Main Project

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Chapter 1:
What is CRM?
What's So Hard About Customer Service?
One person's excellent service may represent barely adequate service to someone else.
What impresses one customer may make absolutely no impression on another. To
complicate matters, what a customer believes to be good service in one context may be
unacceptable in another situation or at another time. Service is perceptual; it is
individualized; and it is situational. So how can you figure out what customers want from
you in terms of service? The kind and level of service that you must deliver depends on
who the customer is, what her expectations are, what experience she has had with you
and other firms, what your strategy is and what role customer service plays in its delivery
—along with a host of other things.
Many managers and executives are uncomfortable with this notion of variable service
delivery; they would much prefer to be able to pin down service and to be able to
standardize it so that it can be consistently delivered. But I don't believe service should be
the same for everyone. In fact, the value of service as a relationship-building tool is its
customizability. Simply out, some customers require and deserve better service than
others. In some situations, you will want to be able to provide service that will impress
customers so as to make an emotional connection. Whenever your employees can say to a
customer, "Let me take care of that for you," you are delivering a higher level of service
than the customer was expecting.
Yet customer service gets far less attention than it deserves in many companies, simply
because managers do not realize or accept its importance in influencing customer
satisfaction and loyalty. Many view customer service provision as a cost, rather than an
investment. Many spend a great deal of time looking for ways to reduce that cost, without
appreciating the impact it has on the customer's feelings toward the firm.
K. J. Somaiya College of Arts and

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At the same time, managers tend to focus on what I call the functional side of service
provision: the speed and accuracy of service delivery, in particular. Do we arrive on
time? Do we have things in stock? Do we answer incoming calls within 20 seconds?
These are the aspects of service with which managers in many firms are most
comfortable, mainly because they are most easily and frequently measured in
conventional customer satisfaction surveys. But they are a dangerously limiting view of
service and not nearly as all-encompassing as the customer's view of service.
Four levels of service

Another element that gets in the way of impressive service delivery is management's very
simplistic view of customer service. I can think of at least four levels of customer service,
each of which involves the creation of progressively more emotional value for customers.
To the customer, service involves more than just the functional delivery of service (the
first level, which, in a world where companies like FedEx have practically perfected
technical service provision, customers take as a given). Customers care how easy you
make it for them to communicate with you. This opens the door to a discussion of your
phone system, your web site and your customer service center—not to mention whether
customers can find someone to serve them in your store. Increasingly, when you keep
them on hold for 20 minutes, don't respond to their email inquiries and ask them to deal
with unknowledgeable and unhelpful staff, they will walk away.
At the third level, companies need to understand how customer service is linked to the
people they employ. My experience suggests that customers are most likely to equate the
notion of service with the way they are treated by employees. Finally, the level of service
that customers experience is a powerful influence on how customers feel emotionally
toward a company. Poor service can make a customer feel neglected, unimportant,
frustrated, angry or even humiliated. Surprisingly good service leads to emotions such as
comfort, relief, delight or excitement.
K. J. Somaiya College of Arts and 2

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That holistic view again

Yet, many companies have a less-than-holistic view of their value proposition. Customer
service must be seen to be an integral part of what we offer the customer. I
recently encountered a major company that has separate marketing, sales and
customer service departments, each of which prepares its own annual plan and
sets its own budgets, without consulting with the others. In that firm, customer
service is defined mainly as the operation of the call center. To the customer,
service means much more.
It is far too simplistic to ask customers to rate your customer service on the
predictable 10-point scale. It's much too complex a concept for customers to
reduce it to a single number. You can't interpret it, anyway. So last month they
gave us a rating of 8.1 on customer service. What does that mean? Very little.
There's no direction on how we can improve. Anyway, the only people who are
rating you are current customers. How would those customers who stormed out or
hung up in disgust rate your customer service? You will never know. Yet theirs is
a much more important number.
Customer service is not optional. It's not trivial. And it's not easily standardized.
Don't make the mistake that one Canadian bank made of treating customer service
as a promotion. That bank offered customers $5 if they had to wait in line more
than five minutes in its branches. Customers were generally not impressed. To
them, a wait time of five minutes was not the issue. Of course, wait time is
important—but not nearly as important as being served politely and efficiently
once you reach the counter.

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Customer service is extremely complex, much like value, satisfaction and the
increasingly popular customer experience. To apply such concepts effectively,
management must appreciate their complexity. To utilize customer service to
increase customer loyalty, to reinforce the positioning of the brand and to gain a
competitive advantage, companies much have a strategy to guide its development
and implementation.
What is Customer Relationship Management?

Before we begin to examine the conceptual foundations of CRM, it will be useful to
define what CRM is. A narrow perspective of customer relationship management is
database marketing emphasizing the promotional aspects of marketing linked to database
efforts.
Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention in
which a variety of after marketing tactics is used for customer bonding or staying in
touch after the sale is made.
Shani and Chalasani define relationship marketing as “an integrated effort to identify,
maintain, and build up a network with individuals consumers and to continuously
strengthen the network for mutual benefit of both sides, through interactive,
individualized and value-added contacts over a period of time”.
In today’s hyper competitive scenario, more than three quarters of the money and time
spent by companies go towards acquiring and retaining customers. Customer-centricity
has become the buzzword and the ones with clear and relentless focus on customers,
enjoy a better competitive position. This is proved time and again. Yet, companies go
through meticulous processes to gradually and consistently mature into an “organization
for the customers”. But, how would you mature into a customer-focused or customer-
centric organization? The answer is: By reading and understanding your customers. Yes,

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this is all you need to do! And this you need to do not just once, but regularly and
consistently over the lifetime of your customer and beyond.
Reading the customer demographics and understanding their needs (both explicit and
implicit) is what customer insight is all about. Customer insight is the basic point or the
foundation for building a customer centric organization. Everything in the value chain
revolves around this. This is the raw material. This is more a conversion process rather,
since the end product is Customer Loyalty! Over decades, many organizations had
successfully completed the conversion process and tasted higher returns, most
organizations miserably failed in their efforts.
Customer Insight goes through a set of processes to get converted into Customer Loyalty-
the finished product. The set of processes include use of machine, process and people to
obtain the final outcome - just like a manufacturing process in a factory. The machine
here is technology - information technology to be precise, process - the custom made
steps based on set objectives; and people - those who are trained to efficiently carry out
the conversion process. This whole scheme of activities that begin from customer
information and end in processes and interactions that result in customer loyalty - in
entirety, is what CRM is all about.
CRM relies on customer data to create customer loyalty. The concept of CRM was again
the result of an evolution born out of necessity. When companies understood the need to
obtain and maintain customer data, which was exhaustive and scattered in nature and
were desperately looking for a tool that could compile, preserve use the data in a way
they want, technology came to the rescue with exclusive methods called data mining,
data warehousing and thus data base management techniques were born. Technology is
mechanistic and didn’t know what is required and what is not. A managerial tool was
needed to perform the director’s role in order to decide the path and processes. Thus
CRM was engineered as a tool to manage customer data using IT-enabled techniques.
CRM gives a framework for the activities. It decides on what to do - the objectives, what
is required to do it - the resources, who should do it - the people, how to do it - the

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processes, how long to do it - the time frame. CRM could be ready made, tailor-made or
hand made depending on the specific objectives it is set to achieve. CRM is unique in the
respect that it follows a set of pre-determined processes to accumulate and manage
customer data, which was hitherto unpracticed. Hence, CRM is defined as:
“Customer relationship management (CRM) is a business strategy to acquire and

manage the most valuable customer relationships. CRM requires a customer-
centric business philosophy and culture to support effective marketing, sales and
service processes. CRM applications can enable effective customer relationship
management, provided that an enterprise has the right leadership, strategy and
culture.”
As is implicit in the above definition, the purpose of CRM is to improve marketing

productivity. Marketing productivity is achieved by increasing marketing efficiency
and by enhancing marketing effectiveness. In CRM, marketing efficiency is achieved
because cooperative and collaborative processes help in reducing transaction costs and
overall development costs for the company. Two important processes for CRM include
proactive customer business development and building partnering relationship with
most important customers. These lead to superior value creation. The basic concept is
that the customer is not someone outside the organisation, he is a part of the
organisation.

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Purpose of CRM
CRM, in its broadest sense, means managing all interactions and business with
customers. This includes, but is not limited to, improving customer service. A good CRM
program will allow a business to acquire customers, service the customer, increase the
value of the customer to the company, retain good customers, and determine which
customers can be retained or given a higher level of service. A good CRM program can
improve customer service by facilitating communication in several ways :
• Provide product information, product use information, and technical assistance on

web sites that are accessible 24 hours a day, 7 days a week.
• Identify how each individual customer defines quality, and then design a service
strategy for each customer based on these individual requirements and
expectations.
• Provide a fast mechanism for managing and scheduling follow-up sales calls to
assess post-purchase cognitive dissonance, repurchase probabilities, repurchase
times, and repurchase frequencies.
• Provide a mechanism to track all points of contact between a customer and the
company, and do it in an integrated way so that all sources and types of contact
are included, and all users of the system see the same view of the customer
(reduces confusion).
• Help to identify potential problems quickly, before they occur.

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• Provide a user-friendly mechanism for registering customer complaints

(complaints that are not registered with the company cannot be resolved, and are a
major source of customer dissatisfaction).
• Provide a fast mechanism for handling problems and complaints (complaints that
are resolved quickly can increase customer satisfaction).
• Provide a fast mechanism for correcting service deficiencies (correct the problem
before other customers experience the same dissatisfaction).
• Use internet cookies to track customer interests and personalize product offerings
accordingly.
• Use the Internet to engage in collaborative customization or real-time
customization.
• Provide a fast mechanism for managing and scheduling maintenance, repair, and
on-going support (improve efficiency and effectiveness).
• The CRM program can be integrated into other cross-functional systems and
thereby provide accounting and production information to customers when they
want it.

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Key CRM principles

• Differentiate Customers
All customers are not equal; recognize and reward best customers disproportionately.
Understanding each customer becomes particularly important. And the same
customers’ reaction to a cellular company operator may be quite different as
compared to a car dealer. Besides for the same product or the service not all
customers can be treated alike and CRM needs to differentiate between a high value
customer and a low value customer.
What CRM needs to understand while differentiating customers is:
- Sensitivities, Tastes, Preferences and Personalities
- Lifestyle and age
- Culture Background and education
- Physical and psychological characteristics
• Differentiating Offerings
 Low value customer requiring high value customer offerings.
 Low value customer with potential to become high value in near future.
 High value customer requiring high value service.
 High value customer requiring low value service.

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• Keeping Existing Customers

Grading customers from very satisfied to very disappointed should help the
organisation in improving its customer satisfaction levels and scores. As the
satisfaction level for each customer improves, so shall the customer retention with the
organisation.
• Maximizing Life time value

Exploit up-selling and cross-selling potential. By identifying life stage and life event
trigger points by customer, marketers can maximize share of 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.
• Increase Loyalty
Loyal customers are more profitable. 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 advocates on the loyalty
curve. Referral sales invariably are low cost high margin sales.
Summarizing CRM activities

The CRM cycle can be briefly described as follows:
1. Learning from customers and prospects, (having in depth knowledge of
customer)
2. Creating value for customers and prospects
3. Creating loyalty
4. Acquiring new customers
5. Creating profits
6. Acquiring new customers
Why CRM is necessary?

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Several companies are turning to customer-relationship management systems and

strategies to gain a better understanding of their customer's wants and needs. Used in
association with data warehousing, data mining, call centers and other intelligence-based
applications, CRM "allows companies to gather and access information about customers'
buying histories, preferences, complaints, and other data so they can better anticipate
what customers will want. The goal is to instill greater customer loyalty." Other benefits
includes:
• Faster response to customer inquiries.

