer information, hardly a
flawed architecture. But the proliferation of these CRM tools around the enterprise begat
assorted and mismatched customer files, all of which are critical to their respective
systems but none of them are linked.

Each database contains key customer information critical information critical to the
purpose and functionality of the CRM system. The customer data in each database is
different, depending on the requirements of the organization using its data. But as in real
life, some organizations need the same data about customers; thus the SFA and contact
center database both contain customer contact information as well as the payment status
and the SFA and marketing databases each store sales revenue data. Though the name are
the same, the contents and format of the data elements themselves are likely to be
drastically different across systems.

Availing a complete customer profile to a range of different organizations often means

storing data in a centralized, cross-functional database known as a data warehouse. Once
exclusive to the realm of large companies who had a burning need for strategic decision

making as well as generous IT budgets, data warehouses have emerged over the past 15
year as the de facto platform on which companies store and analyze comprehensive data.
This analysis is performed using application tools specially designed to deliver business

Though data warehouses can be used to store a wide cross section of subjects from sales
compensation data to product specification to geographic mapping, they are particularly
valuable for offering an integrated view of the customer or in data warehouse parlance “a
single version of the truth”.

Information stored on data warehouses originates from various systems across the
company, providing a true 360-view of activity, both current and historic. Such source
systems include any of the following:

• Billing systems
• Order and provisioning systems
• Enterprise resource planning systems
• Human resource systems
• Point of sale
• Web servers
• Marketing databases
• Call center systems
• Corporate financial packages
• External data providers.

The greater the number of subject sources for a data warehouse, the richer the
information available to the business.

Integration Demographics
of Survey Responses
customer Data Purchase Data
data on warehouse Campaign Responses
Billing and Payments
Web activity
warehouse Returns
Call center contacts

One of the strengths of a data warehouse is in its ability to store large quantities of
historical data, enabling companies to compare customer behaviors over time. For
instance, by storing customer purchase history, a company can evaluate what might have

attracted a customer to making a purchase or gauge whether that customer’s purchases
are increasing or decreasing.

Comparing time variant data can provide the company with the information it needs to
deploy intelligent marketing and sales campaigns and offer customers appropriate levels
of service. Storing historical customer data is the main reason for the enormous growth of
data warehouses, both literally and figuratively.

In the early days of CRM, industry experts were celebrating CRM products for their
automation of previously manual tasks. Today however many of these systems have
simply perpetuated the “stovepipe syndrome” of proliferating to a small subset of
business users. Thus most industry analysts have changed their tune, calling for
integrated data as a CRM critical success factor.

Integrated customer data is mandatory for a company to server its customers well.
Motivating the customer to come back-means understanding more than a customer’s
name, current address and income level. It means knowing his preferred products, his
consumption rates, values, lifestyles, life stage and even a superset of his behavior
outside of his relationship with the company.

CRM and the Data Warehouse

The best intentioned companies often slip up when it comes to providing data
warehousing and the accompanying business intelligence capabilities to their business
users. On the one hand, the IT department understands that data can not be divorced from
CRM and that the corporate data warehouse is the ideal CRM source system. On the
other hand, the business community is pushing for a quick win and doesn’t care where
the data comes from as long as they get it fast. The business begins using its CRM
application without a vision for how to drive ongoing business process improvements.

IT scrambles to provide enterprise data to the CRM application without understanding

which data will support the actions and business processes the business wants to improve.
The businesspeople keep asking when it will all be finished.

So begins the slippery slope of the CRM point solution. As the data warehousing
community saw with its stovepipe data marts that effectively served organizational needs
but were tough to link together, stovepipe CRM systems represents the burgeoning for
many companies even those with robust, enterprise wide data infrastructure.

Data warehouses provide a rich source of analysis for a range of topics:

• Customer focused data
• product defect data
• welfare claims
• criminal records
• human gene sequences

Perhaps the most challenging problems posed by stovepipe CRM environments is that
they prevent the company from knowing certain potentially critical facts. From the
disconnected environments, it is clear that some important business questions cannot be
easily answered.

• A CSR scheduling a follow-up communication with a customer cannot

discern that the customer’s value score to determine the level of service that
should be provided
• A segment manager cannot track a customer’s complaint history before
trying to cross-sell a product
• The campaign staff in marketing doesn’t want to solicit customers who are
late paying their bills.
• An account representative has no idea whether a key business customer has
responded to certain key promotion
• A CSR cannot see the full list of products a customer might have so she can
determine whether a give trouble ticket applies to more than one.
• A customer support analyst tries in vain to measure complaint history
against sales revenue for a given product
• A marketing data analyst lacks the data necessary to understand the role of
the company’s key sales contact for customers in the segment with the
highest sales revenues.
• A customer support executives cannot obtain a regular report on average
customer satisfaction survey scores for each customer segment.

The customer information that can provide answers to these and other business
questions can drive key decisions about:
• Customer treatment
• Sales techniques
• Upcoming promotion strategies etc

By integrating operational CRM data with information from around the enterprise,
companies can begin performing analytical CRM and with it make truly customer centric
business decisions.

The practice of data analysis predates even databases and transcends data warehousing
and CRM.

Many CRM vendors have incorporated analysis into their products thereby offering the
ability not only to perform key CRM business processes but also to apply business
intelligence to these CRM functions to make them more accurate and more valuable.

With analytical CRM, users can predictive modeling into its toolset
• To provide a list of customers most likely to respond to a given marketing
• Purchase pattern recognition into their offerings

• Enables marketing and sales staff to compare customers with like behaviors
so that they can position new products to an optimal audience
• Organization can maintain a progressive relationship with a customer
• Able to track a range of customer actions and events over time
• Provides 360 degree view which emphasizes communicating with customer
across channels based on the optimization of relevant and two-way
personalized interactions through a new marketing campaign or from a
caller’s complaint history.
• Offers the ability to transcend more broad-brush customer segmentation and
deploy customer communication that are truly one to one

With both operational and analytical CRM capabilities organizations are changing
business strategies to:

1. Reward customers with personalized discounts and perks for using lower
cost channels
2. Proactively offer products and services that fit a given customer’s needs
based on what the customer has already purchased
3. Increase purchase rates by dynamically personalizing content based on the
Web visitor’s profile
4. Adjust per customer marketing expenditures based on life time value scores
5. Analyze combinations of touchpoints across channels to predict customers’s
next likely purchase.
6. Relate high web traffic to individual visitors and customer segments to better
understand Web use and improve web design
7. Tailor commissions and incentive programs for sales partners based on the
value of the customers they bring
8. Prevent a customer from churning by offering incentives based on individual
9. Provide customers in the highest value tier with personal representatives who
understand their history and preferences.

