Solved Paper of CRM

Q1. What is Customer Relationship Management ? Who are the stakeholders of CRM?

Ans=1 Customer Relationship Management is an enterprise approach to

understanding and influencing customer behaviour through meaningful
communications in order to improve customer acquisition, customer retention,
customer loyalty and customer profitability.
CRM integrates people, process and technology to maximize relationships with all
customers. CRM is a comprehensive approach that provides seamless coordination
between all customer-facing functions. CRM increasingly leverages the Internet.
There are four principal stakeholders who play a major role in the entire process of
Customers Relationship Management.
1.Customers : The most important persons in the CRM design for whose delight the
whole exercise is conducted.
2.Employees : They include those right from the frontline staff who actually executes
to the top management who designs the CRM
3.Suppliers : The are the part of system who provides input to a company's values
chain.
4.Partners : The are the creators of additional value for the customers.
Customers are generally able to contact their financial service provider by a variety of
means: in person visit, phone, written or fax order. Each requires its own means of
verification and documentation that includes the client's instructions.
This, in turn, requires multiple actions, ranging from verification of request to ensure
proper authorization, submitting request, regulatory/legal requirements, and
verification that the process has been completed.
Q2. Explain the concept of customer satisfaction.
Ans=2 Customer satisfaction operates in two different ways: transaction specific and
satisfaction overall. The transaction-specific concept concerns customers satisfaction
as the assessment made after a specific purchase, while general overall in concerned
with all encounter and experiences.
Customers satisfaction or consumer satisfaction is a buyer's emotional or cognitive
response post-subjective assessment and comparison of pre-purchase expectations
and actual performance subsequent to the consumption of the product or service.
Satisfaction is a psychological term largely understood to define gratification one feels
when one's desire, need or expectations are fulfilled. This gratification is highly
subjective and varies with people and also with situations.
Three general components of satisfactions
i- Satisfaction is a response (emotional or cognitive)
ii-The response pertains to a particular focus (expectations, product, consumptions,
experience, etc.)
iii-The response occurs at a particular time (after consumption, after choice, based on
accumulated experience.
Word of mouth advertising (WOM) is the unpaid spread of a positive marketing
message from person to person.An unpaid form of promotion in which satisfied
customers tell other people how much they like a business, product or service .Word-
of-mouth is triggered when a customer experiences something far beyond what was
expected.
Word-of-mouth marketing (WOM Marketing) is when a consumer's interest for a
company's product or service is reflected in their daily dialogs. Word-of-mouth
marketing can be encouraged through different publicity activities set up by
companies, or by having opportunities to encourage consumer-to-consumer and
consumer-to-marketer communications.
Q3. What is zone of Tolerance? Explain the concept of service qualily.
Ans=3

