Customer Relationship Management

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Presentation Transcript

C R M : 

C R M Customer Relationship Management

Slide 2: 


Introduction : 

Introduction Aditya Ray B. Tech., PGDM 18 years Corporate Experience Companies where I have worked Zee Entertainment Times of India MTV in Sri Lanka Amtrex Hitachi Dunlop India Propack GoAir

Course Objective : 

Course Objective Upon successful completion of this course, students will: Understand the significance of CRM for B2C & B2B businesses. Understand the fundamentals of developing a CRM strategy. Be familiar with the various processes that are part of CRM Be familiar with the existing CRM practices in various Industry Sectors Would be confident and excited to take up a career opportunity in devising / implementing CRM in a chosen Industry

We are all Co-learners : 

We are all Co-learners Attendance 5 Marks Class Participation 10 Marks Class Test 1 10 Marks Class Test 2 10 Marks Case Study 10 Marks Team Presentation 15 Marks End Test 40 Marks

Ground Rules : 

Ground Rules No Mobile Phone No Intrusion / No Permission Collaborative Learning Participation with permission – One at a time

What is CRM : 

What is CRM Customer Relationship Management Customer Relationship Management Customer Current Future Past Relationship General > Personal Transactional > Long term Complaint free > Satisfied Satisfied > Delighted Delighted > Loyal Management Tool Process Method Strategy

The Context of CRM : 

The Context of CRM Unprecedented technological innovation and market transformation Customers represent a moving target and even the most established market leaders can be ousted quickly from their dominant positions Advent of a global operating environment; and the erosion of conventional timeframes in this electronic-enabled era. Escalating expectations and empowerment of the individual It is no longer enough to offer excellent products: ease of duplication and market saturation can quickly dispel initial indications of a winning formula. Emerging key differentiator is exceptional service provided on a consistent and distinctive basis. Service is more difficult to imitate than a product because service requires customer input and involvement. Imperative to create an ongoing dialogue with customers and exploit the information and insights obtained at every customer touch point.

Changes in the Environment : 

Changes in the Environment Paradigm Shifts Independent Stores  Chain of Stores Mass advertising  Segmented messaging Network television  Internet One Plan/Product to FitAll  Customized Plan / Product

The Insight : 

The Insight Everyone wants to be an individual and wants to be acknowledged as an individual by having his or her likes and preferences known and acted upon. Customers want to do business with organizations that understand what they want and need and that continue to fill those wants and needs.

Evolution of Business Ecosystem : 

Evolution of Business Ecosystem Manufacturing Efficiency Product-driven Corporate Ecosystem Customer-centric Ecosystem Material Planning Manufacturing Resource Planning Enterprise Resource Planning Customer Relationship Management CRM initiatives are aimed at treating each individual customer differently.

Retention is more important : 

Retention is more important It costs 6 times more to sell to a new customer than to sell to an existing customer. A typical dissatisfied customer will tell 8 to 10 people about his or her experience. A known customer’s feedback is regarded 5 to 20 times stronger than well-articulated manufacturer’s claim or advertisement A company can boost its profits 85% by increasing its annual customer retention by only 5 percent. 70% of complaining customers will do business with the company again if it quickly takes care of a service problem.

Customer Satisfaction Hierarchy : 

Customer Satisfaction Hierarchy Build Customer Loyalty Develop Customer Confidence Prevent Customer Complaints

Why Customer Loyalty Matters : 

Why Customer Loyalty Matters Loyal customers tend to increase their purchases over time Long term relationships typically cost less to serve Loyal customers are the best source of referrals Loyal customers are generally less price sensitive

Three Levels of Service / Sales : 

Three Levels of Service / Sales

The Transition : 

The Transition

Customer Relationship Management : 

Customer Relationship Management CRM stands for Customer Relationship Management. It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationship with them. A stronger relationship with customers facilitates greater repeat purchase, increased customer advocacy and lesser selling cost amongst many other benefits resulting in improved profitability and market share with stronger sustainability against competition. Strategy for managing and nurturing a company’s interactions with customers and sales prospects. Involves using technology to organize, automate & synchronize business processes – Sales related activities, Marketing, Customer Service & Technical Support. The overall goals are to find, attract, and win new customers, nurture and retain those the company already has, entice former customers back into the fold, and reduce the costs of marketing and customer service.

C R M : 

C R M CRM, also more recently called ‘customer management’, is a comprehensive business approach that seeks to create, develop and enhance relationships with carefully targeted customers in order to improve customer value and corporate profitability and thereby maximize shareholder value. CRM is often associated with utilizing information technology to implement relationship marketing strategies. As such, CRM unites the potential of new technologies and new marketing thinking to deliver profitable, long-term relationships.

