Customer Relationship Management

Customer Relationship Management
CONCEPT OF CRM
INTRODUCTION TO CRM
CRM (Customer Relationship Management) has been growing steadily for the last few years and is now seen as the way forward for any business wishing to thrive in the e-future. CRM concentrates on the retention of customers by collecting all data from every interaction every customer ma!es with a company from all access points whether they are phone mail web or field. "he company can then use this data for specific business purposes Mar!eting #ervice #upport or #ales whilst concentrating on a customer centric approach rather than a product centric. $very business is different and therefore needs a different approach to CRM. $very company also has different legacy systems and has various levels of data integration within the company. "his is why CRM is so hard to define as it is all things to all companies. Customer Relationship Management (CRM) is developing into a ma%or element of corporate strategy for many organisations. CRM also !nown by other terms such as relationship mar!eting and customer management is concerned with the creation development and enhancement of individualised customer relationships with carefully targeted customers and customer groups resulting in ma&imi'ing their total customer life-time value. (ndustry leaders are now addressing how to transform their approach to customer management. )arrow functionally-based traditional mar!eting is being replaced by a new form of cross functional mar!eting CRM. "he traditional approach to mar!eting has been increasingly 1
*uestioned in recent years. "his approach emphasised management of the !ey mar!eting mi& elements such as product price promotion and place within the functional conte&t of the mar!eting department. "he new CRM approach whilst recognising these !ey elements still need to be addressed reflects the need to create an integrated crossfunctional focus on mar!eting - one which emphasises !eeping as well as winning customers. "hus the focus is shifting from customer ac*uisition to customer retention and ensuring the appropriate amounts of time money and managerial resources are directed at both of these !ey tas!s. "he new CRM paradigm reflects a change from traditional mar!eting to what is now being described as customer management.
CRM-DEFINITION
(n many companies there is still confusion as to what CRM is all about. "o some it is about a loyalty scheme to some it is about a help des!. "o others it is about a relational data base for !ey account management and for others it is about mass profiling the customer base without underta!ing detailed segmentation. Relatively few organisations have implemented an integrated approach which addresses all the !ey strategic elements of CRM. +nly a small number of businesses have a clear idea what should be done with information technology in order to successfully implement CRM. "he core theme of all CRM and relationship mar!eting perspectives is its focus on cooperative and collaborative relationship between the firm and its customers and,or other mar!eting actors. #uch cooperative relationships as being interdependent and long-term oriented rather than
being concerned with short-term discrete transactions. "he long term orientation is often emphasi'ed because it is believed that mar!eting actors will not engage in opportunistic behavior if they have a long-term orientation and that such relationships will be anchored on mutual gains and cooperation. -nother important facet of CRM is .customer selectivity/. -s several research studies have shown not all customers are e*ually profitable for an individual company. "he company therefore must be selective in tailors its program and mar!eting efforts by segmenting and selecting appropriate customers for individual mar!eting programs. (n some cases it could even lead to .outsourcing of some customers . so that a company better utili'e its resources on those customer it can serve better and create mutual value. 0owever the ob%ective of a company is not to really prune its customer base but to identify appropriate programs and methods that would be profitable and create value for the firm and the customer. "hus Customer Relationship management can be defined as1 Customer relationship management is a comprehensive strategy an process o! ac"uiring# retaining an partnering $ith selective the customers to create superior value !or the company an customer%&
EMER'ENCE OF CRM (R)CTICE

Customer relationship has historical antecedents going bac! into the pre-industrial era. Much of it was due to direct interaction between producers of agricultural products and their consumers. #imilarly artisans often developed customi'ed products for each customer. #uch direct interaction led to relational bonding between the producer and the consumer. (t was only after industrial eras mass production society and the advent of middlemen that were less fre*uent interactions between producer and consumer leading to transactions oriented mar!eting. "he production and consumption functions got separated leading to mar!eting functions being performed by the middlemen. -nd middlemen are in general oriented towards economic aspects of buying since the largest cost is often the cost of goods sold. (n recent years however several factors have contributed to the rapid development and evolution of CRM. "hese include the growing deintermediation process in many industries due to the advent of sophisticated computer and telecommunication technologies that allow producers to directly interact with end-customers. 2or e&ample in many industries such as airlines ban!s insurance computer program software or household appliances and even consumables the de-intermediation process is fast changing the nature of mar!eting and conse*uent ma!ing relationship mar!eting more popular. 3atabases and direct mar!eting tools give them the means it individuali'e their mar!eting efforts. -s a result producers do not need those functions formerly performed by the middlemen. $ven consumers are willing to underta!e some of the responsibilities of direct ordering personal merchandising and product use related services with little help from the producers.
-nother force driving the adoption of CRM has been the "otal *uality movement. 4hen the company embraced "otal 5uality Management ("5M) philosophy to improve *uality and reduce costs. (t became necessary to involve suppliers and customers in implementing the program at all levels of the value chain. "his needed close wor!ing relationships with customers suppliers and other members of the mar!eting infrastructure. "hus several companies such as Motorola (6M 7eneral Motors 8ero& 2ord "oyota etc. +ther programs such as 9ust(n-"ime (9(") and Materials re*uirement :lanning (MR:) also made the use of interdependent relationships between suppliers and customers. 4ith the advent of the digital technology and comple& product systems selling approach became common. "his approach emphasi'ed the integration of parts supplies and the sale of services along with the individual capital e*uipment. Customers li!e the idea of systems integration and sellers were able to sell augmented products and services to customers. "he popularity of system integration began to e&tend to consumer pac!aged goods as well as services. "his measure created intimacy and cooperation in the buyer-seller relationships. (nstead of purchasing a product or service customer were more interested in buying a relationship with a vendor. #uch programs have led to the foundation of strategic partnering within the overall domain of customer relationship management. #imilarly in the current era of hyper-competition mar!eters are forced to be more concerned with customer retention and loyalty. -s several studies have indicated retaining customers is less e&pensive and perhaps more sustainable competitive advantage than ac*uiring new ones. +n the supply side it pays more to develop closer relationship with a
few suppliers than to develop more vendors. (n addition several mar!eters also concerned with !eeping customers for life rather than mar!eting onetime sale. "here is greater opportunity for cross-selling and up-selling to a customer who is loyal and committed to the firm and its offerings. -lso customers e&pectation has rapidly changed over the last decades. 2ueled by new technology and growing availability of advanced product features and services customers e&pectations are changing almost on a daily basis. Customers are less willing to ma!e compromises or trade-off in product and service *uality. (n the world of ever changing customer e&pectations cooperative and collaborative relationship with customers seem to be the most prudent way to !eep trac! of their changing e&pectations and appropriately influencing it. "oday many large internationally oriented companies are trying to become global by integrating their worldwide operations. "o achieve this they are see!ing cooperative and collaborative solutions for global operations from their vendors instead of merely engaging in transactional activities with them. #uch customers needs ma!e it imperative for mar!eters interested in their business of companies who are global to adopt CRM programs particularly global account management programs. 7lobal -ccount Management is conceptually similar to national account management program e&cept that they have to be global in scope and thus they are more comple&. Managing customer relationships around the world call for e&ternal; and internal partnering activities partnering across a firms worldwide organi'ation. including
(RINCI(*E+ OF CRM
CRM in effect implies building long-term relationship with your customers and understanding their needs and responding throughout multiple products and services through multiple channels. CRM should finally enable .a targeted beneficial profitable relationship with individuals and groups./ - good CRM solution should allow for
Di!!erentiating Customers- Most CRM systems allow for very little

freedom customi'e to specific industry verticals. #ince the customer needs emerge from the products and offering of the industry CRM system should respond to the customer needs. <nderstanding each customer becomes particularly important. -nd the same customers reaction to a cellular company operator may be *uite different as compared to a car dealer. 6esides for the same product or a service not all customers can be treated ali!e and CRM need to differentiate between a high value customer and a low value customer. 4hat CRM need to understand while differentiating customers is=
#ensitivities tastes preferences and personalities >ifestyle and age Culture bac!ground and education :hysical and psychological characteristics 3ifferentiating +fferings- - CRM solution needs to differentiate
between a low value customer and a high value customer.
>ow value customer re*uiring high value customer findings. >ow value customer with potential to become high value in near
future.
0igh ?alue customer re*uiring high value service. 0igh value customer re*uiring low value service. ,eeping e-isting customers- 7rading customers from very satisfied
to very disappoint shall help the organi'ation in always improving its customer satisfaction levels and scores. -s the satisfaction level for each customer improves so shall the customer retention with the organi'ation.
Ma-imi.ing li!e time value- 6y identifying life stage and life event
trigger point by customer mar!eters can ma&imi'e share of the purchase potential. "hus the single adults shall re*uire a new car stereo and as he grows into a married couple his needs grow into appliances.
Increase loyalty- (t is an endeavor of any corporate to see that its

customers are advocate for the company and its products. -ny company will li!e its mindshare status to improve from being a suspect to being an advocate. Company has to invent in terms of its product and service offerings to its customers. (t has to innovate and meet the very needs of its clients, customers so that they remain as advocates on the loyalty curve. "hus summari'ing CRM cycle can be briefly described as follows1
>earning from customers and prospects Creating value for customers and prospects Creating loyalty -c*uiring new customers Creating profits -c*uiring new customers
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CRM PROCESS FRAMEWORK

"his framewor! suggests that CRM process comprise of the following four sub-processes1 FORMATION MANAGEMENT AND GOVERNANCE PERFORMANCE
urpose $ %ncrease !ffecti#eness $ %mpro#e !fficienc"
Team Structure Role specification rograms $ &ccount Management $ Retention Mar'eting $ Co$op &greements $ Strategic artnerships lanning rocess rocess alignment Relationship erformance $ Strategic $ (inancial $ Mar'eting Retention Satisfaction )o"alt"
Monitoring process
Communication artners $ Criteria $ rocess !mplo"ee Moti#ation
!mplo"ee Training
!#olution $ !nhancement $ %mpro#ement
CRM Process Framework