• Increased efficiency through automation.
• Deeper understanding of customers.
• Increased marketing and selling opportunities.
• Identifying the most profitable customers.
• Receiving customer feedback that leads to new and improved products or services
Benefits of CRM
Implementing a customer relationship management (CRM) solution might involve

considerable time and expense. However, there are many potential benefits. A major
benefit can be the development of better relations with your existing customers, which
can lead to:
• increased sales through better timing due to anticipating needs based on historic
trends
• identifying needs more effectively by understanding specific customer
requirements
• cross-selling of other products by highlighting and suggesting alternatives or
enhancements
• effective targeted marketing communications aimed specifically at customer

needs

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• a more personal approach and the development of new or improved products and
services in order to win more business in the future
• enhanced customer satisfaction and retention, ensuring that your good reputation
in the marketplace continues to grow
• increased value from your existing customers and reduced cost associated with
supporting and servicing them, increasing your overall efficiency and reducing total
cost of sales
Once your business starts to look after its existing customers effectively, efforts can be
concentrated on finding new customers and expanding your market. The more you know
about your customers, the easier it is to identify new prospects and increase your
customer base.
Even with years of accumulated knowledge, there's always room for improvement.
Customer needs change over time, and technology can make it easier to find out more
about customers and ensure that everyone in an organisation can exploit this information.
History of CRM
Customer Relationship Management (CRM) is one of those magnificent concepts that

swept the business world in the 1990’s with the promise of forever changing the way
businesses small and large interacted with their customer bases. In the short term,
however, it proved to be an unwieldy process that was better in theory than in
practice for a variety of reasons. First among these was that it was simply so difficult
and expensive to track and keep the high volume of records needed accurately and
constantly update them.
In the last several years, however, newer software systems and advanced tracking
features have vastly improved CRM capabilities and the real promise of CRM is
becoming a reality. As the price of newer, more customizable Internet solutions have

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hit the marketplace; competition has driven the prices down so that even relatively
small businesses are reaping the benefits of some custom CRM programs.
In the beginning…
The 1980’s saw the emergence of database marketing, which was simply a catch
phrase to define the practice of setting up customer service groups to speak
individually to all of a company’s customers.
In the case of larger, key clients it was a valuable tool for keeping the lines of
communication open and tailoring service to the clients needs. In the case of smaller
clients, however, it tended to provide repetitive, survey-like information that cluttered
databases and didn’t provide much insight. As companies began tracking database
information, they realized that the bare bones were all that was needed in most cases:
what they buy regularly, what they spend, what they do.
Advances in the 1990’s
In the 1990’s companies began to improve on Customer Relationship Management

by making it more of a two-way street. Instead of simply gathering data for their own
use, they began giving back to their customers not only in terms of the obvious goal
of improved customer service, but in incentives, gifts and other perks for customer
loyalty.
This was the beginning of the now familiar frequent flyer programs, bonus points on
credit cards and a host of other resources that are based on CRM tracking of customer
activity and spending patterns. CRM was now being used as a way to increase sales
passively as well as through active improvement of customer service.
True CRM comes of age
Real Customer Relationship Management as it’s thought of today really began in

earnest in the early years of this century. As software companies began releasing
newer, more advanced solutions that were customizable across industries, it became
feasible to really use the information in a dynamic way.

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Instead of feeding information into a static database for future reference, CRM
became a way to continuously update understanding of customer needs and behavior.
Branching of information, sub-folders, and custom tailored features enabled
companies to break down information into smaller subsets so that they could evaluate
not only concrete statistics, but information on the motivation and reactions of
customers.
The Internet provided a huge boon to the development of these huge databases by
enabling offsite information storage, where before companies had difficulty
supporting the enormous amounts of information. The Internet provided new
possibilities and CRM took off as providers began moving toward Internet solutions.
With the increased fluidity of these programs came a less rigid relationship between
sales, customer service and marketing. CRM enabled the development of new
strategies for more cooperative work between these different divisions through shared
information and understanding, leading to increased customer satisfaction from order
to end product.
Today, CRM is still utilized most frequently by companies that rely heavily on two
distinct features: customer service or technology. The three sectors of business that
rely most heavily on CRM -- and use it to great advantage -- are financial services, a
variety of high tech corporations and the telecommunications industry.
The financial services industry in particular tracks the level of client satisfaction and
what customers are looking for in terms of changes and personalized features. They
also track changes in investment habits and spending patterns as the economy shifts.
Software specific to the industry can give financial service providers truly impressive
feedback in these areas.
In recent years however, several factors have contributed to the rapid development and
evolution of CRM. These include: -
1. The growing de-intermediation process in many industries due to the advent of
sophisticated computer and telecommunication technologies that allow producers to

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directly interact with end-customers. For example, in many industries such as

airlines, banks insurance, software or household appliances and even consumables,
the de-intermediation process is fast changing the nature of marketing and
consequently making relationship marketing more popular. Databases and direct
marketing tools give them the means to individualize their marketing efforts.
2. Advances in information technology, networking and manufacturing technology have
helped companies to quickly match competition. As a result product quality and cost
are no longer significant competitive advantages.
3. The growth in service economy. Since services are typically produced and delivered
at the same institution, it minimizes the role of the middlemen.
4. Another force driving the adoption of CRM has been the total quality movement.
When companies embraced TQM it became necessary to involve customers and
suppliers in implementing the program at all levels of the value chain. This needed
close working relationships with the customers. Thus several companies such as
Motorola, IBM, General Motors, Xerox, Ford, Toyota, etc formed partnering relations
with suppliers and customers to practice TQM. Other programs such as JIT and MRP
also made use of interdependent relationships between suppliers and customers.
5. Customer expectations are changing almost on a daily basis. Newly Empowered
customers who choose how to communicate with the companies across various
available channels. Also nowadays consumers expect a high degree of
personalization.
6. Emerging real time, interactive channels including e-mail, ATMs and call centre that
must be synchronized with customer’s non-electronic activities. The speed of
business change, requiring flexibility and rapid adoption to technologies.
7. In the current era of hyper competition, marketers are forced to be more concerned
with customer retention and customer loyalty.
8. As several researches have found out retaining customers is less expensive and more
sustainable competitive advantage than acquiring new ones.
9. On the supply side it pays more to develop closer relationships with a few suppliers
than to develop more vendors.

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10. The globalization of world marketplace makes it necessary to have global account
management for the customers.
Chapter 2:
CRM Programs & Activities
CRM Programs
One-to-one Marketing
Meeting and satisfying each customer’s need uniquely and individually. In the mass
markets individualized information on customers is now possible at low costs due to the
rapid development in the information technology and due to availability of scalable data
warehouses and data mining products. By using online information and databases on

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individual customer interactions, marketers aim to fulfill the unique needs of each mass-
market customer. Information on individual customers is utilized to develop frequency
marketing, interactive marketing, and aftermarketing programs in order to develop
relationship with high-yielding customers. In the context of business-to-business markets,
individual marketing has been in place of quite sometime. Known as Key Account
Management Program, here marketers appoint customer teams to husband the company
resources according to individual customer needs.
Continuity Marketing Programs

Take the shape of membership and loyalty card programs where customers are often
rewarded for their member and loyalty relationships with the marketers. The basic
premise of continuity marketing programs is to retain customers and increase loyalty
through long-term special services that has a potential to increase mutual value through
learning about each other.
Partnering Programs
The third type of CRM programs is partnering relationships between customer and
marketers to serve end user needs. In the mass markets, two types of partnering programs
are most common: co-branding and affinity partnering.
Missing process of CRM
Traditionally customer relationship management (CRM) revolves around the three

functions of selling, marketing and support. Various process models have been built
around how these functions are integrated and operated in a customer oriented enterprise.
There is however a fourth critical function that is lacking in most CRM models.
The fourth function that often is the source of a competitive edge is that of innovation.
Companies must continually reinvent themselves to deliver an improved and often a
totally new value offering to their customer base. CRM must provide the customer

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intelligence that feeds information back into the enterprise’s knowledge management
processes where it can trigger new innovation processes. When CRM is integrated into
the innovation process, significant value can be derived from faster time to market cycle
times and with new processes and services.
Marketing automation must ensure that the innovation processes are actually market
driven. A market driven innovation process must include both strategies that are focused
on satisfying customer requirements as well as strategies focused at redefining customer
requirements. Sales automation should be integrated with the innovation process by
ensuring that all sales channels are prepared and ready to take new processes and services
to market before competitive forces can react. Customer service automation must be
designed to empower the customer with the option of assisting with the design of the
value offering. Redefining CRM around innovation, sales, marketing and service can
identify new competitive opportunities for an enterprise.
The remaining question is whether companies are prepared to take the initiative and
expand the definition of customer relationship management to include the process of
innovation. The pressure to deliver results within the traditional definition of CRM
already overwhelms companies. The dialog must start rather earlier than later because the
competitive window of traditional CRM is decreasing and customer demands for a more
innovative and responsive enterprise will increase
Architecture of CRM
There are three parts of application architecture of CRM:
• Operational - automation to the basic business processes (marketing, sales,

service)
• Analytical - support to analyze customer behavior, implements business
intelligence alike technology
• Collaborative - ensures the contact with customers (phone, email, fax, web, sms,
post, in person)

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Operational CRM
Operational CRM means supporting the "front office" business processes, which include
customer contact (sales, marketing and service). Tasks resulting from these processes are
forwarded to resources responsible for them, as well as the information necessary for
carrying out the tasks and interfaces to back-end applications are being provided and
activities with customers are being documented for further reference.
Operational CRM provides the following benefits:
• Delivers personalized and efficient marketing, sales, and service through multi-
channel collaboration.
• Enables a 360-degree view of your customer while you are interacting with them.
• Sales people and service engineers can access complete history of all customer
interaction with your company, regardless of the touch point.
The operational part of CRM typically involves three general areas of business:
• Sales force automation (SFA)

SFA automates some of the company's critical sales and sales force management
functions, for example, lead/account management, contact management, quote
management, forecasting, sales administration, keeping track of customer preferences,
buying habits, and demographics, as well as performance management. SFA tools are
designed to improve field sales productivity. Key infrastructure requirements of SFA are
mobile synchronization and integrated product configuration.
• Customer service and support (CSS)

CSS automates some service requests, complaints, product returns, and information
requests. Traditional internal help desk and traditional inbound call-center support for
customer inquiries are now evolved into the "customer interaction center" (CIC), using
multiple channels (Web, phone/fax, face-to-face, kiosk, etc). Key infrastructure

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requirements of CSS include computer telephony integration (CTI) which provides high
volume processing capability, and reliability.
• Enterprise marketing automation (EMA)

EMA provides information about the business environment, including competitors,
industry trends, and macro-environmental variables. It is the execution side of campaign
and lead management. The intent of EMA applications is to improve marketing campaign
efficiencies. Functions include demographic analysis, variable segmentation, and
predictive modeling occurs on the analytical (Business Intelligence) side.
Integrated CRM software is often also known as "front office solutions." This is because
they deal directly with the customer. Many call centers use CRM software to store all of
their customer's details. When a customer calls, the system can be used to retrieve and
store information relevant to the customer. By serving the customer quickly and
efficiently, and also keeping all information of a customer in one place, a company aims
to make cost savings, and also encourage new customers.
CRM solutions can also be used to allow customers to perform their own service via a
variety of communication channels. For example, you might be able to check your bank
balance via your WAP phone without ever having to talk to a person, saving money for
the company, and saving your time.
Analytical CRM
In analytical CRM, data gathered within operational CRM and/or other sources are
analyzed to segment customers or to identify potential to enhance client relationship.
Customer analysis typically can lead to targeted campaigns to increase share of
customer's wallet. Examples of Campaigns directed towards customers are:
• Acquisition: Cross-sell, up-sell

• Retention: Retaining customers who leave due to maturity or attrition.
• Information: Providing timely and regular information to customers.

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• Modification: Altering details of the transactional nature of the customers'

relationship.
Analysis typically covers but is not limited to:
• Decision support: Dashboards, reporting, metrics, performance etc.

