CRM: Migration from Suspect To Advocate

Chapter-1

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
promises.
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:
1960s: 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 its mass so your trying to get your as
many as you can.
1970s: 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.
1980s: 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.
1990s: 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
customers part to provide information to the organization.
Year
1960
1970
1980

Era
The Era of Mass Marketing
The Era of Segmentation
The Era of Niche Marketing

1990

The
Era
Marketing

of

Apporach
Transactional Marketing

Relationship Relationship Marketing

Table 1.1 Evolution of CRM

As it is implicit that upto 1980s 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 Marketing Approach

Relationship Marketing Approach

Figure 1.1 Migration Towards Relationship Marketing

Difference between Transactional Marketing and Relationship

Marketing
Transactional Marketing
Relationship Marketing
Focus on Single Sale recruitment
Emphasis on product features

Focus on retention of the customer

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
customers
Focus on product quality while production Focus on quality at all levels
Communicate to persuade
Communication to make sense and
meaning
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 8Cs 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 4Ps of Transactional Marketing to 8Cs

Relationship Marketing
4

This figure shows that 4Ps 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.

4Ps Transactional Marketing

8Cs 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
Differentiate Offerings
Keep Existing Customers
Maximize Lifetime Value
Increase Loyalty

Key CRM Principles

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 ProspectCustomer ClientSupporterAdvocate

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 competitors customers
6

The competitors lapsed customers

The competitors 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
organizations new offerings to fulfill the customers emerging new needs and so on.
The competitors customers, competitors lapsed customers, competitors former
customers and competitors 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 competitors
customers if the customers perceive that they would be rewarded with more value for
money.
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 organizations
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
process.

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 buyers 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 repatronize 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 its not what the customer wants to hear: Sometimes
freelancers have the mistaken impression that good customer service means

10

3.

4.

5.
6.
7.
8.

always saying yes. They couldnt 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.
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
Become the quality provider: I once tried purchasing my childrens 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.
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.
Reward the customer in appropriate manner for their loyalty.
Get to know the customer as much as you can. Simple gestures like sending
birthday cards can emotionally bond the customer with the organization.
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 hes contacted.

11

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. Vendors 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 (dogtoys.com).
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

12

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
delivery.
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 collectors items bargains.
8. Electronic communities: INTERNET allows customers to interact with other
customers in electronic communities and exchange ideas as well as compare
experiences.

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

13

3.

4.

5.

6.

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.
PRM: Partner relationship management (PRM) is a business strategy for
improving communication between companies and their channel partners. Webbased 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
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.
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.
mCRM:

14

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 customers
behavior.

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:

15

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
package.
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
disrupted.
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 companys 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, its 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.

16

Price elasticity modeling and dynamic pricing: Determining the optimal

price for a given product often for a given customer or customer
segment.
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 customers 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

17

easily. Sales representatives can access such information through their mobile
PDAs or laptops anywhere, while on the move and accordingly tone their sales
pitch.

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
connectivity.
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.

Features

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

manner

Improve fulfillment response with full views of inventory and on-thespot 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.
Sales Cycle Visibility

Benefits

2.

18

3.

4.

5.

6.

7.

8.

9.

10.

11.

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.
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.
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.
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.
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.
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.
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
updates.
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
problem.
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.
Competitive advantage

19

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
workplace.
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
users.
5. Timely information is critical. Features such as server-pushed alerts and
scheduled synchronization will simulate an always-connected experience

20

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.

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
customers
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
strategies.
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 firms specific needs to fulfill their customers.
Customer Interaction: According to customers 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 customers specific needs.

21

eCRM strategy components

When enterprises integrate their customer information, there are three eCRM strategy
components:
1. Operational: Because of sharing information, the processes in business should
make customers 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
customers.
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
technologies.
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

22

servers

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 Fords 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

email.

Coordinate marketing initiatives across all customer channels.

Leverage customer information for more effective eMarketing and

eBusiness.

Focus business on improving customer relationships, and earning a

greater share of each customers business through consistent
measurement, assessment and actionable customer contact strategies.

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
23

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 buyers 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

24

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 customers 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 companys 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

25

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 companys supply chain network to check inventory, outstanding
shipments and other order details.
Download customizable sales presentations and other product marketing
literature.
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 partners characteristics from their head quarters address to which
competitive products the partner might be selling but also to track the partners 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
companys 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.

26

CRM implementation Roadmap

Step 1
Business Planning
CRM strategy
CRM business plan
Process planning and identification
ROI
Step-2
Architecture/Design
Project prioritization
Staff planning
Pre-implementation checklist
Step-3
Technology selection
Vendor evaluation
Technology alignment
Product installation
Step-4
Development
Customization/development
Process integration
Prototyping
Database design
Step-5
Delivery
Deployment
Documentation
User training
Internal PR
27

Step-6
Measurement
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 dont 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 customers 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

28

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 customers 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
externally.
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
program.

Other CRM saboteurs

1.
2.
3.
4.

Lack of CRM integration

Poor organizational planning
Demanding customers
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 customers overall
profile.
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

29

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

30