CRM FORM)TION (ROCE++ "he formation process of CRM refers to decisions regarding initiation of relational activities for a firm with respect to a specific group of customers or with respect to an individual customer with whom the company wishes to engage in a cooperative or collaborative relationship. 0ence it is important that a company is able to identify and differeiatiate individual customers. (n the formation process three important decision areas relate to defining the purpose (or ob%ective) of engaging in CRM; selecting parties (or customer partner) for appropriate CRM programs; and developing programs (or relational activity schemes) for relationship engagement with the customer.
CRM (urpose-"he overall purpose of CRM is to improve mar!eting

productivity and enhance mutual value for the parties involved in the relationship. CRM has the potential to improve mar!eting productivity and create mutual values by increasing mar!eting efficiencies and,or enhancing mar!eting effectiveness. 6y see!ing and achieving operational goals such as lower distribution costs streamlining order processing and inventory management reducing the burden of e&cessive customer ac*uisition costs and through customer retention economics firm could achieve greater mar!eting efficiencies. "hey can enhance mar!eting effectiveness by carefully selecting customers for its various programs individuali'ing and personali'ing their mar!et offerings to anticipate and serve the emerging needs of individual
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customer building customer loyalty and commitment partnering to enter new mar!ets and develop new products and redefining the competitive playing field for their company. "hus stating ob%ectives and defining the purpose of CRM in a company helps clarify the nature of CRM programs and activities that ought to be performed by the partners. 3efining the purpose would also help in identifying suitable relationship partners who have the necessary e&pectation and capabilities to fulfill mutual goals. (t will further help in evaluating CRM performance by comparing results against ob%ectives. "hese ob%ectives could be specified as financial goals mar!eting goals strategic goals operational goals and general goals.
Relational (arties- Customer partner selection (or parties with whom

to engage in cooperative or collaborative relationships) to another important decision in the relationship formation stage. $ven though a company may serve all customer types few have the necessary resources and commitment to establish programs for all. "herefore inn the initial phase a company has to decide which customer type and specific customers or customer groups will be the focus of their CRM efforts. #ubse*uently when the company gains e&perience and achieve successful results the scope of CRM activities could be e&panded to include other customers into the program or engage in additional programs. -lthough partner selection is an important decision in achieving CRM goals not all companies have a formali'ed process of selecting customers. #ome follow intuitive %udgmental approach of senior managers in selecting customer partners and other partner with those customers who demand so. @et other companies have formali'ed process of selecting relational partners through e&tensive research and evaluation among chosen criteria.
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CRM (rograms- - careful review of literature and observation of

corporate practices suggests that there are three types of CRM programs1 continuity mar!eting one-to-one mar!eting; and partnering programs. "hese ta!e different forms depending on whether they are meant for end-consumers distributors or business to business customers. "he table below presents various types of CRM programs commonly developed for different types of customers. +bviously mar!eting practioneers in search of new creative ideas develop many variations and combinations of these programs to build closer and mutual benefecial relationship with their customers.
CRM (RO'R)M+
CUSTOMER TYPES M)++ M)R,ET+ PROGRAM TYPES Continuity mar0eting -fter-mar!eting >oyalty programs Cross-selling :ermission mar!eting :ersonali'ation -ffinity partnering Co-branding DI+TRI/UTOR+ /U+INE++ TO /U+INE++ M)R,ET+ #pecial sourcing -rrangements
One-Toone mar0eting (artnering mar0eting
Continuous replenishment $fficient consumer response programs Customer business Aey account development 7lobal account programs >ogistics partnering 9oint mar!eting #trategic partnering Co-design Co-development
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CRM 'O1ERN)NCE (ROCE++ +nce CRM program is developed and rolled out the program as well as the individual relationships must be managed and governed. 2or massmar!et customers the degree to which there is symmetry or asymmetry in the primary responsibility of whether the customer or the program sponsoring company will be managing the relationship varies with the si'e of the mar!et. 0owever for programs directed at distributors and business customers the management of the relationship would re*uire the involvement of both parties. "he degree to which these governance responsibilities are shared or managed independently will depend on the perception of norms of governance process among relational partners given the nature if their CRM programs and the purpose or engaging in the relationship. "hese include decision regarding
Role speci!ication- relates to determining the role of partners in

fulfilling the CRM tas!s as well as the role of specific individual or teams in managing the relationships and related activities.
Communication- with customer partners is a necessary process of

relationship mar!eting. (t helps in relationship development fosters trust and proves the information and !nowledge needed to underta!e cooperative and collaborative activities of relationship mar!et.
Creating Common 2on s- "he mar!eters should create common

bonds through symbolic relationships endorsements affinity groups 13
and membership benefits or by creating on-line communities. 4hatever is the chosen mode creating value bonding reputation bonding and structural bondings are useful process of institutionali'ing relationship with customers.
(lanning process- (nvolving customers in the planning process would

ensure their support in plan implementation and achievement of planned goals.
(rocess alignment- #everal aspects of the operating process need to

be aligned depending on the nature and scope of the relationship. 2or e&ample operating alignment will be needed in order processing accounting and budgeting process information systems merchandising process etc.
Employee motivation- #everal human resource decisions are also

important in creating the right organi'ation and climate for managing relationship mar!eting. "raining employees to interact with customers to wor! in teams and manage relationship e&pectation are important. #o is the issue of creating the right motivation through incentives rewards and compensation system towards building stronger relationship is desirable for the long-term benefit of the company personal relationships are nevertheless formed and have an impact on the institutional relationship. "hus proper training and motivation of employees to professionally handle customer relationships are needed.
(roper monitoring processes- are needed to safeguard against

failure and manage conflicts in relationships. #uch monitoring 14
processes include periodic evaluation of goals and results initiating changes in relationship structure design or governance process if needed creating a system for discussing problems and resolving conflicts. 7ood monitoring procedures help avoid relationship destabili'ation and creation of power asymmetries. "hey also help in !eeping the CRM program on trac! by evaluating the proper alignment of goals results and resources. +verall development the governance process helps in maintenance
and e&ecution aspects of CRM. (t also helps in
strengthening the relationship among relationship partners and if the process is satisfactorily implemented it ensures the continuation and enhancement of relationship with customers. Relationship satisfaction for involved parties would include governance process satisfaction and in addition to satisfaction from the results achieved in the relationship. CRM (ERFORM)NCE E1)*U)TION (ROCE++ :eriodic assessment of results in CRM is needed to evaluate if programs are meeting e&pectation and if they are sustainable in the long run. :erformance evaluation also helps in ma!ing corrective action in terms of relationship governance or in modifying relationship mar!eting ob%ectives and programs features. 4ithout a proper performance metrics to evaluate CRM efforts it would be hard to ma!e ob%ective decisions regarding continuation modifications or termination of CRM programs. 3eveloping a performance metrics is always a challenging activity as most firms are inclined to use e&isting mar!eting measures to evaluate CRM. 0owever many e&isting mar!eting measures such as mar!et share and total volume of sales may not be appropriate in the conte&t of CRM. $ven when a more
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CRM oriented measures are selected it cannot be applied uniformly across all CRM programs particularly when the purpose of each program is different from one another. 2or e&ample if the purpose of a particular CRM effort is to enhance distribution efficiencies by reducing overall distribution cost measuring the programs impact on revenue growth and share of customers business may not be appropriate. (n this case the program must be evaluated based on its impact on reducing distribution costs and other metrics that are aligned with those ob%ectives. 6y harmoni'ing the ob%ective and performance measures one would e&pect to see a more goal directed managerial action by those involved in managing the relationship. 2or measuring CRM performance a balanced score card that
combines a variety of measures based on the defined purpose of each program is recommended. (n other words the performance evaluation metrics for each relationship or CRM program should mirror the sets of defined ob%ectives for the program. 0owever certain global measures of the impact of CRM effort of the company are also possible. (f cooperative and collaborative relationship with customers is treated as an intangible asset of the firm its economic value adds can be assessed using discounted future cash flow estimates. (n some ways the value of relationships is similar to the concept of brand e*uity of the firm and hence many scholars have alluded to the term relationship e*uity is not available in the literature as yet companies are trying to estimate its value particularly for measuring the intangible assets of the firm. -nother global measure used by firms to monitor CRM performance is the measurement satisfaction. #imilar to the measurement of customer satisfaction which is now widely applied in many companies relationship satisfaction measurement would help in !nowing to what e&tent relational
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partners are satisfied with their current cooperative and collaborative relationships. <nli!e customer satisfaction measures that are applied to measure satisfaction on one side of the dyad relationship measures could be applied on both sides of dyad. 6oth the customer and the mar!eting firm have to perform in order to produce the results in a cooperative relationship and hence each partys relationship satisfaction could be measured. 6y measuring relationship satisfaction one could be estimate the propensity of either partys inclination to continue or terminate the relationship. #uch propensity could also be indirectly measured by measuring customer loyalty. 4hen relationship satisfaction or loyalty measurement scales are designed based on its antecedents it could provide rich information on their determinants and thereby help companies identify those managerial actions that are li!ely to improve relationship satisfaction and,or loyalty. CRM E1O*UTION (ROCE++ (ndividual customer relationships and CRM programs are li!ely to undergo evolution as they mature. #ome evaluation paths may be preplanned while others would naturally evolve. (n any case several decisions have to be made by the partners involved about the evolution of CRM programs. "hese include decision regarding the continuation termination enhancement and modifications of the relationship engagement. #everal factors could cause the precipitation of any of these decisions. -mongst them relationship performance and relationship satisfaction are li!ely to have the greatest impact on the evolution of the CRM programs. 4hen performance does not meet e&pectation partners may consider termination or modifying the relationship. 0owever e&traneous factors could also impact these decisions. 2or e&ample when companies are ac*uired merged or divested many relationships and relationship mar!eting programs
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undergo changes. -lso when senior corporate e&ecutives and senior leaders in the company move CRM programs undergo changes. @et there are many collaborative relationships that are terminated because they had planned endings. 2or companies that can chart out their relationship evolution cycle and state the contingencies for ma!ing evolutionary decisions CRM programs would be more systematic.
CRM IM(*EMENT)TION I++UE+