• Predictive modeling of customer attributes
• Strategy and research.
Analysis of Customer data may relate to one or more of the following analyses:
• Contact channel optimization

• Contact Optimization
• Customer Acquisition / Reactivation / Retention
• Customer Segmentation
• Customer Satisfaction Measurement / Increase
• Sales Coverage Optimization
• Fraud Detection and analysis
• Financial Forecasts
• Pricing Optimization
• Product Development
• Program Evaluation
• Risk Assessment and Management
Data collection and analysis is viewed as a continuing and iterative process. Ideally,
business decisions are refined over time, based on feedback from earlier analysis and
decisions. Therefore, most successful analytical CRM projects take advantage of a data
warehouse to provide suitable data.
Business Intelligence is a related discipline offering some more functionality as separate

application software.

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Collaborative CRM
Collaborative CRM facilitates interactions with customers through all channels (personal,
letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and
channels. It is a solution that brings people, processes and data together so companies can
better serve and retain their customers. The data/activities can be structured, unstructured,
conversational and/or transactional in nature.
Collaborative CRM provides the following benefits:
• Enables efficient productive customer interactions across all communications

channels
• Enables web collaboration to reduce customer service costs
• Integrates call centers enabling multi-channel personal customer interaction
• Integrates view of the customer while interaction at the transaction level
Chapter 3:
Tools for CRM
Customer database

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A good customer information system should consist of a regular flow of information,

systematic collection of information that is properly evaluated and compared against
different points in time, and it has sufficient depth to understand the customer and
accurately anticipate their behavioral patterns in future. The customer database helps the
company to plan, implement, and monitor customer contact. Customer relationships are
increasingly sustained by information systems. Companies are increasingly adding data
from a variety of sources to their databases. Customer data strategy should focus on
processes to manage customer acquisition, retention, and development.
Call Centre
A call centre is a centralized office used for the purpose of receiving and transmitting a
large volume of requests by telephone.
A call centre is operated by a company to administer incoming product support or

information inquiries from consumers. Outgoing calls for telemarketing, clientele, and
debt collection are also made. In addition to a call centre, collective handling of letters,
faxes, and e-mails at one location is known as a contact centre.
A call centre is often operated through an extensive open workspace, with work stations
that include a computer, a telephone set/headset connected to a telecom switch, and one
or more supervisor stations. It can be independently operated or networked with
additional centres, often linked to a corporate computer network, including mainframes,
microcomputers and LANs. Increasingly, the voice and data pathways into the centre are
linked through a set of new technologies called computer telephony integration (CTI).
Most major businesses use call centres to interact with their customers. Examples include
utility companies, mail order catalogue firms, and customer support for computer
hardware and software. Some businesses even service internal functions through call
centres. Examples of this include help desks and sales support.

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Systems Integration
While CRM solutions are front office automation solutions, ERP is back office
automation solution. An ERP helps in automating business functions of production,
finance, inventory, order fulfillment and human resource giving an integrated view of
business, where as CRM automates the relationship with customer covering contact and
opportunity management , marketing and product knowledge, sales force management,
sales forecasting, customer order processing and fulfillment, delivery, installation, pre-
sale and post-sale services and complaint handling by providing an integrated view of the
customer. It is necessary that the two systems integrate with each other and complement
information as well as business workflow. Therefore, CRM and ERP are complementary.
This integration of CRM with ERP helps companies to provide faster customer service
through an enabled network, which can direct all customer queries and issues through
appropriate channels to the right place for speedy resolution. This will help the company
in tracking and correcting the product problems reported by customers by feeding this
information into the R&D operations via ERP.
Data Mining for CRM: Some Relevant issues
Data mining is an important enabler for CRM. Advances in data storage and processing
technologies have made it possible today to store very large amounts of data in what are
called data warehouses and then use data mining tools to extract relevant information.
Data mining helps in the process of understanding a customer by providing the necessary
information and facilitates informed decision-making.
Chapter 4:
Implementation of CRM
How to implement CRM

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The implementation of a customer relationship management (CRM) solution is best

treated as a six-stage process, moving from collecting information about your customers
and processing it to using that information to improve your marketing and the customer
experience.
Stage one - Collecting information
The priority should be to capture the information you need to identify your customers and
categorise their behaviour. Those businesses with a website and online customer service
have an advantage as customers can enter and maintain their own details when they buy.
Stage two - Storing information
The most effective way to store and manage your customer information is in a relational
database - a centralised customer database that will allow you to run all your systems
from the same source, ensuring that everyone uses up-to-date information.
Stage three - Accessing information
With information collected and stored centrally, the next stage is to make this information
available to staff in the most useful format.
Stage four - Analysing customer behaviour
Using data mining tools in spreadsheet programs, which analyse data to identify patterns
or relationships, you can begin to profile customers and develop sales strategies.
Stage five - Marketing more effectively
Many businesses find that a small percentage of their customers generate a high
percentage of their profits. Using CRM to gain a better understanding of your customers'
needs, desires and self-perception, you can reward and target your most valuable
customers.

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Stage six - Enhancing the customer experience
Just as a small group of customers are the most profitable, a small number of complaining
customers often take up a disproportionate amount of staff time. If their problems can be
identified and resolved quickly, your staff will have more time for other customers.
Types for implementing CRM
The final way to implement CRM is to find a full-service vendor of customer-service

solutions, which might include phone assistance, e-mail handling, real-time chat and even
creation of a knowledge base for your site. If you outsource your CRM, then you won't
need any customer-service infrastructure, including customer-service representatives;
however, you will need to make sure that your marketing teams can access the business-
intelligence components.
 Purchasing or Licensing Software
Owning the software and running it on your own servers is ideal if you have highly
customized enterprise resource planning, or ERP, or order-management system, or OMS,
software. If you have third-party software for your back-office processes (accounting,
ERP, OMS, etc.) and your front-end systems (content management, merchandising,
checkout, personalization engine), then you should be able to find CRM software that
works with at least some of your systems without extensive customization. It's
unavoidable that you will have to do some customization, but, by working with vendors
that have partnerships and interfaces with your existing vendors and their software — or
with vendors that have partnerships with the ASPs that host your existing solutions —
you can keep customization to a minimum. Customization is not only expensive when
you first install third-party software, but it's also expensive every time you try to apply a
patch or an upgrade.
The advantages of purchasing or licensing the software and implementing it on your own
servers are that you have complete control over the software and over the data. There

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aren't any of the privacy issues that might arise from having your data residing with a
third party. If you already have a customer-service department with trained associates,
and you don't expect rapid growth — or you believe you're equipped to handle rapid
growth — then there's no point in paying to train CSRs elsewhere.
 CRM Via ASP
Only recently have CRM services become available via an ASP. There are two kinds of
ASPs providing CRM solutions. With one type, of which ShopTok is one example, the
ASP hosts its own CRM software. The other type hosts a best-of-breed third-party
solution. The disadvantage of the second type is that when something isn't working with
the software, you don't always know whether the problem rests with the ASP or with the
software, and you can't necessarily get it fixed. With ASPs that host their own software,
the vendor hears your requirements for new features and your complaints about existing
functionality.
When you work with an ASP, the first thing you'll want to know is the degree to which
you can customize the interface and the software so that your other business software will
talk to your CRM software. After all, your CSRs need to know what a customer has
purchased to handle inquiries from that customer, requiring integration between the
order-management system and the CRM system. If the customer database doesn’t talk to
the CRM system, then your marketing department can’t segment customers based on
purchases and use the analytical tools frequently built into CRM software to make
intelligent decisions on what kind of promotions to make to attract the highest-value
customers.
There are several advantages to either kind of ASP described above. First, the cost of
getting started is usually low — certainly much lower than the cost of implementing
software on your own servers. Second, the implementation time is usually short. Finally,
no additional infrastructure or support are required from your IT department. However,
some ASPs will tell you that they'll implement whatever CRM software you'd like (at
your expense, of course), in which case you don't get to take advantage of speed, reduced
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cost, or experienced tech support. Rather than choosing the software and the ASP
separately, let the software dictate the ASP you select.
 Outsourcing Customer Service
While you can outsource customer service, which is one component of CRM, you can't
outsource business intelligence, which is the strategic component of CRM. If you don’t
need to integrate with existing systems, or you only need limited integration, then the
fastest route to take is to outsource your customer service to a full-service provider who
will give you Web access to the business-intelligence tools. Most full-service customer-
service providers will work with the best-of-breed CRM vendors and offer you a choice
of CRM systems with which to manage your customers. Some are also willing to
purchase and install the CRM software of your choice on their servers, but be aware that
this will eliminate the advantage of a quick implementation, lower entry costs and CSRs
who already know the software. The cost associated with outsourcing CRM is usually a
significant startup cost for developing your materials, their training materials and your
knowledge base, then a monthly fee based either on the number of hours of CSR you
want available or on the number of calls/messages they receive for your site. The pay-as-
you-go model can be very attractive to smaller merchants. The ability to grow quickly
can be an advantage for any size Web merchant.
Critical Success Factors for Implementation of CRM Systems
Critical success factors have been defined as the elements that make a project a success,
and as the ‘events and conditions in a few key areas which absolutely must go right for
the business to succeed’. These include trust, effective communication, and top
management support. For this to occur, proper measurement tools and metrics must be
utilized to effectively control the project. The key CSF for CRM projects are:
 Key Stakeholder Support

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Support from all stakeholders in the organization, including top management and all
management levels, employees, government, suppliers, strategic partners, and
investors. Includes the timely reporting of the project status with accurate
information.
 Sufficient Resources
Resources of money, equipment and expertise available with appropriate support

structures in place. Includes time and budget allocations for training.
 Clearly Defined Objective
A clearly defined mission with a set of defined goals and objectives communicated to
all stakeholders through clearly defined communication channels, with alignment of
project and corporate goals. This is managed through a detailed project plan.
 Managing Change
Project changes are implemented through a formally defined process with appropriate
approvals sought. Any scope changes are mutually agreed and documented, with
appropriate analysis of resource requirements.
Challenges of CRM Implementation
Organizations face a number of key challenges in implementing CRM systems. These

include:
 Methodology driven by end users
IT personnel do not have knowledge or authority to influence corporate decision

makers
 Lack of executive sponsorship
CRM projects are mostly driven by a functional head, such as a VP or

sales/marketing, and rarely produce an enterprise view of customers

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 Lack of customer centric culture
An acceptable return on investment will no be achieved if the organization does not

have a strong customer centric culture
 Inappropriate design approach
CRM is designed to model a single functional view not an enterprise wide customer
view, resulting in failure
 Over automation
Focus on functionality and process design leads to highly automated business

functions Lack of network infrastructure Inadequate IT infrastructure and networking
facilities prevent the CRM from being implemented enterprise wide
As can be seen from the challenges faced, it is important for organizations to realize that
a CRM system implementation will only succeed when it is supported by a customer
focused organizational culture. The CRM system will be the main driver for a paradigm
shift, becoming an enabler for communication between the organization and its
customers, and within the organization itself.
Chapter 5:
CRM Related Concepts

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• Knowledge Management
Knowledge Management (KM) refers to a range of practices used by organizations to

identify, create, represent, and distribute knowledge for reuse and learning across the
organization.
Knowledge Management programs are typically tied to organizational objectives and are
intended to lead to the achievement of specific business outcomes such as improved
performance, competitive advantage, or higher levels of innovation.
While knowledge transfer (an aspect of Knowledge Management) has always existed in
one form or another, for example through on-the-job discussions with peers, formally
through apprenticeship, through the maintenance of corporate libraries, through
professional training and mentoring programmes, and — since the late twentieth century
— technologically through knowledge bases, expert systems, and other knowledge
repositories, Knowledge Management programs attempt to explicitly evaluate and
manage the process of creation or identification, accumulation, and application of
knowledge or intellectual capital across an organization.
Knowledge Management, therefore, attempts to bring under one set of practices various
strands of thought and practice relating to:
- intellectual capital and the knowledge worker in the knowledge economy

- the idea of the learning organization;
- various enabling organizational practices such as Communities of Practice and
corporate Yellow Page directories for accessing key personnel and expertise;
- various enabling technologies such as knowledge bases and expert systems, help
desks, corporate intranets and extranets, Content Management, wikis, and Document
Management.

