INTRODUCTION OF CRM INTRODUCTION OF CRM A Peep into the Past
A Peep into the Past
CRM first appeared in 1980s. In the
CRM first appeared in 1980s. In the buddibuddi ng stagng stage e it was in the form of it was in the form of Customer Information System (CIS). This first generation applications
Customer Information System (CIS). This first generation applications were singlewere single function solutions designed to support a specific set of employees. Typical function solutions designed to support a specific set of employees. Typical applications were at help desk, sales and marketing department, or a particular applications were at help desk, sales and marketing department, or a particular function within a call center. Then it
function within a call center. Then it shaped to shaped to Contact Management, Sales ForceContact Management, Sales Force Automation (SFA), Call Center and Customer Contact Center(CCC). These CRM Automation (SFA), Call Center and Customer Contact Center(CCC). These CRM applications increased the functionality of the
applications increased the functionality of the software.software.
These applications offered inter-operable modules that included marketing, These applications offered inter-operable modules that included marketing, sales, analytics, customer service and call center support functions. Today it sales, analytics, customer service and call center support functions. Today it has
has maturmatur eed to d to CRM and also Mobile CRM (m-CRM). The term CRM was firstCRM and also Mobile CRM (m-CRM). The term CRM was first coined in early 1990s. It is a major strategic approach to customers and businesses coined in early 1990s. It is a major strategic approach to customers and businesses are investing millions of dollars to acquire CRM services and solutions. It is the are investing millions of dollars to acquire CRM services and solutions. It is the leading business strategy of the
leading business strategy of the new millennium.new millennium. Customer relationship management
Customer relationship management ((CRMCRM) is a model for managing a) is a model for managing a company’s interactions with current and future
company’s interactions with current and future customers.customers. It involves usingIt involves using technology to organize, automate, and synchronize
technology to organize, automate, and synchronize sales,sales, marketing,marketing, customer customer service,
service, andand technical supporttechnical support Definitions (2)
Definitions (2) 1.
1. AA management philosophymanagement philosophy according to which a company’saccording to which a company’s goalsgoals can be bestcan be best achieved through identification and
achieved through identification and satisfactionsatisfaction of theof the customers'customers' stated andstated and unstated
unstated needs and wants.needs and wants.
2.A computerized system for identifying, targeting,
2.A computerized system for identifying, targeting, acquiring,acquiring, andand retainingretaining thethe best mix of cus
best mix of customers.tomers.
Customer relationship management helps in
Customer relationship management helps in profilingprofiling prospects,prospects, understandingunderstanding their needs, and in
their needs, and in buildingbuilding relationshipsrelationships with them bywith them by providingproviding the mostthe most suitable
suitable productsproducts and enhancedand enhanced customer service.customer service. ItIt integratesintegrates back back andand frontfront office
office systemssystems toto createcreate aa databasedatabase of customer of customer contacts,contacts, purchases,purchases, andand technicaltechnical support,
What is CRM What is CRM
CRM methodology enables the organization to understand the customers' CRM methodology enables the organization to understand the customers' needs and behavior better. It introduces reliable processes and procedures for needs and behavior better. It introduces reliable processes and procedures for interacting with customers and develop stronger relationships with them. The interacting with customers and develop stronger relationships with them. The process
process helps helps organization organization in in assimilatinassimilating g informatioinformation n about about customers, customers, sales,sales, marketing effectiveness, responsiveness, and market trends. Then this information marketing effectiveness, responsiveness, and market trends. Then this information is used to give insight into behavior of customers and value of retaining those is used to give insight into behavior of customers and value of retaining those customers. The whole process is designed to reduce cost and increase profitability customers. The whole process is designed to reduce cost and increase profitability by holding on to
by holding on to the customthe customer loyalty.er loyalty.
A simple installation and integration of the software package doesn't ensure A simple installation and integration of the software package doesn't ensure success. It has to be absorbed into the system. Employees have to be convinced success. It has to be absorbed into the system. Employees have to be convinced about its positive attributes, then they have to be trained. The existing business about its positive attributes, then they have to be trained. The existing business processes
processes have have to to be be modified. modified. The The company company has has to to decide decide what what kind kind of of information is to be collected about the customers, what is to be done with the information is to be collected about the customers, what is to be done with the information, and prioritize this accumulated information. The company must drill information, and prioritize this accumulated information. The company must drill into this database of its customers and ascertain their buying patterns, product into this database of its customers and ascertain their buying patterns, product preferences, th
preferences, the potential for ade potential for add on sales etc.d on sales etc.
