Presented by:

Nikita (Roll no.24)

Anil Ashish Topno(Roll no.03)
Definitions

“A view of the customer that asserts that he or she is a

valuable asset to be managed.” –S. Thomas Foster
Deciding that “you want lifetime clients.” -Richard
Buckingham

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 Definitions
“The long-term success of the organization and improved
value for its shareholders lies to a very great extent in the
company’s ability to develop and sustain genuine
relationships with its customer.” -James G. Barnes

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What is CRM?
CRM is a strategy by which companies optimise
profitability through enhanced
customer satisfaction

It’s all about becoming customer-focused

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Value ( $ )

nship
ela tio
he R
ue of t
al
he V
Duration of Customer Relationship
T

Targeting Acquisition Retention Expansion

• Who Do we target
• What segments are most
profitable
• What segments match our Value
Proposition
• What is the best segmentation
strategy for us / our industry
• What is the best channel for
each segment
• What is the acquisition cost for
a channel / segment
• Do certain channels deliver
certain types of customers
• Cost effective acquisition
• How can we improve
retention
• What is our average
customer relationship length
• How can we hold customer
for as long as possible
• What is the most cost
effective method of retention
• How many products does our
average customer buy
• How can we induce our
current base to buy more
products
• Who are the prime targets for
expansion
• What is the cost of expansion

Customer Relationship Management can be simply defined as everything involved with

managing the customer relationship.

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Titan Watch Repair Services
What did Titan Do?

The Titan Signet CRM initiative was undertaken in May 1995 to provide that ‘extra’ touch to
its special customers at the exclusive World of Titan stores.
Its mission was to create a sense of belonging of the customer to the store and vice versa by:
• Building a special relationship with high life time value Titan customers
• Recognising and rewarding his/her loyalty to Titan
• Providing a platform for direct feedback from these valued customers to the company

Where?
It initially started in 6 showrooms in Bangalore. Today the Titan Signet has been extended to
102 World of Titan showrooms across 59 cities all over India

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 Behind The Scenes
While the program has taken customer bonding one step further in Titan,
there are many behind-the-scene activities that ensure that the program is
run efficiently, effectively and with the level of enthusiastic participation.
These are :
• Showroom Personnel are trained not only in the operations of the program
at the showroom but also in the finer details of CRM.
• Enrolments in the program are tracked on a monthly basis for each
showroom, along with data on purchases made by Signet members who
have returned to the showroom to buy again.
• Signet operations form a part of the quarterly appraisal for their
showrooms, thereby ensuring that they earn more marks on their efficient
and effective performance.
• A grievance redressal system is in place to ensure that our valued
customers are responded to within stipulated time frame.

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Customer Relationship Management Process
Capture
Capture Customer
Customer Data
Data
and and Measure
Measure
Results
Results

Capture Customer
The
DataCustomer
and Measure
Results Store Data, Mine
Capture Customer
and Make
The CRM Data and Measure
Information
Results
Accessible
Dynamic

Take Action
Capture to
Customer
Enrich the Customer
Data and Measure
Relationship Capture
Results Build and Customer
Manage
Data and Measure
Customer Value
Results

 The building blocks of CRM allow an organization to manage this cycle and use the
knowledge on customers to enhance the Life Time value of the customer portfolio.
 No organization has perfect information on its customers. Knowledge of customers is
continuously enhanced through the CRM dynamic.

Customer Relationship Management is a ongoing, dynamic learning process for an organization

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 CRM Strategies
Customer Acquisition
 Gain the greatest number of new “Best” customers as early in their “lifespan”
as possible.
Customer Retention
 Retain and expand your business and relationships with your customers
through up-selling, cross-selling and servicing.
Customer Loyalty
 Offer programs to ensure that your customers happily buy what you offer only
from you.
Customer Evangelism
Enable loyal customers to become a volunteer sales force.
Cost Reduction
 Reduce costs related to marketing, sales, customer service and support.
Improve Productivity
Enhance your e-business strategies.

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Four Tools
Complaint Resolution

Feedback

Guarantees

Corrective Action

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Complaint Resolution

Three types of complaints:

Regulatory, Employee,
Customer
Compensation
Contrition
Ease of Resolution

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Feedback
Customer Data

Customer Behavior

Data-gathering

Analyzing Data

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Guarantees
Customer Rights

Guarantee Design:
Unconditional
Meaningful
Communicable
Painless to invoke

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Corrective Action

The way a firm reacts to a problem so that the

problem never reoccurs.