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While Knowledge Management programs are closely related to Organizational Learning

initiatives, Knowledge Management may be distinguished from Organizational Learning
by its greater focus on the management of specific knowledge assets and development
and cultivation of the channels through which knowledge flows.
The emergence of knowledge management has generated new organizational roles and
responsibilities an early example of which was the Chief Knowledge Officer. In recent
years, Personal Knowledge Management (PKM) practice has arisen in which individuals
apply KM practice to themselves, their role in the organisation and their career
development.
Knowledge Management is a continually evolving discipline, with a wide range of

contributions and a wide range of views on what represents good practice in Knowledge
Management.
Knowledge Management Plays a Key Role in CRM Success
CRM and knowledge management (KM) were once considered entirely different
disciplines, with the two sharing little but perhaps the same data warehouse hardware and
a vague understanding that both efforts were meant to improve business efficiency and
customer satisfaction. It has become clear, however, that the two disciplines were really
working toward the same goal, and that to deliver continuous improvement to business
clients, they would have to start speaking the same language.
KM focuses largely on finding the right solution to a problem that requires detailed
insight, be it locating the right expert at the right time, or ensuring that the solution to a
complex problem can be written once but reused many times. It is not difficult to
understand why that capability is of great interest to CRM strategists. Industry estimates
suggest that upwards of three quarters of variable support costs come from the time and
energy put into the resolution of customer support inquiries, rather than routing and post-
call management.

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Better KM/CRM integration can help companies navigate complex support problems
more easily. Many manufacturers, such as computer companies, sell a single product that
may incorporate dozens or even hundreds of other components. Being able to cross-
reference the entire collected library for technical support and conflict resolution can
make the difference between first-call resolution and a lingering headache.
Many companies still have not attained the level of deep integration that ties knowledge
base activity (particularly at the self-service level) to a CRM-facing customer record, but
companies like computer peripheral manufacturer Adaptec use the intersection of CRM
and KM to guide product and service decisions and attempt to waylay customer service
overloads before they begin.
Conquering their own individual demons will not mean the end of the road for CRM and
knowledge management leaders, as they must join forces to realize even more value from
the spheres of customer and product knowledge.
• Regain Management
“The cost of acquiring a new customer is 9 to 12 times that of holding on to an existing

customer.” - Philip Kotler
Goal of customer regain management is to reinitiate valuable customer relationships,

which have beenalready terminated. Regain management has to detect such ‘lost’
customers, select valuable relationships and attempt to regain them in an effective and
effic ient way, for which a systematic process is necessary. Addition to this process
structure, there is an information base needed, which enables the exchange of collected
information along the customer regain process.
- An incentive strategy tempts to regain business relations by offering customers some
form of incentives like for example tickets for events, gifts and discounts.
- A compensation strategy aims to compensate some (real or perceived) disservices,
which as the motive for termination. For example the company could offer some form of
vouchers.
- A dialogue strategy tries to regain trust through a dialog (e.g. personal call).

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- A convincing strategy aims to persuade customers by means of use argumentations and

explanation of some product advantage.
• CRM in Supply Chain Management (SCM)
Supply Chain Management (SCM) is a business system of enterprise strategies, business

processes and information technologies for improving the planning, execution and
collaboration of material flows, information flows, financial flows and workforce flows
in the supply chain. SCM is supported by modular software applications that integrate
activities across organizations, from demand forecasting, product planning, parts
purchasing, inventory control, manufacturing, product assembly to product distribution.
In the context of SCM, where alliances and partnerships are keys to success, CRM plays
an important role in building long-term relationships. The success of relationships
depends upon sharing of savings from the supply chain, which may be reinvested to
further enhance its efficiency, and sustain the competitive advantage.
The supply chain of tomorrow will look like a virtual organisation, seamlessly integrated
through sharing data and savings as well. The bonding between partners will be closely
held by CRM practices.
Goals of SCM
- to reduce inventory cost,

- to increase sales
- to improve the coordination and the collaboration with suppliers, manufacturers and
distributors.
• CRM-ERP Integration
ERP’s foundation (which evolved from either manufacturing-based manufacturing

resources planning (MRP) applications and its later incarnation, MRPII applications), it is

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based on creating internally stable business functions and predictable process control.
The concept of ERP was the integration of all back-office functions so that the basic
problems responsible for interruptions and breaks in the processes were smoothed out and
the incompatibilities of the best of processes were smoothened and the incompatibilities
of the best-of-breed applications were eliminated or reduced. This doesn’t work with
CRM, which is external. How can you be in command of the processes when they are
based on your customers’ behaviour? Conceptually, one important reason for CRM is
real-time response to the constantly liquid-shifting of customer demands, which is not
controlled internally at all. It also means the psychology of the front-office is quite
different from the psychology of the back-office.
The simplest option is to hire a systems integrator to come in and integrate the systems.
However, the obvious hazard here is that they are not only dealing with ERP and CRM
applications they may not know much about, they are also dealing with your legacy
systems, which they know nothing about. But integrating all of that is what you could
hire the ERP vendor for and implement the ERP vendor’s CRM solution. But many of the
solutions remain vapourware or poorly integrated. The third solution is what many
companies are increasingly turning to Enterprise Application Integration (EAI).
EAI applications, previously known as middleware, can be the most cost-effective way of
integrating the back and front offices. EAI’s purpose is mainly to integrate data between
disparate applications that don’t natively speak with each other.
What is eCRM?
In simple terms, eCRM provides to companies a means to conduct interactive,

personalised and relevant communication with customers across both electronic and

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traditional channels. It utilises a complete view of the customer to make decisions about
messaging, offers, and channel delivery. It synchronises communications across
disjointed customer-facing systems. It focuses on understanding how the economics of
customer relationships affect the business. Advocates of eCRM recognize that a
comprehensive understanding of customer activities, personalization, relevance,
permission, timeliness and metrics is a means to an end optimizing the value of your most
important asset: your customers.
For Fortune 500 companies, evolving to eCRM requires process and organisational
changes, a suite of integrated applications and a non-trivial technical architecture to
support both the eCRM process and the enterprise applications that automate the process.
Mid-size companies may benefit from less sophisticated and easier-it-implement (and
affordable), hosted solutions offered through Application Service Providers. But
regardless of the size of the firm, you have no choice but to evolve to eCRM quickly.
eCRM v/s CRM: The Differences
Being able to take care of your customer via the Internet, or, customers being able to take
care of themselves online: That’s the difference between CRM and eCRM. It implies a
myriad of issues, questions, approaches, technologies, and architecture that are different
from client/server-based CRM. Many of them are issues general to the Internet. Others
are issues related to the creation of applications for the Internet. The third group is related
directly to eCRM and its actual value to business.
Companies agree that eCRM is critical to their business, but unfortunately very few
understands exactly what it is or how to evolve from their existing database marketing
practices to an eCRM solution.
Basic Requirements of eCRM or Six “E” of eCRM
• Electronic Channels

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New electronic channels such as the Web and personalised eMessaging have become
the medium for fast, interactive and economic customer communications, challenging
companies to keep pace with this increased velocity.
• Enterprise
Through eCRM, a company gains the means to touch and shape a customer’s
experience across the entire organization, reaching beyond just the bounds of
marketing to sales, services and corner offices – whose occupants need to understand
and assess customer behaviour. An eCRM strategy relies heavily on the construction
and maintenance of a data warehouse that provides a consolidated, detailed view of
individual customer behaviour and communication history.
• Empowerment
In this new age, eCRM strategies must be structured to accommodate customers who
now have the power to decide when and how to communicate with the company and
through which channel, which ability to opt for or out of. Consumers decide which
firms earn the privilege to “talk” with them.
• Economics
Too many companies execute communication strategies withlittle effort or ability to

understand the economics of customer relationships and channel delivery choices.
Yet customer economics drives smart asset allocation decisions, directing resources
and efforts at individuals likely to provide the greatest return on customer
communication initiatives.
• Evaluation
Understanding customer economics relies on a company’s ability to attribute

customer behaviour to marketing programs. A company should evaluate customer
interactions along with various customer touch point channels and compare
anticipated ROI against returns, through customer analytic reporting. Evaluation of

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results allows companies to continuously refine and improve efforts to optimise

relationships between companies and their customers.
• External Information
The use of consumer-sanctioned external information can be employed to further

understand customer needs. This information can be gained from sources such as
third-party information networks and Webpage profiler applications, under the
condition that companies adhere to strict consumer opt-in rules and privacy concerns.
The Need to Adopt eCRM
Companies need to take firm initiatives on the eCRM frontier to

• Optimize the value of interactive relationship.
• Enable the business to extend its personalized messaging to the Web and e-mail.
• Co-ordinate marketing activities across all customer channels.
• Leverage customer information for more effective eMarketing and eBusiness.
• Focus business on improving customer relationship and earning a greater share of
each customer’s business through consistent measurement, assessment and
“actionable” customer-contact strategies.
Chapter 6:

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Problems and Drawbacks
There are several reasons why a customer relationship management (CRM) solution
might not have the desired results.
There could be a lack of commitment from people within the company to the
implementation of a CRM solution. Adapting to a customer-focused approach may
require a cultural change. There is a danger that relationships with customers will break
down somewhere along the line, unless everyone in the business is committed to viewing
their operations from the customers' perspective. The result is customer dissatisfaction
and eventual loss of revenue.
Poor communication can prevent buy-in. In order to make CRM work, all the relevant
people in your business must know what information you need and how to use it.
Weak leadership could cause problems for any CRM implementation plan. The onus is
on management to lead by example and push for a customer focus on every project. If a
proposed plan isn't right for your customers, don't do it. Send your teams back to the
drawing board to come up with a solution that will work.
Trying to implement CRM as a complete solution in one goes is a tempting but risky
strategy. It is better to break your CRM project down into manageable pieces by setting
up pilot programs and short-term milestones. Consider starting with a pilot project that
incorporates all the necessary departments and groups but is small and flexible enough to
allow adjustments along the way.
Don't underestimate how much data you will require, and make sure that you can expand
your systems if necessary. You need to carefully consider what data is collected and
stored to ensure that only useful data is kept.

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You must also ensure you comply with the eight principles of the Data Protection Act
that govern the processing of information on living, identifiable individuals. For more
information, see their guide on how to comply with data protection legislation.
Avoid adopting rigid rules which cannot be changed to be more flexible to the needs of
individual customers.
Reasons for CRM Implementation Failure
An understanding of the challenges and critical success factors is paramount to project

success. In this way, the organization is aware of those factors by which success can be
measured, and will ensure the CRM system is implemented in a manner to satisfy all
stakeholders. The main reasons for CRM failures include:
 Customer focus
Organizational culture is not customer focused, with limited involvement of customer

facing personnel in the design and implementation phase
 Organizational Management
Lack of support and understanding form senior management, lack of CRM

understanding, lack of communications and changing business needs
 Project Management
Misalignment between project and business requirements, with unrealistic goals,

timelines, coupled with a lack of planning and insufficient reporting and control
 Team Members
Lack of support, incentives, and lack of technical knowledge
 Data & Warehouse Requirements
Poor quality data, inconsistent data between different systems

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 Technical Factors
Short term solution focus not aligned to long term architectural infrastructure growth,
no prototyping or testing, misunderstanding technical requirements.
CRM is failing because the correct capabilities are not being built at the enterprise level.
The requisite changes in organizational culture, behavior and attitude are not being
implemented. Overall, in failed projects, there is little or no alignment between
stakeholders on success criteria, critical success factors, performance metrics, project
drivers, nor on the dynamics of how these parameters may change over the project life
cycle. The requirements of the customer are either misunderstood, or not taken into
account. The result is an inconsistency in focus, with less than optimum system design
and implementation.
Hence CRM is failing due to two primary reasons: a) technical; due to the size,
complexity, and lack of knowledge of technology, and b) human behavior; due to general
change management issues in the organization. What is required is a coherent, all
encompassing strategy that focuses on key stakeholder requirements. Companies
underestimate the complexities of CRM projects, lack clearly defined business objectives,
and tend to invest inadequately in the provision of CRM software.