Operational CRM Enterpise Data Analytical

CRM=Enterpise Data +
Operational CRM
Activity Management Billing Workforce Automation
Contact Management Product Customer Profiling
Pricing and Configuration Financial Aspects Partner Contribution
SRM SCM Measurement
PRM ERP Revenue analysis
Campaign Management E-commerce Customer segmentation
Customer Support Channel Analysis
Supplier Evaluation
Campaign Measurement

Prospect qualification
Churn analysis and
Propensity to buy
Customer value
Risk scoring

With seamless user interface, CRM users cannot only share data but can actually run the
CRM modules. A marketing person can look at customer’s contact data through the same
application used by the sales force. Likewise analysts within the company can access a
centralized CRM portal to view a range of customer related data without having to
change application tools.

New eCRM product provides a central portal through which marketers can create and
view customer segments, monitor campaigns in real time and generate a variety of
customer reports. These are also called as business intelligence software, which combines
powerful analytical capabilities to interrelate CRM functions such as Web traffic analysis
and marketing campaign.

Major Types of Data Analysis

The integration of operational and analytical CRM applies across channels. Web is more
than just a communication channel for most companies-it is a rich source of data, offering
customer behavior information. A few emerging analysis techniques heavily leverage
enterprise wide data particularly collect on Web.

OLAP (Online Analytical Processing)

The term “drill down” is more appropriately applied to the practice of Online analytical
processing called as OLAP. OLAP has become the most popular type of decision support
analysis, allowing the average business person to explore data online with the aim of
focusing on detailed data at a lower and lower level of the data hierarchy. This means
generating an online report, analyzing the results and submitting a more detailed query in
order to understand the result data.

OLAP generally focuses on providing a set of data attributes from a database organized
around certain dimensions such as time and location. Thus, a user can request the
company’s regional sales revenues for all baby care products by region or by store. He
can request a report detailing regional revenues for each month within a quarter.

OLAP generally requires the analyst to have a query or hypothesis in mind. With an
OLAP tool, the analyst would have to guess which products a home office worker would
purchase and then identify customers making such a purchase.

Data Mining in CRM

Data mining tools identify patterns in data and deliver valuable new information that
increase a company’s understanding of itself and its customers. Data mining is commonly
used to help data analysts search for information they don’t yet know to look for, often
involving no hypothesis. It has helped companies uncover a diverse set of new
knowledge, from a customer next purchase to optimal store layouts to the most
favourable release data for a movie in preproduction.

Data mining involves the identification of meaningful patterns and rules from detailed
data usually from large amounts of data. Thus instead of analyzing customer segments to
determine who is likely to churn as with OLAP data mining would examine individual
customers, touching each of the millions of records in a database.

There are many different types of data mining algorithms, some of them are:

1. Prediction: The use of historical data to determine future behaviors. Predictive

modeling generates output that populates a model or structure to represent the
results. For instance a predictive model can indicate the next product a customer
is most like to purchase based on historical purchases by that customer and other
customers who have purchased the same products.
2. Sequence: Sequential analysis identifies combination of activities that occur in a
particular order. Businesses use sequential analysis to determine whether
customers are doing things in a particular order. It can help a business distill
behavior from events captured from various operational systems around a
company to determine patterns. For example, a bank or telephone company can
learn more about a given customer or customer segment by examining patterns in
the slowdown of purchases or in service cancellation.
3. Association: Association analysis detects groups of similar items or events. It can
be used to detect items or events that occur together. The association algorithm is
often applied to market basket analysis to help businesses understand products
being purchased together. By understanding customer and product affinities, a
company can make important decisions about which products to advertise or
discount and which customers should be targeted for certain products.

One central difference between data mining and other types of decision support analysis
is that data mining usually involves statisticians or product specialists intimate with the
use of correct algorithms and their application to business problems as well as with the
specific data mining software. Although a business person rarely mines the data herself,
she might use data mining results either represented graphically in a visualization tool or
deployed to a database for general query access – to help make important decision about
managing customer relationships.

There are numerous uses for the three types of data mining

• To target brand new customers by modeling existing customers response patterns

• To avoid high risk prospects through risk prediction or forecasting a customer
lifetime value
• To build customer models and explore various customer behavior patterns
• To experiment with pricing plans
• To create dynamic customer segments for testing new campaigns and performing
what-if analysis

Applications of Data Mining

1. Clickstream analysis: It connotes how the user arrived at the site, how long he
stayed, what he did during his visit and when he returned. They are the equivalent
of camera in a department store recording a shopper’s every move. It usually
stored either as part of a company’s data warehouse or in a dedicated clickstream
data store sometimes called a “data webhouse”. A Clickstream is the recording of
what a computer user clicks on while Web browsing or using another software
application. As the user clicks anywhere in the webpage or application, the action
is logged on a client or inside the Web server, as well as possibly the Web
browser, routers, proxy servers, and ad servers. Clickstream analysis is useful for
Web activity analysis, software testing, market research, and for analyzing
employee productivity.

Since the business world is quickly evolving into a state of e-commerce,

analyzing the data of clients that visit a company website is becoming a necessity
in order to remain competitive. This analysis can be used to generate two findings
for the company, the first being an analysis of a user’s clickstream while using a
website to reveal usage patterns, which in turn gives a heightened understanding
of customer behaviour. This use of the analysis creates a user profile that aids in
understanding the types of people that visit a company’s website. As discussed in
Van den Poel & Buckinx (2005), clickstream analysis can be used to predict
whether a customer is likely to purchase from an e-commerce website.
Clickstream analysis can also be used to improve customer satisfaction with the
website and with the company itself. Both of these uses generate a huge business
advantage. It can also be used to assess the effectiveness of advertising on a web
page or site.

For example, one client of mine, a general merchandise retailer who has joined
the e-tailing ranks wants its website to be as sticky as possible and has begun
prematurely. The company has sharpened its analysis to determine the value of
abandoned shopping carts. When a customer leaves the site in the midst of a
shopping trip, whatever the reason, the company looks to see what products were
in the cart. The data is then compared with similar data from other abandoned
carts to examine.

• How much revenue the abandoned carts represented

• Whether the products in the cart were high products in the cart were high
profit items or loss leaders

• If the same products were found in other abandoned carts.
• The volume of products and the number of different product categories in
the cart
• Whether the total bill for the abandoned carts consistently fell within a
certain dollar range.
• At what point during the shopping trip the cart was actually abandoned
• How the average and total bills for abandoned carts compared with un-
abandoned carts-those that that made it through the checkout process.
The result of this analysis can trigger some interesting theories

• Perhaps none of the products in the cart was appealing enough to a particular
customer to motivate her to continue shopping
• The customer was putoff by frequent inquiries asking her whether she was ready
to check out
• Possibly at a particular dollar total, the customer thought the better of the entire
shopping trip and bailed.
• Perhaps the number of products in the cart reminded the customer of another site
that offered a steeper discount for similar purchases.