4here CRM is well understood as a concept many board-level managers are still unclear as to how a particular CRM approach should be cost-effectively implemented and what technology options should be adopted. "he starting point for introducing or further developing CRM must be determined from a strategic review of the organisations current position. Companies need to address four broad issues1 what is the core business and how will this evolve in the future; what form of CRM is appropriate for the business now and in the future; what (" infrastructure does the company have and what do they need to support the future organisation needs; and what vendors and partners do they need to choose= -n organisation should first e&amine its core business and consider how it will evolve in the future. (t then needs to consider the form of CRM that is appropriate for their business now and in the future and what organisation resources does it have to support the business now and in the future.
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0aving identified the present and future focus of CRM organisation then needs to address the appropriate architecture to enable their CRM strategy to be implemented. CRM.
the
information #tated
simply the tas! is how can the company e&ploit technology for improved
-s organisations increase their sophistication they will need to creativity integrate these technologies. .:lanned evolution/ is a good way of summarising the technology approach to building the bac!bone to support the relevant CRM strategy that has been mapped out for the business. -s shown in the figure below CRM solutions platform needs to be based on interactive technology and processes it should assist the company in developing and enhancing customer interactions and one-toone mar!eting through the application of suitable intelligent agents that develop front-line relationship with customers. #uch a system would identify appropriate data inputs at each customer interaction site and use analytical platforms to generate appropriate !nowledge output for front-line staff during customer profitability analysis management customer segmentation customer care demand generation account planning opportunity management contact integrated mar!eting communications strategies customer problem solving virtual team management of large global accounts and measuring CRM performance would be the ne&t level of solutions sought by most enterprises. -n essential element of achieving successful implementation is to ensure that their strategy is underpinned by viable and appropriate technology architecture. "his involves the selection of vendors and partners based on issues of customisation capability and other appropriate commercial factors including both technological and commercial criteria.
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"he new millennium Customer Relationship Management will have advanced considerably and we will have reached much more sophisticated level of one-to-one mar!eting and data mining. "here is now an enormous opportunity for organisations to improve their customer ownership by building a co-ordinated and integrated set of activities which address all the !ey strategic elements of CRM. strategic vision for the future <ltimately however organisations success in CRM will involve creating an appropriate ma!ing the appropriate choice of applications creatively using appropriate analytical techni*ues to e&ploit the data and choosing the right vendor for supply of the technology solution.
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IMPLICATIONS OF GLOBALIZATION ON CRM

"he globali'ation of mar!ets has been one of the ma%or business developments in the last three decades contend that choosing not to participate in global mar!ets is no longer optional. "he pressure of global competition impacts every domestic mar!et as well as international mar!ets. Mar!etplaces are transitioning to demand-side approaches with a focus on customer needs and wants. Customer relationship management thus should assume a central role in the mar!eting management of global products and services. "he impact of globali'ation on CRM however represents an under-researched area. "he multinational corporation operates in a number of countries and ad%usts its products and practices in each at high relative costs. "he global corporation operates with resolute constancy at low relative cost as if the entire world (or ma%or regions of it) were a single entity; it sells the same thing in the same way everywhereB "he merits and demerits of standardi'ation versus locali'ation of product,service offerings and the associated promotional activity are again being debated in the trade and academic literature admittedly more vociferous in the former than in the latter settings. #ome authors suggest that the debate is forcing a false dichotomy and that it should be recogni'ed that different strategies with regard to the degree of standardi'ation or locali'ation should apply. "hese strategies would be contingent upon the nature of the product or service and on the mar!et in which it is active for e&ample contends that for the service industry at 21
least
decentrali'ed strategies empower those most involved with
customers allowing them to ma!e business decisions which recogni'e mar!etplace variations. "hus mar!eting itself is now concerned with understanding of target customers and develops the value propositions that customers want and need and then creating the mar!eting approach. "his does not mean that this approach is followed by international firms certain other factors for e&ample corporate edict may control how country strategic business units approach mar!eting and mar!eting communication. Mar!et segmentation and positioning strategies may need to reflect wide divergence in consumer needs and preferences. "he structure of the competitive environment may also vary widely from country to country not to mention current product life cycle stage on the temporal dimension. "hese factors will inevitably impact on mar!eting communication strategies and techni*ues as will other issues outlined below.
Cultural differences may impact on what is or is not acceptable in mar!eting communication such as the way women are portrayed and what values such as individualism versus collectivism are used. Cultural differences may be overstated in the area of technology (e.g. personal computers). Recent research that suggests that attitudes motivations and needs for these products transcend national boundaries with regional differences ma!ing no appreciable impact on the purchase process. 0owever the e&clusion of developing countries in the study cited may limit the generali'e ability of this finding.
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0owever while the importance of CRM is recogni'ed and interest is high there is also a great deal of confusion regarding how effective strategies can be developed and what operational processes are re*uired to support this at an individual country level let alone on a global basis CRM software is increasingly being offered as Cthe solutionC to many operational problems but users suggest that simple software CsolutionsC may allow technical and organi'ational challenges to be underestimated. #uggests that !ey portions of actual operations can be missed or may be dis%ointed and that the software is not of itself sufficient to remedy CsystemC deficiencies. "he impact of technology on globali'ation should not be understated. 4hile technology is helping to shrin! distances between mar!ets and firms who are able to effectively manage the interaction of technology !nowledge and information management seem to be the most successful technology presents its own problems. 2or e&ample while the (nternet can help global mar!eting efforts it can also create discontent for consumers and distributors in relation to price discrimination across mar!ets and variations in distribution strategies. "echnology is however no panacea for solving one of the ma%or enduring problems being e&perienced in the global mar!etplace1 cultural arrogance and insensitivity "he impact of arrogance and insensitivity on the development of customer relationships in both the short and long term is obvious.
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EFFECTIVE CRM THROUGH CUSTOMER KNOWLEDGE MANAGEMENT

Customer relationship management starts with an in-depth !nowledge of customers their habits desires and their needs by analy'ing their cognitive effective behavior and attributes. CRM applies this !nowledge to develop and design-mar!eting strategies to develop and cultivate long lasting mutually beneficial interaction and relationship with the customer. Customer !nowledge and customer interaction on the basis of this !nowledge are tow pillars on which any CRM design and its successful implementation rests. 34)T I+ ,NO3*ED'E M)N)'EMENT Core of any !nowledge management implementation is to abstract vital and meaningful !nowledge from the voluminous amount of data available from variety of internal end e&ternal sources and ensure is practical use. Anowledge management is a management discipline that treats intellectual capital as managed asset it is not about creating a central database that is a complete replica of all that is !nown by employees or that is embedded in the system they use Anowledge management is about embracing a diversify of !nowledge sources li!e legacy systems e&isting data-warehouses portals websites customers suppliers partners e&ternal mar!eting research agencies and cultivating this !nowledge where it resides. <nderstanding data in terms of its conte&t and inert-relationship give information; understanding principles of
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!nowledge gives wisdom top satisfy complete needs of customer. "his has the potential of developing customers even before product or service is developed. Anowledge management helps an organi'ation to gain insight and understanding from its own e&perience. Anowledge management implementation also protects intellectual assets from decay adds to firm intelligence and provides fle&ibility. "here are three guiding issues in the concept of Anowledge Management :eople :rocesses and "echnology. "he people throughout a company-from the C$+ to each and every customer service rep-need to buy in to and support CRM. - companyCs business processes must be reengineered to bolster its CRM initiative; often from the view of how can this process better serve the customer= 2irms must select the right technology to drive these improved processes provide the best data to the employees and be easy enough to operate that users wonCt bal!. (f one of these three foundations is not sound the entire CRM structure will crumble. <nderstanding of organi'ational needs its vision and mission should determine development of !nowledge management system. !nowledge management could be developed more effectively on !nowledge of organi'ational structure information flow information usage and storage any proposed business process reengineering e&isting automation levels e&isting data warehouse solutions e&isting messaging systems and internal applications any other legacy systems.
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CU+TOMER 1)*UE C4)IN
Customer +ata
Customer %nformation
Customer ,no-le.ge
/is.om to Completel" Satisf" Customers
The CRM Value Chain
2oundation of customer !nowledge rests on variety of data sources data could be numerical te&tual organi'e in tables discrete and so on. Aey to leverage this data is to organi'e it so that it becomes !nowledge on the basis of which informed business decisions could be ta!en. (ndustry analysts estimate that data has no e&ternal structure (internally there are sentences paragraphs words) represent DEF of the enterprise information compared to GEF of structures data. (ts a proven fact that DEF of an organi'ation revenues come form GEF from its
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customers it becomeHs imperative to design CRM solutions !eeping in mind these most valuable customers and to leverage DEF non structured data of about GEF of these most valuable customers. "hus if CRM architecture could ta!e care of this simple but important fact CRM implementation will become less cumbersome and would start giving fruitful results very *uic!ly. +nly way to leverage this DEF of unstructured but most useful data is to use !nowledge management architecture. 4ell-managed customer information that is properly catalogued and structured available and accessible to the right people at the right time becomes customer !nowledge. 9ust as more tangible corporate assets li!e computer systems have a finite shelf life so too does !nowledge it must be available at the right time to be able to act upon it. (t is not only important to capture customer !nowledge form the e&isting structured and unstructured internal and e&ternal sources but to be able to cultivate this !nowledge as to be able to gain a strategic advantage even in the future CRM systems should be able to classify store retrieve when re*uire this dynamic information which is created every moment. "here are many !ind of much tacit !nowledge for e&ample
troubleshooting of very comple& control system which is used by every valuable customer of a capital e*uipment manufacturer. - service man when goes to a customer ste does number of hit and trial chec!s in the basis of his e&perience and thus able to transform system to a healthy state. #ince the system is so comple& that every visit of service man is a new e&ercise in which he uses past !nowledge to solve comple& problem. "his !ind of tacit product !nowledge is derived from e&pertness data and documents. "his is hard to define and can only be shared through consultation mentoring and giving e&amples.
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Retaining tacit !nowledge means retaining the individual which is invariably not possible. (t is possible to generate e&plicit !nowledge from tacit !nowledge but its a comple& e&ercise. "he !ey ingredients of this e&change is face to face sharing of !nowledge or using virtual environmental tools li!e >otus notes which can facilitate tacit !nowledge e&change. 0ence for tacit !nowledge e&change te&t mining is very useful and important. "here are ways to do te&t mining li!e search engines web solutions te&t analysis tools. "he !ey to successful customer !nowledge management is personali'ation i.e. how to e&tract the !nowledge that is pertinent to the user and translate it into a format that is easily understood. (t is important form the point of navigation through various data sources information and !nowledge. - customer !nowledge catalogue should be created in which a categori'ed collection of companys intellectual assets will e&ist. (t should be build on a database platform that enables enterprise wide scaling protects and maintains the !nowledge content and allows for consistent fast access to enterprise wide customer !nowledge resources.
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(RO(O+ED CU+TOMER ,NO3*ED'E M)N)'EMENT FOR EFFECTI1E CRM
- phase for proposed customer !nowledge management for effective CRM is shown below.
Resources &nal"sis &ligning C,M an. 0usiness strateg" C,M architecture .esign 1ase. on ,M CRM 'no-le.ge au.it an. anal"sis C,M team foun.ation C,M team organi2ation 1lueprint +e#elop the C,M s"stem C,M .eplo"ment 3rgani2ational culture C,M performance an. e#aluation
Phase 1 Evaluation
Phase 2 CKM S ste! anal sis" #esi$n an# #e%lo !ent
Phase & De%lo !ent Phase ' S ste! Evaluation
Phases of Implementation of Customer Knowledge Management
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-s stated earlier li!e any Anowledge management implementation Customer Anowledge Management should have four phases as shown above. "he customer !nowledge management architecture should have a layered approach. $&isting systems should be seamlessly lin!ed with the proposed layer. "he choice for a customer !nowledge management could be 4eb or a pac!aged solution such as >otus )otes Microsoft solutions. #ome important points concerning Customer Anowledge Management architecture are
(ntegration of internal and e&ternal customer !nowledge sources. (dentification of (" components of !nowledge creation collaboration and application. (dentification of e&isting and re*uired data mining and !nowledge discovery techni*ues including artificial intelligence genetic algorithms neural networ!s e&pert and decision support system reasoning tools.
(dentify push and pull bases mechanism for !nowledge sharing and delivery. (dentification of right mi& of searching inde&ing and retrieval. "agging e&isting !nowledge bases depending on attributes domain form type product service time and location. (dentify platform and element of the interface layer li!e clients servers and gateways. (dentification of components of !nowledge architecture.
3*
WINNING MARKETS THROUGH EFFECTIVE CRM

