CUSTOMER RELATIONSHIP

MANAGEMENT

Under the Guidance of : Submitted By:

Prof. Yadnyavalkya Joshi Aakriti Dixit
Bharat Bajoria
Gollamudi Lakshmi Janaki
Idea behind Customer Relationship
Management
• What is CRM?
It is an approach to manage a
company’s interaction with
current and potential customers.
• Why CRM?
To improve business
relationships with customers
Focusing on customer
retention
Driving sales growth.
Value Drivers
Target Profitable Customers

Integrate Offerings across

Value Equity Channels

Improve Sales Force

Customer Equity Brand Equity Improve Pricing

Improve Customer Service

Individualize Message
Relationship
Equity

Customize
Strategies for implementing CRM
1. Customer: One of the most important strategies is to identify the target customers based on the existing
business model and corporate mission.

• Identify the types of interactions with each segment

that will generate the greatest loyalty among customers
Identification and the most profit for the business.

• product-centric analysis marketing segmentation;

Models of Customer • customer management customer segment advisors;
Centricity • customer segment owners customer-centric profit and
loss.
Strategies for implementing CRM

Channel Organisation must justify which channels they should use and how well they are using
those they have chosen.

We can design and compare an old and a new channel map. These maps show the market
power and the channel added value.

By comparing the two maps, companies can identify where channel-change is needed and
where the channel conflict will be most intense.

The old map is also called “status quo map” and it identifies the existing business channels.
The new map is called “future map” and it incorporates likely change scenarios and new
relationships, roles, and interactions in the channel.
Once organizations have determined market power and channel value for each existing
channel becomes a framework for strategic thinking.
Channel map comparison
Strategies for implementing CRM
Brand. Brand values strategy contributes to the companies’ ultimate goal, which is to understand and recognize
its customers’ behaviors.
• It is all about the encapsulation of all the customers’ interactions with the company and its products and
services. The following illustrates a successful brand:
• Brand must be “top-of-mind”, to be built based on loyal customers, emotionally, and financially committed
to repeat purchasing
• Advertising is the key to successful brand building.
• Brand must be consumer-driven
• maintaining a High-quality relationship with long-term customers is important.
Differentiation. Products or services should be better and different on a
dimension that customers care about than those of other competitors.
Consistency. Promises made to customers should be executed precisely.
Effective communication to customers. What has been promised to the customers must be true no matter
what happens.
CRM Eg: Coca-Cola’s ‘Friendly Twist’ campaigns
Coca-Cola launched a campaign in Colombia where
college freshmen were given Coke bottles on their
first day on campus

The caps of these bottles could be opened only by

clicking together with another cap. This
encouraged students to team up, and leading to
conversations between strangers on the first day
of college

The company played a key role in breaking the ice

among freshmen; this initiative reflected Coca-
Cola’s brand image, a part of which is the
beginning of important friendships and the sharing
of joyful, long lasting memories.
 CRITICAL SUCCESS FACTORS (CSF) for CRM

Sales & Marketing Business Process Client

• Senior Management & Staff • Customer contacts

• Sales automation Commitment management
• Information systems
• Marketing automation integration • Customer information
• Creation of a management
multidisciplinary team
• Forecasting Efficiency
• Support for operational • Customer service
management

Study was done to identify the CSF through quantitative analysis of 84 questionnaires and a qualitative study of
20 companies, managers and employees.
 Social Media in CRM
Social CRM is more about customer service representative, about putting the customers first and using social media
accounts in a way to connect one to one, not just to push marketing materials to them.

70% of online adults use Social Media

SCRM Traditional
Traditional Approach:
As per Contenet Marketing Institute (2012)
86% of people skip TV commercials,
44% of direct email is never opened,
91% of email users have unsubscribed from a company email

Most companies use social medias to

• Communicate with customers
• Generate sales leads and to sell products.
Promote events.
• Customer reviews, to provide support or
find out customers` ideas.
• They use social media as a marketing tool
more than collecting and analysing data.
 Benefits of SCRM
• Better image over sales opportunities and client interactions
• the optimal sales scenarios can be identified; also the performance
Sales & Marketing ratios can be followed
• Companies can plan, implement and evaluate marketing campaigns.

• Automatization of the sales processes optimizes operating

Business procedures.
• The communication becomes more relevant and is accessible all
Processes around the world, to each employee.