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Chapter 7:
CEM: Future Concept
Customer experience management (CEM) is "the process of strategically managing a

customer's entire experience with a product or a company"
Marketing research has shown that about 70 to 80% of all products are perceived as
commodities that are, seen as being more-or-less the same as competing products. This
makes marketing the product difficult. Marketers have taken various approaches to this
problem including: branding, product differentiation, market segmentation, and
relationship marketing.
Relationship marketing, (also called loyalty marketing) focuses on establishing and

building a long term relationship between a company and a customer. There are several
approaches that have been espoused including customer experience management,
customer relationship management, loyalty programs, and database marketing.
CEM's critique of traditional marketing
The development of customer experience management originally started with a critique

of three existing marketing concepts. It concluded that the following three concepts do
not go far enough:
• Marketing concept--Since the 1970s there has been a gradual shift from a
product-, technology-, and sales-focused orientation towards a customer- and
market-oriented approach by determining the wants and needs of customers and
satisfying them more efficiently or effectively as compared to competitors.
However, the approach is still mostly functional, with similarities and differences
between competitors being defined mostly by product features and customer
benefits. In addition, the customer is perceived as being rational, which is in most
cases not the case, as e.g. Kahneman and Tversky's Prospect theory has proven.
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Also, it is asserted that market research is mostly analytical leaving little room for
qualitative assessments of customer relationships towards products, services, or
brands. It is claimed (by Shultz) that traditional marketing, in practice, takes an
inside-out approach (starting with internal variables like production capabilities
and available capital then moving to external variables like customer needs),
rather than taking an outside-in approach as marketing theory requires.
• Customer relationship management is claimed to be deficient because it primarily
consists of database and software programs used in call centers and thus, focuses
too much on quantitative data. By doing this, it is led by transactions rather than a
desire to build lasting relationships with customers.
• Customer satisfaction is an outcome-oriented attitude deriving from customers
who compare the performance or value of the product with their expectations of
it. It is claimed that the customer satisfaction approach depends too heavily on
outcome oriented measures like satisfaction and too superficially on direct
experiential measures. A customer is said to be satisfied when a product's
performance is above the customer's expectations. Thus, traditional customer
satisfaction techniques are deficient if they don't help firms to understand and
manage customers' experiences, experiences that lead to the following equation:
good experience = satisfaction.
CEM recognizes, as does all of marketing since the early 1970s, that customers are a
company’s most valuable asset. What makes CEM different from traditional marketing is
that it claims that marketing theory has seldom been implemented adequately.
Although all marketing management and strategic management does all of these, CEM
supporters claim that they have a methodology that will yield better results. Being
convinced that the marketing concept is too product-centered, Customer relationship
management too focused on quantitative data, and customer satisfaction too functional,
CEM looks for another perspective on the relationship of a consumer with a product or
service. And what's key? The experience linked to it is the key. This enables companies

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to strategically manage a customer's experience with a brand and by doing so, achieve a
truly customer focused management concept.
The CEM Framework
Schmitt's book "Customer Experience Management" offers the following five step
framework that should help managers understand and manage the "customer experience":
Step 1: Analyzing the Experiential world of the customer
• analyze socio-cultural context of the customer (needs/wants/lifestyle)

• analyze business concept (requirements/solutions)
Step 2: Building the Experiential platform
• connection between strategy and implementation

• specifies the value that the customer can expect from the product.
Whereas steps 1 (Analysis) and 2 (Strategy) form the basis for CEM, steps 3, 4, and 5
are focusing on Implementation.
Step 3: Designing the Brand experience
• experiential features, product aesthetics, “look and feel”, e.g. logos
Step 4: Structuring the Customer interface
• all sorts of dynamic exchanges and contract points with customers

• intangible elements (i.e. value, attitude, behaviour)
Step 5: Engaging in Continuous Experiential innovation
• anything that improves end customers' personal lives and business customers'
working lives

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And finally, to bring all pieces together, a holistic approach is required that provides a
linkage between the different steps and connects them with the organization.
How Does CEM Technology Work?
CEM Technology captures customer experience information across all customer touch
points and feeds it back to the organization so that action can be taken to improve
profitability. At the beginning or end (or both) of an interaction, and within context, the
customer is invited (automatically or manually) to provide their perspective via four or
five short questions. Done properly, this process will result in better than 80% customer
participation and have a measurably positive effect on customers.
Whether phone, email or Web channels, the experience information is collected within
context of the interaction. The questions that are delivered to the customer are specific to
that interaction type; the people, products, and processes that were a part of the
interaction; and the customer. The questions are also conditional in nature and facilitate
both quantitative as well as qualitative experience information.
CEM Technology accesses existing CRM data, productivity metrics, and incorporates
key information related to customer behavior and profitability. Information such as
retention rates, average purchase amounts, store sales, complaint and resolution rates,
customer segments, etc. are all combined with customer experience information and
analyzed/reported in real-time. The strength of a CEM system is in its ability to
continually align company performance with customer needs and behaviors, enabling
companies to make effective, correct, and critical day-to-day adjustments in resource
allocation and execution — as well as enterprise-wide shifts in strategy.
Customer Experiences can be categorized into three unique states. The state of the
customer experience has implications on the type of information to communicate with

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and collect from customers. The three states of Customer Experience are: Normal
Experience, Critical Experience, and Unique Experience.
Fig. Managing Customer Interaction
CEM Versus CRM
Managing customer experience is a subject of lip service at many companies; contact

centers learning that it's about more than efficiency
Despite some confusion and marketing spin though, customer experience management
(CEM) is emerging as a way companies can look in their own back yards to leverage

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CRM for qualitative as well as quantitative insight into interactions that improve
opportunities for customer loyalty and new sales.
CRM starts with vision and strategy. The next layer down is collaboration and valued
customer experience. You can't have CRM unless the organization works well together,
and you can't have CRM unless you create a great customer experience. So CEM is a part
of CRM, it's not separate and distinct.
Caching the Experience
If you've ever heard a voice say, "This call may be monitored for quality assurance."
you've been part of the CEM experience. As it applies to the contact center, CEM is about
capturing (recording) interactions between agents and customers and applying business
rules to them.
Initially, CEM was used as a coaching and training tool, game film of how we did and
how we can improve. It's more multimedia now. CEM is still important to trigger gap-
training or e-learning sessions for agents, though newer goals of up-selling, cross-selling
and surveying are also at work. CEM solutions like Witness or NICE integrate with CRM
applications like Siebel, or with case management products like Remedy. Contact center
agents listen to a call and appropriately enter keywords like "cancellation" or a product
name into the CRM system; business rules trigger the CEM system to digitally record and
file the conversation for specific owners like product or marketing managers. Alerts can
be sent, or files can be listened to at their owners' leisure.
Toni Portmann is president of Spectrum Contact Services, a Texas-based outsource

service provider that manages one million calls per month for large software firms and
ISPs. Spectrum uses CEM technology from NICE Systems. While the contact center
might deal in hundreds of products, a query lets managers tap a single point of interest
and monitor the recorded calls. Training and supervisory review of calls helps team
leaders spot opportunities for agents to use the inquiry to increase loyalty. While some
customers are reluctant to be up-sold or surveyed, indicating interest in another product
or service. That means relationships should be built on a proper foundation that brings the
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customer into the discussion. "He doesn't want to be polled every day, let's start with
listening. When he calls, he's the best consultant you can get and it's free."
The Reluctant Customer and Self Service
Cost management benefits of CEM are clear, but when customers call a contact center
about a problem with a product or service, do they really want to be polled or up-sold?
It's funny, there are almost two major groups of people, one that doesn't mind being
interviewed, and the other that just wants to get off the phone.
Having figured out that CEM is a process and not just technology, companies are doing a
better job of fusing marketing automation with CEM. "Imagine if you called upset, and
your problem was resolved and now you are pleased, At that point, if a supervisor says,
'We really don't want this to happen again, would you mind if we ask you a few
questions?' they might get valuable information they'd never get from self-service."
Meanwhile, in the name of efficiency, companies are increasingly offering voice and
Web self-service, which by definition involves no agent participation. This may be fine
for checking a balance or buying a book or plane ticket, but often enrages customers
faced with deeper service or product needs.
BMW just started charging $5 to people who preferred to talk on the phone rather than
use self-service. Efficiency is a strategy, but don't then expect the customer to pay a
premium for your service. Efficiency equals customers judging you on price and it will
take you downhill. If customers escalate the problem, it just goes to the more expensive
contact center channel anyway.

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Chapter 8:
CRM in India
Software is to India what oil was to Gulf. It is therefore no surprise that the Indian
companies are jumping into the CRM bandwagon to seize a chunk of the global market,
both products as well as services.
With is vast talent pool; India is fast becoming an important development base of major
CRM companies. This trend is likely to increase in the future. Call centers, catering
primarily to the American and European markets are coming up in and around the
metros. With the easing of infrastructure constraints, India is likely to emerge as a
significant player in this segment.
Companies in India are realizing the need for RM and some of the forward-thinking ones
have been strategically investing in CRM initiatives and relate activities. Even though,
some industries like steel, aluminum and cement could get by without any active
customer management, they realize that is now all history and that they have to do
something to create and build relationships.
So the awareness of CRM there. The first steps have been taken by many. The question is
whether you want to compare CRM programs of Indian companies with the standards
and best practices of players like Ikea and Marriott who have been torchbearers in this

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field. India has a long way to go. Indian companies would do well to realize that CRM
cannot be delegated to the marketing department.
It has to be whole revolution within the entire organization. The entire organization from
the chairman to the doorman has to be galvanized to become a customer-oriented
organization. It’s about training, learning, reskilling and the ability to adapt that will
distinguish the laggards from the winners. It needs a CEO who walks the talk, in other
words CRM is an absolute necessity now for the smallest kirana store to a large player
like Ambuja Cement. One has 200 customers and the other 2000 customers. But both
can’t afford to lose even a single of their customers, because the cost of creating a new
customer is 5 to 10 times more than the cost of retaining an old, good customer. CRM is
now an integral part of organizational strategy and overall business objectives.
Has CRM in India been reduced to an empty buzzword that’s tossed around so that a
company appears to be keeping up with the industry? Not entirely, because organisations
like Standard Chartered Bank, ICICI Lombard, BPL Telecom and Air-India have
successfully used these tools—and benefited. The difference lies in the way CRM has
been deployed at these organisations. It is a combination of technology and process
change that has worked.
Adoption of CRM by Indian companies is at an infancy stage. The CRM enabled

companies include Modi Xerox, Tata Telecom, TVS Electronics, HP India, Tata Infotech,
Carrier Refrigeration, Tata Teleservices, Satyam Infoway, Planet M, and Epicenter
Technologies among many others.
India even has a CRM Foundation in New Delhi, founded with the purpose of assessing
and improving CRM practices. Founding members include Tata Telecom, Escotel, Modi
Xerox, Global Groupware, AC Nielsen, Carrier Aircon, and Motorola India, among
others.
Outsourcing CRM back offices. India is growing to be the back office of the world, and
many Indian companies are managing CRM operations for Fortune 500 and medium-