(nformation technology and (nternet are rapidly changing the face of what is possible in customer contact care and insight. Moreover customer e&pectations for *uality service and value are rising continually. Aeeping this in mind successful companies are now gearing to organi'e their business around the types of customers they serve types rather than organi'ing their business along the product lines poor geographic business units. "oday with ever increasing focus on customers companies are ta!ing a process-oriented approach to customer relationship management. "he following is a framewor! bases on the new paradigm by which CRM research and applications might be e&panded to provide better and more useful information for effectively managing customer relations. Tra.itional &pproach to CRM Customer Contact 1" Telephone Mail %n erson ersonal Staffing &fter Sales Ser#ice Complaint 4an.ling &ccount Management Customer Care Customer Satisfaction /e1$ena1le. an. %ntegration &pproach %ntegration -ith Technolog"
6/e1
an. %nternet7
Customer %nformation S"stem Customer +ata1ase !lectronic oint of Sale Sales (orce &utomation of Customer Support processes Call Centers S"stem %ntegration )ifetime 5alue of a Customer
Customer Relationship- A Technology Driven Approach
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- framewor! in designing a strategy for effective customer relationship management and highlighting the important elements vi'. 3eveloping Customer (nsight e&perience. DE1E*O(IN' CU+TOMER IN+I'4T Companies gather information from all points if interactions with the customers and ma!e available to everyone within the organi'ation. "his function is facilitated by customer ata2ase. - good customer database information system should consist of a regular flow of information systematic collection of information that is properly evaluated and compared against different points in time and it has sufficient depth top understand the customers and accurately anticipate their behavioral patterns in future. "he customer database helps the company to plan implement and monitor customer contact. Customer relationships are increasingly sustained by information systems. Companies are increasingly adding data from a variety of sources to their databases. Customer data strategy should focus on processes to manage customer ac*uisition retention and development. Current spread of information in the company over many different databases is often incompatible and therefore has to focus on data warehousing to integrate the into one analy'able data set. 2ew businesses have the lu&ury of defining their customer data re*uirements from the beginning. -s customers needs and behavior change and mar!eting strategies respond new datasets are re*uired. $ach dataset <se of "echnology in CRM customer contact :ersonali'ing Customer (nteraction and -chieving #uperior Customer
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collected will therefore need to be developed dynamically. #ome data will cease to be relevant; other data will need to be added.
U+E OF TEC4NO*O'5 IN CRM "he application of technology is the most e&citing fastest growing and change the way customers get information about products and services. "echnology includes all of the e*uipment software and communication lin!s that organi'ations use to enable or improve their processes including everything from simple overhead transparency pro%ectors to laptop computers from fa& machines to e-mail from audio cassette and video cassette players to cellular phones and voice mail. "he most widely used tools as e&plained below
Electronic (oint O! sale 6E(O+7 - "he main benefit of $:+# and

retail scanner systems is the amount of timely and accurate information they deliver. -dvances in the technology have significantly aided the scope for data analysis. (n addition to the original scanner-related data on sales rate stoc! levels stoc! turn price and margin demographics variables-price retailers now have information about the lifestyle characteristics of socio-economic and promotion advertising
consumers. "hey can in addition asses the impact of whole host of position in store shelf position number of facings and so on. "his information drives their choice of product mi& allocation of shell space and promotional tactics. $:+# has certainly changed the relationship between buyer and seller.
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+ales !orce )utomation-
"hese systems help in auto mating and
optimi'ing sales process to shorten the sales cycle and increase sales productivity. "hey enable the company to trac! and manage all *ualified leads contacts and opportunities throughout the sales cycle including customer support. "he improve the effectiveness of mar!eting communications programmes for generating *uality leads as well as greater accuracy to sales forecasting. "he internet can be used by the company in imparting proper training to its sales force. (n-depth product information speciali'ed databases of solutions sales force support *ueries and a set of internal information on the internet can improve the productivity of the sales force.
Customer service 4elp es0- "hese applications help the company

in automating the customer support processes which enable it to deliver high *uality service tom their customers. #uch software helps in logging the information about customer problems en*uires and suggestions etc. (t also helps in directing these *ueries to appropriate employees within the company. (t maintains information regarding status of customer en*uiries and stores all support calls and related communications to final resolution continually updating the database accordingly. 4ith an automated customer service a company can reduce the costs of maintaining its customer service department while at the same time improving the level and *uality of customer service. Customer service using the web provides more information and tools in the hands of customers which enhances customer benefits by allowing them to learn more about the product and improving their s!ills in using the product.
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Call Centre- Call centre helps in automating the operation of

inbound and outbound calls generated between company and its customers. "hese solutions integrate the voice switch of automated telephone systems (e.g. $:-68) with agent host software allowing for automatic call routing to agents auto display of relevant customer data predictive dialing self service (nteractive ?oice Response systems etc. "hese systems are useful in high volume segments li!e ban!ing telecom and hospitality. "oday more innovative channels of interacting with customers are emerging as a result of new technology such as global telephone based call centers and the internet. Companies are now focusing to offer solutions that leverage the internet in building comprehensive CRM systems allowing them to handle customer interactions in all forms.
+ystem Integration- 4hile CRM solutions are front-office

automation solutions. $R: is bac!-office automation solution. -n $R: helps in automating business functions of production finance inventory order fulfillment and human resource giving an integrated view of business where as CRM automates the relationship with a customer covering contact and opportunity management mar!eting and product !nowledge sales force management sales forecasting customer order processing and fulfillment delivery installation presale and post-sale services and complaint handling by providing an integrated view of the customer. (t is necessary that the two systems integrate with each other and complement information as well business wor!flow. "herefore CRM and $R: are complementary; the integration of CRM with $R: will help companies to provide faster customer service through an enabled networ! which can direct all customer *ueries and issues through appropriate channels to the
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right place for speedy resolution. "his will help the company in trac!ing and correcting the products problems reported by customers by feeding this information into the RI3 operations via $R: .Choice boards/ are interactive on-line systems that allow
individual customers to design their own products by changing from a menu of attributes components prices and delivery options. "he customer selection send signals to he suppliers manufacturing system that set in motion the wheels of procurement assembly and delivery. "he role of the customer in this system shifts from passive recipient to active designer. $very business no matter how much it relies on indirect sales channels no has the opportunity to begin electronically thin!ing lin!ing its channel partners with its end customers and participating in the dialogue between them.
CU+TOMER CONT)CT
(nternet us helping companies in improving communication with customers. Consumers have been increasingly engaging themselves in an active and e&plicit dialogue with manufacturers of products and services. (ndividual; consumers can address and learn about business either on their own or through the collective !nowledge of other customers. <senet groups and chat discussions allow feedbac! and targeted e-mail surveys can pinpoint problem areas and options that will have high benefits from improvement. Collaborative design with suppliers allows much faster turnaround of new deign. "his causes the earlier introduction of products generating much higher satisfaction and feelings of getting
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state-of-the art products. "he connecting of supplier-manufacturer intranets into functioning e&tranets has been notably successful.
(ER+ON)*I8IN' CU+TOMER INTER)CTION

"he modern devices and technology tools are designed to help consumers ma!e informed purchasing decisions. Customer Communities Customers in the new economy are finding it easier to form on their own self-selecting virtual communities. +n-line customer communities can be *uite tightly !nit. (nternet chart rooms are easy to start up %oin and participate in. Chat rooms accommodate a wide range of personalities-many of them assumed ones. Customer comminutes can e&ercise powerful influence on the mar!et. "he power of such communities derives in large measures from the speed with which they can be mobili'ed. 4ord spreads so fast on the internet that people now refer to word of mouth as/ virtual mar!eting/
(ersonali.ation :ersonali'ation is a special form of product differentiation. (t transforms a standard product or service into a speciali'ed soElutioon for an individual. (t changes product design from an inherent compromise to a process of deciding what features would benefit a specific individual. Combined with innovative distribution it can do a better %ob of matching consumer tastes without the waste of current approach. +nline choice
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assistance ta!es a set of products tries to determine an intervals tastes and needs and ma!es a recommendation. (f this recommendation is accurate and trusted it creates value and loyalty. (n other words personali'ation helps the customers in becoming the co-creators of the content of their e&periences.
)C4IE1IN' +U(ERIOR CU+TOMER E9(ERIENCE

Customer relationship management is about managing director life cycle through all points of customer contacts ensuring that every interaction leads to a value addition on relationship. "his is made possible through each contact point empowered with the !nowledge capable of being responsive to customer needs and to offer superior e&perience to the customer. $&periences occur as result of encouraging undergoing or living through situations. $&periences also connect the company and the brand to the customers lifestyle and place individual customer actions and the purchase occasion in a broader social conte&t. - good customer e&perience delivers service product-and peace of mind. Consumers e&periences of a buying and using a product or service depend on their perceptions about actual performance of that product or service.
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DATA MINING FOR CRM