Clickstream analysis can help the manager in following ways:

• It can reveal some interesting patters i.e. reasons for leaving the site by customers

• Can use results to tweak the design and content of its web site and monitor
resulting improvements

• Patterns might indicate product affinities, suggesting cross selling and up selling

• With Customer demographics, psychographics and past behaviors, click stream

data can bring the understanding of customer behavior to a whole new level.

• To provide a holistic view of that customer’s value and interests.

• Clickstream data when integrated with other key data from around the enterprise
enhances opportunities to personalize customer communications.

But understanding a customer’s navigation around a site can help a company decide how
to lure him back

• Company’s usual tactic for all registered visitors who visit the site but don’t make
a purchase is to mail them a discount coupon which gives a unique code so no one
but the given customer can redeem it

• Emailing is the lower cost option for contacting customer
• Placing more customized ad banners on the partner’s site and even provide better
financial incentive for the partner when customer click through.
• Donot allow customer to become cherry picker

Personalization and Collaborative filtering

Personalization, the practice of tailoring communication directly to a customer segment

or increasingly to an individual customer. The premise of personalization is that by
collecting sufficient customer data a company can market to an individual’s unique needs
both new and in the future. Personalized communications is the principal technique via
which companies can convince customers they understand them and that their
information-which the company often uses thanks to the customer’s explicit permission is
mutually beneficial. The goal is to deliver accurate product recommendations content
geared to individual preferences and targeted promotions for individual web visitors.

Personalization not only maintaining customer loyalty but also driving purchases higher.
It leverages detailed information about individuals and dictate some very tactical
decisions. The following analysis topics from a drugstore e-tailer suggest the level of
individual detail and resulting tactics personalization can provide:

• For people who have bought or expressed interest in vitamin supplements, which
other products are they likely to buy?
• How likely is Customer X to buy prescription drugs online?
• What other items are likely to be in a shopper’s market basket if he buys say
• Which products are most similar to the Brand X eyedrops the customer chose?

Personalization can take various forms. It can involve customizing actual web pages
including a Web site look and feel according to the features favored by an individual
visitor. Many web sites allow the visitor to customize the site according to her
preferences, eliminating format variations and allowing her a private window into the

There are two main types of personalization

1. Rules based personalization: It leverages established rules that dictate for

instance which products might be purchased together or whether a certain web
page should precede or follow another. It most often involves rules that have been
hard coded in to the software. For this reason its often difficult to maintain and
support. For example when a visitor to a software web site buys the Quicken, the
site might suggest he buy Quicken: The official guide before going to the
checkout screen.
2. Adaptive personalization: It learn as it goes. Most commonly known as
collaborative filtering, this type of personalization gets smarter as it observes
customer behaviors and applies them to new circumstances. For example, if a

gardening e-tailer using collaborative filtering observes that shoppers tend to buy
low cost perennial flowers at the same time they order gardening tools, the
website might begin suggesting a flat of pansies to all customers who buy bulb
planters. Collaborative filtering uses the behavior of other “like” visitors as the
basis for its recommendations. Collaborative filtering tools are often more
complex, and thus more expensive than rules based personalization. The most
celebrated example of collaborative filtering is’s purchase circles in
which Amazon factors in the buyer’s purchases and geography to suggest what
readers who live in her neighborhood and have similar interests might be reading.
The more similar shoppers buy the smarter Amazon becomes about their
preferences and the more accurate are the site’s recommendations.

Advantages of Personalization

1. The company will use the information to provide a value added service such as
periodic discounts or special news letters
2. Gives look and feel to customer according to favored features
3. Personalization can customize content and screen layouts for individual visitors to
increase the site’s stickiness
4. Personalization can increase the shopper’s propensity to buy.
5. It can offer various product combinations and solicits their feedback
6. It stores customer’s responses to questions or surveys making those answers part
of her profile so they can be used to cross sell her additional products.
7. It allow sellers the opportunity to differentiate customers and their price
8. It introduces the concept of dynamic pricing, it actually leverages CRM
technology and detailed customer data to let a company say compare a shopper’s
desire for the product with his perceived ability to pay for that product.

Analysis checklist for success

Integrating data from around the company, let alone using that data to drive sophisticated
analysis that can differentiate you from your competition is a lofty CRM objectives.

• Don’t underestimate data integration: integrated customer data can mean the
difference between a decision that alienate a customer and one that triggers long
term loyalty. But even the best CRM suite products don’t offer easy answers on
how to integrate disparate data from around your company. Talk to vendors about
their databases and their processes for systematically locating, gathering,
modeling, cleansing and loading data into a database or datawarehouse.
• Beware of “dirty data”: That means data in its natural state prior to being
cleansed and formatted for use by businesspeople.
• If your company has a datawarehouse reinvest in it now: Proper
infrastructural support must be given

• Know who’s analyzing the data: Understand which users are actually
performing analytical CRM the data they are looking at and what results from
their work.
• Translate analysis into action: Many companies with really big databases and
really neat end user tools nevertheless ignore what their data tells them. Even
though they have rich customer information, they continue to rely
disproportionately on the appointment books of their salespeople to generate leads
and on executive golf outings to nurture alliance partnerships. Know your current
customer focused initiatives and which one could be improved with analysis,
empowering the business people to actually make decisions.
• Don’t forget business processes: Effectively managing and enhancing customer
relationships has much to do with work process improvements. Performing
analytical CRM means understanding how your customers interact with you and
using this refine business process to provide them better experience. Analytical
CRM should be used to improve business processes, streamline workflows,
establish sound policies and accelerate customer purchases.

End to End CRM Infrastructure

Planning your CRM program
Planning a CRM program can be as simple as building consensus over a series of
meetings with key stakeholders who have all have vested interest in keeping customers. It
can be as complex as launching a multi-month project to gather requirements from
across the company, interview stakeholders and draft a game plan working with staff
members who might not have ever heard of CRM.

CRM engenders business change, and business change is just a by-product of CRM and it
is one of the goals of CRM.

Good planning can make or break a CRM initiative, planning involves more than simply
drafting a list of actions. A CRM program requires:
• a clear understanding of and commitment to the company’s focus
• Vigilant adherence to detailed goals
• Commitment from both executives and line workers
• Constant awareness of the customer’s viewpoint
CRM is not a single product or technology. It is not exclusive to marketing or customer
care. And it ideally involves a cross-section of customer touchpoints. The ability to
understand customers across their various interactions with the company, meaning that
the organizational boundaries of CRM should be understood upfront.