Other Definitions : 

Other Definitions CRM is the development and maintenance of mutually beneficial long-term relationships with strategically significant customers - (Francis Buttle, 2000) CRM is an IT enhanced value process, which identifies, develops, integrates and focuses the various competencies of the firm to the ‘voice’ of the customer in order to deliver long-term superior customer value, at a profit to well-identified existing and potential customers. - (Plakoyiannaki and Tzokas, 2001) CRM is a business strategy designed to optimize profitability, revenue and customer satisfaction. - Gartner

Between The Lines… : 

Between The Lines… “comprehensive.” CRM does not belong just to sales and marketing. It is not the sole responsibility of the customer service group. Nor is it the brainchild of the information technology team. While any one of these areas may be the internal champion for CRM in an organization, CRM must be a way of doing business that touches all areas. “approach” - CRM is a way of thinking about and dealing with customer relationships. We might also use the word strategy here because, done well, CRM involves a clear plan. “creating, maintaining and expanding.” – CRM is about the entire customer cycle. Capturing & analyzing data about targeted customers and their buying habits in order to understand and predict customer behavior. Marketing efforts, armed with customer intelligence to find new customers and cultivating a deeper relationship (share of wallet from) with current customers. CRM is about creating the feel of high touch in a high tech environment.

CRM : 

CRM Customer Interaction to collect useful data Effect Change in Product & Service Analyze data, Devise Strategy, Share data Customer C R M

Strategically Significant Customers : 

Strategically Significant Customers Not all customers are strategically significant. Indeed some customers are simply too expensive to acquire and service. They buy little and infrequently; they pay late or default; they make extraordinary demands on customer service and sales resources; they demand expensive, short-run, customized output; and then they defect to competitors. High life-time value customers Life-time value potential is the present day value of all future margins that might be earned in a relationship. Benchmarks These are customers that other customers copy. Inspirations Futuristic customers who inspire change in the supplying company Cost Magnets Who absorb a disproportionately high volume of fixed cost

Calculating customer lifetime value : 

Calculating customer lifetime value This customer has no revenues or profit in the first year and then generates a profit of $1 000 000 in year 1, increasing steadily to a profit of $5 000 000 in year 5. The formula used for the discount rate is: D = (1 + i)n where i = the market rate of interest including risk and n = the number of years.

CRM Value Chain : 

CRM Value Chain

CRM Value Chain : 

CRM Value Chain Customer Portfolio Analysis: CPA acknowledges that not all customers have equal value to the company. CPA asks the question: ‘who are our SSCs?’ It requires analyzing and sorting all customer segments by profit potential and not by volume Customer intimacy: Getting to know the customer well. Use the data to better understand the who, what, why, where, when and how of customer behaviour. Building a customer data-base which is accessible to all those whose decisions or activities impact upon customer attitude and behaviour. Network Development: Building a strong network of relationships with employees, suppliers, partners and investors who understand the requirements of the chosen customers.

CRM Value Chain : 

CRM Value Chain Value Proposition Development: Developing, with the network’s compliance, propositions which create value jointly for the customer and company. Great value is found more effective and more efficient solutions of customer problems. Although it is traditional to focus on the product as the main source of value, many companies are finding that people, process and service offer more competitive advantage as products become more commoditized. Managing the relationship: To manage the customer relationship with SSCs. The focus here is on both structure and process. Companies need to replace their single marketing strategy with a trio made up of a Customer Acquisition Plan, Customer Retention Plan and Customer Development Plan

Cost of Acquisition : 

Cost of Acquisition

Slide 28: 

Drives Drives CRM Strategy Drives Structure And Technology

CRM Perspectives : 

CRM Perspectives Information Technology (IT) perspective

CRM Perspectives : 

CRM Perspectives The Customer Life Cycle (CLC) perspective

CRM Perspectives : 

CRM Perspectives Business Strategy perspective

CRM System: In the context of Technology Solution : 

CRM System: In the context of Technology Solution CRM System uses people, processes, and technology to gain insight into the behavior and value of customers. This insight allows for improved customer service, increased call centre efficiency, added cross-sell and up-sell opportunities, improved close rates, streamlined sales and marketing processes, improved customer profiling and targeting, reduced costs, and increased share of customer and overall profitability

Components of CRM Systems : 


Components of CRM : SFA : 

Components of CRM : SFA A Sales Force Automation (SFA) system provides an array of capabilities to streamline all phases of the sales process, minimizing the time that reps need to spend on manual data entry and administration. This allows them to successfully pursue more customers in a shorter amount of time than would otherwise be possible. At the heart of SFA is a contact management system for tracking and recording every stage in the sales process for each prospective customer, from initial contact to final disposition. Many SFA applications also include features for opportunity management, territory management, sales forecasting and pipeline, workflow automation, quote generation, and product knowledge.