A good strategy will be to
A good strategy will be to integrate every area of touch point with integrate every area of touch point with customerscustomers like marketing, sales, customer service, and field support. This is
like marketing, sales, customer service, and field support. This is achieved with theachieved with the integration of the people, process, and technology in the business.
integration of the people, process, and technology in the business.
Advantages of CRM Advantages of CRM
o
o Reduces advertising costsReduces advertising costs
Increases awareness of Increases awareness of customer needs
customer needs
o
o Tracks the effectiveness of Tracks the effectiveness of
promotional cam
promotional campaignspaigns
o
o Allows Allows competition competition for for
customers based on service, customers based on service, not prices
o
o Prevents overspending onPrevents overspending on
low-value clients and under low-value clients and under spending on high-value ones spending on high-value ones
o
o Speeds the time it takes toSpeeds the time it takes to
develop and market a product develop and market a product
o
o Improves use of the customer Improves use of the customer
channel channel
Objectives of CRM Objectives of CRM
CRM, the technology, along with human resources of the company, enables CRM, the technology, along with human resources of the company, enables the company to analyze the behavior of customers and their value. The main the company to analyze the behavior of customers and their value. The main areas of focus are as the name suggests:
areas of focus are as the name suggests: customer customer ,,relationship relationship , and, and thth e e manage
managemement nt of of rr eelatilati onsonshihi p p and the main objectives to implement CRM in theand the main objectives to implement CRM in the business s
business strategy are:trategy are:
To simplify marketing and To simplify marketing and sales processsales process
To make call centers more efficientTo make call centers more efficient
To provide better To provide better customer servicecustomer service
To discover new To discover new customers and increase customer revenuecustomers and increase customer revenue
To cross sell products more To cross sell products more effectivelyeffectively
Understand customer needs better Understand customer needs better
Maintain long--term customer relationshipsMaintain long--term customer relationships
Be able to Be able to pursue a strategy of Relationship Marketingpursue a strategy of Relationship Marketing Main Objectives of CRM
Main Objectives of CRM
o
o Customer Retention -Customer Retention - retain loyal and profitable customers andretain loyal and profitable customers and
channels channels
o
o Customer Acquisition -Customer Acquisition - acquire customer based on knownacquire customer based on known
characteristics which drive growth and increase
characteristics which drive growth and increase marginsmargins
o
o Customer Profitability -Customer Profitability - increase individual customer margins byincrease individual customer margins by
offering the right product at the
offering the right product at the right timeright time
o
o ••Uses Technology to:••Uses Technology to:
–– –– CollectCollect
–– –– SortSort
Benefits Benefits
The following are the
The following are the benefits of adopting CRM processes:benefits of adopting CRM processes:
Develop better communication channelsDevelop better communication channels
Collect customer related dataCollect customer related data
Create detailed profiles of individual customersCreate detailed profiles of individual customers
Increased customer satisfactionIncreased customer satisfaction
Access to customer account history, order information, and customer Access to customer account history, order information, and customer information at all touch points
information at all touch points
Identify new selling Identify new selling opportunitieopportunitiess
Increased market share and Increased market share and profit marginprofit margin
Increased revenuesIncreased revenues
More effective reach and marketingMore effective reach and marketing
Improved customer service and supportImproved customer service and support
Improved response time to customer requests for informationImproved response time to customer requests for information
Enhanced customer loyaltyEnhanced customer loyalty
Improved ability to meet Improved ability to meet customer requirementscustomer requirements
Improved quality communication and Improved quality communication and networkingnetworking
Reduced costs of buying and using product and servicesReduced costs of buying and using product and services
Better stand against global competitionBetter stand against global competition Implementation
Implementation
To implement CRM, following factors need to be given due
To implement CRM, following factors need to be given due consideratconsideration:ion:
- Easy interaction between customers and company, enhancing quick response- Easy interaction between customers and company, enhancing quick response to customers' request and suggestions
to customers' request and suggestions
- Easy access to information about company like content of customization,- Easy access to information about company like content of customization, advantages of the company, benefits doled
advantages of the company, benefits doled out to the out to the customers. This establishecustomers. This establishess profitable relat
profitable relationships witionships with the customerh the customers based on ms based on mutual trust and rutual trust and respectespect
- Abundant supply of customer information which have been accumulated and- Abundant supply of customer information which have been accumulated and integrated from different channels
integrated from different channels
- Grow with - Grow with customers i.e. customers' informcustomers i.e. customers' information should be updated along ation should be updated along withwith the passage of time
the passage of time
- Have cordial relationship with other companies targeting the same customer - Have cordial relationship with other companies targeting the same customer segment. Thus giving relevant solution to customers' need and increasing segment. Thus giving relevant solution to customers' need and increasing acknowledgement to customers
- Customers' information must be segmented to provide support for - Customers' information must be segmented to provide support for customization based on personalized information i.e. tailoring the company's customization based on personalized information i.e. tailoring the company's product and ser
product and services accordingvices accordinglyly
Improvement in customer relationships increases customer loyalty, decreases Improvement in customer relationships increases customer loyalty, decreases customer turnover, increases sales revenue, and decreases marketing costs, thus customer turnover, increases sales revenue, and decreases marketing costs, thus increasing profit margins.