Indeed the entire company – from executives to programmers should agree on a unified
CRM vision. The pressure is on for those forward thinking managers who can articulate
that vision but lack the organizational buy-in to enact a truly corporate wide program.

The payoff of such foresight could be revolutionary-employees from across the company
accessing common data about customers through a single enterprise portal and making
better decisions based on a single view. This is called single version of the customer truth
and using it to increase customer profitability. Launch a CRM pilot project for single
department to actually prove CRM’s benefits in a couple of months.

The majority of successful CRM projects have started out as Stovepipe projects in
business units. They began in a single organization perhaps marketing where a
visionary manager recognizes the benefits early and enlists the IT organization in
developing a standalone CRM system. Once deployed, the system generates
efficiencies while delivering value. People in other departments gradually take
notice, either because the CRM users tout their success or because the benefits get
noticed. Other organizations eventually request access to the CRM system, which
gradually grows horizontally with additional functionality data and users.

Enterprise CRM is such a vision doesn’t happen overnight and trying to force it happen
could take a life time. The better your view of how a finite and clearly described CRM

solution can help deliver long term benefits to the company, the more likely you are to
get the support you need.

Gauging the Factors of CRM success

Factor Ideal Desirable Undesirable

Initial Trigger An executive or board A customer support A product manager
member reads about CRM executive returns sees a vendor demo
and understands how its from an industry and returns to the
benefits can result in conference where a office touting
competitive advantage case study depicted functions and
uplift in existing features
sales via CRM
Sponsorship A cross functional A business The IT organization
executive team agrees that visionary sees decides to
CRM is a competitive quantifiable benefits implement CRM
necessity for the organization system because an
in the short term and existing vendor has
for the company at just substantially
large soon after discounted its CRM
Objective Increased customer loyalty, To provide an To automate
definition better customer service, organization with a existing processes-
additional sales revenue greater degree of especially if they are
and an overall customer knowledge not costly to begin
enhancement of external and improved with. Or to add
perception customer CRM technology to
interactions the IT portfolio.
Solution Allowing corporate Tool delivers Selection of CRM
selection strategy and business process efficiencies market leader or
drivers to dictate CRM while applying existing software
functionality and letting additional customer vendor with
required functionality intelligence via minimal research.
dictate tool integrated data
Operating Integration of CRM Introduction of Standalone CRM
environment product into existing IT dedicated CRM systems
infrastructure, including environment linked
ERP and data warehouse to corporate
systems network and key
data sources
User Employees across the Business people Operational CRM
community corporation at all levels from one or two available to select
using CRM for different departments group of users who
purposes but basing their leveraging disperse findings
decisions on the same operational and from time to time to
customer information analytical CRM selected executives

on paper
Efficiencies Process efficiencies and Automation leads to Automation leads to
integrated data combine to process efficiencies process efficiencies
deliver strategic decisions and new resulting in
in turn leading to higher information that timesaving but
customer profitability, advance failing to cover
sales uplift, and customer departmental goals CRM program
satisfaction and result in expenses
improved customer
Measurement Clear sales uplift or Improved IT has successfully
decrease complaints and perception among linked the CRM
measurable improvement existing customer system to
in customer response rate based and suspected operational systems
across touchpoints improvements in and has deployed
marketing CRM to desktops.
campaigns closed
sales, product
quality and so on

Four overarching measurements for CRM success

1. CRM’s ability to impact corporate strategy

2. Successful technology integration
3. Enhanced strategic partnerships
4. Assimilation of CRM related technologies

The point here is that companies implementing CRM understand that the means to the
end doesn’t matter-it’s the program’s ultimate strategic impact and the usefulness of the
resulting tool set that affect the perception of success. If the customer profiling provides
new details about customer behaviour but cannot be viewed by call center staff is a flop.

From operation to Enterprise: An implementation Scenario

Indeed CRM can be both revolution and evolution. A single department can adopt a
CRM program that promises value to other organizations, which averse to starting from
scratch-grab the proverbial CRM ball and run with it.

Because the company’s customer support organization required basic information about
customers and trouble tickets, it was the first department to recognize the value of
combining operational CRM- the company was surveying customers at the conclusions
of every web or telephone based contact and tracking customer satisfaction scores with
analytical CRM to streamline its call center processes.

The call center adopts CRM

Objective Organization Data
Customer satisfaction Trouble Tickets
Self service efficiencies
Faster trouble ticketCall Center Customer Name/Address
Customer satisfaction scores
resolution elementary Web access

The call center’s goal was to survey scores to analyze customer complaints and foster
product and service improvements while simultaneously putting in a place a Web-based
customer self service infrastructure. Over time, the company’s customer would be able to
request service on the company’s website, mitigating the need for in person assistance in
addition to being able to order new services and add on features such as caller-id.
Customer support recognized the promise of not only cost reduction but also higher
customer retention rates.

Soon after launching the project, customer support got the attention of the company’s
marketing department which as interested in the satisfaction scores and their correlation
to certain customer segments. Marketing convinced call center to share its data which
existed on a server accessible by the call center transaction system. Marketing purchased
an additional module from the company’s CRM vendor in order to perform dynamic
customer segmentation and begin more targeted customer communication and
The marketing adopts CRM

Objective Organization Data

More targeted mailings Marketing Customer segments
Customer satisfaction by Call center Mailing history
segment analysis
Refined marketing Response Rates

The advantages of this building block approach:

• Marketing could leverage the CRM product, system resources and data the call
center was using
• Supplement the call center’s database with additional data, marketing was
providing call center employees rich customer information that they could in turn
use to qualify higher value customer at the time of contact.

As the call center and marketing organizations becomes more integrated the two
departments realized they could be even more customer focused with more data and

processing power, and they lobbied upper management for budget money, citing the
benefits already gained by cross functional CRM.

By leveraging a centralized customer database, sales could deploy SFA across regions
and territories, ensuring access to richer base of customer data-data tat already existed on
what was now known as the CRM server.

The company’s IT department ran a synchronization program that reconciled customer

data from each salesperson with the customer data on the CRM server. Due to new sales
data added to the CRM system, sales staff in the field could not only access a centralized
customer data but track outbound correspondence their customers might have received
from the call center and marketing organizations

The Sales adopts CRM

Objective Organization Data
Streamline sales process Sales Sales Activities
Qualify prospects based on Marketing Order
past success
Track contact history Call center Contacts and prospects
The call center could use the new sales data to track trouble tickets on recently placed
orders and could tell whether the part calling was on existing customers, a prospect or a
lapsed customer. Call center management implement call center scripts according to the
caller’s customer segment and status guiding CSR in responding to customer contacts in
a way that was tailored to each customer segment.

