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Think long-term
It costs most organisations money to sign up a new client. Depending who you talk
to it can cost a company 9x more to acquire a new client than to service and grow
an existing one. To get any real benefit and profits from your client you need to
have her on board for the long haul.
This concept should totally change your perspective. Let's take an example of a
pizza takeaway restaurant: Imagine that a person buys an average of one pizza a
week at R30 and he does this religiously for 40 years. You're looking at a massive
R62 400 over that person's lifetime. Isn't it true that you'd treat a R62 400 client a
whole lot better than a R30 customer. You'd want him to spend that money in your
pizza takeaway and not in your competitor's restaurant, wouldn't you?
"What's in it for me?" you may ask. Well, if you become more client-focused, you
become more valuable to the company. And if you become valuable, who knows
where it could lead - more money, promotion and status?
Employ some of the following strategies over the next 30 days. There'll be three
winners: your client, your organisation and you. If you go the extra mile and
implement some of the ideas I put forward, you'll see profitable results for your
organisation and for you. Remember, successful people do what unsuccessful
people aren't prepared to do.
Client Relationship Strategy #1
Speak to all your existing clients (particularly, the happy ones) and ask them to
recommend three other decision-makers in non-competing companies that your
organisation can do business with. This is sure to lead to sales. Challenge yourself
to follow up with those companies. I guarantee if you bring in those sales, the sky's
the limit in your organisation for you.
Get to know your clients better: birthdays, hobbies, sports interests and the like.
Get as much information about them as possible and then use it.
Get back your lost clients. Go through your dormant client base and send them
letters asking them why you haven't heard from them in a while. Apologise to them
for not getting back to them sooner. You can give them a discount to entice them
back. These clients are not dealing with your organisation because it is taking them
for granted and not making them feel real special. That's the bottom line.
NOTE: You're welcome to "reprint" this article online as long as it remains complete
and unaltered (including the "about the author" info at the end), and you send a
copy of your reprint to jacques@jacquesdevilliers.com
CRM: From evolution to revolution
Starting this issue we will run a series of articles on e-business. The first of the series talks
about Customer Relationship Management, (CRM) and why it is important in today's
business environment.
It is 10.30 in the morning. Kate, a young woman living in Boston, is waiting for her
appointment with her doctor. She has been feeling unwell. The beaming doctor, after a
check-up confirms her pregnancy. Jubilant, she rushes home to break the news to her
husband.
10.45, the same day, Robert meets Jake, Kate's husband, at his office. He shows to a
bewildered Jake, his company's brochures for baby cradles. Jake protests that he neither
has a child, nor was expecting one. Just then the phone rings and Kate announces the
expected arrival. Needless to say that Robert walks out with a plum order.
Smith is a busy business manager. On his trip to London, he finds time to buy the birthday
gift for his fiancée living in Paris, from the supermarket chain. He likes the gold watch, but
would like a different strap and his name etched on it. Moreover, he would like the gift to be
delivered to his fiancée's home. On reaching back to his home in New York, he calls the
local number of the supermarket chain, ready to give the details of his purchase, and
enquire if the gift was delivered. When the phone is picked, the operator, without asking for
any introduction, greets him "
Good Morning, Mr. Smith. Your gift was delivered yesterday. Thanks for doing business with
us". Mr. Smith is bewildered but, of course very happy, wondering how on earth did the
operator 'recognize' him.
If you are surprised, don't be. Welcome to the world of Customer Relationship Management,
the management mantra of the new millennium.
CRM-What is it all about?
Broadly speaking, Customer Relationship Management or CRM is a web enabled marketing,
sales and service application integrated across all customer contact points.
It is a tool that seamlessly integrates into the enterprise information system. The Internet
has revolutionized
the way business is done and has virtually taken the enterprise information system within
the reach of the
customer. It can be accessed through the call centers, through the Internet and increasingly
through mobile devices. See Figure 1.
Market size and key players
The worldwide CRM market consists of two broad segments: The CRM products and the CRM
services. Both the segments have shown astronomical growth during the past couple of
years and as per the projections of the leading market research companies, CRM products
and services will grow, over the next five years with a Compound Annual Growth Rate
(CAGR) of 49 per cent and 29 per cent respectively, well above the overall expected CAGR
of the IT industry of 11 per cent.
