Introduction to the course ~

Customer Relationship
Management

Dr. Banasree
Dey

Agenda

Discussion of Course Outline

Formation of groups for project

Introduction to CRM Evolution, relevance,

definition and elements

Course Outline

Conceptual Framework

Customer Life Cycle Management

Technology in CRM

CRM Implementation

CRM Applications

Evaluation Criteria
S. no.

Criteria

Weightage
(%)

Quizzes

10

Class Participation (Includes DF)

10

Project (Presentation + Report)

20

Mid-Term Exam

20

End-Term Exam

40

Project

Each group would be allocated an industry. The group members are required to
select two companies in the given industry and analyze the CRM practices of
these two companies. The report should include the following:
Brief background of the two companies.
CRM practices adopted in each company.
Implementation and Measurement of CRM Strategy in the above firms
CRM Software tools used by them.
A comparative assessment of the practices followed by each company.
Suggestions to enhance the CRM effectiveness in the selected companies.

Introduction to CRM

Evolution of CRM

The 1980s saw the emergence of database

marketing, which was simply a catch phrase
to define the practice of setting up customer
service groups to speak individually to all of a
companys customers.

In the 1990s companies began to improve on

Customer Relationship Management by
making it more of a two-way street. Instead
of simply gathering data for their own use,
they began giving back to their
customers not only in terms of the obvious
goal of improved customer service, but in
incentives, gifts and other perks for customer
loyalty.

Evolution of CRM (contd.)

Real Customer Relationship Management as

its thought of today really began in earnest in
the early years of this century.

Instead of feeding information into a static

database for future reference, CRM became a
way to continuously update
understanding of customer needs and
behavior.

The Internet provided a huge boon to the

development of these huge databases

Early Adopters

Financial Services

Retailing

Telecommunication

Travel and Hospitality

Utilities

Touchpoints..

Customer Touchpoints

Involves the areas where direct customer

contact occurs. May be classified into:
Face-to-face touchpoints
E.g. sales, service, events

Database driven touchpoints

E.g. telephone, e-mail, sms

Mass media
E.g. Advertising, PR, Website

Cross-selling and Upselling

Cross-selling: act of selling a product or

service to a customer as a result of another
purchase

Up-selling: act of motivating customers to

trade up to more profitable products

Customer Centricity

There is greater profitability for an organization when

consumers are willing to pay a premium for a
product/service or are willing to pay more/recommend it
more and stay longer thus committing more of their share
of the wallet to the organization

Central to this has to be the strategy to bring about a

companys transformation to customer centricity. It is a
long-term strategy that requires long-term management
and commitment of significant resources

It deploys technology solutions for managing customers at

front-end, database to integrate sales, service, marketing
touchpoint inputs to provide a single view of the customer

Key Elements of CRM

initiative
People

Process

Technology

The people working within a business, from

the
CEO
to
the
customer
service
representative, need to not only buy into
the idea, but also support it.

The company then needs to create

processes intended to build upon the CRM
initiative, such as identifying methods
through which a process will benefit the
customer.

Then, the company must have the right

technology to drive the processes and
provide data to employees.

Technology and CRM

The advances in information, communication

and production technologies have helped
marketers come closer to their customers

Technology has changed the way a customer

interacts with the organization. The
touchpoints have grown and matured from the
age-old personal contacts to interactive and
technology-driven methods

Though the emergence of CRM in recent times

coincided with the information age, we must
remember that technology is just an enabler.

Role of Technology

To foster customer-focused business

relationships, an enterprise must integrate:

The disparate information systems

Databases
Business units
Customer touch points
And many other facets

to ensure that all employees

who interact with customers have real-time
access to current customer information.

Role of Technology

The objective is to optimize each

customer interaction
and ensure that the dialogue is seamless
that each conversation picks up
from where the last one ended.

Role of Technology

Technology has made possible the mass

customization of products and services,
enabling businesses to treat different
customers differently, in a cost-efficient way.

Implementing an effective customer strategy

can be challenging and costly because of the
sophisticated technology and skill set
needed by relationship managers to execute
the customer-driven business model.

Evolution of Relationships
with Customers
We have only two sources of competitive
advantage:
1. The ability to learn more about our customers
faster than the competition.
2. The ability to turn that learning into action
faster than the competition

-. Jack Welch, former CEO, General Electric

Bloomberg News Service, 2000

In Essence

CRM involves treating different

customers differently.

In the current competitive

environment, companies are
striving hard to survive,
realizing that the best
strategy is to retain existing
customers by developing a
close and cooperative
relationship with them

Example Ford
Ford can try to sell as many Tauruses as
possible, for any price, to anyone who will
buy,

OR

Example Ford
It can, by knowing Mrs. Smith better,
make sure that all cars in Mrs. Smiths
garage are Ford brands, including the
used car she buys for her teenaged son,
and that Mrs. Smith uses Ford financing
and credit cards, and gets her service,
maintenance and repairs at Ford
dealerships throughout her driving
lifetime.

Today, instead of
Return on Investments
(ROI), organizations
stress on Return on
Relationships (ROR) !!

CRM

Represents a tailored approach to an

organizations dealings with customers

IT is an enabler of CRM and customer

knowledge is its resource

Not confined to marketing department

alone, entails the whole organization to be
customer-centric

An important dimension of is selecting

profitable customers

Definitions of CRM

Peppers and Rogers (2004) broadly describe

CRM as increasing the value of the
company through specific customer
strategies

A comprehensive strategy and process of

acquiring, retaining and partnering
with selective customers to create
superior value for the company and the
customer (Parvatiyar and Seth)

In a nutshell.