Marketing too was able to use the new sales information to close the loop, tracking
campaign responses through to actual orders. Campaign managers could refine their
campaigns now that they knew which customer segments ordered which products, and
through which channels. This in turn allowed the marketing organizations to establish a
segment marketing function wherein specific customer segments were managed and
communicated with separately. With this information in hand marketing could interact
more effectively with sales and channel partners about the optimal sales, given a
prospect’s profile and characteristics.

Enterprise CRM
Objective Organization Data
Track installations Field services Equipment outage
Track repair status Sales Order and repair data

Call center
After the call center brought CRM online, the marketing department was able to
demonstrate lower customer attrition directly attributable to preemptive targeted

communications with at risk customers. Marketing has never planned on stemming
customer attrition, let alone quantifying the improvements. The wireless service providers
continues to enrich its CRM capabilities, regularly measuring profitability gains as a
result of increasing customer loyalty and is now making information on the CRM server
available to its financial and executive organizations.

Determining CRM Complexity

The key to planning CRM initiative is in the ability to deconstruct it into manageable
pieces. A CRM initiative complexity relies on two main metrics:

1. Quantity of functions: If your CRM objective is simply to deliver customer

profiling, you probably have a single function. If it’s to automate you campaign
management. You will likely have at least a handful of functions to implement.
2. Ranges of usage: How many departments are slated to use the CRM system after
it is up and running? Implementing CRM for a single relatively small department
is much less complex than deploying it to the entire enterprise.

The contrast among the four quadrants is stark and has significance impact on the
development process.

1. A single function CRM project to one department is nothing more than a

customer focused application. It is most likely driven by a handful of business
people and managers not corporate executives and will be used by a single
organization. You will probably be able leverage a series of in-house development
processes and existing staff to deliver single function CRM to the department that
needs it.
2. A multifunction CRM project to a single department is another story. Instituting a
customer focused contact center dictates a range of new range of new customer
oriented business processes, not mention new policies and end user training.
Defining and documenting business processes will give a good idea of CRM
system’s true complexity and the development resources it requires.
3. Conversely, a single CRM function to be deployed across the company represents
a newly institutionalized business function. If the call center, marketing, risk
management, and sales organization have each requested customer life time value
information, a simple function takes on additional complexity because it involves
multiple departments and thus varied business requirements. This additional
complexity will likely require additional development resources and longer up-
front planning.
4. The most complex type of CRM is multifunctional and multidepartmental or
enterprise wide. This means deploying a new range of business functions across
the company to a variety of business people for a variety of purposes.
Requirements will be complex as will the technology to enable CRM. The

complexity suggests a variety of development resources and a range of CRM
technologies from CRM product suites to Internet access to data warehousing.

Preparing the CRM Business Plan

A CRM business plan includes several discrete components that when combined
explained the value proposition and tactical implementation plan for CRM.
Understanding the program approval process in the company will take a long way toward
creating a solid and useful business plan. As with the wireless company, many companies
have governance committees made up of executives from various organizations. These
executives based on the content of the business plan as well as formal pitch from the
program’s sponsor. Funding is allocated to a variety of factors. The factors are:
 The requirement for new technologies
 The impact on existing technologies
 Ongoing support and maintenance requirements
 CRM alternatives
Typical CRM Approval Factors

Evaluation Factor Explanation Examples

The program’s long term Why the proposed CRM Marketing’s CRM initiative is
value initiative will have long estimated to increase target
term, sustainable value to marketing response rate by
the company 50% delivering annual net
revenue gains of approximately
$14 million
Its adherence to company How CRM pertains to the An enterprise CRM will allow
objectives company’s stated goals or us to achieve our objectives of
overarching strategies exceeding 40% market share
through decreased attrition
levels and more successful
marketing campaigns
Its ability to deliver key How specific business CRM will allow the company
business objectives goals will be met with to adopt true one to one
CRM relationships with our
customers by delivering both
personalization on our website
and real time customers
profiling capabilities for our
call center staff
Its cost An estimate of the cost During the next fiscal year the
breakdown proposed CRM is estimated to
need $1.5 million in funding
technology and addition $1
million for permanent head
count $1.5 million for

consulting services and a half
million for external data
Its boundaries An explanation of the The initial release of the eCRM
initial CRM project’s program will include the
resulting deliverable deployment of IVR service,
Web enabled provisioning and
Web FAQ services to alleviate
demands on the contact center
Staffing requirements A list of necessary staff In addition to the current CRM
for requirements SWAT team, we estimate the
gathering, technology need for
acquisition, development  A CRM
and roll out of CRM development
solution manager
 Two CRM
Risk Assessment A description of the We foresee the ebusiness
potential risks involved in organizations historical
launching a CRM reluctance to share its data as a
program at this time likely impediment to sales
department access to existing
customers web purchase and
self service history, rendering
customer history profiles
incomplete and the resulting
decisions potentially faulty

CRM Readiness Evaluation Metrics Factor Explanation

1 Targeted business users Are the business people slated to use CRM after it’s
display an understanding of deployed aware of its intended improvements?
CRM and accompanying its
2 Management displays an Not only must executives understand what CRM
understanding of CRM and means; they should also understand its value
companying its benefits proposition and be able to articulate it consistently.
And they should understand which corporate
objectives depends on CRM
3 CRM application The business areas most in need of CRM should be
opportunities are identified along with the projected deliverables

4 A business sponsor exists Staff members in the trenches, irrespective of their
for each discrete CRM need for more customer intelligence are not enough
opportunity someone in management should be lobbying for
CRM willing to tie his goals to CRM and even
willing to fund it
5 Obvious stakeholdership Are there other people within each candidate
exists for each discrete business unit who will support or help deliver a
CRM project? Are these people in the majority?
6 Client has expressed a need Management should be able to tie CRM and its
for market differentiation benefits back to the company’s competitive goals
and understand how CRM can help differentiate
7 Communicated strategic If the company has a list of strategic objectives
initiatives can be supported those objectives should be customer focused and
by CRM thus supported by CRM
8 Stakeholders can articulate Business sponsors or management should be able to
projected CRM benefits for describe the tactical business improvements that can
each discrete opportunity be delivered by CRM
9 Stated opportunities can be The CRM opportunities being discussed must be
improved with customer able to be supported and improved with clear,
related data consolidated customer data
10 Projected data sources are Where will the customer profiles and segments
highly regarded for data originate? If those systems are not trustworthy no
accuracy and integrity one will trust the ultimate CRM applications
11 Cross functional customer A data warehouse containing consolidated customer
data exists in a data information around the company will jump start any
warehouse CRM program and will decrease the infrastructure
12 Organizations currently Has data sharing been institutionalized already with
share a cross section of other systems?
information requirements
13 The client is already If customer segments are already being identified,
engaging in some sort of there is an understanding of customer
customer differentiation or differentiation which makes CRM much more
segmentation culturally palatable
14 Business units and IT staff The extent to which one organization wants to own
agree on CRM ownership CRM is the extent to which politics will get in the
way of productivity
15 Executive management has Executives should understand not only that CRM
expressed commitment to involves a significant investment but that additional
fund CRM related activities funding might also need to be reserved
16 Client agrees to modify Access to complete customer data should trigger
business processes as a business efficiencies
result of CRM
17 IT staffing infrastructure is Although CRM might leverage skill set and
in place to support CRM knowledge from other IT areas, it should be