AMR Research, Inc, predicts the Customer Relationship Management (CRM) market will
reach $16.8 billion by the year 2003, CAGR of 49 per cent over the next five years.
The firm also predicts that the European CRM market will grow to $4.3 billion in 2003 from
$500 million in 1998, with a compound annual growth rate of 53 per cent, exceeding the 44
percent CAGR expected in North America over the same period.
Total Customer Relationship Management Revenue, 1998 - 2003 (Forecast)
1998 1999 2000 2001 2002 2003 5 Year
CAGR
$2.3 B $3.7 B $5.4 B $7.9 B $11.5 B $16.8 B 49%
Source: AMR Research, 1999
The Aberdeen group forecast that the CRM product market (Independent Software Vendors)
to grow to close to US$ 13 billion by 2003.
The top vendors, based on 1998 total company revenue, were Siebel, Vantive, and Clarify.
ERP vendors are beginning to have a tremendous impact on the CRM market, with Oracle
and Baan capturing two of the top five
positions in overall CRM revenue. The marketplace has become even more fragmented with
Peoplesoft's acquisition of Vantive and success of a number of other players.
IDC forecasts that the total worldwide market for CRM services will grow from US$ 34.42
billion in 1999 to US$ 125.2 billion by 2004.
US and Worldwide CRM Services Revenue,
1999 and 2004 ($M)
Country 1999 2004
United States 18,845 63,854
World Wide 34,420 125,205
Source: IDC, 2000
The CRM services consist of six major segments:
1. Consulting services (IDC projects growth from US$2.2 billion to US$ 7.1 billion by 2004
at CAGR of 26per cent, compared to CAGR of 12per cent of IT & Business Consultancy)
2. Implementation services: This makes the second largest segment of the CRM services
and will grow from 19per cent in 1999 of the market to 25per cent of the market in 2004
(as per IDC's forecast).
3. CRM Outsourcing services: IDC forecasts that this market will grow from US$ 23 billion to
US$ 75.1 billion by 2004.
4. Training services: The CRM training market is forecasted to grow from US$ 2.2 billion in
1999 to US$ 9.1 billion by 2004 at a CAGR of 33per cent.
Bulk of the revenues would continue to come from USA while Latin America is likely to be
the fastest growing
market.
The evolution of CRM
It is not suddenly that the business managers have realized that the customer is supreme or
the need to render personalized service. However, it was not possible to address the
preferences of a massive group of widely dispersed individuals. Neither the tools nor the
technology was available. The smart business managers did the next best thing, which was
to conduct a market research and classify the market into broad segments with different
preferences. The product managers would (and still do) then position their products catering
broadly to these segments.
The information systems have evolved tremendously over the last three decades and so
have the communication systems, as shown in Figure 2. While ERP, the management
mantra of nineties offered the means to optimize resource planning at the enterprise level
encompassing every area of the enterprise on a real time basis, there was still no means to
connect to the customer. The customer had just too many locations.
The commercial penetration of Internet into the homes changed everything. It provided the
means to take the integrated enterprise information system to the customer's living room.
He could buy, sell or bank sitting there, while uniquely identifying himself.
This has led to the evolution of CRM, which uses the Net to integrate the customer contact
points directly with the enterprise. It provides the means to interact with every customer
individually (thereby interacting with million or even billions of customers). The interactions
over a period of time create history that is available to the field sales/support personnel at
the touch of a button.
Doing business in the CRM era
CRM has revolutionized the way the business is transacted. Customization and
personalization has been radically redefined. There was a time when companies could do
business by making a range of products, and the customers could choose from the available
product range. Now the customer demands 'Merawala ………'. And the companies have to
gear themselves to deliver the 'Mera wala' products to the customers.
CRM is the great enabler that makes it possible to achieve this level of customization in a
cost effective manner. Right from a highly focused marketing to the transaction and after
sales support, CRM provides a cost effective, easily accessible and cost effective interface.
By enabling the direct customer interaction, CRM has changed every sphere of activity. The
products must have modular designs that can be easily customized. Even the warehouses
are changing from being just storehouses to those having the facility for 'Assemble to
Order'. The customization increases the product variety multifold and it may not be
economical to store such huge variety. The intelligent warehouses, as they are popularly
known as, stock the knocked down modules and assemble them on the receipt of order. The
interaction cycle using CRM is shown in Figure 3.