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sized companies in USA and Europe. Now that the outsourcing market is mature, Indian
companies may also begin to outsource for cost reduction.
BPO’s in India
The business process outsourcing industry in India has grown by leaps and bounds and as
its size increases so does its competitive advantage. Compared with 1996 when this
Industry had started inroads into the United States with Outbound Telemarketing
campaigns, today the vehicle for these calls-the internet has become cheaper and more
reliable for the average Indian business.
The business has boomed to the extent that many people are now running BPO’s out of
their cyber cafes and houses in New Delhi.
The sector witnessed considerable activity during 2004-05, including a ramping up of

operations by major Indian and MNC players and stepped up hiring. The domestic BPO
market, catalyzed by demand from the telecommunications and BFSI segments, matched
the growth of BPO exports. The market experienced maturity and consolidation, a result
of numerous mergers and acquisitions taking place within the sector. There were over
400 companies operating within the Indian BPO space, including captive units (of both
MNCs and Indian companies) and third-party services providers.
The Indian BPO industry remains on a growth path, emerging as one of the key
investment markets in the country.
BPO is one of the greatest global forces for improvement today. CRM outsourcing
providers alone have a $30 billion market opportunity, and businesses that capitalize on
the potential cannot only reduce cost, but also increase productivity and raise revenue
significantly.
BPO began as a way to significantly reduce labor costs for low-value or transaction
activities (e.g., help desk calls, bill payments), but now, it's emerging as a way to deal
with higher complexity, value-added activities. However, few companies have realized

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the full range of benefits that BPO offers. To capture these benefits organizations need to
do two things: outsource to improve productivity (not just costs) and cost-effectively
identify emerging revenue opportunities.
Chapter 9:
Case Studies on CRM
1. Hewlett Packard – Computers and IT sector
Traditionally, HP would begin implementing a new CRM system by starting with a

strong focus on systems design and functional specs. But when they set out to implement
in Japan as part of their efforts to make the company's CRM systems operate globally,
they recognized it wouldn't work that way.
The sales support operations manager, Kozo Sekino, who was their local eyes and ears
with the sales and marketing groups in Tokyo, pointed out that the Japanese work better
by being included in the business process definition early on. If HP strongly involves
management and multiple audiences along the way, it ensures that in the end they have
maximum buy-in to the true business changes that need to occur. And then they realized
that they needed to do the same for other countries—without sacrificing the global
standards HP aims to institute based on their long-term strategy.
Resistance

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Globalization meets resistance in many ways. For CRM, it usually arises through the
local sales and marketing organizations such as their Japan country teams, who, for good
reason, are concerned that their ability to meet customer needs may be hampered by an
overzealous and globally-driven standardization effort. Oftentimes, highly customized,
local solutions make the implementation of globally consistent business processes more
challenging.
HP, where Mike Overly has been for more than 20 years and Johannes Beirmann has
been for 10 years, has overcome some of the unique challenges an American-based
company regularly faces when aiming for global standardization of business processes
and IT infrastructures. As a whole, the company has always been intent of reducing cost
to stay competitive. In today's landscape, that requires trade-offs between global
standardization and local needs. The IT infrastructure has become the notable beneficiary
of the CRM effort: Global standards allow for much simpler IT environments and the
retirement of a vast number of dispersed assets.
What is so unique about being an American-based company and how does this affect a
CRM implementation outside the United States? Consider these three problematic
characteristics and how HP handled them:
• American companies are not anxious to spend much time on planning and
implementing an agreed-to business process or solution. They want to see
immediate results pertaining to the defined change, particularly from a financial
perspective.
Yet, when you're implementing a solution in another country, you must be adaptive
and culturally sensitive. In Japan, they recognized that all due diligence to the point of
"pushing the button to be online with CRM" had to be done prior to the meeting with
the top sales executive. Their usual order of implementation began with executive
meetings to launch the effort. They reversed that in Japan.

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It took them about nine months to agree on the roadmap for Japan and set the "go-
live" day—a real challenge for their deployment team. The benefit, however, was an
explicit statement by the leaders that committed all management levels to the
importance of utilizing CRM once they did deploy.
Since January 2006, they have seen a tremendous business being managed through
the new solution environment, using global standard processes in sales across field
and inside sales. Every sales rep in Japan now uses the CRM system, both for field
and inside sales, which was not the case before.
• American companies tend to struggle to find the right regional balance for
common standards. One example is the stricter and varying customer privacy
standards in different countries. But you can find this struggle in business processes
as a whole. For example, should HP follow the same selling methodology in Japan
that it does in Canada?
To address this, they gathered feedback from top executives, specifically including
the regional sales and marketing managers in this process, something that had not
been the case in earlier efforts. They also formed a permanent governance structure
with and strong regional representation.
A global team at HP designed the future-state global business processes. They

developed a common account planning and selling methodology by including as
many regional people in the planning as they could.
Japan team members from sales and marketing took part routinely in key global
workshops well before they even made it to the hot implementation phase in Q4 of
2005 by adding their valuable inputs into the business process design. High personal
buy-in proved the case—although it was not an easy achievement, given the
continuous involvement of hundreds of decision-makers and subject matter experts.
"Global Process Consistency" was initially just the project name. It has since become
the unspoken and guiding principle for the effort. Go to Japan, and you will find that

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"GPC" is almost like a "rallying cry." The end result was considerable cost reductions
in the IT infrastructure, as they consolidated and eliminated redundancy and increased
productivity for both sales and marketing.
• American companies don't integrate non-technical resources consistently.

Despite the fact that American-based companies know the importance of managing
the organizational and people-related transitions associated with a changed—and
usually more integrated—CRM environment, there is often a false focus on technical
deployment.
HP put a real focus on process adoption. It led them to have task forces dedicated by
region—and in some cases by country—to securing not just technical deployment but
also adoption of the CRM system. In Japan, they formed an extended task force that
dedicated substantial time to the implementation. It included representatives from
their call center in Fukuoka, field sales personnel in the local enterprise group and
marketing managers from three business groups. They complemented these with
resources helping the prospective end-users with the organizational readiness.
Top-level executive commitment is a must-do, but the real work is to engage first-level
sales and marketing users in regions and country field organizations; explain the business
value of CRM in simple terms; and engage them through workshops, posters or video
messages to their staff. That is exactly what Hewlett Packward did in Japan—and what
they do in other countries across the world.
Hewlett Packard: Enterprise-Wide Solutions on a Global Scale
While the company set out to improve a variety of business issues with CRM, its
overarching goal is to provide a best in class customer experience. With customers
ranging from the largest companies in the world to small mom-and-pop operations, HP
has a lot of customers to satisfy. Combine this with the fact that the company is rolling
out its CRM program worldwide, and the program's magnitude only begins to hit home.

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What They Did:
Mike Overly and his HP CRM team weren't naïve. They knew that in order to deploy a
global CRM solution, they needed to influence the entire organization. Reporting directly
to the President of HP's consumer business unit provided the team with the clout and
visibility it needed to gather consensus from a range of different corporate functions,
from the sales organization to marketing to the company’s myriad call centers. The
mantra sung by each organization is the same: To manage the total customer experience.
HP's initial CRM effort focused on the organization that touches the customer most: The
sales force. Its goal was to provide the company's global sales force with an automated—
and standard—way to perform contact management and account planning. While the
initial functionality was classic sales force automation, the hurdles were high. Everyone
had their own rules and guidelines about managing their customer activities, but what
makes a customer happy is pretty universal.
The company chose a CRM solution from business partner Oracle, and has deployed the
Oracle Sales Online product to customer-facing employees around the world with more
on the way. By integrating customer activity data in an Oracle "customer master"
database, HP can provide a remote salesperson with the ability to track a customer's
activities across organizations. For instance, a salesperson can find out which of his
customers have contacted the company's help desk, or call up information about the latest
marketing campaign and its primary channels. Indeed, Overly's CRM team has made the
ability to share information about customer touch points across organizations a key CRM
success measure.
HP is gunning for even bigger improvements, such as dynamic personalization for Web
visitors and automatic lead routing from marketing to the internal sales staff and HP
partners. Over time, both headquarters and field staff will have access to a range of
customer information and history on both corporate and local Oracle databases. The goal
is to establish an ongoing dialog with customers so that customers will gain greater
control over their relationships with HP.

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Standardizing CRM corporate-wide has meant phasing out numerous legacy systems.
Data, business processes, and technologies that are customer-related will slowly be
merged with the current CRM program, driving cost savings in the millions of dollars.
The Challenges:
Deploying CRM worldwide has its trials. No matter where they are in the world, sales
reps share the goal of being as productive as possible. However, every sales person has a
preferred way of getting the job done. Overly and his team have had to surmount habits
and assumptions that are often not only organizationally entrenched but cultural. They
were no longer talking about a personal productivity tool, but about an HP solution.
Since Oracle's CRM environment is based on portal technology, sales people can
customize their interfaces to include client information and contact activities as well as
data from external news sources and the global financial markets. The company is
delivering Web-based CRM training in order to educate staff on how to use the Oracle
CRM technology and apply it to their specific job functions. While most of the training is
conducted in English, the company offers localized Web courses in native languages to
several countries including Korea and Japan.
Another challenge has been rendering ongoing management sponsorship and

involvement as painless as possible for HP's busy executives. Besides establishing
ongoing CRM performance measures, the Change Manager is chartered with developing
and tracking all project communications, including internal communications across HP
such as guiding executives in communicating new customer-focused policies.
Good Idea:
From the beginning of the CRM initiative, Overly’s team shrewdly steered away from the
point solution approach, preferring instead to expend the extra time, money, and internal
education necessary to deploy enterprise-wide CRM. This meant organizing CRM
development around so-called "vertical silos" representing various corporate functions

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such as internal sales, marketing, and customer service. The CRM team members for
each vertical silo work with the executives in related business organization, as well as
with a CRM manager who's responsibility is to integrate each independent effort into the
corporate-wide CRM program.
This approach of uniting vertical efforts with horizontal standards not only avoids
development in a vacuum, it ensures that CRM business processes, technologies, data,
and implementation methods are consistent across the company.
Overly advises others who may be deploying CRM on a similar global scale to be
mindful of three success metrics:
1: Obtain sustained executive presence, meaning that executive leadership must be

engaged throughout the CRM lifecycle.
2: Always keep one eye on today's problem, and the other on tomorrow's problem.
3: Ensure change leadership, with emphasis on the word leader. "Every day there's a new
challenge—you need someone who has a good understanding of the problem and the
authority to fix it."
The Golden Nugget:
While HP has committed to three primary measures—increased revenue, decreased costs,

and improving the total customer experience—measurement, like the CRM program
itself, is ongoing. Measurement results might dictate a range of business changes, such as
changing sales compensation levels to rely less on customer revenues and more on
customer satisfaction. The CRM team considers customer survey data to be a primary
measurement source.
For a multi-disciplinary technology conglomerate like HP, deploying a global and

interdisciplinary CRM program could take years. With such a high-visibility
commitment, not to mention the complexity, executive involvement, and process

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changes, it’s noteworthy that it took the initial SFA application months, not years, to be
released to its global business users.
How can a company of HP's size be so nimble, yet so visionary? HP Team would politely
reiterate: "We're in the solutions business."
2. Bharti Tele-Ventures – Telecom Sector
Bharti Tele-Ventures is one of India's leading private sector telecom operators. Its
cellular business, AirTel, is a leading mobile telephony brand. Like any Telco, Bharti
considers information technology a key business enabler. For telecom, IT is like bread
and butter. Bharti believes it plays two significant roles-it works as a support system, and
it can also be a business driver. Thus IT is very important to Bharti. It had a WAN in
place with a mix of leased lines and E1 and E3 lines. The company also has an extranet in
place through which it extends different applications to its dealers and partners. Bharti
have an extremely large infrastructure based on products from multiple vendors. This
includes a range of high-end servers from Sun and HP. In the telecom business volumes
are very large. They have millions of records and process them everyday, so for them
storage is in terabytes.
Bharti also has a storage area network (SAN) in place. The main data centre is located in
Gurgaon, Haryana. As far as software is concerned, some of the applications that are
running on its network are billing, fraud management, revenue assurance and data
warehousing. They also have some internal-facing applications like Oracle Financial and
Oracle HRMS.

