Customer Relationship Management
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Transcript of Customer Relationship Management
CUSTOMER RELATIONSHIPMANAGEMENT
PRESENTED BYHarish K.
Lakshmaiah Shetty P.Mishaal Hamza
What is CRM?Customer Relationship Management is a comprehensive
strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.
CRM is a management approach a model that puts a customer at the core of a company processes and practices.
CRM leverages cutting edge technology integrated strategic planning up-close and personal marketing techniques and Organization development tools to build internal external relationships that increase profit margins and productivity within a company.
CRM DefinitionCRM is a cross functional process for
achieving:A continuing dialogue with customersAcross all their contact and access points, withPersonalized treatment for the most valuable
customersTo increase customer retention and the
effectiveness of marketing initiatives
CRM ComponentsCRM’s can be broken down into three key components.
Operational
AnalyticalCollaborative
Enhance Company
Relationship with
Customer
Front Office
Operations (sales,
marketing, service
etc)
Interaction With
Customers (email, letters, phone,
meetings, fax etc)
Evolution Of CRM
The Customer RelationshipTargetFindUnderstandAttractQualifyCloseLearn fromDevelop
Need For CRM To meet the changing expectations of customer due to:
(a) social and demographic factors.
(b) economic situations.
(c) educational standards.
(d) competitors product
(e) experience.
Loyal customers are the source of most profits A relatively small percentage of customers may generate most of the profits. Marketing cost and efforts are less for existing customers. Dissatisfied customers tell others about their experiences. So do satisfied customers.
Slowing the rate of defection grows the customer base.
Reducing costs (e.g. through self-service).
Customer Need Assessment and Acquisition
Customer development
Through Personalization and
Customization
Customer Equity Leverage through Cross Selling and
Up Selling
Customer Retention and
Referrals for new Customers CRM
Customer Life Cycle Management
Team Structure
Role Specification
Planning Process
Process Alignment
Monitoring Process
Employee Motivation
Employee Training
Purpose-increases effectiveness-improve efficiency
Programs-Account Mgmt-Retention Mktg.-Co-op Agreement-Strategic Partnership
Partners-Criteria-Process Evolution
-Enhancement-Improvement
Relationship Performance-Strategic-Financial-Marketing• Retention• Satisfaction • loyalty
Communication
Formation Management & GovernancePerformance
CRM Process Framework
Personal Needs
Expected Service
Perceived Service
Service Delivery
Word - of- Mouth Communications
Management perceptions of Customer Expectations
Service quality specifications
Past Experience
External Communications to Customers
Service Provider
Customer
Service Quality Model
Gap 1 : Not knowing what customers expect
Gap 2 : Not selecting the right service design standards
Gap 3 : Not delivering to Service Standards
Gap 4 : Not matching Performance to Promises
Gap 5 : Perceived Service and Expected Service
Service Quality Gaps
Gap Analysis Grid
Attributes that need attention - area where priorities should be focused
Low Priority
Current company strength
Unnecessary strengths - possible over skill
Low High
High
Low
IMPORTANCE
SATISFACTION
The Key Stages of CRM
Satisfaction Based
State Culture
Re-active Meet customer needs
Respond to complaints
Minimal evaluation of customer service levels
Performance Based Pro-Active Evaluate customer perception
Identify customer retention factors
Stage
Commitment Based
Very Pro-Active
Evaluate multiple customer needs
Continuous inbound/outbound flow and feedback
Continuous improvement
Electronic Customer Relationship Management
Latest paradigm in the world of CRM
NEED OF e-CRM
Due to the introduction of new technology
To satisfy the customers at global level. (Sometimes customer itself prefer to do online
purchasing.)
Basically e-CRM is concerned with attracting & keeping economically valuable customers & eliminating less profitable ones.
Difference Between CRM And e-CRM CRITERION CRM e-CRM
Customer Contacts Traditional Means-Retail Store, Telephone Or Fax
Through Internet, E- Mail, Wireless, Mobile And PDA Technologies
System Interface Works With Backend Application Through ERP System
Designed For Frontend As Well As backend Applications Through ERP, Data Mart And Data Warehouse
System IT Requires PC Clients To Download Various Applets And Applications.
Here, Browser Is The Customers Portal To e-CRM
Contd..
CRITERION CRM eCRM
Customization and Personalization
Different People Require Different Information But Personalized Views For Different Audience Are Not Possible Here
Personalized Views Based On Purchase Are Possible.
System Focus System Is Designed Around Product And Job Functions. Here, Applications Are designed Around One Department Or Business Unit.
System Is Designed Around The Customers Need. Enterprise Wide Portals Are Designed And Not Limited To A Single Department.
Systems Maintenance And Modifications
Implementation Is Longer And Costly.
System Implementation Require Less Time And Cost.
Process of e-CRM
Benefits Of e-CRM
Convenience
Improvement in overall quality of customer experience
Increased profitability
More effective marketing.
Improved customer service and support.
. Greater efficiency and cost reduction.
Increased customer loyalty. (time frame)
Pitfalls• Huge money is required to implement ECRM.
• Highly knowledge requiring process.
• Results are not according to expectations.
• Sales and Marketing are reluctant to adopt new automated CRM system.
e-CRM Implementation Steps
Categorizing Customers
*You have no choice but to handle them very carefully.Will consume energy.#Think of innovate ways of getting them on your side, but the cost of acquisition must be controlled
*Cultivate relationship. Spend energyGo out of your way# Think of strategies to move them away from competitionWill consume disproportionately high energy
* Focus on short term profitabilitySpend minimum energy to meet your objectives# Don’t pursueUse opportunity as it comesShort term acquisition should not affectLong term image
* Very cautious decision neededRe-examine business plan & strategy. Evaluate that your loss does not become nightmare for you# Needs in-depth strategic review as acquisition alone and dissatisfaction later could be more harmful
Low HighProfitability Potential
Low
High
St r
ateg
i c I
mpo
rtan
ce t o
you
r bu
sin
ess
Pla
n
* Existing Customer # Potential Customers
Economics Of Customer Retention
“Winning back a lost customer can cost up to 50-100 times as much as keeping a current one satisfied.”
Rob Yanker, Partner, McKinsey & Company
Understanding your customer is key to retention…..
Image Value
Product Value
Services Value
Monetary Price
Time cost
Energy cost
Psychic cost
Total
customer
value
Total
customer
cost
Customerdelivered value
Determinants Of Customer Added Value
Myths of CRM
• CRM is Primarily about Technology
• Successful CRM projects are managed by IT
• “Executive buy-in is the key”
• “We need to roll this out across the enterprise ASAP”
• “CRM systems are intuitive…. Users will only need some initial hand holding.”
CRM: Not A PanaceaNot feasible for every market and customers
customers don’t want to be committed to every brand/relationshipNot feasible for low-involvement, habitual purchasing in B2B or B2CSome markets/customers may have low “personalization potential”.
Shopping agents used by consumers undercut the idea of relp’s.
The organizational capability to produce a seamless/personalized experience is more difficult to master than a transactional approach.
Lower tier customers may become disaffected when they find out service is differentiated.
References
Websites:
- ephany.com
- google.com
- peoplesoft.com
- bwiwatch.com