If fuel efficiency was the selling proposition for automobiles in the seventies, sportiness in
the eighties and safety in the nineties, customization is the selling proposition of the new
millennium. The e-sales concept is increasingly becoming significant in volumes for most
American and European manufacturers. The interactive e-Store front of the manufacturer
permits the customer to configure his own automobile the kind of upholstery, music system,
accessories, etc.
The customer preferences which were captured
through the earlier interaction automatically create work orders and the customized product
is delivered.
Even though the product is highly customized, there is hardly any additional cost involved.
More companies
are focusing their growth strategies around direct sales through the Net.
Most affected industries
Travel and transportation industry has been almost revolutionized by CRM. For them CRM
makes the difference between being in business or out of it. Financial services, insurance,
investment banking, education and utilities are the other large scale adopters of CRM in the
services sector.
The concept of retailing has been redefined with CRM. Product industries are using it for
marketing as well as after sales support. Increasing number of product manufacturers are
able to retail directly, thanks to CRM.
Why should you adopt CRM?
CEOs are realizing those who are not able to come up with effective CRM strategies risk
being edged out of business. Customer is the king and the business strategies must be built
for ensuring customer loyalty. It costs six times more to create a new customer than retain
an old one.
Increased sales revenues.
• Sales reps spend more time on productive calls and less on chasing information and
dry calls.
• Ability to penetrate and support wider geographical area.
• Sales transactions 24 hours, 7 days a week.
Increased responsiveness
Ability to respond to changing customer preferences in real time. Reduced left over stocks,
reduced business risk and zero budget planning.
Increased win rates
• Ability to concentrate resources on likely customers.
• Availability of customer preference data.
Increased margins
• Improved value-sell and reduced price-sell.
• Opportunity for cross-sell and up sell.
Reduced cost
• Improved customer satisfaction ratings
• Personalized customer service.
• 24X7 service and support.
• Customized products.
• Improved information availability.
Decreased costs
• Decreased low value work for sales reps.
• No duplication of effort due to shared schema
• Focused campaigns reduce wastage of resources.
• Reduced communication costs.
Current trends in CRM
As CRM matures, distinct trends are emerging.
Hosted solution: Enterprises are increasingly showing an interest in the buying a hosted
solution from the ASPs.
This trend is likely to increase as the enterprises would prefer to concentrate on their core
businesses and let the ASPs provide updated solutions.
Integrated solution: There is an increasing trend to integrate the CRM activities with the
supply chain, manufacturing and B2B market places. This trend is likely to increase.
Evolution of marketing and branding services: Internet marketing and branding is a
different paradigm with different set of rules. Specialized services, with the convergence of
marketing and CRM professionals are fast emerging.
Data warehouses: Even as enterprise rush to warehouse their own data captured at
interaction points, data has become a commodity. It can be bought, sold, shared and
leased. There are companies whose only business in data transactions.
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.
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.
Critical success factors
A CRM solution is not a stand-alone solution that could be implemented in isolation to the
enterprise information system. It marks a shift of the focus from product centric planning to
customer centric planning. A prudent CRM strategy is essential for a successful adoption of
CRM. Some of the critical success factors that must be evaluated are:
1. Identify the mission, objectives and goals: Technology has radically changed the business
environment. A detailed business strategy analysis lays the foundation for engineering an
information system for the enterprise that will fulfill the current and the future needs of the
organization.
2. Identify and prioritize what functions need to be automated: A CRM automation audit
shall help create a roadmap to complete automation. There may be processes that are
inefficient and automating them without re-engineering is not a desirable solution.
3. Gain Top Management support and unequivocal commitment: No CRM strategy can ever
succeed unless the top management is totally committed to its success.
4. Employ technology smartly: Technological obsolescence is a real threat. A long term
vision and prudent planning is a must. As a thumb rule, look for open architectures,
scalability, and integration into existing systems, reliability, and support etc. Evaluate
options and take an informed decision. Keep in mind that it may be too expensive to
reverse this decision.
5. Involve users early: Involve the likely users early in the process. They know their needs
best and can best help define the new system, for they are best aware of the old one. It is
important to make then participate in the process and 'own' the solution.
6. Prototype the solution: Deploy the solution on a smaller scale and test all the functions,
instead of jumping to the 'big leap'.