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The case for CRM
Initially, when Bharti started operations, the whole system was run manually. At that
point of time only 40 percent of their customer issues were getting resolved-this has now
gone up to about 90 percent.
It is vital for them to manage the expectations of their customers and provide them with
innovative products and services in a manner which makes them loyal. To achieve this,
Bharti needed the right tools. It is this need that made them opt for a CRM (customer
relationship management) solution.
Cherrypicking a solution
Today Bharti is using the Oracle CRM platform. As part of their vision, they intend to
provide AirTel services anywhere and at any time. A customer should get the same
quality of service no matter which of their call centres he contacts. This has been their
vision, and because of that they have gone in for a centralised application like CRM.
Before choosing its CRM tool, Bharti evaluated many options. It considered factors like
proper workflow automation, facilitation of knowledge sharing, and integration with the
billing system. After a thorough evaluation exercise, it decided to go ahead with the
Oracle CRM platform.
Roll it
After starting its services in Delhi, Bharti acquired many circles and sought new licences
in other circles; whenever they got a new licence, they implemented the CRM tool
immediately. But they had to put in a migration strategy in those acquired circles which
had an existing subscriber base. The migration had to be done in such a manner that the
existing customer base did not suffer. The goal was that all the circles would go live by
the first quarter of 2004.

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The biggest challenge for Bharti was to have a unified process in place. Once this was
done they faced the challenge of imparting training. When they went in for such a large-
scale implementation they faced problems. They also had certain technical difficulties
during implementation, but they were able to overcome them.
The CRM strategy at Airtel revolves around two aspects: operational CRM and analytical
CRM. The first is about helping their call centres in the workflow part, helping them in
their day-to-day activities. The second provides staff with the required information on
customers; this is used for business development activities. Together they help Bharti
provide better services to its customers.
Tailor-made schemes
One of the primary things that Bharti has done with CRM is segmentation of customers,
which has helped in providing customers more value for their money. It was important to
understand and segregate customer needs depending on the product and services he is
buying. One of the primary things that Bharti have done in this solution is the
segmentation of customers. With this, AirTel is now able to give its customers more
value for money. With the help of CRM, they are able to provide customers different
schemes and services depending on airtime usage. If the customer is a heavy user then
they have some specific schemes; for normal users they have other schemes. Apart from
this, they have also managed to segregate their workflow with the help of the CRM tool.

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3. Pfizer – Pharmaceutical sector
Competition is forcing pharmaceutical companies to look at marketing as a key

differentiator. Pharmas are working at maintaining an active field force that targets
doctors one at a time as the most economical means for creating awareness.
While most companies have a scientific approach to this activity, some who have
automated it to a large extent have found that their IT systems have brought substantial
returns to them. Pfizer is one of the few pharmas to adopt a home-grown Customer
Relationship Management (CRM) software solution to catalogue all data pertaining to its
sales force.
.Net Platform
In 2001, the Indian wing of Pfizer perceived that the deployment of a sales reporting
system would ensure structured documentation of information collected by its
representatives. It will also help in cases of attrition where if a sales representative quit
another could take over easily with the help of the information available online.

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Each representative has about 200 doctors on his list. The doctors are classified by
priority. However, being an A-class doctor does not mean that the representative will
make 10 calls to him every day.
The nine-member IT team at Pfizer designed Optima to fulfil this need. Over the past
four years, the system has been overhauled considerably, and today it is a full-scale CRM
solution coded on the Microsoft .NET platform. The CRM application runs on Windows
2003 and SQL Server that is primarily accessed over the Internet and is hosted at a third-
party IDC.
One-Stop-Shop
The first step to any CRM implementation is collection of extensive and clean data. At
Pfizer that is taken care of because all data input is checked as per predefined business
rules before it is entered into the system.
Basic information captured in the Pfizer CRM includes doctors’ and chemists’ profiles.
In the case of doctors, based on the data entered into the system, the sales team can
determine what kind of prescriptions the doctor generates, the profiles of the patients that
he treats, whether or not he is price-sensitive, and how quickly he prescribes new drugs.
In addition to that the system captures data with regard to the associations or societies the
doctor is a part of, and the events he attends. If the doctor participates in public forums
the Pfizer CRM captures whether or not the doctor is an opinion leader. The information
in the system is reviewed on a regular basis to check for new entrants as well as pattern
changes in different areas.
Similarly for the chemists, the CRM captures the profile and buying power of a chemist’s
customers. The system has two advantages. Since it is based on the combined
information on the doctors and chemists in a particular locality, it is easy to identify
markets that will have good returns.
The second benefit is that the CRM helps predict the stock requirement pattern. The
company can therefore manufacture, stock and transfer the right amount of drugs to the
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market just-in-time so as to minimise storage space and lessen the chances of wastage
from damaged or expired products. Improved response to customer queries is another
advantage that is derived from Optima.
Different people have different requirements from the system, so the information the
CRM returns is based on need. If a representative works in North-east Mumbai, he has to
know which doctors can be targeted. The system generates a list of doctors in the area
with ratings and the expected frequency of visits.
The CRM system also helps provide market intelligence on competitors. For example, if
a Pfizer representative pays a visit to the doctor, while waiting he may meet his
counterpart from another company and can feed in the information he collects. Or if sales
personnel come across schemes being run by Pfizer’s competition, the information is
keyed into the system. The product management team can then start using the
information to provide business intelligence. Planning and reporting the key Sales Force
Automation features have improved analysis capabilities with regard to field force
activities.
Regular Updation
As part of technology upgradation, the system is updated every five to six months with a
clear business objective. Perhaps that is why Pfizer has not invested in a system that
allows input on the fly.
The information gathered needs to be consolidated and analysed for business decisions.
Hence, whether the sales force feeds in information at the end of the day or every few
days does not make any difference. According to the company, the system is yielding
good returns in the present format, but may not be feasible for mobile devices.
Pfizer has reserved its CRM for the sales force. One section on the Pfizer India Web site
has been enabled for doctors to log in and post queries and concerns. Even so, the
company has noticed that instances of Indian doctors approaching the company via the

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Internet is limited. In most cases it is the company representative who has to be on his
toes and deliver to the expectations of the doctors.
For adverse reports, Pfizer has manned telephone numbers on which doctors can call. The
call operators or representatives who gather the adverse report feed it into the system and
the problem is highlighted till it is resolved. The entire process is documented in the
CRM.
User Buy-In
At Pfizer, the IT budgeting has provisions only for the infrastructure. To ensure that there
is business and user buy-in, the company works on a model wherein the department that
requires IT budgets for it. For example, the marketing department pays for CRM and HR
buys software to automate salary calculations. Even the maintenance budgets for IT are
taken care of by the respective departments. This ensures that the systems installed are
used to the maximum.
To ensure that every solution caters to a specific business need, Pfizer maintains a small
IT team comprising mainly project managers (with experience in the pharma business)
and technology specialists. The in-house team that architects the solutions is limited to
nine people. A large part of the technical work is outsourced.
To ensure that there is business and user buy-in, Pfizer works on a model wherein the
department that requires IT bud gets for it. For example, the marketing department pays
for CRM, and HR buys software to automate salary calculations
Looking For More
Most problems with regard to the CRM deployment were technical in nature and could be
resolved easily. However, the company wants to maintain the users’ faith in the system; it
believes in conducting training, and communicating via e-mail. Champions in the
technology are identified, and asked to pass their skill-sets to their colleagues. People

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continually expect improvements in the system and want their suggestions to be

incorporated. Thus, managing expectations is a continuous challenge.
The first version of Optima, exclusively meant for reporting, took 10 to 15 minutes to
complete a task. Now employees want the system to do much more—but within the same
time-frame.
4. Wockhardt – Hospital and Health care sector
When you aim to build a world class hospital, you need world-class processes in place.
Keeping this goal in mind and to give patients better value for their money, WHHI was
looking for a solution that would allow the hospital to manage its patient and staff details'
database efficiently. It also needed to connect specialists to the hospital network such that
the doctors could monitor the patient remotely.
The WHHI IT team, which consists of four people, found that the most suitable solution
was to put in place two inter-linked systems. The foursome considered a CRM solution
custom-made to the hospital's needs and a network linking that they termed eICU. This
system connected the patients' monitors to an RAS accessible over the internet.

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The CRM system WHHI put into place not only helps identify the right doctor for the
right occasion, it now also generates reports. Plus it can sort categories of patients such
that the hospital has now been able to start clubs of people with similar experiences.
The beginning
To develop and maintain a special relationship with doctors, patients, and corporates,
WHHI required an easily manageable system that would catalog all the required details.
Moreover, with the narrowing difference in service level at hotels and hospitals
internationally, Vishal Bali, Vice President Operations, WHHI, believed that such
implementations are required to create an ambiance of efficiency. The implementation
was also required to track feedback to generate a patient satisfaction index.
The solution
To meet these requirements, the hospital approached an outfit called Think Ahead, which
conceived, developed and implemented a CRM application to specifically meet the
demands of WHHI. The implementation generates feedback reports, occupancy reports,
average length of stay, waiting and discharge reports. While all these reports were being
filed even earlier, the solution has helped maintain and update all the reports on a daily
basis, obviating any chance of delay. The accuracy rate of the reports has seen a new high
as a result.
More importantly the CRM solution has automated relationship management. It has
resulted in the creation of the Happy Hearts' Club, a group of people who have undergone
similar heart surgeries at WHHI. At the forum, patients share their experience and
sometimes also learn from each other.
The CRM solution also automatically forwards newsletters and relevant information to
keep in touch with doctors and patients. Vishal Bali, Vice President Operations explained
the importance of this routine task: "Hospitalization should not be seen as an episode but
as a patient hospital relation, it is not a one time transaction." And the CRM solution has
helped with just that.
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e-Hospital
Besides the CRM system, WHHI has developed an eICU. The eICU consists of ICU
monitors on the side of the bed. These are connected to a Windows 2000 Server that is
linked to Remote Access Servers (RASs). The RASs can be accessed over the internet via
a 2 MBPS line.
The eICU allows doctors to consult specialists in life and death situations. A resident
doctor can consult a senior consultant while at the operation table and the CRM solution
helps retrieve the most suited consultant for a given case. This way all decisions can be
collaborative. Furthermore, in case of a smaller problem the doctor is not required to rush
to the hospital. The remote system also means that every patient has 24x7 coverage from
his/her doctor.
e-Visit
WHHI's association with Think Ahead led to other creative initiatives. The first is the
Virtual Family Visit. Relatives and friends can visit any patient online in a virtual patient
room. The system is capable of transferring audio, video, text, and images.
Similarly, WHHI was also able to initiate a tele-medicine program. These are video links
established at medical colleges in the relatively less developed parts of India. The doctors
at WHHI use this link to address classes in these colleges as well as to make routine
follow-ups on chronic patients.
Security issues
With so much data available over the internet it is natural that information security would
be a concern. To secure its network, the WHHI IT team has set up a hardware and
software firewall. The hardware blocks unauthorized access and the software firewall acts
as an active state packet filtering firewall. The Total Internet Security Suite scans
inbound and outbound network traffic.