CRM is a company-wide business strategy

designed
to
reduce
costs and
increase
profitability by solidifying customer loyalty. True
CRM brings together information from all data
sources within an organization (and where
appropriate, from outside the organization) to
give one, holistic view of each customer in real
time. This allows customer facing employees in
such areas as sales, customer support, and
marketing to make quick yet informed decisions
on everything from cross-selling and upselling
opportunities to target marketing strategies to
competitive positioning tactics.

The Central Purpose

of managing customer relationships

is for the enterprise to focus on
increasing the overall value of its
customer base - and customer retention is
critical to its success.

Increasing the value of the customer base

through:
Cross-selling
Upselling
Customer refferals

Goal Of CRM
The idea of CRM is that it helps businesses use
technology and human resources to gain insight
into the behavior of customers and the value of
those customers. With an effective CRM strategy,
a business can increase revenues by:
providing services and products that are exactly what
your customers want
offering better customer service
cross selling products more effectively
helping sales staff close deals faster
retaining existing customers and discovering new ones

Levels of CRM

Operational CRM

Analytical CRM

Collaborative CRM

Operational CRM

Takes care of individual transactions and is used by the

operational staf. Interactions by customers are stored in
the database and are used later by the service, sales and
marketing staff for operational decisions

Operational CRM systems usually involve the processes and

systems by which day-to-day customer-based activities
such as customer enquiries, orders, shipment, and
invoicing are managed

Such systems need to be functionally integrated, to enable

all those who need to see a customers history to do so at
the touch of a button.

Analytical CRM

It is the use of analysis and reports of historical

data captured over a period of time to take
decisions by the senior management on what
should happen

Involves the strategic use of customer data to

inform long-term planning and decision-making at
the top of the organization. Questions such as
which markets to serve and how to maximize
customer profitability are addressed here

Analytical CRM affects the shape and direction of

the organization

Collaborative CRM

In order to build long-term and profitable relationships with

customers, it is necessary that all the concerned parts of
the organization work in collaboration with the aligned
purpose, objective and strategy to achieve this outcome.
This is the role of collaborative CRM

Thus, Collaborative CRM is an approach to customer

relationship management (CRM) in which the various
departments of a company, such as sales, technical
support, and marketing, share any information they
collect from interactions with customers.

Feedback from a technical support center, for example,

could be used to inform marketing staffers about specific
services
and
features
requested
by
customers.
Collaborative CRMs ultimate goal is to use information
collected from all departments to improve the quality of
customer service.

FEDEX Case Study

The CRM initiatives of FedEx through adoption of

technology was evident way back in 1979 when it
introduced the computerized package tracking system
called COSMOS (Customers, Operations and Services
Master Online System). The barcode on each package was
used for tracking the package at each stage. The system
also maintained exhaustive data with regard to collection
and delivery cycles. By analyzing this data, FedEx could get
clues about the various customer segments and their
expectations..

To get better control over the movement of fleet, FedEx

launched the Global Operations Control Centre which
helped to provide exact information regarding the location
in real time.

FEDEX Case Study (contd.)

FedEx furthered its CRM initiatives by launching the FedEx

Powership in 1984.Customers undertaking large shipment
could send details of their order through a telephonic
connection directly to the COSMOS. This alerted he
concerned people for undertaking pickup and the accounts
department for he billing details. By sharing data across
departments, the CRM was more effective and presented a
unified customer view

In 2001, it began its eCRM initiative which helped to

integrate the data across the various channels including the
website and the call centers. The CRM applications helped
to create and maintain customer profiles..

With the intent of using CRM as a business strategy FedEx

launched the 6x6 Transformation initiatives in
2003

CRM delivers for FedEx

FedEx knows that customers absolutely, positively want

fast service. "Customers want to see FedEx as a flat
organization--for example, they don't want to be
transferred when they call," says Scot Struminger, vice
president of IT.
To keep the organization flat FedEx is using a three-pronged
approach to service: precall intelligence; interaction
history; and integration (e.g., customer information
integrated with package tracking). The company uses
AmdocsCRM in its more than 45 call centers globally to
support this strategy--and its 4,000-plus agents. In addition,
FedEx is moving CRM horizontally, so now such areas as
billing, claims, and package trace can more easily share
information. "We believe that's so powerful, because the
best team wins and we're integrating our team so we'll
win," Struminger says.

Contd.

Another CRM strategy FedEx is using is closed-loop case

management. "It's extremely important that when customers have
an issue we can give agents the information they need to react,"
Struminger says. That's why, according to Struminger, FedEx is
finding AmdocsCRM such a valuable tool. "You need to give that
tool to someone who can make a difference in the customer
experience," he says.
Agents have made an impact on the customer experience.
According to Struminger, customer satisfaction and agent
productivity are increasing year over year, inbound calls have
dropped by about 89,000 per day, transferred calls are rare, and
new-hire training has been reduced by 50 percent. "As we use the
[AmdocsCRM] application and take out internal acronyms and
replace them with a language that agents and customers can
understand, the application becomes easier to use," Struminger
says. Additionally, the agent attrition rate has improved 20
percent. "We're empowering reps with this platform," he says.
"There's job satisfaction in solving customer problems."

Groups for Project

Group 1: Apoorv, Malvika, pankaj,

radhika,shweta,siddharth,simranjeet
Group 2 ankit, shivam, abhishek, ankita, manjima, aditi

Group 3prasanjit, krati, ankita devra, , ayushi,,anshul

Group 4: arpan, shruti,tarun,sarthak,shubhanshi, megha

Group 5: Hemant, Anisha, Amandeep, Ipshita, Supriya,

Sahil,

Group 6 siddhant (shukla,singhai,tiwari,) hardik, manjesh

Group7 asheesh tyagi,ashish sharma,vidya sagar,avinash,
Navneet, vaibhav

Sector Allocation for Groups