7. Training: The paramount importance of training cannot be over emphasized. This is one
of the single most prevalent reasons for failures/incomplete success. A smart manager
would realize that training costs more than the combined hardware/software cost over the
solution lifecycle.
8. Allocate responsibility: It is important to ensure maximum uptime and reliability of the
system so that the users may not loose faith. Make one department/person responsible for
the CRM system.
9. Cross department management team: Form a committee with people from sales,
marketing and service departments apart from the information systems department to
monitor the CRM project.
10. Keep the employees motivated: Technology usually breeds fear and insecurity. It is
desirable to 'sell' to system internally before implementing it to avoid non co-
operation/resistance.
Enterprise managers are more obsessed with the product. However, experience shows that
even the best product fails to meet the desired end goals if the implementation is improper
or the training inadequate. Rushing to implementing a CRM system without a prudent
evaluation and audit usually results in a failure. The choice of an experienced and able
consultancy organization is usually very critical.
The Road Ahead
Technology has been a major driving factor for CRM and is bringing radical changes. The
developments in several technological areas are likely to have a major impact on CRM.
Some of the areas are listed below:
Biometric sensing: passwords continue to be the least user friendly and the most un-secure
link in the CRM chain.
However, advancement in biometrics will soon make it possible to make a foolproof
recognition through voice, live fingerprint or image. The system would automatically identify
(and not just verify) the user. Peoplesoft has already announced that it is working on voice
recognition.
M-commerce: There has been an enormous advancement in this area. Rapid developments
in the mobile computing and data access devices are likely to be a major growth area for
CRM. The global marketplace is all set to shrink to a palm top.
Digital signatures and secured identification technologies.
Integration with B2B marketplaces: Many argue that online marketplaces will drive sales in
the coming decades and branding will no longer be important. Even if such a postulation is
far-fetched, there can be little doubt that enterprises will integrate the CRM solutions with
B2B market places. NM
Chetan Agarwal, team leader, Quark Systems, Chandigarh. He can be reached on
cagarwal@quark.stpm.soft.net
Disclaimer: The contents of this article are the author's own and expressed in his personal
capacity, without any association whatsoever, expressed or implied, with his employer.
The Customer Relationship Management (CRM) system was first introduced into the Service
Centre in January 2004, with further scoping and development completed later in the year for
WCA and incoming Study Abroad and Exchange students.
Other facets of the CRM include: relationship management with other key stakeholders
such as schools, agents, sponsoring bodies and credit transfer organisations; web
management of course information; on-line enquiries and booking of events; and a library
of quality-assured procedures and guidelines.
The next phase of development will incorporate both the management of outgoing
Exchange students and formal linkages with partner institutions.
Applying the Power of Social Networks to Customer Relationship Management ... (Article)
Abstract: Customer relationship management (CRM) is rapidly morphing from a customer management
model to one of customer engagement. Social networks, podcasts, blogs, and wikis are enabling
customers to become advocates, and not simply the targets they were in the traditional CRM process.
The same techniques are also being used within the CRM industry itself to create a content-rich, social
media environment for CRM professionals. Find out what these sweeping changes mean to businesses
and CRM professionals alike, as TEC's director of research Wayne Thompson sits down with Paul
Greenberg and Bruce Culbert of BPT Partners, a leading CRM consulting firm.
Scala and Microsoft Become (Not So) Strange CRM Bedfellows Part Two: Market Impact
Continued ... (Article)
Abstract: Microsoft's foray into the CRM arena has not been a bed of roses, despite its indisputably large
marketing muscle and R&D investment, its strong channel, traditionally attractive pricing policies, and the
aura and experience within the market segment. Microsoft CRM remains both a threat and an opportunity
for the most nimble mid-market CRM vendors. Microsoft’s entry with CRM evangelism through an array of
seminars nationwide has bolstered the market’s awareness of the need for CRM applications.
Using CRM to Recession-proof Your Business - Vendor Guru ... (White Paper)
Abstract: Since the last recession in 2001, customer relationship management (CRM) systems have
gained greater acceptance. Though CRM systems haven’t been widely tested under adverse business
conditions, results achieved by CRM strategies indicate that businesses with an effective CRM approach
will have a vital competitive advantage in recessionary conditions. Discover three key strategies to using
CRM as a tool against a recession.
