Masters in FMS

Co-Taught By : Ms.Dimple,
Assistant Professor, FMS Department
NIFT-Delhi
 What is CRM?

Customer Relationship Management is a comprehensive

strategy and process of acquiring, retaining and partnering
with selective customers to create superior value for the
company and the customer.
CRM is a management approach a model that puts a
customer at the core of a company processes and practices.
CRM leverages cutting edge technology integrated strategic
planning up-close and personal marketing techniques and
Organisation development tools to build internal external
relationships that increase profit margins and productivity
within a company
CRM has helped today’s businesses by:

 providing greater individual customer insight

 allowing firms to effectively respond to
individual requirements
 integrating the business processes of the firm
around individual customers
 BI meets CRM
 Customer facing applications
 All By Itself
 Upcoming Technologies
 Where are we?
Pleasant Loyalty Customer World Class
Transactor Builder Centric
Efficient Satisfaction Proactive in Total experience
Operations focussed product / service management
Ease of doing development Real time
Company “knows
Business Voice of customer information
you”
Lack of specific management
Active
knowledge of Service collaboration Precision in
customers Differentiation investments
based on Economic Learning
Undifferentiated Potential organisation Co-ordinated
offerings front office and
Retention focussed Decision making back-office
Product based segment driven
Emphasis on Event reminders Customer
Actively grow value investment focus
Revenue of customer
Minimal portfolio Systematically
Segmentation defined business
rules
 Customer Need Assessment and
Acquisition

Customer
Customer
development
Retention and
Through
Referrals for new
R M Personalization and
Customers C Customization

Customer Equity
Leverage through
Cross Selling and
Up Selling
 CRM Process Framework
Formation Management & Governance
Performance
Purpose Team Structure
-increases effectiveness
-improve efficiency Role Specification

Planning Process
Programs Relationship Performance
-Account Mgmt Process Alignment -Strategic
-Retention Mktg. -Financial
-Co-op Agreement Monitoring Process -Marketing
-Strategic Partnership • Retention
Communication • Satisfaction
• loyalty
Employee Motivation
Partners
Employee Training
-Criteria
-Process Evolution
-Enhancement
-Improvement
 SERVICE QUALITY MODEL

Word - of- Mouth Past

Personal Needs Experience
Communications
Expected Service
Customer
Perceived Service
External
Service Service Delivery Communications
Provider to Customers
Service quality specifications

Management perceptions of
Customer Expectations
 Service Quality Gaps

Gap 1 : Not knowing what customers expect

Gap 2 : Not selecting the right service design standards
Gap 3 : Not delivering to Service Standards
Gap 4 : Not matching Performance to Promises
Gap 5 : Perceived Service and Expected Service
 The Key Stages of CRM
Stage State Culture
Satisfaction Based Re-active Meet customer needs
Respond to complaints
Minimal evaluation of
customer service levels
Performance Based Pro-Active Evaluate customer perception
Identify customer retention
factors

Commitment Very Pro- Evaluate multiple customer

needs
Based Active
Continuous inbound/outbound
flow and feedback
Continuous improvement
Customer Relationship Management - A Framework

Traditional Approach to Web-enabled and

CRM Integration Approach
• Customer Information
• Customer Contact by: System
Telephone, Mail, In • Customer Database
Person Integration with
Technology • Electronic Point of Sale
• Personal Selling Sales force
• After Sales Service • Automation of
Web & Internet Customer Support
• Complaint Handling Processes
• Account Management • Call Centres
• Customer care • Systems Integration
• Lifetime value of a
• Customer Satisfaction customer
Strategic Importance to your business Plan
Categorising Customers….1

*You have no choice but to handle *Cultivate relationship.

H them very carefully.
Will consume energy.
i #Think of innovate ways of getting
g them on your side, but the cost of
acquisition must be controlled
h high energy
* Focus on short term profitability
Spend minimum energy to meet
your objectives
# Don’t pursue
Use opportunity as it comes
L Short term acquisition should not
o affect
w Long term image
Spend energy
Go out of your way
# Think of strategies to move
them away from competition
Will consume disproportionately
* Very cautious decision needed
Re-examine business plan &
strategy. Evaluate that your loss
does not become nightmare for
you
# Needs in-depth strategic review
as acquisition alone and
dissatisfaction later could be more
harmful

Low High
Profitability Potential

* Existing Customer # Potential Customers

DETERMINANTS OF CUSTOMER ADDED VALUE

Image Value
Total
Product Value
customer
Services Value
value
Customer
Monetary Price delivered value
Time cost Total

Energy cost customer

Psychic cost cost

 Gap Analysis Grid
SATISFACTION
I Low High
M Attributes that Current
High need attention - company
P strength
area where
O priorities should
be focused
R
T
A Low
Unnecessary
N strengths -
C Low Priority possible
E overskill
CRM Programmes
 CRM Programs -1

Program Type: Continuity Marketing

Customer Types :
Distributors Business to
Mass Markets Business
• Loyalty Programs • Continuous Markets
• Cross-selling Replinshment • Special Sourcing
• ECR Programs Arrangements
 CRM Programs -2

Program Type: One-to-One Marketing

Customer Types :
Business to
Business
Mass Markets Distributors Markets
• Permission • Customer • Key Account
Marketing Business
Development • Global Account
• Personalisation Programs
 CRM Programs -3

Program Type: Partnering / Co-marketing

Customer Types
Business to
Business
Mass Markets Distributors
Markets
•Affinity Partnering •Logistics Partnering •Strategic Partnering
•Co-Branding •Joint Marketing •Co-Design
•Co-Development
Sample measurements for the balanced scorecard
Financial Measures
Price Premium
Volume increases
Value of customer
referrals
Value of Cross sales
Long-term Value of
Customer
Customer Perspective Operational Perspective
Service Perceptions Right First Time (% hits)
Service Expectations Right on Time (% hits)
Perceived Value Innovation
Behavioral intentions and Responsiveness (% on
time)
% Loyalty
% intent to switch
Learning Perspective Transaction Time ( hours,
days)
# Customer referrals Goals Measures
# Cross sales
# of Defections
 Myths of CRM

• CRM is Primarily about Technology

• Successful CRM projects are managed by IT
• “Executive buy-in is the key”
• “We need to roll this out across the enterprise
ASAP”
• “CRM systems are intuitive…. Users will only
need some initial hand holding.”
 Kindly Remember

Customer Satisfaction
is
A Moving Target