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 Differentiating Customers/
Customer Identification
 All customers are not equal
 Recognize and reward best customers disproportionately
 Understanding each customer becomes particularly
important.
 Same customers’ reaction to a cellular company operator
may be quite different as compared to a car dealer.
 Besides for the same product or the service not all
customers can be treated alike
CRM needs to differentiate between a high value customer
and a low value customer.
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What CRM needs to understand while
differentiating customers
 Sensitivities, Tastes, Preferences and Personalities
 Lifestyle and age
 Culture Background and education
 Physical and psychological characteristics

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Differentiating Offerings-
→ Low value customer requiring high value customer
offerings
→ Low value customer with potential to become high
value in near future
→ High value customer requiring high value service
→ High value customer requiring low value service

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Expanding the size of Customer
Database -Barnes’ 4 R’s
Customer Customer
Retention Relationships

Customer Referrals Recovery

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Customer Retention
A low-cost way to increase revenue. Retention is
cheaper than acquisition.

Must be voluntary.

Must lead to long-term relationships.

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Relationships
Attempting to know the
customer.
Commitment and
Communication
“Clients should call you only
once. After that, you should
proactively call them.” –
Richard Buckingham

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Referrals
Powerful tool that results from customer satisfaction or
dissatisfaction.

“Referral clients are already sold, before they even call

you.” –Richard Buckingham

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Recovery
Empower employees so that they may deal with
mistakes as they occur.

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Customer Lifetime Value

Customer Lifetime Value means the

economic value of customer relations
during the whole period of relation
between customer and company.

Krafft (2000) “Kundenbindung und Kundenwert“)

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MITES - Shrikant Kulkarni 24
Models to calculate Customer
Lifetime Value
A few elements are part of all CLV models:

 Period under consideration of analysis (e.g. month, quarter)

 Discount rate of a company (cost of capital)
 Planning horizon (how many periods)
Frequency of buying/turnover
 Average turnover per buying
 Estimated customer retention

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Every Company’s Big
Unknown….Customer Value
Full Potential

bi ip
ita sh
y
lit
of on
Pr lati
Re
Number of Relationships

Current
Current
Customer
Value

Current

Relationship Duration
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Relationship management suggests that sellers identify their most
valuable customers and provide special products/services to them,
either immediately in an effort to build a sense of commitment to the
firm
 Acquisition strategy
 Retention strategy
 While a monopolist profits most from an acquisition CRM
strategy, assuming costs are held constant, the main result of the
analytic model is that in a competitive marketplace one firm
pursues an acquisition strategy and its rival uses a retention
strategy.
 A critical ingredient in this finding is exogenous and identical
customer churn rates.
 While a monopolist should choose acquisition CRM, when there
is competition a first mover should choose retention CRM.
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Islands of Automation Need To Be Bridged
Over time, channels & operational systems are added to cater to changing customer
demands. The result…several functional groups are interacting with customers
independently.

Sales
Force

Customer
Service

Direct
Mail

We
b

$ Branche
s

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Why CRM?
It costs six times more to sell to new customer than to
sell to an existing one.
A typical dissatisfied customer will tell 8-10 people
By increasing the customer retention rate by 5%,
profits could increase by 85%
Odds of selling to new customers = 15%, as
compared to those for existing customers (50%)
70% of the complaining customers will remain loyal
if problem is solved
90% of companies do not have the sales and service
integration to support e-commerce

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Importance of CRM Scope Depth
Customer Management Process
Marketing Selling
Threads Servicing
Customer Interaction Channels

Are we making the

Customer Relationship right level and type
of marketing, sales,
Broadcast Strategies and service
investments in each
Mail of our customer
segments?
Field Personnel
Are we taking a
Customer Relationship holistic approach to
Agents/Distributors
Structure our customers
across processes
Call Center and channels?
Retail

Internet Customer Relationship Have we

implemented best
Performance practices and
technology in
process/channel?
Back Office Process/Systems

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The Benefits of Customer Relationship Management
In addition to LTV of the customer, likelihood to
recommend is another important benefit of CRM.
High Ownership of Problems

Impact on Service Quality

Available at
Convenient Times Know. Product/Svcs.
Resolution Time
Likelihood to
Acquisition Retention Lift/upsell
Recommend
Courteous
Easy to Reach
Access to
# of Rings Live AgentsRight Tel. #
Low Know. About Account
Low High
Total Perceived Current Performance
Value

The customer value analysis should be performed for each segment individually. The
perceived importance of price and service drivers can differ significantly by segment.

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Thank You

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