Components of CRM : Mktg : 

Components of CRM : Mktg Systems for marketing (also known as marketing automation) help the enterprise identify and target its best customers and generate qualified leads for the sales team. A key marketing capability is managing and measuring multichannel campaigns, including email, search, social media, and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. Marketing automation also encompasses capabilities for managing customer loyalty, lists, collateral, and internal marketing resources. As marketing departments are increasingly obliged to demonstrate revenue impact, today’s systems typically include performance management features for measuring the ROI of campaigns.

Components of CRM : Customer Service and Support : 

Components of CRM : Customer Service and Support Recognizing that customer service is an important differentiator, organizations are increasingly turning to technology platforms to help them improve their customers’ experience while increasing efficiency and keeping a lid on costs. The core for customer service has been and still is comprehensive call center management, including such features as intelligent call routing, computer telephone integration (CTI), and escalation capabilities.

Components of CRM : Analytics : 

Components of CRM : Analytics Relevant analytics capabilities are often interwoven into applications for sales, marketing, and customer service. Sales analytics let companies monitor and understand customer actions and preferences, through sales forecasting, data quality management, and dashboards that graphically display key performance indicators (KPIs). Marketing applications generally come with predictive analytics to improve customer segmentation and targeting, and features for measuring the effectiveness of online, offline and search marketing campaign.

Components of CRM : Analytics : 

Components of CRM : Analytics Web analytics have evolved significantly from their starting point of merely tracking mouse clicks on Web sites. By evaluating customer “buy signals,” marketers can see which prospects are most likely to transact and also identify those who are bogged down in a sales process and need assistance. Marketing and finance personnel also use analytics to assess the value of multi-faceted programs as a whole. Customer service analytics are increasing in popularity as companies demand greater visibility into the performance of call centers and other support channels, in order to correct problems before they affect customer satisfaction levels. Support-focused applications typically include dashboards similar to those for sales, plus capabilities to measure and analyze response times, service quality, agent performance, and the frequency of various customer issues.

CRM Success Factor : 

CRM Success Factor Clarity in Intension and the CRM strategy Strong internal partnerships around the CRM strategy Employees at all levels and all areas accurately collect information for the CRM system CRM tools are customer- and employee-friendly Report out only the data you use, and use the data you report Don’t go high-tech when low-tech will do

Example 1 : 

Example 1 I went to a Restaurant at Delhi called Mehfil, it was not one of those that we frequent. We found lots of people waiting outside. But surprisingly, found all of them engaged in doing something. Soon we approached the captain and he handed over a piece of paper. It was carrying a small crossword puzzle and the name of Gautam Gambhir on it. We heard Irfan Pathan, table for two, Tendulkar, table for four and when our turn came, it was announced Gautam Gambhir, table for three. We also qualified for a free dessert for successfully completing the crossword before we got our seat. At the end, we ordered two more of that for all of us and got a surprise 40% discount in the total dessert cost in lieu of that free dessert.

Practical Examples : 

Practical Examples Did you ever notice that Whenever you call up from your regular phone Domino’s Pizza Meru Cab Just Dial Tata Power Apollo Clinic But not when you call up your Cell phone helpline from your cellphone…why?

Parting Thought : 

Parting Thought Personal CRM – Part of your Personality / Grooming / Network Building

CRM Initiatives : 

CRM Initiatives Operational CRM To bring operational improvement and excellence Focused on customer convenience Integrating customer information from multiple channel Sales automation – web-based sale – reduction in transaction cost of business Better claim management and grievance handling - claim / grievance status on web

CRM Initiatives : 

CRM Initiatives Analytical CRM To analyze the mass of data created on operational side of CRM to find Marketing opportunity within an existing customer data-base Information and Strategy on customer retention / attrition Predictive capability to determine customer behavior Portfolio analysis to know how various portfolios are behaving and to take corrective steps. Pricing strategy

Legal Environment of CRM : 

Legal Environment of CRM Law of Contracts Law of Torts Rights of Citizens under Constitution

Constitution of India : 

Constitution of India Right to Equality Right to FreedomRight against ExploitationRight to Freedom of Religion Cultural and Educational RightsRight to Constitutional Remedies --1.Habeas Corpus, 2.Mandamus, 3.Prohibition, 4.Quo Warranto and 5.Certiorari,

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