• The clients can be observed in a one centralized system and detailed

analyzes can be realized,
Client • The services for clients are better managed – faster resolutions to
requests by accessing complete databases.

It does not replace the classical CRM, but is an extension to the old one, trying to get closer to the client through blogs,
forums, social networks, searching engines, etc.
 Impact of BIG DATA on CRM
• A research was done on importance of Big data in
maintaining CRM in an organisation.
• CRM strategies should be enriched with a Big Data-
led business direction.
• Traditional customer data warehouses must fuel
and be integrated with emergent Big data
warehousing technologies.
• Organisational and process redesign in Big Data
enabled CRM should aim to pervasive
management and exploitation of all kinds of data
across the firm.
ROLE OF BIG DATA in improving customer management
in different divisions of organisation.
Mc Donald’s CRM in India
1. Mc Donalds uses CRM which provides improved data capture, real time reporting,
and fast issue resolution.
2. Don’t offer any beef or pork item in India.
3. In products like Mc Veggie, Pizza McPuff etc., they use spices favoured by Indians.
4. Soft serves and Mc shakes are eggless.
5. Offer gifts to children like Hot wheel car, Barbie doll etc
6. Actively involved in many social activities like child education, Pulse polio
association etc.
7. They have a feedback and suggestion form available at each outlet.
8. For the techno savvy customers they have an online feedback form.
9. All the upcoming product and relatedinfo are posted on their website.
10. Complementary drinks with every late order delivery after 1 min.
11. Being able to assesss retaurants by region, or even individual restaurant means
that Mc Donald’s can quickly spot potential customer relationship issues and
resolve them before they become a serious problem.
 Customer relationship management and customers’ reactions
among LG appliance industries companies in Tehran

Conceptual model: Research Instrument features:

Research Methodology:
• Gathered necessary information ,theories from the university library.
• Used standard questionnaire to gather statistical data for this research.
• Inferential statistics judged about population on the base of the result to reach the total result.

Cronbachs’ Alpha is a psychometric test to estimate the high reliable internal consistency among test items . Highly reliability
if its value is greater than 0.7
Negative Effects of CRM
Employee Motivation

CRM negatively impacts the quality of life of executives and may lower
motivation of employees.

Cost

CRM creates increased costs of products and services.

CRM detracts from what is really important – the product.

Consumer Expectation
CRM actually increases customer frustration due to never-ending cycle
of consumer expectations.
 Studying Impact of CRM on Firm Performance
• Firms that implement CRM systems improve their
Hypothesis - I business process measures to a greater degree than
firms that do not implement CRM systems.

• Firms that implement CRM systems improve

Hypothesis - II operational performance to a greater degree than firms
that do not implement CRM systems.

•138 public firms Same industry

•Announcements
SAMPLING PROCESS

Lexis Nexis was were identified firms were used

from Vendors or
used for finding using CRM with ROA within
Firms were
Sample. between 2001– 90–110% the
tracked.
2011. treatment firm

These guidelines were developed following Hendricks et al. (2007) and Barber and Lyon (1996),. The authors of
these papers document the importance of using a portfolio of firms for the comparison group, and that utilizing
this method allows for well-specified and powerful test statistics. Using this method we end with a final sample of
1256 observations, 87 treatment observations and 1169 control observations
Hypothesis-I Testing: Improvement in Sales
Efficiency
• For all three columns, our
coefficient of interest is in the
predicted direction and is
significant (p < 0.10).
• The positive coefficient in Column
1 suggests that CRM systems
improve the operating margin.
• The negative coefficients in both
Columns 2 and 3 suggest that
these firms are spending less on
SGA expenses.
• Specifically firms that implement
CRM systems reduce the amount
spent to make sales by 24%.
These results further support our
first hypothesis, because they
show that CRM systems improve
business processes that affect
sales efficiency.
Hypothesis-II Testing: Improvement in
Operational Efficiency
• Results of our second hypothesis
regarding CRM systems and operation
performance.
• In Column 1, we find that our coefficient of
interest is significant (p =0.047). This
indicates that CRM system implementation
does improve overall profitability.
• Specifically, for the CRM implementers,
ROA increases by 6.5% more than other
firms. Additionally, the coefficient is
positive and significant in both of the
remaining columns (p < 0.10).
• The positive and significant coefficient in
both Columns 2 and 3 show that CRM
system firms experienced a greater
increase in operational.
• Overall, we find evidence supporting our
second hypothesis.