The zone of tolerance (ZOT) is defined as the difference between desired service and
the level of service considered adequate. The zone of tolerance is usually defined as
the range of customer perceptions of a service between desired and minimum
acceptable standards ( Zeithaml, Berry, and Parasuraman). In essence it is the range
of service performance that a customer considers satisfactory. Performance below the
zone is seen as dissatisfying and performance above the zone is seen as delighting.
The importance of this zone of tolerance is that customers may accept variation
within a range of performance, and any increase or decrease in performance within
this area will only have a marginal effect on perceptions.
As per Parasuraman, Zeithaml& Berry the service quality is defined as :
Service Quality = Perception Expectation
Service quality is nothing but the difference between the service expectation &
service actually received by the customer. Customer has certain expectation about
the service. If the customer experience the same service as they expect then this
difference will be zero and we can say that the service quality is very good. Higher the
difference of above equation lower will be the service quality.
Chang (2008) describes that the concept of service quality should be generally
approached from the customers point of view.
Kumra (2008), states, service quality is not only involved in the final product and
service, but also involved in the production and delivery process.
Q4. What is E-CRM ? What is meant by Database Management ?
Ans=4 E-CRM is the process of maximising sales to the existing customer,
encouraging continuous relationships through the use of digital communications
technologies such as operational databases, personalized web messages, Customer
Service, Email and Social Media Marketing.
Features of E CRM
eCRM implies capabilities like self service knowledge bases, automated email
response, personalization of web content, online product bundling and pricing.
eCRM gives Internet users the ability to interact with the business through their
preferred communication channel.
It also allows business to offset expensive customer service agents with
technology.
eCRM puts much emphasis on the customer satisfaction and reduced cost
through improved efficiency.
eCRM use customer data for personalization, cross-selling and up-selling.
Sales Force Automation(SFA )and Enterprise Marketing Automation(EMA) is
integrated in the eCRM.
A database management system (DBMS) is system software for creating and
managing databases. The DBMS provides users and programmers with a systematic
way to create, retrieve, update and manage data. Database Management consist of:
1. Database Construction
2. Database Warehousing
3. Data Warehouse Architecture
Database management includes the following Key Features:
Performance management using Automatic Workload Repository (AWR), AWR
Warehouse, Automatic Database Diagnostics Monitor (ADDM), AWR Baselines
and Adaptive Thresholds, ASH Analytics
Application Tuning using SQL Tuning Advisor, SQL Access Advisor, Real Time SQL
Monitoring, Database Operations Monitoring
Response Time Testing using SQL Performance Analyzer, SPA Quick Check
Throughput Testing using Database Replay
Q5. Explain the concept of customer value. What is Rural CRM ? What is Customer
Intelligence?
Ans=5 Customer Value is the difference between what a customer gets from a
product, and what he or she has to give in order to get it.
Value = Benefit/Price
There are two aspects to customer value: desired value and perceived value. Desired
value refers to what customers desire in a product or service. Perceived value is the
benefit that a customer believes he or she received from a product after it was
purchased.
Customer loyalty encourages consumers to shop more consistently, spend a greater
share of wallet, and feel positive about a shopping experience. It leads to positive
word of mouth.
Customer Lifetime Value (CLV) is a forward looking strategic metric that identifies
customer value and upside potential, and can be leveraged to increase customer
share, customer retention
This emerged after the practice of Rural Marketing. In order to cater the base of the
pyramid, this was started by C K Prahlad. The Transactional Marketing of rural crm
later converted into Relational Marketing and the rural CRM emerged to acquire, retain
grow customers on a continuous basis.
Customer intelligence (CI) is the process of gathering and analyzing information
regarding customers; their details and their activities, in order to build deeper and
more effective customer relationships and improve strategic decision
making.Customer Intelligence begins with reference data basic key facts about the
customer, such as their geographic location.
The importance of this zone of tolerance is that customers may accept variation
within a range of performance, and any increase or decrease in performance within
this area will only have a marginal effect on perception
This data is then supplemented with transaction data reports of customer
activity.Customer intelligence is a key component of effective customer relationship
management (CRM), and when effectively implemented it is a rich source of insight
into the behaviour and experience of a company's customer base.

Q6.What is CRM Strategy? What is Customer Loyalty? What is Customer Lifetime

Value?
Ans 6 = The aim of strategic CRM is to concentrate and enhance the knowledge about
customers and use this knowledge to improve and customize the interactions with
customers to maintain a long-term relationship with them a comprehensive
CRM strategy should have multiple levels, including business objectives, data strategy
and analytics, experience/communications planning, channel strategy, content
strategy, technology, continuous improvement and metrics/measurements. Once the
objectives are set and defined, one can then start mapping the customer journey,
utilising all information, data and analytics.
Customer loyalty is both an attitudinal and behavioral tendency to favor one brand
over all others, whether due to satisfaction with the product or service, its
convenience or performance, or simply familiarity and comfort with the brand.
Customer loyalty encourages consumers to shop more consistently, spend a greater
share of wallet, and feel positive about a shopping experience. It leads to positive
word of mouth.
Customer Lifetime Value (CLV) is a forward looking strategic metric that identifies
customer value and upside potential, and can be leveraged to increase customer
share, customer retention, margin improvement and top line revenues. But too few
business leaders harness this metric. Here's how to calculate CLV and put this
measure to strategic use.
Customers satisfaction or consumer satisfaction is a buyer's emotional or cognitive
response post-subjective assessment and comparison of pre-purchase expectations
and actual performance subsequent to the consumption of the product or service.
Satisfaction is a psychological term largely understood to define gratification one feels
when one's desire, need or expectations are fulfilled. This gratification is highly
subjective and varies with people and also with situations.