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Cost factor
Overall, the implementation cost WHHI close to Rs 2 million, according to Bali. Perhaps,
the level of automation and improved efficiency due to this system could be used to
establish the system's ROI. However, Bali does not look at it from a profit perspective,
but rather as a 'Staying in Business' investment. According to him, as the standards for
hospitals improve the world over, Wockhardt must set a standard in India.
5. HDFC – Banking and Financial Sector
Owing a Home still remains to be the single most cherished dream for many Indian
households and one need to be treated with great care while assisting people realize their
dreams. At HDFC, the element of care not only reflects in the very vision that prompted
its inception, but also in the manner in which the company relates to its customers. To
HDFC, providing finance for housing is not merely about earning profits, but a way to
provide an essential and valuable service to the society.
It all began with a thought that took shape in the mind of HDFC’s founder, Late Shri H.
T. Parekh, who built the organisation on the core values of integrity, transparency and
trust. Though HDFC enjoyed a monopoly when it started out, the company’s firm focus

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has always been on customer care and satisfaction. It believed that the best strategies are
established with long-term commitment and relationships with the customers.
Since the company has always been dealing directly with its customers, this has helped it
keep in touch with the changing trends and customer expectations. Its experience and in-
depth knowledge of the sector is a boon for its customers. HDFC understands that buying
a house is an event which happens once in a lifetime for most and is the single largest
investment; hence buying the property with the fullest knowledge is vital. While buying a
property, where except in few cases the developers have established a brand, most
builders are local and relatively unknown, there are a number of issues and concerns a
customer has when he deals with any developer.
With over 28 years of experience in the real estate industry and business relations with
the developers, it has a thorough understanding of the market and this is passed on to the
customers. It provides counseling through its property services on how and where to buy
a house in India, the real estate prices and trends in the real estate market and any
assistance that may be required at various stages of property dealings. HDFC aims to
bring creditability and trust to the property deals.
It has from time to time tied up with developers to bring special packages to its customers
and reach out to them. It conveys the properties to the customers by visiting companies to
put up special counters displaying new projects of builders, so they don’t have to move
out to locate a home and make presentations to address their financial concerns. This
approach is also used in colonies with a large number of families. The company also
arranges property fairs where customers can visit, select the property and seal the deal
immediately.
At HDFC, product innovations are based on customer feedback and are aimed at
customer convenience. It was the first company to offer floating rate loans when the
interest rate scenario turned conducive for customers and introduce a part fixed part
floating product enabling customers to hedge their risks in an uncertain interest rate
environment. It was also the first to launch repayment option that supported housing

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loans on the basis of age and customer needs. As the first company to computerize the
home loan process, technology has always been a focus area for the company in its
endeavour to simplify transaction for customers.
All in all HDFC is a brand, which not only offers Housing Finance but “Total Housing
Solutions”. Given the diverse portfolio of customers that HDFC caters to, the counselors
at HDFC are trained to understand customer requirements and structure the loan to match
individual concern. Departing from the usual norm of providing just loans, it offers
customers a personalised counseling service to help customers encash on the vast pool of
knowledge that comes with its experience.
It follows a single window concept where customers get legal and technical approvals by
its experienced in-house counsellors. This usually saves a lot of time and efforts for
customers of obtaining these clearances from other authorities and saves money as the
processing and administrative charges cover all these expenses. Customer service at
HDFC goes beyond process handling, with counsellors taking out time to understand the
applicants’ needs, the demands of their growing families, the necessity to ensure savings
for emergencies and then arriving at the right amount for them to borrow.
HDFC’s philosophy of care also engulfs its interaction with customers who have
defaulted in repaying the loan. From the beginning it followed a different model and
setup a “follow-up” department to deal with delinquent borrowers instead of a
“recoveries” section, believing that individuals were basically honest and would pay back
in time. Its debt collection policy emphasizes on fostering borrower confidence by
understanding their crisis; discussing their repayment capacity – considering their
income, number f dependents, he nature of their expenses etc; and after ascertaining the
facts and the reasons for default work out a solution, even reschedule the loan if required.
Though the policy deals with a negative situation, it has a strong value-based premise that
ensures that the implementation will not be unduly coercive. Infact, the policy is built on
courtesy, fair treatment and persuation.

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The Home Loan Protection Plan (a product of HDFC Standard Life) that HDFC offers to
it home loan borrowers provides the customer the comfort of knowing that in case of the
unfortunate death of the borrower, a sum of money depending on the insurance cover will
be made available towards repaying the housing loan.
For HDFC, its strength emanates from its intrinsic value of customer orientation and care.
They are the basis for all growth and development. The task at hand is to bridge the gaps
and to provide the common man access to resources to fulfill his basic dream. In its 28
years of operations it has assisted 27 lakh families own a home through loan approvals of
over Rs. 1,00,000 crores. As it moves along taking small steps in this direction what
makes the effort truly worthwhile is when it ultimately benefits individuals and the
society at large.
Who’s in the CRM game?
About 50% of the CRM market is currently divided between five major players in the
industry: PeopleSoft, Oracle, SAP, Siebel and relative newcomer Telemation, based
on Linux and developed by an old standard, Database Solutions, Inc.
The other half of the market falls to a variety of other players, although Microsoft’s
new emergence in the CRM market may cause a shift soon. Whether Microsoft can
capture a share of the market remains to be seen. However, their brand-name
familiarity may give them an edge with small businesses considering a first-time
CRM package.

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PeopleSoft was founded in the mid-1980’s by Ken Morris and Dave Duffield as a
client-server based human resources application. In 1998, PeopleSoft had evolved
into a purely Internet based system, PeopleSoft 8. There’s no client software to
maintain and it supports over 150 applications. PeopleSoft 8 is the brainchild of over
2,000 dedicated developers and $500 million in research and development.
PeopleSoft branched out from their original human resources platform in the 1990’s
and now supports everything from customer service to supply chain management. Its
user-friendly system required minimal training is relatively inexpensive to deploy. .
One of PeopleSoft’s major contributions to CRM was their detailed analytic program
that identifies and ranks the importance of customers based on numerous criteria,
including amount of purchase, cost of supplying them, and frequency of service.
Oracle built a solid base of high-end customers in the late 1980’s, then burst into
national attention around 1990 when, under Tom Siebel, the company aggressively
marketed a small-to-medium business CRM solution. Unfortunately they couldn’t
follow up themselves on the incredible sales they garnered and ran into a few years of
real problems.
Oracle landed on its feet after a restructuring and their own refocusing on customer
needs and by the mid-1990’s the company was once again a leader in CRM
technologies. They continue to be one of the leaders in the enterprise marketplace
with the Oracle Customer Data Management System.
Telemation’s CRM solution is flexible and user-friendly, with a toolkit that makes
changing features and settings relatively easy. The system also provides a quick
learning environment that newcomers will appreciate. Its uniqueness lies in that,
although compatible with Windows, it was developed as a Linux program. Will
Linux be the wave of the future? We don’t know, but if it is, Telemation’s ahead of
the game.

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The last few years…
In 2002, Oracle released their Global CRM in 90 Days package that promised quick
implementation of CRM throughout company offices. Offered with the package was
a set fee service for set-up and training for core business needs. .
Also in 2002 (a stellar year for CRM), SAP America’s mySAP began using a
“middleware” hub that was capable of connecting SAP systems to externals and front
and back office systems for a unified operation that links partners, employees,
process and technologies in a closed-loop function.
Siebel consistently based its business primarily on enterprise size businesses willing
to invest millions in CRM systems, which worked for them to the tune of $2.1 billion
in 2001. However, in 2002 and 2003 revenues slipped as several smaller CRM firms
joined the fray as ASP’s (Application Service Providers). These companies, including
UpShot, NetSuite and SalesNet, offered businesses CRM-style tracking and data
management without the high cost of traditional CRM start-up.
In October of 2003, Siebel launched CRM OnDemand in collaboration with IBM.

Their entry into the hosted, monthly CRM solution niche hit the marketplace with
gale force. To some of the monthly ASP’s it was a call to arms, to others it was a sign
of Siebel’s increasing confusion over brand identity and increasing loss of market
share. In a stroke of genius, Siebel acquired UpShot a few months later to get them
started and smooth their transition into the ASP market. It was a successful move.
With Microsoft now in the game, it’s too soon to tell what the results will be, but it
seems likely that they may get some share of small businesses that tend to buy based
on familiarity and usability. ASP’s will continue to grow in popularity as well,
especially with mid-sized businesses, so companies like NetSuite, SalesNet and
Siebel’s OnDemand will thrive. CRM on the web has come of age!

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Chapter 10:
Conclusion
CRM is basically the collection and distribution of “all” data to “all” areas of business.
The data can then help market the company, help up sell to existing customer, understand
customers better so that customers can be given better service and allows them to interact
with the company by whatever means they wish. Customer Relationships are achieved by
the whole company working together to give customers what they really want. CRM is a
business strategy to create and sustain long-term, profitable customer relationships.

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Successful CRM initiatives start with a business philosophy that aligns company
activities around customer needs. Only then can CRM technology be used as it should be
used—as a critical enabling tool of the processes required to turn strategy into business
results.
CRM is now an integral part of the business vision/strategic roadmap of companies in

virtually every industry domain and feeder-linked sectors. It is the various stages that lead
to better understanding of all aspects of customer behavior; interface points, transactional
issues and “intangible” benefits proffered that helps a company differentiate itself from
others in terms of leadership and market dominance in a particular space. The “We Care”
principle has to be embedded in the very vitals of the organisation for long-term benefits
to accrue and for “delighted customers to keep coming back.
Clearly, it is a matter of being in synch with customers’ changing needs that shapes
business success stories. Companies that continuously align and re-align their brands,
products and services have a better chance of understanding their present as well as future
consumers. Total customer orientation centered on customer understanding is bound to
provide long-term customer value and by inference superior company and shareholders
value in terms of sustainable growth and profits.
Customer Relationship Management is a prerequisite for maneuver strategy as it provides

customer information proactively for making swift moves. When there is a strong info-
structure available for the firm through greater access of customer information that can be
manipulated with changing time and market dynamics, it allows the marketer to make
calculated judgments as to where and when to move. Tools of customer relationship
management like data warehousing help in realizing optimal results when the manager
understands the strategic paradox. Customer Relationship Management helps in
developing the most important competitive advantage in the form making the desired
consumer information available at the fingertips of the decision makers for taking
optimum decisions.

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It has been said that the most successful companies of the future won’t be the big ones;
they’ll be the fast ones. The power of the emergent social network will undoubtedly
increase as global companies make their impact known, and you can bet that social
networks will try to keep up with even the fastest corporation. The Internet will be the
lens used by social networks to monitor bad corporate behavior, and the wallet will be the
stick to whip corporations into shape.
CRM applications will increasingly mimic the way our social environment works in the
years ahead.
Finally, concluding about CRM in the following points:
 A strategy defined around producing value to fulfill business meeds.

 A collaborative value chain of all institutions and processes needed to fulfill
business needs.
 A set of measurements that reflects how successful (or unsuccessful) the
collaborative value chain has been in fulfilling customer’s needs and the ability to
adjust the processes to improve the rate of success.
 A system that provides insight into customers so that improvements can be made.
 Access to all the services customer need for news, information, purchases,
business, delivery, and on to infinity, from wherever customer are in whatever
circumstances.

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------------------------- Customer Relationship Management

What's So Hard About Customer Service?

K. J. Somaiya College of Arts and

Four levels of service

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That holistic view again

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What is Customer Relationship Management?

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“Customer relationship management (CRM) is a business strategy to acquire and

As is implicit in the above definition, the purpose of CRM is to improve marketing

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• Provide product information, product use information, and technical assistance on

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• Provide a user-friendly mechanism for registering customer complaints

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Key CRM principles

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• Keeping Existing Customers

• Maximizing Life time value

Summarizing CRM activities

Why CRM is necessary?

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Several companies are turning to customer-relationship management systems and

• Faster response to customer inquiries.

Implementing a customer relationship management (CRM) solution might involve

• effective targeted marketing communications aimed specifically at customer

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Customer Relationship Management (CRM) is one of those magnificent concepts that

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Advances in the 1990’s

In the 1990’s companies began to improve on Customer Relationship Management

True CRM comes of age

Real Customer Relationship Management as it’s thought of today really began in

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directly interact with end-customers. For example, in many industries such as

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Continuity Marketing Programs

Missing process of CRM

Traditionally customer relationship management (CRM) revolves around the three

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There are three parts of application architecture of CRM:

• Operational - automation to the basic business processes (marketing, sales,

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Operational CRM provides the following benefits:

• Sales force automation (SFA)

• Customer service and support (CSS)

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• Enterprise marketing automation (EMA)

• Acquisition: Cross-sell, up-sell

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• Modification: Altering details of the transactional nature of the customers'

Analysis typically covers but is not limited to:

• Decision support: Dashboards, reporting, metrics, performance etc.

• Contact channel optimization

Business Intelligence is a related discipline offering some more functionality as separate

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Collaborative CRM provides the following benefits:

• Enables efficient productive customer interactions across all communications

Tools for CRM

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