CRM: The Truth, The Whole Truth And Nothing But The Truth(For A Change) ... (Article)
Abstract: Finding out the true facts about what makes CRM tick and how fast it circles the ROI clock—if it
indeed reaches ROI-has long frustrated potential CRM implementers looking for answers. And getting
good answers really matters, because their only alternative to being forewarned may be leaping into
enterprise-wide, mega-bucks, change management-laden CRM implementations—and testing the depth
of the water with both feet. For the first time, there are statistically-based, substantive answers to many
questions about CRM.
How CRM Helps Companies Market to Buyers - Vendor Guru ... (White Paper)
Abstract: While marketing automation modules have begun to attract a new wave of companies to
customer relationship management (CRM) software, CRM’s long-term benefits can help businesses make
the most effective use of advertising and sales resources. According to leading industry experts,
companies can leverage CRM applications in five specific ways. For one, CRM systems help you identify
where to place ad dollars. Find out more.
6 Ways CRM Software Earns Loyal Customers - Vendor Guru ... (White Paper)
Abstract: Many companies approach customer relationship management (CRM) software as an
opportunity to save money via automation. While most CRM solutions offer powerful infrastructure
benefits, approaching your new CRM tool with a focus on customer loyalty can earn you more repeat
business. Learn about six ways your CRM solution can help your service agents personalize customer
service—and maintain customer loyalty.
The Unexpected Costs of Free CRM Systems - Vendor Guru ... (White Paper)
Abstract: Effective CRM deployment can bring many productivity gains. And although free customer
relationship management (CRM) tools may sound great to overburdened company directors, there are
five reasons why free CRM tools should be avoided. For one, free isn’t always free, as hidden costs can
undermine your budget. Find out about the other reasons why it’s better to tighten your CRM budget now,
rather than go bust later.
How to Avoid the Most Common Mistakes in CRM Integration - Scribe Software ... (White Paper)
Abstract: Customer relationship management (CRM) is being adopted by businesses worldwide. But the
key question for many executives as they create their CRM strategy: how can they gain strategic
advantage if their competitors are implementing these same CRM systems? The answer: through
integration. Find out how leveraging your existing information assets can turn CRM from a tactical project
into a key strategic initiative.
Evolution at the Speed of Change: SAP CRM 5.2 and Beyond - Infosys Technologies ... (White
Paper)
Abstract: The future of customer service management (CRM) is changing—and SAP’s CRM 5.2 is a big
part of the reason. SAP is known for constantly enhancing its products—whether it’s changing its tier
architecture or introducing new dimensional components. But its latest in CRM technology provides many
new features and functionalities, and introduces some of the latest trends. If you want to know more about
SAP CRM 5.2, here it is.
How to Choose the Right Hosted CRM Solution for You - InsideCRM ... (White Paper)
Abstract: How can you get the most out of a customer relationship management (CRM) solution while
reducing operating costs and increasing overall profitability? By purchasing a hosted CRM solution that’ll
provide the benefits of an on-premise CRM solution without the need for a complex implementation or the
assistance of an in-house IT team. Hosted CRM is a cost-effective solution that promises a quick return
on investment (ROI).
CRM Without Workflow Is Not CRM: How to Maximize Sales and Service Productivity -
Entellium ... (White Paper)
Abstract: Since there are multiple vendors offering hosted customer relationship management (CRM)
applications, the buyer’s toughest decision is finding a vendor that offers the many benefits that come
from a workflow engine similar to those used in multimillion-dollar CRM deployments. Truth be told, CRM
alone is not enough, as not all providers have a workflow engine which enables full process automation.
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Posted by newuser on May 29th, 2010 and filed under Assorted, CRM, ERP, Featured
Cases, Industry Specific Cases, Technology, Telecom Industry. You can follow any responses to
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Airtel, a telephony superbrand, is well on its way to mastering the art of managing
customers. The journey has been evolutionary and CRM now gives them the power
to study the lives of its customers and offer them personalized services. CRM’s
more than a test for Airtel, India’s largest mobile service provider—it’s a lifeline.
Airtel’s CRM is roping in more business in a game that’s getting hard, everyday, just
to stay in. CRM, mere jargon
for most until recently, is now bandied in junior management conversation and has
become crucial for many businesses … click here to refer more on Airtel’s CRM
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