- typical CRM cycles consists of front-end operations in which the customer interacts with your company via e-mail telephone web or faceto-face through your companys 6ac! +ffice #ales team Mar!eting division etc. -s the interaction progresses to a sale service *uery or *uote the information from that interaction is stored and fed through middleware into a database. "his data can then be used to create data marts warehouses etc and drawn upon by sales service mar!eting or business to add a greater functionality to those departments. 3ata analysis is done by data mining methods. "he output is interpreted and new !nowledge is transferred to a central customer repository where all employees of the firm access it. "his helps them to customi'e Reponses. "hus data mining provides the intelligence behind the CRM initiative.
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+ne can also view the same CRM tas! from a technology point of view having three primary components operational process management technologies analytical or performance management technologies and collaborative or business collaboration management technologies- all of which are re*uired to achieve a balanced CRM approach. +perational CRM solutions involve integration of business processes involving customer touch points. Collaborative CRM involves the facilitation of collaborative services (such as e-mail) to facilitate interaction between customer and employees. -ll this effort produces rich data that feeds the -nalytical CRM technologies. (t analyses the data using data mining and other technologies and in turn feeds the result (i.e. !nowledge gained) bac! to the operational and collaborative CRM technologies. (t is to be noted that there is very big overlap in the above description and there is feedbac! between efforts.
O%e(ational CRM
Anal ti)al CRM
Colla*o(ative CRM
Custo!e(
Interaction between CRM technologies

4igh #alue customers -ho re8uire a high le#el of ser#ice are maintaine. -ithout e9pan.ing the costl" offering to the entire customer population
4*
"hus as seen form above . Data mining is an activity that provi es intelligence to the CRM initiative% Data mining# the process o! iscovering implicit an hi en patterns in ata%& (t is one of the most important bac! end processes. (t provides relevant intelligence to the CRM initiative. 3ata mining is not %ust e&ecution of e&otic data e&traction algorithms but a process that enables informed decision to be ta!en by the employees at the customer contact point. 3epending on the level at which the data is mined the data mining operations into two categories; The aggregate or macro level wherein without loo!ing at any customer in particular we try to find general customer behavior trends and preferences form a large database such as mar!et bas!et purchaser from a retail store. +perations at this level include segmentation deviation detection classification and regression and lin! analysis. In ivi ual or the micro level wherein provides specific information about a particular customer. 2or e&ample the retail store can go to the e&tent of finding out the preferred colors of his shirt. - firm ta!es up micro-level mining to build a featured customer profile of a regular customer. 3ata mining in this level might be e&pensive if the data mining has to cull out individual information from a large database. 0aving a separate database for profitable customers will be helpful.
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INFORM)TION RE:UIREMENT+ OF )N EFFECTI1E CRM +O*UTION

"he employees of a firm employing CRM would re*uire rich information about their firm and customer base including the following1 (nformation about the mar!et (nformation about the firm. "he current customer segment. 3emographic distribution (by age se& education income martial status etc.) "he firms best customers and the segment they belong to products the buy preferences habits and tastes of each segment. (ndividual level information such as customer personal details li!es disli!es habits and preferences events coming their personal life the customer group,segments to which the individual belongs. "he use of data mining models is becoming more and more widespread.
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D)T) MININ' T)+,+ RE*E1)NT TO CRM

3ata mining tas! produce !nowledge that tend to be either predictive or descriptive. :redictive operations assigns value to some variables based on other related ones. 3escription focuses on declining essential features or characteristics of the data. CRM uses both predictive and descriptive power of data mining tas!s to try to understand the customer better. Classi!ication- Classification is a process that maps a given data into one of the several predefined classes. CRM uses classification for a variety of purposes li!e behavioral prediction product and customer categori'ation. #uppose the retail store allows customers to buy products on credit and repay in installments. (t would li!e to e&tend this facility to only that customer who is not li!ely to default. "he classification then guides the staff to allow customers buy on credit. Classification would not be meaningful if we have no pre-defined categories e.g. (f our retail outlet is e&clusive to a particular class of customer then it would not be meaningful to classify the customer. Regression- Regression is the operation of learning a function that predicts the value of a real valued dependant variable based on values of other interdependent variables. Regression finds application in a CRM environment where prediction needs to be made about the behavior involving real valued variables. #uppose the retail store collects data on the monthly visits of customer vi'. 43
fre*uency time spent on each visits and purchases made during each visit. (f the manager has a strong intuition that the value of the total purchases made during a month is related to the fre*uency of visits and the amount of time spent in the store then this situation can be modeled by regression. "his model can then be used to predict future purchases of a customer. Regression needs sufficient amount of data to be reliable and valid. (f the store does not have enough data then regression is not the techni*ue to be employed. *in0 )nalysis- >in! -nalysis see!s to establish relationship between items or variables in a database record to e&pose patterns and trends. >in! analysis can also trace connections between items of records over time. "he most important lin! application in CRM called mar!et bas!et analysis is an operation that see!s relationships between product items characteri'ing product affinities or buyer preferences. "he retail store collects thousands of transaction daily. - lin! analysis tas!s performed on this data will point to items that are bought together e.g. a bread and butter are bought together rather bread and orange %uice. #uch information can be used to deign store layouts coupons etc. +egmentation- #egmentation aims to identify a finite set of naturally occurring clusters or categories to describe data. #egmentation is done in such a way that cases belonging to a segment or cluster are more similar with respect to the clustering criterion while they differ significantly from the cases belonging to other segments. 2or e&ample the retailer can segment his design
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customers bases o buying habits. 0e might find two distinct clusters1 the first cluster consisting of customers who tend to spend less time in the store and buy less e&pensive items while member of the second cluster spend more time in the store and tend to buy e&pensive items. #egmentation of customers based on profitably would help the retailer to concentrate on the appropriate segment. (n CRM segmentation would not be useful if there are no underlying groups. Deviation Detection- 3eviation detection focuses on dic!ering the most significant changes in the data from previously measured e&pected or normative values. Most CRM solution has a deviation detection tas! running in parallel on a regular basis. #uppose a retailer finds that sales from a particular section of the store have been much less than e&pected. "his deviation on further analysis points to non-stoc!ing of a popular brand.
3ata mining tas!s are e&ploratory in nature. "hey do not ascertain the reason for the occurrence of the detected pattern. -lso the use of data mining tas! is dictated by *uestions that have been raised. "wo or more data mining tas!s used in proper con%unction phenomenon would ta!ing give a manager and rich insight ferret into the place probably out hidden
relationships otherwise impossible to recover.
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D)T) MININ' TOO*+ )ND TEC4NI:UE+

- variety of data mining tools techni*ues and algorithms are available to support the five minings tas!. "hey differ from each other in type of data handled assumptions about the data scope and interpretations of the output. Decision trees- 3ecision trees are classification tools that classify e&amples in to finite number of classes considering one variable at a time and dividing the entire data set based on it. 3ecision trees can be used for inducing rules for classification and segmentation. #egmentation is possible at each node the decision tree splits the database into segments based on the value of the variable considered. "he retailer can classify customer into classes using the decision tree. - new product can be classified into a category by a decision tree by its price *uality and durability. Rule in uction- rule induction is the process of inducing general rules from a database of specific e&amples. (n this pro%ect only associate rules will be considered. -ssociation rules are implication rules of the form -JK6 which imply a relationship between - and 6 where - and 6 can be a single items or set of items. "hese rules do not give e&act nature but only point towards a general interaction between the two items. "he retail stores can obtain insights on which products sell together by running an association rule algorithm. Customers can be pre-empted into buying related goods by suitably modifying store layout or bundling products.
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Case
2ase
Reasoning- Case
6ased
Reasoning
(C6R)
methods try to stimulate how a human being thin!s. "ypically when an e&ample is presented to a C6R solution it tries to match the current e&ample with other e&amples that it has in its repository and retrieves the case that is most similar to the current case. 3ecision is then ta!en based on e&trapolation its power depends largely on the inde&ing method used to store cases and the matching method use to retrieve relevant cases. "he retail store can use C6R techni*ues to classify items or assign a customer to a class. 0owever if a database of typical cases is not available then this method will not produce a good classification scheme. 1isuali.ation Techni"ues- ?isuali'ation techni*ues allow the user to view data from various angles using graphic display techni*ue li!e charts diagrams displays for multidimensional data etc. <sed in con%unction with other data mining techni*ues visuali'ation techni*ues are ideal when users do not !now what and where to loo! for or to discover new !nowledge. "hey also help in interpretation and evaluation of information e&tracted by other data mining techni*ues and tas!s. Most data-mining suite of tools includes at least one visuali'ation tool. Nearest Neigh2or Techni"ues- )earest )eighbor "echni*ues use a set of e&amples to appro&imate a classification model. #imilarity measure is used to find the closes e&ample in terms of certain parameters and then it assigns this new case to the class that has the ma&imum representation amongst its
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neighbors. (n CRM it is primarily used for classification such as assigning a class to the retail store that has been recently set up. Clustering )lgorithms- Clustering -lgorithms segment the database into clusters such that intra-cluster similarity is ma&imi'ed and the inter-cluster similarity is ma&imi'ed. Most data mining that supports CRM include clustering algorithms.
Choice of data-mining tools depends not only on the capability of the tool but also on the *uestion that the firm see!s to answer. Multiple tools might answer the same *uestion but to different degrees of satisfaction and completeness. -s transactions with the customers is constantly ta!ing place new data comes into the data warehouse updating old data. 3ata mining solution for a particular CRM application must be capable of catering to such !ind of dynamism. Running the same algorithm over the entire database repeatedly is an e&pensive proposition in terms of both time and resources. "ools with incremental !nowledge between the front end CRM solution and the bac! end data mining solution helps to ensure initiative. consistency and timely information dissemination throughout the firm- an important re*uirement of any CRM
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eCRM
Companies agree that eCRM(e Customer Relationship
Management) is critical tot heir businesses but unfortunately few understand what it is what is the difference between traditional CRM and e-CRM how to evolve from their e&isting mar!eting practices to an e-CRM solution. (n simplest terms e-CRM provides companies with a means to conduct interactive personali'ed and relevant communications with customers across both electronic and traditional channels. (t utili'es a complete view of the customer to ma!e decisions about messaging offers and channel otherwise delivery. dis%oint (t synchroni'es respecting communications across customer-facing
systems. (t adheres to permission-based practices
individual preferences regarding how and whether they wish to communicate with you and it focuses on understanding how the economics of customer relationships affect the business. 4hile the definition is simple achieving eCRM itself is hard. 2or business organi'ation evolving to eCRM re*uires process and organi'ational changes a suite of integrated applications and a non-trivial technical architecture to support both the eCRM process and the enterprise application that automate the process.
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eCRM 1+% CRM

