Customer

Relationship
Management
 Characteristics of New
Economy
• Retailers are more powerful than brand owners!
(Getting Closer - Directly)
• Value is shifting from ownership of tangible assets to
intangible assets. Companies are outsourcing asset-
intensive activities. (Servicization)
• Value is shifting from companies that provide
standard products to companies that can provide
high customization at low cost (Mass Customization)
Contemporary Challenges &
Practices
• Competition, Brand Proliferation, Parity of
Offers
• Smart, connected, Informed, Individualistic
Consumer
How do you
• CRM offer unique
value and retain
a customer

• Viral Marketing How do you manage

your brand image
through consumer
conversations
 TERM –
Contemporary
Marketing Tool
 Buzzwords: Consultant
Branded Versions
• CRM: Customer Relationship Management
• CRM: Continuous Relationship Marketing
(McKinsey)
• eCRM: Electronic CRM (Silknet, ATG)
• mCRM: Mobile CRM
• ERM: Enterprise Relationship Management
(Oracle, SAP, Peoplesoft)
• PRM: Partner Relationship Management
• SRM: Supplier Relationship Management
• CEM: Customer Experience Management
 Buzzwords
• ORM: Online Relationship Management
• CFM: Customer Focussed Marketing (Niche
Mkting)
• RM: Relationship Marketing (Regis McKenna)
• TERM: Technology Enabled Relationship Marketing
(Gartner Group)
• TRM: Total Relationship Management
• Interactive Marketing (John Deighton, HBS)
• Database Marketing (Direct Marketers)
• 1 to 1 Marketing (Don Peppers & Martha Rogers)
• Customer Intimacy (Fred Wieserma)
• XRM: Extended Relationship Management
 What is TERM/CRM?

To recognize and treat each customer

individually to optimize customer
experience by serving their unspoken
needs and make him buy the product
again & again
 The Modern Marketing
Concept

Starting Focus Means End

Point
Selling and Profits through
Old Factory Products Promotion Sales Volume

Target Customer Integrated Profits through customer

Classical Market needs Marketing satisfaction

Individual Customer Profits through

CRM
Modern Customer Experience
Customer loyalty
 Why loyalty is
important?
• Retaining customers is much profitable than
acquiring new

• Reduction of 5% of defective customers may

result in 80% increase in profitability (Reichheld &
Sasser, 1990)

• 90% of customers who love a company will

repeat but only 30% of customers who like the
company will repeat (Opinion Research Corp.)
 Satisfaction & Loyalty
• With increased competition, satisfaction
and loyalty relationship has changed
• The reason why satisfied customers defect
is because false beliefs of companies such
as:
• It is sufficient merely satisfy a customer
• Investment in changing customers from ‘satisfied’ to
‘completely satisfied’ is not wise use of resources
• Focus on bringing few dissatisfied customers to satisfied
state than taking more satisfied customers to completely
satisfied state
 Competition and
Satisfaction-Loyalty
Relationship
Noncompeti
tive Zone High
Local Telephone
•Regulated
monopoly or
few Airlines
substitutes Personal
computers
•Dominant
Loyalty

Highly
brand equity Competitive
•High cost of Zone
switching •Commoditization
•Powerful or low differential
Hospitals
loyalty •Consumer
program Automobil
es
indifference
•Proprietary Low •Many substitutes
technology Completely 1 2 3 4 5 Completel
y•satisfied
Low cost of
dissatisfied
Satisfaction switching
CRM – the process
 How does one build long
term relationship?
• Continuous communication
• Understanding
• Get Personal
• Interactivity
 How to
Personalize/Customize?
• Technology: Database, Internet &
Mass Customization
• Cherry Picking - 80:20s
 CRM Process

Interactions

Customization of Marketing Mix

Learning about Customers
Knowledge Acquisition Product
Customer Differentiation Price
Place
Promotion

Interactions
Is the process of acquiring,
retaining,and growing
profitable customers
CRM – the function
4 key functions

Identification

Differentiation

Interaction

Customization
CRM – the system
 CRM is … any application or initiative
designed to help an organization
optimize interactions with customers,
suppliers, or prospects via one or more
touchpoints – such as a call center,
salesperson, distributor, store, branch
office, Web, or email – for the purpose
of acquiring, retaining, or cross-selling
customers. (TDWI 2000)
 A Few Basic CRM
Concepts…
• Touch Points
– Each time your company interacts with
a customer is a touch point.
– Can we name a few Guest Touch Points?
– How about Owner Touch Points?
 Guest Touch Points

• First Call/Internet Visit

• Lease
• Pre-arrival
• Check-In/Check-Out
• Post stay thank you
• Newsletters, Interest Lists
• Housekeeping/Maintenance
• All marketing materials
 Owner Touch Points
• First Call/Internet Visit
• Original purchase of property
• Rental listing
• Any owner stays in property
• Every month’s owner statement
• Newsletters
• Owner get-togethers
• Any phone call – positive or negative
• Any marketing information that the owner
may see
 Touch Points
• Are they planned? Managed?
Documented?
• Are all “touchers” properly trained?
Enroll your complete staff in the vision.
• Any way to increase the effectiveness of
the touch?
• Any way to increase the number of
touches?
 Key Technologies
• Database Technology
• Interactivity
• Mass Customization
 CRM Tools
• Customer Contact Applications
• Customer Facing Applications
- Contact Center: telephony applications inbound (teleservice/
telesales) & outbound (telemarketing/ telesales)
- SFA: Support selling efforts of sales force. Managing leads, follow
up, prospects
- FSA: Support field service reps. Services requests, schedules,
contracts terms, etc.
• Customer Touching Applications
- Campaign Management: Automate marketing campaigns, Present
offers to targeted leads, Event-based campaigns.
- E-Commerce: marketing, sales, service through on-line touchpoints.
Web, chat, e-mail, online catalogs, etc.
- Self-Service Customer Support: Let customers help themselves
 CRM Tools
• Customer Intelligence Applications
• Datawarehousing:
– Provides inputs to Intelligence Applications
– It contains:
• info about customers
- Contact, Classification, Channel, Response, transaction data
• products and services info
• info on marketing initiatives
• info on customer requests and response to them
• info on touchpoints and channels
• Reporting: Information reports, data summary, etc.
• Data mining and OLAP: Identify patterns in data and deliver
valuable new information. Give information which analysts don’t
know what to look for.
 4 Types of CRM
Programs
• Win Back or Save
• Prospecting
• Loyalty
• Cross-Sell/ Up-Sell