Q7. What are the benefits of implementing SFA (Sales Force Automation)?
Ans =7 Sales Force Automation or Sales Force Management are information systems
that efficiently automate the sales process and management of the sales force. SFA
manages all stages of the sales process from initial customer contact to closing the
deal.
Effective SFA ensures full integration among all departments. The sales person is not
the only person dealing with the customer, various other departments such as
marketing, customer service, accounts and technical experts are also involved. If all
these different departments are communicating with the customer at the same time
or worse still, sending duplicate information to the customer, youll end up with one
frustrated customer. Excessive communication is a sure-fire way to irritate the
customer. SFA ensures that the right hand knows what the left hand is doing all
departments have easy access to see what interaction the other has had with the
customer.
Some of the key benefits for growing businesses from sales force automation:
Contact management and diary management - The customers contact
information and details (name, address, telephone, email, etc.) are stored in a
compact way and scheduling appointments and follow-ups can happen easily with the
calendar and diary application.
Account management - holistic view of accounts with their related contacts,
contracts, cases, opportunities and much more. Keep track of customer interaction,
track the status of opportunities, view past sales history and get a good idea of the
likelihood of closing the next deal.
Driving leads and managing opportunities - SFA systems pull possible leads from
various sources such as marketing communication, email campaigns, website visits or
outbound calls. Once first contact has been made with a prospect this translates into
a sales lead.
Generating quotes and managing orders - streamlined quote conversion to lead
and sharing with others. The sales representative is now enthusiastically making
contact with all prospects and giving the sales pitch. Once the customer bites and
expresses an interest, the rep is now ready to provide a quote.
Sales forecasting - SFA measures past sales history, current trends, number of
orders and opportunities in the pipeline to provide an intelligent projection of future
sales.
Tracking competitors - SFA helps monitor trends and the reasons why a deal has
been won or lost, and if lost to whom and why. To make effective use of this tool, the
sales rep has to be diligent in updating the records with the reasons deals were lost or
won and input relevant competitor information.
Reports and analytics - view system reports with real-time information or create ad
hoc reports. Generate accurate reports ranging from a birds-eye view of across the
board sales to drilling down into specific sales territories, per sales rep, geographical
regions or demographics. Easily create charts and graphics and export reports to MS
Excel or PDF.
Mobile applications - In todays world of smartphones, CRM solutions have also
become mobile. Field staff can now have instant access to information and leads while
being on the road, rather than waiting until they are back in the office to access vital
information about customer interaction.
Q8. What is CRM Business Plan? What are its contents?
Ans =8 A CRM Business Plan Consist of following steps -
1 Build a Project Team
Its essential to secure CRM buy-in across the business, starting at the top with board
level management support that will filter through to the teams on the ground. Most
departments are certain to have an involvement with at least one or more CRM
process so its essential that they are involved in the early planning stages.
2 Define your CRM Vision
Set high level goals that will be your benchmark for the project before determining
how your key success metrics will be measured.
objectives frequently include:
Creating a complete view of each client relationship in a single application
Improving the quality of management information reporting
Developing more efficient business processes
Increasing lead generation
Improving account retention and service delivery
3 Prioritise your CRM Goals
Rather than attempting to tackle all of your CRM goals in a big bang single
implementation we should have a phased approach that focuses on quick wins. Some
goals will more important than others so its important to prioritize them and ensure
that your plan is realistic, both in terms of your budget and the resourcing that is
needed to deliver your CRM implementation on time.
4 Map out your Processes
Map out the flow of each step in your current processes to help define how they will
be managed in CRM.This presents a superb opportunity to gain clarity on how well
your processes are currently working and identify how CRM can improve their
efficiency, often by removing duplication of effort and applying greater process
automation.
5 Consider Reporting Outputs
Having defined our CRM success criteria , targets should be specific and
measurable.Think about the information that CRM will need to track specific to each of
these goals and what reports, charts and dashboards youll need to measure progress.
6 CRM Data Capture
Consider which fields you need to track on each CRM record to achieve your goals. For
example, you may be taking a phased approach by leading with an initial CRM sales
team deployment so consider what fields will need to be tracked on your records for
accounts, contacts, opportunities and leads.]This includes defining what type of fields
will be used.
7 Prepare your Data
The resources needed to consolidate and prepare existing data for migration to a new
CRM system is often underestimated. To ensure your readiness consider these points:
What data needs to be imported into CRM? Where is it currently stored?
How good is the data quality? Does it need cleansing?
How far back do you want to go with relationship history data? 1 year, 2 years,
or longer...?
What duplicate matching rules need to be set?
8 Integrating CRM
Which applications will CRM need to integrate with? What direction will the data flow?
If one of your goals is to create a single view of each relationship, integrating CRM
with an external data source is likely to be a high priority.
As well as feeding data from other applications, CRM will also push data to other
sources, for example to create a new order in the back-office ERP system when a CRM
sales opportunity is converted. Other CRM integrations can include email marketing,
web forms, Sharepoint and eCommerce platforms.
9 Managing User Security
Consider how CRM will be shared in your business. Make a list of the users, roles and
groups that will have CRM permissions and define what level of access they should
get. For example, do you want every CRM user to export data to Excel? Flexible CRM
solutions like Microsoft Dynamics CRM enable advanced user permissions which can
include team and territory management to precisely control which records users are
entitled to access and what controls they can use.
10 Identify the Risks
All projects have risks. Consider the main hazards to your project and how
significantly these threaten its success. The CRM technology could be a risk if the
database isn't flexible enough to adapt to your processes, or if the system lacks the
scalability to grow with your business.
11 Create a User Adoption Plan
The biggest risk to CRM success is low user adoption. Successful CRM projects engage
with multiple users at an early stage to consult for ideas and stimulate interest in
CRM. Visible board level commitment for CRM is a crucial step but often project
managers neglect to listen to user needs and fail to build support from the ground up
resulting in challenging user adoption barriers to overcome.
Q.9. What are the stages of Customer Life Cycle Management? Highlight your answer
in reference with banking service to a customer.
Ans 9 = Stages of customer life cycle management:
Reach Your content must be properly marketed in places where people/businesses in
your market will find your information. This way they will become aware of your
companys existence.
Acquire You have to understand your potential customers wants/needs so you can
provide a product/service they will want to purchase. Contact them directly with
personalized communication in order to convert them from potential leads to paying
customers.
Develop After the first purchase, keep in touch and build a relationship with your
customer. Ensure they are fully satisfied with their purchase.
Retain One time customers will become repeat customers as long as you are
satisfying their needs. Care for them and continue to cultivate a relationship with
them. Do not be afraid to ask for feedback. They will be happy you care about their
opinion and you can use their comments to improve your product/services. Make them
feel a part of the process.
Advocacy If your customers are truly satisfied, they will become brand advocates.
This will spread awareness within their social circles and the cycle will come full cycle
when you reach potential new customers due to your existing customers.
In reference to banking service to a customer
The processes and goals underlying the client lifecycle are intelligent, transparent,
and agile, allowing financial institutions to provide unparalleled service with the
utmost efficiency.

