Customer Relationship Management

(CRM)
 Business Performance Factors Contribution to
Shareholder Value
90% 86% 83%
75%
80% 71%
62%
70%
60%
50% 47%
40%
30%
20%
10%
0%
Product/Service Customer Sat. Operating Financial Innovation Employee
Quality & Loyalty Efficiency Results Satisfaction

Source: Price Waterhouse Coopers, 2010

 Changes in Marketing
OLD MARKETING
– Transaction oriented
– Market share oriented
– All customers are equal
– Marketers sell
– Mass marketing
– Focus on new customers
– Offensive
– 4Ps
NEW MARKETING
– Relationship oriented
– Share of wallet oriented
– All customers are not equal
– Marketers manage demand
– Individual marketing
– Focus on existing customers
– Defensive
– Dialogue oriented
– Customer lifetime value
– SIVA
 SIVA
 Solution: How appropriate is the solution to the
customers problem/need

 Information: Does the customer know about the

solution, and if so how, from whom , do they know
enough to let them make a buying decision

 Value: Does the customer know the value of the

transaction, what it will cost, what are the benefits,
what might they have to sacrifice, what will be their
reward?

 Access: Where can the customer find the solution. How

easily/locally/remotely can they buy it and take
delivery.
 Offensive vs. Defensive Marketing

 OM refers to increasing your customer base, acquiring new

customers(may be from competitors)

 DM refers to activities aimed at existing customers.

– Defensive marketing has become more profitable.

“Mass and Blast” is being replaced by 1:1

– Rifle Shot

– Carpet Bombing
 Marketing and Customer Orientations
One-to-one marketing
involves matching
individual products with Mass marketing is a way of
individual customers. The dealing with customers by
4. offering the same product
result is a product
One-to-one to the entire market.
personalized for each
customer in some way. marketing

3.
1.
Niche CRM Mass marketing
marketing

Niche marketing is offering a
specialized product or small range
of products to an individual
customer segment with
specialized needs.
Differentiated marketing is
selling to different groups
2.
of customers by offering a
Differentiated unique product for each
marketing group.
 Value Discipline Model

The Best Product

Focusing investment and energy to
Product develop the newest and most
Leadership revolutionary products

Operational Customer
Excellence Intimacy
The Best Total Cost The Best Total Solution
Product quality+ best Building strong customer
price+ best purchasing relationships, really
experience understand the customer
Doug Hall’s 5 proven strategies to strengthen a
marketing message

 Kitchen logic
 Personal experience
 Pedigree
 Testimonial
 Guarantee
 Kitchen Logic

Conveys to customers HOW your product/service

benefit is delivered, using language that your audience
can easily understand and quickly relate to.

Good old-fashioned logic…. Still works well and just

makes sense.
 Personal Experience
Providing customers with an opportunity to see, feel, and
experience your product or benefit.

Three types of personal experience:

1. Sampling

2. Demonstration : Effective when set in a situation that

seems nearly hopeless

3. Sensory feedback : Helps to reinforce a product’s

effectiveness by helping prospects to see, feel, smell,
taste, or touch the experience.
 Pedigree
Providing confidence to potential customers by
communicating the heritage behind a product or service.

There are three types of pedigrees:

1. Development Pedigree : Providing credibility as a result of the

design, creation, formulation, or production process behind a
product or service.

2. Marketing Pedigree : Best selling, Recommended by Experts

3. Trademark Pedigree: Using a brand or trademark that has a

pedigree of trust – Dettol.
 Testimonials
 Testimonials can be provided by customers, experts, independent
third parties

 Media quotes can also be a good source of independent testimonials.

 However, consumer is beginning to attack the tried and true

testimonial. We are becoming suspicious. Is this a real person? Did
they actually say this? How can we be sure?

 For this reason, Companies are evolving to the next-generation

testimonial: customer reviews.

 Good CRM can be a BIG plus

 Guarantees

 Guarantees can be the most powerful reason to believe*

If the fine print is minimized

 Power of a guarantee is directly linked to the level of risk

that the marketer is perceived to be taking. If you aren’t
taking any risk with your guarantee – you must not have
much confidence in what you’re selling.
 CRM ?
 “Strategy”

 “An approach to build and sustain long-term business

with customers.”

 It is about creating a feel of high touch in high tech

environment

 Maximum return on spend per customer

 Reduced customer acquisition costs

 Motivates customer to be a brand ambassador

 The Objectives of CRM
 Identify potential
customers
 Understand needs
 Differentiate dollars and
cents
 Decrease attrition
 Increase usage
 Increase cross usage
 Increase usage of more
prestigious items
 Increase satisfaction
 Increase longevity
 Improve campaign
management
 Increase referrals
 Win back lost customers
 Move customers up
relationship hierarchy
 Integrate marketing and
sales throughout channels
 Benefits of CRM
♥ Competitive Advantage

♥ Reduces costs, provides efficient operation

♥ Increases customer satisfaction & Loyalty

♥ Increased marketing and selling opportunities

♥ Faster response to customer inquiries

♥ Receiving customer feedback that leads to new and

improved products or services

♥ Increased Profits
 CRM is not just a software

CRM applications & technologies

are tools to support CRM No Kidney Stone Management
strategy
Business
Strategy

People & Process

Information Technology

CRM strategy drives structure & technology

 Business facts!
 It costs six times more to sell to a new customer than to
sell to an existing one.
 Satisfied customers may be passive supporters but a
dissatisfied customer will tell eight to ten people about
his or her experience….online…online…online?
 The odds of selling a product to a new customer are 15
percent, whereas the odds of selling a product to an
existing customer are 50 percent.
 90% companies don’t have sales and service integration
 70% of complaining customers will do business again if
their complaint quickly addressed.
 CRM Vision

Delighted


Customer
community
Base ?
Empowered

Adds value to business

Advocates
the brand

To create a customer community which is Delighted, Empowered. Adds

value to business & advocates the brand
 Four types of CRM
Type of CRM Dominant characteristic

Strategic CRM is a core customer-centric business strategy

Strategic that aims at winning and retaining profitable customers.

Operational Operational CRM focuses on the automation of customer-

facing processes such as selling and customer service.

Analytical Analytical CRM focuses on the intelligent mining of

customer-related data for strategic or operational purposes.

Collaborative Collaborative CRM applies technology across organizational

boundaries with a view to optimizing company, partner and
customer value.
 Operational CRM
Marketing automation
Market segmentation
Campaign management
Event-based marketing
Sales force automation
Account management
Lead management
Opportunity management
Pipeline management
Contact management
Quotation and proposal generation
Product configuration
Service automation
Case ( incident or issue) management
Inbound communications management
Queuing and routing
Service level management
 Sources of data for analytical CRM

Internal sources
 Sales data (purchase history), financial data
(payment history, credit score), marketing data
(campaign response, loyalty scheme data) and
service data.

External sources
 Geo-demographic and life-style data from
business intelligence organisations, for example
IMRB, ORG-MARG, Absolute Data.
 Common Reasons for Failure

 Implementing CRM before creating customer strategy

 Implementation costs and processes
 Political Friction
 Initiatives driven by technology
 Technology being implemented without proper support
 Lack of communication between everyone in the
customer relationship chain
 Lack of training to the staff
 Misunderstandings
 Stalking, not wooing customers
 CRM challenges vary across context

1. Banks
2. Auto manufacturers
3. IT companies
4. Consumer goods manufacturers
5. Airlines
6. Not-for-profits
7. Insurance