planned as a discrete
18 No decisions have been Beware the tail that wags the dog: are stakeholders
made about potential CRM communicating CRM requirements based on a
technology solutions product demo or sales pitch
19 There is consensus that Like other large corporative initiatives CRM is an
CRM is process and not a ongoing process that grows and improves over time
one time activity
20 There is willingness to Management should be aware that along with more
sustain the organizational data and process changes job roles might change
impact of CRM and new skills might be needed

Maintaining a Customer Focus: Requirements Driven Product

• CRM should always be aligned to corporate strategic objectives i.e. customer
focused strategy. For example the ability to track the success of target marketing
• Planning a straightforward CRM solution
• CRM system should be cross functional
• Understanding of right technology which your company needs for implementation
of CRM

Defining CRM functionality

As the requirements define the “what” functionality defines the “how”. Each function
should map back to a business requirement. Identify the best way to map the functionality
to business process. To illustrate how this works, consider the following example. A
major bank was discovering that many of its customers did business with other financial
institutions and already had the product being marketed. If the bank’s customers did not
opt for the first marketed alternative, telemarketers would have the option, depending on
the customer’s interest level, to make subsequent recommendations. The bank decided to
use CRM to generate a list of five different product recommendations for each customer,
based on that customer’s likelihood to buy them.

For this to work, the process had to involve these steps:

1. Analyse customer purchase history to understand the most frequently purchase

products by other like customers
2. Score the likelihood that a customer will buy an individual product
3. Communicate resulting customer list and product scores to call center application
4. Collect response rates
5. Refine scores based on campaign results.
Requirements + process = functionality

Best way to find the CRM products that offer your required functionality

• CRM conferences
• Analysts firms specializing in CRM such as Yankee group, META group
• Trade shows
• Consulting firms specializing in CRM
• Trade publications, particularly those that perform product reviews such as
Intelligent Enterprise
• Internal IT organization
• Vendors seminars
• CRM websites
• Business magazines, particularly those that review IT vendor companies

Defining Technical Requirements

1. Integration and connection requirements: Ability of the tool to integrate into the
company’s unique technology infrastructure from a hardware, software and
networking perspective.
• Support of windows 98 client OS
• Ability of the CRM product to interact with your existing database
• Conformance to company sanctioned open standards
• Ability to interface with in house telephony package to support CSR
specific call routing and web based live chat
• Ability to integrate with other applications
• Product extensibility and customization features
• Inclusion of a published data model that can be customized and
extended to meet business specific data requirements
2. Processing and Performance requirements: Indicate the product’s ability to
support and control required operations
a. Number of transactions the product can support
b. Data volumes the product can support
c. Number of concurrent users that can be supported
d. Support of data and system backups
e. Synchronization strategy and efforts required
f. Ability to send and receive data to and from the data warehouse
3. Security requirement: The product’s ability to limit user access
a. Provision of usage and access reporting on a per user basis
b. Provision of access restrictions an a per user basis
c. Usage management at the individual, departmental or CRM screen level
d. Password encryption
e. Ability to provide limited data access to non company users
4. Reporting requirements: The product’s versatility to provide company and user
requested information
a. Ability to push pre formatted reports to end users

b. Ability for end users to perform ad hoc reporting
c. Allowing for end user creation of local canned reports
d. Ability for end users to extract data for local analysis
5. Usability requirements: Enabling end users to easily and intuitively accomplish
required tasks:
a. Ability for end users to have a customer home page
b. Ability for end users to seamlessly access other corporate systems through
a common CRM portal
c. Ability to customize online help screens with application specific
d. Ability to perform screen prints
e. Ability to display graphics, pictures and photographs
6. Function enabling features: The way in which the product provides certain
required functionality
a. A workflow management, capability, including the support and
automation of user defined workflows
b. An email response engine able to route incoming emails to specific CSRs
c. Predictive modeling functionality
d. Support of wireless access to CRM server
7. Performance requirements: Laying out acceptable turnaround time for CRM
activities or reporting response time
a. Ability to provide 30 second or less reporting response time for internet
b. Ability to generate campaign lists, irrespective of attributes within one
hour or less
8. Availability requirements: Indicating the acceptable level of system availability.
For example:
a. Product and accompanying database both available from 8a.m. to 8p.m.
seven days a week
b. Inclusion of self diagnostic tools that can alert system administrators to
slow response or likely downtime
c. Accommodation of different time zones if your company is geographically
d. Web page availability 24 by 7

Development Approaches

Homegrown CRM

Most CRM development efforts involve some level of software customization be it to

integrate the call center CRM system with marketing’s campaign management software
or to change data names, they begin with a core product that provides the foundation
from which to customize. Developing CRM software from scratch is called Homegrown
CRM. Companies develop their own homegrown CRM systems for the following four
main reasons:

1. They require core CRM functionality that did not exist at the time they were
2. They perceive retail packages as being too expensive
3. The combination of core functions they require is too specialized for a single
CRM product
4. They want assurance of a unique solution one competition cannot use and vendors
cannot reference

Because all of the data is centralized on a data warehouse these companies have
formalized their processes for integrating and deploying customer data to provide the
business with 360 degree view of its customers. An effective enterprise portal that allows
business people a common view of the application and data means the applications
themselves can be distributed and developed at separate times and no one need know.
CRM’s strategic importance they have no choice but to build their own CRM
environments to maintain their differentiation and their confidentiality.

