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Customer Relationship Management

-Customer care - CLC & CLV -Relationship Marketing

CRM
- Earlier companies focused on COST MANAGEMENT or REVENUE GENERATION -Today companies have strong customer focus

Prevalent Approaches - Production Oriented - Product Oriented - Selling Oriented - Marketing Oriented

Marketing Orientation-CRM Base


Customer Organization (needs, wants (ability, quality Requirements, exp.) value) CRM Base

Customer evaluation

Increased CRM

CRM- Value creation


Customer focus Selling focus Product focus Production focus Low Medium Value Creation High

Value creation by product evolution


Mobile services with VAS, Internet Mobile services with VAS Mobile services Low Medium Product Evolution High

Value creation- Five Commitments Model


Customer Organization Self People Task

Customer Life Cycle (CLC)


CLC is journey of the customer from getting attention to becoming customer & finally being retained & associated for a long time with organization Phases of CLC Reach (Prospects, Acquisition) Customer Conversion Customer Retention ( Loyal Customers) Defection

CLC Marketing
Retention Conversion Acquisition Reach CLC PHASE Maintaining Sustaining Selling Value creation Attention Capturing OBJECTIVES Loyalty Programs Segment Strategies Mass Marketing Strategies MARKETING STR

Customer Lifetime Value(CLV)


CLV is present value of all net payments during complete life of customer with the organization. To evaluate CLV all future revenues & costs must be assed Usually CLV is calculated by assessing all future purchases & then discounting the figures to bring them to the present value.

Applications of CLV
Financial aspects of RETURN ON RELATIONSHIP - Allocation of resources - Customer selection - Segmentation - Merger & Acquisition - Customer equity - Marketing campaigns

Calculating CLV
Cost of acquiring customer Periodic cost of providing service/product Retention rate Rate of discount

Service Level Agreements(SLAs)


It is a tool for formalising a relationship with a customer & is mainly used for enterprise customers & high value customers. SLA is a formally negotiated & written agreement between two parties the service provider & service receiver

SLA Preparation
Identifying key service parameter. Defining service level objectives. Defining target level of each parameter. Establishing accountability for meeting these parameters levels. Establishing linkage of this parameters. To commercial reward. Defining actions and liabilities

SLA contents
Scope & Objectives. Description & service. Service level matrix. Role & responsibility of service provider. Role & responsibility of customer. Performance tracking & reporting method. Escalation procedure. Compensation in case of non-compliance.

Relationship Marketing
Revolution in IT & TELECON industry Traditional Marketing Approach - Product - Promotion - Place - Price

Relationship Marketing Approach


Customer touch point Interactions Relationships Customer loyalty Customer advocacy

Traditional Vs Relationship Marketing


Parameters Marketing Focus Traditional Marketing mix approach, Multiple Interactions, Product quality Relationship Integrated marketing Communication, Customer Service

Customer Focus

Acquiring Make existing cust. new customers happy & satisfied

Managing Customers Emotions


Road to success Ecstasy Delight Satisfaction

Road to abyss

Dissatisfaction Disgust Disdain

Cont.
RM in consumer segment Vs service segment In consumer durables relationships are created through brand equity, marketing communication & media. Personal contacts are rarely used. Product quality is must. RM & Service segment Effective service delivery process & personal contacts is strong tool. Customer touch point, movements of truth & customer data management are important aspects of RM. Brand building through RM.

Customer Relationship Management


CRM is the approach implemented by an organization , which integrates strategy, business processes & functionalities to build up , to maintain & expand relationship with customers. CRM is ensuring customer loyalty by being sensitive to the needs of customers Integrated approach of CRM -Strategy Customer base expansion -Business process Sustain -Functionalities Maintain -People Create

Customer Relationship Framework


Know your customer Recognize your customer Value through interaction Interdependence Relationships

Scope/Core modules of CRM


-Customer service management -Sales management (including automation) -Marketing management Technology & CRM -Electronic point of sale -Electronic point of service -Web interface

Cont.
Levels of CRM - Operational CRM -Customer service -Promotional activities - Marketing/Sales automation Analytical CRM -Designing & executing promotional activities -Sales campaigns -MIS Supply chain management

Loyalty Management
Loyalty management is a tool for rewarding customer engagements leading to a long term relationships & improved profits The term loyalty is used to describe the post purchase behavior of customers , whether they are indulging in repeat purchase s of the same brand/service offered by an organization, over a period of time

Graduation of customer organization relationship


Partner Advocate Support Client Customer Prospects

Customer Loyalty Management


CLM is a continuous process, a program , or a group of programs designed with the objectives of keeping a customer satisfied so that he/she will provide more business Stages of association of customers - Customer satisfaction - Repurchase - Recommendation

Ideology & Architecture of Loyalty Management


Ideology - CLC - Customer experience & expectations -Customer Profiling Architecture Customers Touch Points Selected cust. Seg. Cust.Profiling Cust.database

Loyalty Programs

Integration with CRM Solutions

Benefits of loyalty programmes


Building long term continuous relationships with customers Generate sales growth by increasing referrals Improve long term financial performance

Planning & managing loyalty programmes


Measure current loyalty levels Benchmark current loyalty levels Identify key parameters(dimensions of product) Systematic communication within organization Build loyalty & retention programmes Integrate Implement Feedback & corrective action

Types of loyalty programmes


Appreciations Rewards Partnerships Rebate Affinity Reasons for failure of loyalty programmes - Poor design - Insufficient/ unattractive reward policies - Poor implementation - Programmes not communicated properly - Programmes not integrated with organizational policies

Service Quality & Service Capacity Planning


Sales, Marketing & Service are three basic functionalities that are integrated within CRM system Service capacity planning is a process for determining the optimal ways to meet the service parameters with reference to the present business quality parameters & forecasted parameters

Service Capacity Planning Process


Service level intentions Load analysis Service delivery process analysis Analysis of present standards Planning & implementing change Review

Customer Driven Quality


No CRM system will serve any purpose without focus on quality of product Understanding Quality Expectations(Design Quality) Deliver Product/Service Quality(Monitor/Measure Feedback (Change Strategy) Implement/improvement (voice of customer)