The major points to focus upon for a banking institution to maintain crm are -
Focus on customer changing needs- Contemporary customers of financial
institutions demand far more than in the past. Customers expect to be at the centre of
how their cash, investments, and loans are managed and rarely have qualms about
switching providers. Financial institutions must ensure that their customer's
experience is both efficient and effective.
Applying components of Client Prospecting -all components of Client
Prospecting, including lead generation, identification, capture of basic information,
and database checks.
CientOnboarding - The first impression of the account opening process sets the tone
of the relationship between the financial institution and the customer, paving the way
for future business opportunities.
Consolidated Reporting - Customers are generally able to contact their financial
service provider by a variety of means: in person visit, phone, written or fax order.
Each requires its own means of verification and documentation that includes the
client's instructions. This, in turn, requires multiple actions, ranging from verification
of request to ensure proper authorization, submitting request, regulatory/legal
requirements, and verification that the process has been completed.
Periodic Client Review - To facilitate the regular review of a client's accounts, a
financial institution should analyse a client's situation such as Suitability of the bank-
customer need (risk profile accuracy, bulk positions, asset allocation deviations,
unusual transactions etc.)
Applying Analytics - Monitoring processes ranging from the time required to fill out
forms to ensuring compliance with KYC and AML provides the business owner with an
easy method to determine where bottlenecks occur and how best to eliminate the
delays.