increasing profit margins.
The
The CRM processesCRM processes should fully support the basic steps of should fully support the basic steps of cuscustometomer lr l iiffe e cyccycle le .. The basic steps are:
The basic steps are:
Attracting present and new Attracting present and new customerscustomers
Acquiring new customersAcquiring new customers
Serving the customersServing the customers
Finally, retaining the customersFinally, retaining the customers
Five Step Process for CRM Five Step Process for CRM
CRM is the acronym commonly used for customer or client relationship CRM is the acronym commonly used for customer or client relationship management. CRM refers to a process used by an organization to learn more management. CRM refers to a process used by an organization to learn more about its consumers and to improve marketing productivity. about its consumers and to improve marketing productivity. The goal of any business is to derive maximum profitability from its customer The goal of any business is to derive maximum profitability from its customer base.
base. The The CRM CRM value value chain chain describes describes the the process process that that a a business business must must have have inin place
place to to gain gain the the profitability profitability wanted wanted from from customers. customers. Five Five key key steps steps areare necessary for the successful implementation of a CRM strategy, and are necessary for the successful implementation of a CRM strategy, and are commonly referred to as "the five step process for CRM." commonly referred to as "the five step process for CRM."
Customer portfolio analysis Customer portfolio analysis
This first stepThis first step involves analysis of your involves analysis of your organization'organization's customer base to s customer base to determinedetermine what groups and kinds of customers are the most profitable. This will define your what groups and kinds of customers are the most profitable. This will define your organization's target customer base.
organization's target customer base.
Customer intimacyCustomer intimacy is the process of getting familiar with the individualis the process of getting familiar with the individual customers within the organization's target customer base. Relationship building is customers within the organization's target customer base. Relationship building is
predicated
predicated upon upon how how well well you you know know your your customer customer and and that that includes includes everythingeverything from buying habits to when their birthday is. Every interaction with a customer is from buying habits to when their birthday is. Every interaction with a customer is an opportunity to improve customer intimacy and learn more about your target an opportunity to improve customer intimacy and learn more about your target market. This step usually includes building a customer database to store the market. This step usually includes building a customer database to store the gathered information.
gathered information.
Network developmentNetwork development refers to the identification and development of strongrefers to the identification and development of strong relationships with organizations, networks and people that are critical to your relationships with organizations, networks and people that are critical to your success in servicing your customers. These relationships will include external success in servicing your customers. These relationships will include external partners
partners such such as as suppliers suppliers and and investors, investors, as as well well as as internal internal partners, partners, your your employees.
employees.
Value proposition developmentValue proposition development This step builds on the information gatheredThis step builds on the information gathered while working on customer intimacy. Once you have identified your target while working on customer intimacy. Once you have identified your target customer, you can move forward and create a tailored value proposition for this customer, you can move forward and create a tailored value proposition for this customer. In creating value for your customer, your value proposition must also customer. In creating value for your customer, your value proposition must also create value for your organization.
create value for your organization. Customer life cycle management Customer life cycle management
The customer life cycleThe customer life cycle refers to the ideal customer journey: from potential clientrefers to the ideal customer journey: from potential client to product/service advocate. It also relates the
to product/service advocate. It also relates the continuing relationscontinuing relationship you hip you maintainmaintain with your customer. Managing this cycle requires structure and attention to with your customer. Managing this cycle requires structure and attention to process. Your orga
process. Your organization must determnization must determine how it will organize itself ine how it will organize itself to effectivelyto effectively manage customer relationships (structure). As well, thought must be given to manage customer relationships (structure). As well, thought must be given to determining how your organization will approach customer acquisition and determining how your organization will approach customer acquisition and retention, as well as the performance measurement of your CRM strategy retention, as well as the performance measurement of your CRM strategy (process).