2. Using an ASP: This is decision relies on the existence of core infrastructure

components, including sufficient hardware and software, networking or Internet
capabilities, specific skill sets in both the business and technology areas and a
development process robust enough to deliver a requirements driven program.
Application service providers
(ASPs) are an increasingly popular alternative. ASP is often used as a synonym
for outsourcing but ASPs develop, deliver and maintain packaged software
application on behalf of their client companies using the Web as the primary
deployment mechanism. There are two principal types of ASPs
a. Web hosting firms providing customers internet access plus a range of
services not to mention a robust technology infrastructure
b. Application providers offering customer access to specific products and
product packages

The reasons companies elect to outsource their CRM implementation to ASPs include:
a. Robust technology infrastructure: Companies defining themselves as
ASPs must develop mature technology infrastructure that include robust
servers wide area networking, operations and database softwares,
application development technologies and wireless client support for quick
and thorough delivery of multiple software packages.
b. Speed of Implementation: Most CRM ASPs usually specialize in one or
a handful of product packages thus delivery processes and repeatable
across customers, and customization occurs more quickly
c. Expertise: ASPs hire and train their staffs to become experts on specific
CRM products. Because these staff members apply a CRM product to
multiple user environments, they see the product’s strengths and
weaknesses and thus posses an intimacy with the product set that your IT
department would struggle to replicate.
d. Service level agreements: Such contractual agreements establish clear
reliability and availability requirements to which the ASP must adhere.

e. Critical Mass: Not only is the product expertise more solid, but ASPs also
have bench strength, meaning the likelihood of CRM specialist availability
is higher. This is especially valuable for application maintenance and
support no more months spent searching for maintenance programmers
freeing your internal technical resources.
f. Scalability: With an ASP, you simply let the company know of your new
requirement and then work together to schedule the enhancements. Any
systems programmer understands the technology ramifications of
increased workloads or growing data volumes.
g. Economies of Scale: ASP absorbs the high cost of systems administration
and maintenance as well as the staff resources and skills necessary to keep
the technical environment humming.
h. Complexity: ASPs are greater than the sum of their parts. They transcend
the collection of UNIX and NT servers, database products, and CRM tools
installed in their data centers and become solutions providers. These
companies not only deploy and maintain your CRM program, they also
provide critical data maintenance, system security, end user support, web
access and a variety of other nuts and bolts services that when added up do
more than solve you business problem.

Companies foregoing the ASP route cite several valid reasons

• Frequently changing requirements: Many companies who have deployed CRM

are continually fine tuning it and have set up schemes for ongoing end user input.
A constant stream of new requirements resulting in an updated system might be
too much for as ASP who has defined certain standard functionality across its
CRM systems and customers based.
• Complexity and timeliness: Indeed by the time a company can translate its
specific needs to an ASP, it might have been able to customize its CRM tool and
have it deployed.
• Integration with existing system: The number and complexity of a company’s
systems both legacy system and emerging technologies can render data gathering
and provision too complex and cumbersome for some ASPs
• Hostage taking: After a strategic CRM system is in the hands of an ASP the
balance of power shifts. Scary stories proliferate of outsources trying to change
contract terms while in possession of mission critical data.
• Fear: With all the efficiencies and speed that accompany the ASP model, some
companies are still nervous about relinquishing their precious customer data into
the hands of an outside company no matter how strident the security policy.

CRM tool selection checklist for success

• Consider the team selecting the product.

• Be crystal clear about the requirements you would expect an ASP to fulfill
and the services you would expect it to provide.

• If you are considering an ASP, consider why you are unwilling to invest the
money instead into your IT department
• Choose from the customer’s viewpoint
• Avoid religion about consultants either yours or the vendors
• Don’t rely on CRM technologies alone to address business improvements

CRM pre implementation checklist

Evaluation question Explanation Considered

Have you prepared a CRM Regardless of whether
business plan management requires such a
document it’s a very good
idea to have one that
represents CRM baseline
Do you know who your By the time you are ready to
executive sponsor is and launch development the
what she expects CRM executive sponsor
should be crystal clear.
Moreover her role in
defining and validating
requirements, managing
executive expectations and
helping define success
metric should be well
understood by all
Have high level business In CRM this activity should
requirements identified be separate from the formal
development project for two
reasons: business
requirements will dictate
whether the CRM program
moves forward and they
require involvement from
stakeholders who might not
be available during
Have success metrics been How will you know CRM
established program has been a success
Has the project been funded No use planning an entire
CRM program if only a
mere proof of concept has
been approved
Is there agreement on Sales staff will be using
desired customer CRM to manage the sales
behaviours pipeline it should establish

the ideal response to an
information mailing
Does each organization The marketing department
agree on common definition of an automobile company
of customers might consider dealer to be
customer and call center
consider a driver
Can you map the desired Defined data requirements
functionality to data with business requirements
requirements and proper mapping has to
be done
Do you suspect that external Supplement customer data
data will necessary with other external data
such as zip code, real estate
information etc
For customization does the Type of tool needed for
current workstation CRM development
development environment available in organization or
support the CRM product not
Have you identified the Understanding the impact
other applications with of CRM product and how
which the CRM product the data moves in and out
must integrate
Have the organizational or Identify barriers in CRM
political barriers to rolling implementation and tackle
out CRM identified and those barriers strategically
have they been resolved
Have you truly defined your CRM must adhere to
privacy policy corporate privacy policy

CRM development Teams

Core Development Roles

Job Role Description

Business Sponsor The business sponsor might serve across a single CRM project or
across the entire program. His main role is to establish the vision,
articulate overall goals and objectives, set the tone for the project
team and server as a tiebreaker for implementation issue
CRM steering committee For Cross functional or enterprise CRM initiatives where
implementation must be prioritized a committee of decision is there
to provide new requirements, prioritize proposed improvements and
communicate key corporate initiatives
Implementation project This person’s job is to ensure that the requirements defined by
manager business sponsor and steering committee dictate the functionality to

be implemented
Lead developer He should manage the technical development and customization of
the CRM product as it relates to the requirements.
Database developer He should lead the necessary data integration, regardless of whether
it is operational or analytical CRM. An understanding of key
company source systems and how to capture their data is mandatory,
requiring a separate team of database administrators and data
extraction experts
Front end developer Depending on the chosen CRM product programming is needed to
develop or customize the end user interface
Subject matters expert Critical to CRM success are subject matters experts usually business
people from the department slated to use the CRM system and
usually have strong ideas of what CRM should and shouldn’t provide
and should participate regularly in the development and testing of a
CRM product

Optional Development Roles

Job Role Description

Director of e-business CRM must ensure the integration of web based customer services
Director of data Existing data, development processes, source system knowledge and
warehousing metadata can all be used to get a jump start on CRM development.
Development teams might consider sharing resources in order to
integrate the data warehouse as the de facto CRM analysis platform
Chief information officer Socializes CRM as a corporate information resource and facilitate
the activity with the IT department to ensure the appropriate systems
and data resources
Vice president of strategic He should be able to share with the CR team new business areas or
planning product offerings the company expects to move toward, acquisition
and partnership strategies or existing product and services the
company expects to abandon
Chief privacy officer A new position in most companies the chief privacy officer should
be able to provide on corporate or regulatory policies regarding the
use of customer data.

