Building Customer Relationships

Session Coverag ge

Bonding g with Customer CRM Process Framewor rk

Goal of CRM

Enhancing g

Retaining g Satisfying g

Attracting g

The CRM Process s

Learning about Customers 1. Knowledge Acquisition 2. Customer Differentiation

Customization of the Marketing Mix 1. Product / Services 2 Communications 2. 3. Channels 4. Price

IDIC Framework

IDIC framework ex xplains the process of converting existing customers into loyal customers. Identify Differentiate Interact Customize

The Ladder of Lo oyalty

Partner r Advocate e Supporter r Client t Customer r Prospect t

Customer Bonds
Integrated Information Systems Volume & Frequency Awards

Joint Investments Shared Processes & Equipment

Bundling & Cross Selling S bl Pricing Stable Pi i

4. Structural Bonds

1. Financial Bonds

Excellen nt Q Quality y & Value V

Involvement

3. Customization Bonds

Mass Customization Customer Intimacy

2. Social Bonds
Personal Relationship Social Bonds among customers

Continuous Relationship

Source : Berry & Parasuraman, 1991

Bonding for Customer Relati ionship

(Berry & Parasuraman)

Financial Bonds
Volume & Frequency q y Rewards Bundle & Cross selling Stable Pricing

Social Bonds
Personal Relationships p Continuous relationships Social Bonds among customers

Customisation Bonds
Customer intimacy Mass customisation A ti i ti /I Anticipation/Innovation ti

Structural Bonds
Integrated information systems Joint investments Sh d processes and Shared d equipment i t
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Customer Defection

Customers are profitable over a period of time. The e longer they stay t with ith an organisation, i ti the th more profitable fit bl th they are likely lik l to t be. Across industries profits can increase by 35 to 85 % by increasing customer retention by only 5%. About 70% customers switch to competitor offering gs because of perceived indifference of current provider. W hy customers defect?

C t Customers who h d defect f t can be categorised asPrice Defectors Product Defectors Service defectors Market defectors Technology defectors Organisational defectors

M e away Mov O Other friendships C Competition p product dissatisfaction P Perceived indifference

Customer Retention program

Measure Customer Retention

Interview former customers

Analyse com mplaint and servic ce data

Identify y switching g barriers

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Psychological steps across relationship sta ages

Relationship Stages

Prospect

Customer

Clien nt

Supporter

Advocate

Partner

Psychological steps

Initiation

Development

Maintenance/Enhancement

Switching

Satisfaction Trust

Commitment

Loyalty

Major role

Minor role

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Switching g
A prospect becomes a cust tomer

Satisfaction
Emotional state which occurs when product performance exceeds expectations

Trust
Satisfaction over multiple interactions, faith in offering o &consistency in performance performance, confidence in partner partners s reliability & integrity

Commitment

Loyalty
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Commitment
An enduring desire to maintain a relationship.

K variables Key i bl

Trust and commitment are key variables Preserve relationship investments with ith partners t Resist short term gains (lesser than expected benefits of staying on in a long term relationship) View potentially high risk actions p y expect p that as acceptable.They partners will not act opportunistic.

Attitude towards interacting with each other

Formation of bonds (legal,planning,knowledge, , , ) social,technical,structural)

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ICICI-khayal ICICI khayal aa apka series

ICICI Bank celebrates a customers birthday y ICICI Bank Representative tells an old lady that her papers regarding i her pension i would reach home ICICI prudential life insurance ad-where the soldier puts vermillion on his wifes head before leaving for work

ICICI retirement solutionssuraksha zindagi g ke har kadam par

The ICICI mission : When you bank with us we do realize that sometimes you do need to get your loved ones along We take great pride in making them feel as along. comfortable as possible. Apart from your banking needs, we understand your human needs too

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