CRM is essentially a business strategy for ac*uiring and maintaining the/ right/ customers over the long term. 4ithin this framewor! a number of channel e&its for interacting with customers. +ne of these channels is .electronic/- and has been labeled .e-commerce/ or .e-business/. "his electronic channel does not replace the sales force the call center or even the fa&. (t is simply another e&tension albeit a powerful new one to the customer. "he thrust of eCRM is not what an organi'ation is .doing on the web/ but how fully an organi'ation ties its on-line channel bac! to its traditional channels or customer touch points.
3hy employ eCRM;

Companies need to ta!e firm initiatives on the eCRM frontier to
+ptimi'e the value of interactive relationships $nable the business to e&tend its personali'ed reach. Co-ordinate mar!eting initiatives across all the customer
channels.
>everage customer information for more effective e-mar!eting

and e-business
2ocus the business on improving customer relationships and

earning a greater share of each customer business through consistent measurement assessment and actionable/ customer strategies
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T4E +I9 E<+& OF eCRM

"he .e/ in eCRM not only stands for .electronic/ but also can be perceived to have many other connotations. "hough the core of eCRM remains to be cross channel integration and optimi'ation; the si& .e/ in eCRM can be used to frame alternative e!initions of eCRM based upon the channels which eCRM utili'es the issues which it impacts and other factors the si& e s of eCRM are briefly e&plained as follows.
Electronic channels- )ew electronic channels such as the web

and personali'ed e-Messaging have become the medium for fast interactive and economic communication challenging companies to !eep pace with this increased velocity. $CRM thrives on these electronic channels.
Enterprises- "hrough eCRM a company gains the means to

touch and shape a customerCs e&perience though sales service and corner offices- whose occupants need to understand and assess customer behavior.
Empo$erment- $CRM strategies must be structured to

accommodate consumers who now have the power to decide when and how to communicate with the company- "hrough which channel at what fre*uency. -n eCRM solution must be structured to deliver timely persistent valuable information that a consumer accepts in e&change for his or her attention.
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Economics- -n eCRM strategy ideally should concentrate on

customer economics which drives smart asset-allocation decisions directing efforts at individuals li!ely to provide the greatest return on customer-communication initiatives.
Evaluation- <nderstanding customer economies relies on a

companys ability to attribute customer behavior to mar!et programs evaluate customer interactions along various customer touch points channel and compare anticipated R+( against actual terms through customer analytic reporting.
E-ternal In!ormation- "he eCRM solution should be able to

gain and leverage information from such sources as third party information networ!s and web page profiler application. $CRM must address customer optimi'ation along three dimensions
)c"uisition ( increasing the number of customer) E-pansion (increasing portability by encouraging customer to
purchase more products and services)
Retention (increasing the amount of time that customer stays

customers). -n eCRM strategy must be able to identify the e&pansion potential for each customer. - company should be able to identify the opportunities to cross ell and up sell to the same set of customers. -n eCRM solution should also establish a central mechanism to
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determine which customer should receive which investment at the relationship level.
BUY OR RENT A CRM APPLICATION

-lthough a few adventurous souls could opt to develop custom CRM applications few companies have the time money or ris! tolerance for this approach. "he main choices today are to buy a software pac!age or to rent a service hosted elsewhere on the (nternet. :ac!aged CRM applications became popular in the mid-LMMEs and continue to be the first choice of most companies although the underlying technology has shifted rapidly from client,server to 4eb-based. "he rise of (nternet-based applications in the late LMMEs also launched -pplication #ervice :roviders into the mainstream of corporate consciousness. -n application service provider (-#:) manages and delivers application capabilities to multiple entities from a data center across a wide area networ! the *uestion is to use an -#: for CRM applications= "he answer is1 (t depends. -#:s are becoming popular because they enable companies to implement applications faster with reduced capital e&penditures without competing for scarce internal technical resources. "he need for speed is the biggest driver of all in our overheated competitive mar!et place. #ometimes e&ecutives simply wont wait for an application to be implemented in-house even if the ultimate solution will be better. 7et there first is the new mantra which should help the -#: mar!et become a multi-million rupee mar!et in the ne&t few years.
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@et -#:s are not a panacea for CRM. #ome customers will be cautious about placing sensitive customer data in the hands of another company. (ntegration with in-house systems is also challenging. #tandards are not developed yet to enable applications to plug and play across the (nternet. -nd for CRM applications in particular creating a single customer view to guide all interactions or spot business trends is more difficult when using an -#:. -nother consideration is that typically an -#: will align with a particular software vendor concentrating on more popular products. #ome software vendors also provide -#: services. #ince -#:s are productbased they focus on delivering those products. "his gives them good bench strength and the technical s!ills for certain customi'ation of that pac!age for a customer. #trong product ties however could prevent -#: adopters from employing new technologies *uic!ly and efficiently. (mplementing changes through an -#: wor!s well when modifying the product but -#:s can rarely advise you on the impact that change has with other investments re*uired for a complete CRM solution. #ome -#: users have found that managing service levels around the complete solution becomes fragmented since it involves multiple players supporting the components of a CRM solution. 3espite these challenges -#:s seem destined to play a !ey role in the CRM industry. "hey can rapidly provide the functionality of a comple& software pac!age and operate that product as you build a complete CRM solution. "he !ey decision factors will be the available time and internal resources to commit to your CRM pro%ect.
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RELEVANCE OF CRM IN HOTEL INDUSTRY

"raditionally 0otel (and service) industry has been perceived to be different from other industries for the following reasons1
(erisha2ility-"he hotel product cannot be stored. 0otels normally do

not face a constant pattern of demand throughout the year. 3emand could vary on a daily basis or with seasons and even business cycles. 4hile pricing and promotions are normally utili'ed as strategies to manage variation they may not be sufficient Nhowever combined with loyalty built through relationship demand management occupancy and yield. these strategies can resulting better thus minimi'ing variation and optimi'ing
Intangi2ility- 4hile the physical structure and certain components of

the hotel product are intangible a hotel stay is primarily an e&perience and is consummated by the service elements of the product. #ince the management of the moments of truth essentially depends on the intangible factors these are critical for building successful customer relationships.
Insepara2ility- Consumption of a hotel product is insuperable from its

production the product is consumed while it is being produced which necessarily means that the producer and consumer interact at the point of consumption "his means that unli!e manufactured goods
55
there is no scope for *uality chec!s prior to consumption. -ny change in delivery methods can affect the *uality and value of the service
1aria2ility- "he two dimensions to variability are the first being the
e&tent to which production standards vary from a norm both in terms of outcomes and of production processes. "he second being the e&tent to which a service can be deliberately varied to meet the specific needs of individual customers. (n the hotel industry e&pectation are created by the promise.
$&pectation may also be influenced by prior e&perience opinions of friends and associated or on the image of the hotel. $very guest wal!s into a moment of truth with an e&pectation. #o it is really the moment of truth that defines value for a guest. Customer relationship Management in hotels can 2e e!ine as
the continuity process o! managing the moments o! truth an search o! opportunities to create value !or the customer $ith the ultimate o2=ective o! generating customer loyalty 2ase interaction o! the customer $ith the pro uct an hotel% "he !ey to CRM in the hotel industry is the presence of satisfiers. "he tangible elements of the hotel product are manifested in the core benefits and hygiene factors which are necessary conditions in order to eliminate customer dissatisfaction. 6ut it is really the satisfiers that create value for the customer. #atisfiers are often intangible in nature and can be critical in building relationships and loyalty. "he tangible element can be often be duplicated by completion and do not sustain competitive advantage over on the constant employees o! the
56
the hotel brands. 6ut satisfiers if focused on and developed have the potential to become uni*ue to a hotel and can build a definitive competitive advantage.
(RINCI(*E+ OF CRM IN T4E 4OTE* INDU+TR5

"he basic principles underlying the CRM strategies of the hotel industry are as follows
"he basic ob%ective of CRM is fulfilled only when the customers has a
relationship with the hotel and not %ust with a few customers contact employees. $ffective CRM goes beyond service it involves implementing systems and process to ensure that the mar!eting process promises builds an environment for effective delivery and finally delivers the promise in a manner that e&ceeds the customers e&pectation thus adding value and building the relationship.
-ll employees are involved in initiating and building relationships with

customers relationship building is not restricted to sales and mar!eting personnel.
"he relationship goes beyond databases and customer preferences. (t

involves the use of this information to not only target customers with appropriate products but also to create value for the customer though customi'ation.
(t is important to be consistent in both the service offering as well as

the service delivery in order to build the relationship. (f there is toomuch employee-dependent variability then the relationship could end
57
up as one between the guest and the employee which is not the ob%ective of CRM.
3ifference between promotion and relationships1 :romotions do not

build loyalty they can only grow mar!et share for short periods and Relationships are long term and ta!e time to build. - lot of effort needs to be put in consistently in order to buDild and sustain a relationship.
<nderstanding the customers perspective and what the customer

actually wants and put in systems to deliver service accordingly so that the customer !nows that the hotel understands their needs accurately
"heirs should be a sense of reliability on the hotel; and its services. (f

the customer !nows that the hotel can be relied on to consistently provide the same service the relationship will be stronger and long lasting.
"he hotel should ensure that the customer gets complete information
on all services and products. )ot only should the information be complete but it also should be accurate.
>oyal customers should be rewarded. (t is important to distinguish

between regular guest and others. (t is also important to build stronger relationships with regular guest since it is much more cost effective to regard loyal customers than it is to ac*uire new customers.
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HOTEL LEELA VENTURE LIMITED