Types of Development in CRM

• Incremental Development: Incremental or building block development means

the company receives a defined amount of new CRM functionality on a regular basis.
This is due not only to the inherent complexity of most CRM projects but also to the
cultural issues surrounding its deployment. Incremental CRM releases create a perception
among business stakeholders and management of ongoing value. The alternative to
incremental is big bang approach of delivering a major new system and accompanying
business changes all at once.
• Requirements driven development: This means developers who are creating
or customizing CRM functionality have an understanding of the overarching business
requirements driving CRM as well as the necessary functionality. Developing against

requirements eliminates the notorious phenomenon of “score creep” and ensures that
users get what they are expecting.
• Continuous user involvement: Many CRM teams fall into the trap of involving
business users at the beginning and end of CRM but rarely in the middle during its
development where its often critical. This means end users evaluating proofs of concept,
validating data and business rules weighing in on the contents to CRM training, and
reviewing new screens or functionality prior to CRM deployment. It also means
establishing regular communications between development, the business stakeholders
and the CRM business sponsor.
• Implementation process rigor: Even with other CRM best practices in place,
such as comprehensive requirements and an enthusiastic business sponsor, CRM
development must be planned and executed around a structured development process.
This is to ensure that the PMO and project managers can anticipate and accurately scope
various development activities. A sound development roadmap also ensures that
programmers focus less on implementation process and more on the actual delivery of
valuable CRM functionality.

CRM implementation Roadmap

Step 1
Business Planning
• CRM strategy
• CRM business plan
• Process planning and identification
• Project prioritization
• Staff planning
• Pre-implementation checklist
Technology selection
• Vendor evaluation
• Technology alignment
• Product installation
• Customization/development
• Process integration
• Prototyping
• Database design

• Deployment
• Documentation
• User training
• Internal PR
• Evaluate metrics

CRM Implementation Checklist----For Failure

• Failure to define a CRM strategy: Simply defining what CRM means to your
company is difficult enough without gathering consensus on a corporate wide
strategy. Companies routinely misinterpret business requirements and thus
underestimate the complexity of CRM.
• Failing to management staff expectations: Many firms apply rigor to planning
and development but forget about deploying the CRM system to the business. The
CRM rollout in which an IT liaison sends an email to sales staff announcing training
for the new sales force automation package is doomed before its even delivered.
• Failure to define success: CRM business sponsors who understand the differences
between CRM various applications but don’t differentiate between cross selling and
improved profitability.
• Hasty ASP decisions: Companies have not sorted out the advantages and
disadvantages of the ASP model. Small to mid size firms assumes ASPs are too
costly and despite potential cost savings. Understand the pros and cons of the ASP
model and make a decision based on your business and functional requirements.
• Failure to improve business: The proverbial mistake of paving the growth
applies here: CRM should not simply overlay archaic corporate policies. It should
instead formalize and automate nimble customer focused business processes.
Processes should be defined from the customer’s perspective and not the technology.
• Lack of data integration: Effective customer focused decision making means
understanding each customer across her various touchpoints and beyond your
immediate knowledge of her age, income, preferred channel or sales territory. The
difficult truth is that customer data exists in multiple systems on a variety of
technology platforms across your company. Finding, gathering and consolidating this
data is not easy but its critical.
• Failure to continue socializing CRM to the enterprise at large : Companies
who have delivered nothing less that revolutionary customer facing improvements
via CRM often rest on their laurels. CRM is an ongoing process, and success breeds
success. Consider establishing an internal PR job function to communicate with
executing and decision makers who might determine ongoing funding as well as to
the various lines of business who might leverage the functionality and data to further
their own customer focuses.

CRM Roadblocks
CRM roadblocks are the obstacles occur during the business planning or
requirements gathering which do not allow the CRM to set right thing at right time

Four Ps’ of CRM roadblocks

1. Process: Many companies make the mistake of purchasing a CRM tool that supports
repeatable processes only to discover that their business processes are not defined well
enough to be repeatable. Some companies are slow or unwilling to modify their business
processes to support better customer relationship
2. Perception: After CRM has been deployed business people should be able to accomplish
the same work in less time or be able to perform new tasks that ultimately make their jobs
easier and at the same time enhance customer relationships. And customer perception,
after all a customer perception of the company is the basis for whether she will return to
your web site or store. CRM can either deliver or destroy a customer’s high opinion of
your company and its offerings.
3. Privacy: Consumers are more likely to share their personal information with your
company if they receive something valuable in return. Incorporate this into your CRM
planning to ensue that customers are sufficiently motivated to continue interacting with
you at every touchpoint. Understand permission marketing and the trade offs between
asking customers to opt in versus opt out. Customer can log on to a secure website and
actually change their own profiles benefiting both parties. Appoint a chief privacy officer
to enforce a corporate privacy policy and communicate then both internally and
4. Politics: It involves the development of a data warehouse or other CRM related
technology solution and labeling it CRM without defining a clear CRM strategy, planned
process improvements, organizational changes or business participation. Declaring an
activity or technology project to be CRM does not make it so and risk tampering the high
impact business message of any bonafide CRM project awaiting approval. CRM in a
vaccum simply does not work long term and can actually delay or destroy an entire CRM
Other CRM saboteurs
1. Lack of CRM integration
2. Poor organizational planning
3. Demanding customers
4. Poor customer service

Future of CRM
1. The customer as Subject Matters Expert(SME)
a. Companies asking customers how to plan their CRM strategies
b. Rendering customers as subject matters expert
c. Leveraging customers to improve business process and recording the feedback of
customers who have taken the time to participate
d. Customers helps in prioritizing the tasks
2. The Rise of intermediaries
a. Intermediaries act to simplify the purchase process by acting as one stop
information resources.
b. Companies try to keep pace with their customers purchases and feedback
intermediaries triangulate a two way interaction between company and customers

c. Intermediaries help identify purchases and feedback as part of customer’s overall
3. Digital and Broadband Revolutionize Advertising
a. Enable advertisers to send personalized commercials to households that fit a
certain desired customer profile
b. Allow companies to target market in real time
c. Supports mass marketing with customized manner
4. The threat and promise of customer communities
a. Communicate improvements
b. Virtual meeting place of buyer and sellers
c. Communicate experiences
d. Streamlined supply chains
5. CRM goes global
a. Country specific strategy
b. Direct mail communication
c. Expensive
d. Multi language support
e. Serve a growing base of international customers
6. The Coming CRM backlash
a. Improve customer experience
b. Increasing expectations for CRM
c. Increases customer satisfaction
d. Improved customer perceptions