(n the emerging economic scenario "he >eela group of hotels has repositioned its mar!et presence as a successful chain of hotels and strives to attend to the needs of (nternational business travelers. Constant upgrading of the e&isting operating hotels and commissioning of new hotels is a conscious effort towards the same. "he >eela Mumbai the >eela 7oa I the >eela :alace 6angalore continues to be mar!et leader in terms of operational e&cellence. "he mission statement of the >eela is / 4otelier has gone 2eyon the status o! an in ustry% It is to ay an art !orm% It starts $ith innovation# continues the search !or e-cellence# an !inally cele2rates per!ection% These are precisely the three pillars on $hich The *eela 'roup has 2uilt its reputation% "hey also represent the three faces of modern (ndia. "he (ndia which dares to ta!e on the world with its world class technology its great tradition C enriched over the centuries and its obsessive desire to be hospitable to travelers from all over the world. 6ut beyond all this is the simple fact which governs them1 "hey love and en%oy people. (t is this that has made them what they are. Captain C.:. Arishnan )air was born at Cannanore Aerala on the Mth of 2eb. LMGO. 4ith the spirit of a rebel and a freedom fighter he %oined
59
2ree (ndias army. >ater on he resigned his commission to champion the cause of handloom weavers.
2rom pioneering handlooms the far reaching impact of the visionary Capt. Arishnan )air has always been evident. 4hen his sights focused on hospitality he transformed industry standards forever. "oday he is a significant player in the "ourism and 0andloom (ndustry. #pearheading the new thrust is Mr. ?ive! )air ?ice Chairman and the Managing 3irector of 0otel >eela ?enture who has been gradually ta!ing the reins of the hotel from his father Captain C. :. Arishnan )air.
0is three magnificent creations in corporate 0otels and Resorts "he >eela Mumbai "he >eela 7oa and "he >eela :alace 6angalore stand testimony to his unswerving spirit. "he >eela Mumbai has received many rewards for being the best P star delu&e hotel in (ndia and "he >eela :alace 7oa voted the best lu&ury beach resort in (ndia. (t is also the only resort in (ndia to be a member of ."he >eading 0otels of the 4orld./
6*
(ROFI*E OF 4OTE* *EE*) 1ENTURE *IMITED
T4E *EE*) ,EM(IN+,I# MUM/)I
0otel >eela Aempins!i is a leading and e&cellent five star hotel operating in Mumbai. (n the heart of one of MumbaiCs bustling industrial belts a !m away from the international airport and GE minutes away from the domestic airport lies a corporate oasis and a delightful retreat - "he >eela Mumbai. (t is far from the hustle and bustle of the cityCs environs and therefore ideal as a CretreatC and yet it is very much a part of the city. #et in eleven acres of landscaped gardens. "he >eela Mumbai stands out with its uni*ue setting in the midst of e&otic greenery a rare sight in Mumbai its convenient location and its impeccable standards of service and facilities; which e&plains why they have so many repeat guests every year.
)ccommo ation- "his QGO rooms hotel has plushy furnished delu&e
rooms and including OO suites. "he privilege club which is the e&clusive accommodation provides special benefits to the guests. #tate-of-the-art technology combines with tasteful decor to create a haven for the business traveler. 61
Restaurants an /ar- "here are a range of specialty restaurants

which serve a variety of cuisines from authentic (ndian cuisines ("he (ndian harvest) and human specialties (the 7reat 4all) to e&*uisite (talian creation ("he "iorella). "he 4aterfall CafR- a GQ hour coffee shop overloo!s cascading waterfalls and lotus lilies in delicate colors. Cyclone "he Club situated at the basement is the favorite night spot for top notch businessmen in Mumbai.
Facilities- 2ully computeri'ed features which can be operated from a

bedside digital panel combine with impeccably designed furniture and elegantly designed interiors. "here are P meetings rooms which have recently been renovated and updated with the latest conference e*uipment. "he 7rand 6allroom is ideal for large gatherings e&hibitions and ban*uets. (t has P smaller meeting or conference rooms. +ther facilities include same day laundry currency e&change travel des! shopping arcade beauty parlor barber shop ban!ing safe deposit inter-net access 6aby #itting.
Recreation an
sports- "he >eela offers unmatched recreation
facilities at the 0ealth and 2itness Centre. "here is a glass bac!ed s*uash court and a blue lagoon shaped swimming pool. +ther facilities include a steam room sauna and massage rooms a <nise& beauty salon and an ultra modern health spa.
62
"he culture mysti*ue and hospitality of (ndia blends with modern facilities and services to give its guests what is the finest business hotel in the country.
T4E *EE*) ()*)CE# 'O)
)ested among the swaying palms of 7oas whitest longest stretch of sand "he >eela :alace reflects 7oas uni*ue position both geographically and historically. 4ith a harmonious blend of eastern and western cultures the >eela palace replicating the glorious architecture of the LO th century from the city of ?i%ayanagara its magnificent temples and palaces and replete with tropical LDth century Mediterranean-inspired designed
vegetation and lagoons that meander into the sunset.
)ccommo ation- "he >eela :alace has Q Royal ?illas P >agoon

3elu&e suite SQ >agoon #uite LD +cean ?illa 3elu&e Rooms PQ :avilion Rooms and L :residential #uite. "he Royal ?illa feature a private plunge pools each. "he :residential #uite has a private plunge
63
pool a garden shower in a private courtyard and a hot spa. $ach room is lu&uriously appointed with plush furnishings and an e&pensive balcony overloo!ing and e&panse of sleepy blue lagoons.
Restaurants an *ounges- 9amavar "he resorts new signature

restaurant features traditional (ndian fare. -t the Riverside restaurant the moonlit waters of the River #al cast its magic to create a uni*ue dining e&perience. "he @ali >ounge is elegant and airy and lies within the magnificent ?i%ayanagara palace lobby.
Recreation an +ports- "he resort features a fully-e*uipped

gymnasium w and a spa offering a full range of beauty and salon services as a special (ndian ayurvedic herbal massage. (t has a state of the art gaming club and not to mention three floodlight tennis courts and water-sport activities such as a*ua cycling parasailing wind-surfing and sailing.
Facilities- "he ballroom and the conference rooms at the resort create
an elegant environment for both business and social events. "here are boardrooms that provide facilities for all corporate retreats conferences and seminars. (n addition there are conference and ban*uet facilities GQ hours room service and business centre.
64
T4E *EE*) ()*)CE# /)N')*ORE
$vo!ing the architectural glory of Mysore "he >eela :alace 6angalore stands ma%estically amongst acres of lush green gardens. "he >eela :alace stands ma%estically amidst seven acres of lush gardens and a spar!ling lagoon in the garden city of 6angalore. 6uilt in an art-deco form drawing inspiration from the architectural style of the Royal :alace of Mysore and the palaces of ?i%ayanagar $mpire its copper domes arches and ornate ceilings reflect the grandeur of palaces of a bygone era. >ocated on the -irport Road on a plot admeasuring about seven acres the >eela :alace recreates the architectural style of the Mysore :alace in an art-deco form. (ts copper domes arches ornate ceilings and colonnades har!en the grandeur of palaces of yore. "he >eela :alace 6angalore has been designed by the world famous California based firm
65
of -rchitects 4imberly -llision "ong and 7oo who also have to their credit the famous :alace 0otel at #un City in #outh -frica1 "he :alace of "he >ost City. "he location of the hotel allows *uic! access from both Aoramangala and the (nformation "echnology :ar! at 4hitefield.
)ccommo ation -"he palm lined approach of the hotel leads past an
e&*uisite marble fountain into a windswept lobby that overloo!s lush gardens waterfalls and lily ponds. - stri!ing feature of the hotel is its ma%estic airy porte-cochere at the entrance. "he >eela :alace features si& floors of elegant and spacious GPQ rooms and suites. $ach room has a balcony over loo!ing the a'ure pool or the verdant gardens in the courtyard and includes an (talian marble bathroom with separate wal!-in glass shower enclosure.
Restaurants an /ar-Citrus the all day dining 6rasserie with its woodburning pi''a oven and two signature restaurants 9amavar featuring (ndian cuisine and >ibrary 6ar (nternational Martinis and Cigar lounge.
Recreation an 4ealth Facilities- 7olf at the A7- golf course may be

played. #pa offers -yurvedic and 4estern 0olistic treatment for re%uvenation rela&ation and beauty. #aunas therapy suites and 9acu''i ma!e it a most complete wellness center. "he crystal clear waters of the outdoor swimming pool at the >eela :alace 6angalore are an invitation to splashdown in %oy. "he >eela 7alleria is 6angaloreCs largest #hopping Mall featuring a #ports Centre and an all )ight 3isco.
Facilities- "he conference and the ban*uet rooms at "he >eela :alace
6angalore are par e&cellence and feature the finest in audio visual e*uipment and facilities. "he 7rand 6allroom is the largest pillar free 66
room in the city and accommodates up to PEE guests. (n addition to this the Royal 6allroom two boardrooms and the si& meeting rooms are designed accordingly for larger to smaller meetings. "he >eela :alace 6angalore offers an e&perience of true world-class lu&ury.
"heir customers are mainly e&ecutives business travelers from corporate world international as well as domestic. "heir basic target audience is international travelers. -s it is proven in all industries GEF of customers constitute the ma%ority of the business same is applicable for >eela hotels. 3ue to world class services has offered by them which has resulted in favorable word of mouth publicity for attracting new customers. "his is supported by well designed public relations campaign advertising and international mar!eting.
67
OR')NI+)TION +TRUCTURE
T+E ,EE,A
(R3;T 3((%C! (ront office Manager &sst= Manager (ront 3ffice +ut" Manager <uest relation !9ecuti#e
43:S! ,!! %;< <eneral Manager 4ouse 'eeping !9ecuti#e house 'eeping
(33+ &;+ 0!5!R<!
,itchen !9ecuti#e Chef
Ser#ice Manager ,itchen Ste-ar.ing &sst= Mgr= /or'ers
+eput" Manager
Sous Chef
!9ecuti#e Shift %ncharge Room &tten.ants )o11" &tten.ants
Chef .e artie Chef Trainees
(ront 3ffice !9ecuti#e
Shift %ncharge Receptionist
Senior captain 0ell .es' Captain Shift %ncharge 0ell 1o"s
Manager &irport Representati#e &sst= Manager Shift %ncharge &irport Representati#e Restaurant Manager &sst= Manager Senior Captain 4ostess Trainee
(>0 Mgr=
0an8uet Manager Secretar" Senior Captain Captain Ste-ar.s
68
)N)*5+I+ OF CRM (R)CTICE+ )T 4OTE* *EE*) 1ENTURE *TD%

"racing the history of 7uest Relations,Customer Relations function over the years 7uest Relations activity has become more personali'ed and speciali'ed. -dvocating commitment from the top to sphere-head the vision and the mission of the 0otel. "hey believe that every 0otel should as! a *uestion to itself as to what ma!es the 0otel different from the competition and what the 0otel can provide which no other 0otel in the mar!et place provides. -ccording to them endearing services help in earning more 7uest loyalty than e&pected. #ince it is a service industry its basic philosophy from its inception was/ -thithi 3evo 6hava/ which means 7uest is 7od. (t always believed that their customers were li!e 7od and to serve their customers as they would have serve 7od. (t means satisfying customer means satisfying 7od. "hey believe that different type of 7od are satisfied by different types of poo%a similarly different type of customer can be satisfied by different type of service which varies according to the wants and needs of customer. "he concept of CRM which is a new mantra in the economy but since it being a service industry their prime ob%ective from beginning was satisfying customer and building eternal bond with their customers. "he CRM process in their hotels is governed by the basic principle that good service doest not guarantee customer satisfaction. -nd satisfaction does not guarantee loyalty. "here is therefore a need for strong customer relationship is governed by the moment of truth. "his fundamental truth combined with uni*ue characteristics of this industry has focused their complete attention on the customer.
69
"he goals of their customer relationship management as follows1
6uilding a guest centric organi'ation by focusing on understanding and

satisfying guest needs.
(ncreasing guest retention as cost of retaining customer is significantly

lees than ac*uiring new customers "he ob%ective behind implementing CRM is providing *uality service to its customer and satisfies its customer beyond its e&pectation which would help the customers. +nce the people e&perience *uality they do not li!e to go to other hotels resulting in loyalty among customers. 4hen the customers are satisfied they play a ma%or role in bringing new customers through positive word of mouth which is the most effective way of mar!eting any product. "hus it overall helps the organi'ation en%oy a good brand image and gain a competitive advantage. #o far it has succeeded in its ob%ective. (nitially when CRM was started it was a top-down and then downtop approach which means from top level management to lower level and then from lower level to top management. "hey believe CRM cannot be done in isolation and each and every activity is interdependent thus demanding coordination from all. "he CRM is guided administered and controlled by the employees of the organi'ation. (t includes functional head member of service and mar!eting department sales and audit department public relation communication department. "his is because an organi'ation li!e >eela
7*
can serve its customer only if all the activities and function are integrated and coordinated. "here is no person designated as CRM manager as the organi'ation feels each and every employee in the organi'ation is a relation manager and has to perform the duty to manage relation with its customer. "he company uses it internal software to manage the CRM and is waiting for customi'ed software for 0otels to serve its customer better. "he company maintains a database of its customer. (n this the hotel maintains guest profiles or guest history off all guests visiting their hotels. 7uest profiles capture information on guest details such as contact details organi'ation designation and also preference such as type of room food etc. (n addition it captures information on past stays of the guest and are invaluable as leads to guest references that may not be e&pressed by the guest. "his database is available at all the three locations i.e. Mumbai 7oa and 6angalore. "he database is continuously updated and is an ongoing process. "his is because to ma!e the information of customer available whenever customer comes and can customi'e their service according to his e&pectations. "he database also helps in tac!ling problems such as
*ocation changes- for e.g. -4hen a customer stays at "he >eela and
after some time period he goes to 7oa and stays at "he >eela. "he central customer database will help the staff of 7oa to !now about the e&pectations of that customer so that they can serve him beyond his e&pectations.
71
Designation change- for e.g. if a manager leaves the organi'ation it

will not affect the hotel to serve its customer as the data is already with the organi'ation which would be not possible by periodic updating the database as there could be chances of losing of valuable information of the customer which the manager may have.
Employee Change- 2or e.g. - customer was attended by Mr. - the

receptionist the ne&t day when he comes to the reception he approaches Mr. 6. Mr. 6 can only attend the customer properly if he has all the necessary information about that customer. $ach of the hotels has to prepare a monthly statement showing about customer feedbac!. (t is prepared on the basis of services e&ceeded e&pectation met e&pectation did not meet e&pectation on various criteria such as
'uest services- "he customers perception of handling reservation

airport transfer door man welcome handling of baggage.
:uality o! room- 0ow did the customer feel about the house !eeping
furniture and fittings bathroom and lighting=
Room services- "he customers perception of the room services

provided by the hotel.
72
Facilities- "he customers feelings about the swimming pool health

spa limousine services golf course tennis court gamming club discothe*ue
Restaurant- "he customers perception of services offered at various

restaurants and coffee shops.
)ttitu e o! sta!!- "he customers view about the staff in various

aspects such as friendliness handling of problems politeness and courteous.
1alue !or money- 4ere the customers satisfied about the

accomadation food and beverage overall e&perience.
-lso monthly information is given on the 6usiness source i.e. the sources which have enabled to attract the customers. ?arious sources for attracting customer are "ravel agents Meeting with other customers 6rochure, hotel design Corporate travel 3epartment -dvertising. "o build a longer relationship with customers the management has an e&cellent system to handle customer grievances which has resulted the company achieving a negligible number of customer dissatisfied. "his is done through 7uest feedbac! Cards which invites comments from guests on the *uality of their e&perience and the service offered and any suggestion for improvement. "here are guest feedbac! cards in every room when the customer comes to stay. "he grievances are of two types.
73
"he first being during stay in which the customer has any complaints
reports to the reception through guest in card after which measures are ta!en to rectify it then and there itself.
"he second type is when the customer drops the guest in card when
they chec! put of the hotel. (t is not possible to attend the complaints at that moment as they have already left. -fterwards they ta!e necessary measures if possible to rectify if there are any loopholes in the services offered by them. "he guest 2eedbac! Cards 6ased on the 7uest 2eedbac! forms the hotel has led changes in the hotel such as remote controlled switches reducing the decibel of flushing system #hoe polishing mechanism reducing time ta!e to fill a bath tub etc. +n the basis of customer feedbac! the management has ta!en innovative decisions such as electronic safe in all rooms in fact "he >eela is the first to introduce electronic safes in the country. "hey have given a new loo!ed to their restaurants coffee shops and now are renovating their bathrooms. "hus responding to customer feedbac! has led "he >eela to establish long term relationship with their customers. "here is constant interaction between the guest and contact customer employees li!e the front des! (reception) and front office (lobby). 7uest relation e&ecutives are specifically employed to interact with guests and define profiles and preferences as obtain information on the guests stay and any problems that the guest may be facing or any comments that they may have. "hey also communicate with the guest either thorough e-mail or telephone to than! for them their valuable advice
74
and necessary actions have been ta!en. "hey also !eep them inform of the happenings in hotels such as food festival. Constant communication with their customer after providing the service is !ey to their success. "he management feels that ."he biggest single asset of their chain of hotel is their human asset who put in tremendous wor! through bubbling enthusiasm stupendous energy and very high spirits to achieve and e&cel. $&cellence is not a matter of chance; it is a matter of choice. (t is not a thing to be waited for; it is a thing to be achievedT. -chieved through the 'eal and dedication of the team that constitutes "he >eela 2amily. "hey believe in the philosophy that it is the :eople of the >eela 0otels I Resort who ma!e the >eela e&perience an e&ceptional one. "heir goal is to attract and retain a wor! force that is motivated to provide a level of service which is on the basis of their motto1 .Ma!ing $&cellence our way of life/. "his is because as most services are delivered by customer contact employees without any direct supervision of senior managers or supervisors. (t is essential therefore to ensure that the human resource is not only of a high *uality but they have to also remain motivated to perform the critical tas! which they are assigned. "herefore the company provides rigorous training to the customer contact employees in various aspects of customer interaction and customer management including crisis management. "he management of >eela view the e&penses involved in CRM as an .investment./ CRM helps the organi'ation to understand different needs of customer and serve them better. (t is further believed that anything which is wasted has a cost involved therefore they believe CRM
75
is a tool for achieving company and individual ob%ectives and has no cost associated with it. #ince benefits of CRM are intangible and long term >eela measures the benefit of CRM as the number of satisfied customers. "his has resulted in increase in the number of customers and has helped to have higher mar!et share. "he management feels that the secret for their effective CRM are
CRM is not a transactional but a continual process involving

everyone in the company.
7athering and using information and !nowledge about the guest to

create or add high value and loyalty.
(mpossible to isolate Customer relation Management from

technology.
Maintaining human relationship and motivating the customer contact

employees to inculcate interpersonal s!ills to perform their functions efficiently.
(dentifying the needs wants e&pectation what the customer e&pects

from them. -lso chec!ing what is delivered to guests.
2ocusing resources on processes that add value.

"hus it can be said :roduct innovation; efficient handling of customer grievances constant interaction with guest motivating their employees has been their !ey to retain their customer. "he advantage of implementing an effective CRM program can be seen in the case of "he >eela where there were instances li!e the customers in search of better services went to other hotels but they failed and returned to >eela. "his is due to the services offered and the importance the
76
customers are being given at >eela. -nother advantage which >eela gained in implement CRM was it became member of ."he >eading 0otels in the 4orld/ which has enhanced the brand e*uity of "he >eelas.
CONC*U+ION > RECOMMEND)TION+

2aced with stagnant economy sluggish business ma%or thrust in the industries is to survive and compete in a new world business structure. "he retention of customers will be the !ey this is because
"he cost of !eeping the customers is less than replacing. "he analysis
of data from customer interaction allows or target mar!eting better servicing and better support creating lower overheads.
- happy customer will tell O-Q potential clients again creating new
business.
4ith industry analysts estimating that SLF of repeat purchases are

made out of indifference not out of loyalty there is huge potential for new revenue. +n the down side a companys business infrastructure and business methods have to be reviewed along with their e&isting (" infrastructure before CRM should be considered. "he choice of which CRM vendor and whose interface is good is less important than getting your company data integrated and the company strategy implemented. "hus the company should consider the following points while implementing CRM1
77
>ong term profitable relationships can be build when both the service
provider and the customer rise above the transaction approach and wor! in an atmosphere of mutuality and trust.
Relationship li!e real life goes through ups and downs and it ta!e a
great amount of maturity and courage to handle the .lows/. (f one rises to the occasion when the other needs him the relationship gets a booster.
Relationships provide security. 7reater the number of lin!ages

between the service provider and the customer greater is the bonding and the security. #trategic bundling of services is a useful methodology in this conte&t.
"op management must be committed to the relationship as their

e&ample is followed throughout the organi'ation.
6oth the mar!eting and the operating #trategy must be geared to meet
the relationship goals especially where *uic! responses are re*uired. "he pin! pill offered by some CRM consultancies are %ust that and should be avoided but with the profits available from a CRM company strategy and system the time and effort ta!en implementing it properly will be worth it both now and in the ne&t future. The customer is al$ays right% 5ou =ust on<t 0no$ $hat right is yet%
78
/I/*O'R)(45
L. 4ebiliography1 www.icici.com www.google.com www.rediff.com www.yahoo.com www.answers.com
G. 6oo!s1 Customer Relationship Management
79

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