Overview of CRM
description
Transcript of Overview of CRM
APresentation on
Module V: Issues and Challenges in Implementation of CRM
Prepared byNilesh Sen Manohar Rathore Riddhi Mehta Jesal Kothari Jaydeep Budheliya Shekher Nirmal Amod Hardikar
Submitted to
Prof. Neelam Kshatriya
Topics Covered
Overview of Retail
CRM Implementation Road Map
CRM Roadblocks (4P’s)
Emerging trends in CRM
Evaluating customer retention plan
Learning from customer defections
Phased development
Flow of Presentation
Retail
“Rural or Urban, Old OR Young, Malls OR Kirana Shops & So on— People from every Nook & Corner needs everything which is available @ Retail Store.”
OVERVIEw
5th Largest in the world.
Entry of MNC—Walmart,Carrefour,Costco
Major Players—Reliance, Tata, Aditya Birla Group, K Raheja Group.
Accounts 12% of GDP
Organized retail (8%)
Traditional to Shopping Malls
1995
•Emerging
2003
•Growth
2006
•Retail Boom
2007
•Managing it’s NO.1 Position
2008
•High Retail GOLD Rush
2010
•Continued Growth
•
Phased Growth of Indian Retail Market
Advantages of CRM for Retailers
Customer Retention
and Loyalty
Business Performance
Visibility
MicroMarketing
Improved Employee
Productivity
Customer Satisfaction
High Customer
Profitability
Reduced Cost of Sales
Low cost of retaining
old customers
Rank Company
1 Wall mart
2 Kroger
3 Target
4 Wal Green
5 Costco
6 The home depot
7 CVS caremark
8 Lowe’s
9 Bestbuy
10 Safeway
Top 10 Global Retailer
Top 10 Retailers to work for(According to Forbes)
Rank Company
1 REI
2 IKEA
3 Costco
4 Nordstrom
5 J Crew
6 The Gap
7 American Eagle outfitter
8 Anthropologies
9 H & M
10 DSW
Definition of Customer Retention
• Customer Retention is the activity that a selling organization undertakes in order to reduce customer defections.
Facts about CR
Cost of acquiring
a new customer
Leaky Bucket Theory
CRM is part of
CR
Customer complaint
Customer satisfaction V/S
CR
Why Customer switch?
Lessening the
Defection rate
Advantages of CR
Zero Customer Defection
Customer churn
MinimisedCustomer
delight
Improve profitability
Customer Retention
plans
Customer retention is increasingly becoming more and more important .
Most firms offer loyal customer rewards for their loyalty.
Customer portfolio analysis, customer retaining mareting mix, reorganisation for
Customer retention.
However many rewards program are misunderstood and often wrongly applied.
Customer Portfolio Analysis
Optimal balance in customer portfolio
Reduce defector by
10%
Design of a portfolio
Purchasing history
Portfolio segment
Customer Categories
Actual Sales (2012)
Target sales (2013)
First time customers
28% 25%
Repeat Customer 40% 60%
Switched away, then returned
10% 5%
Last time (Defectors)
22% 10%
Total 100% 100%
Contd…..
Reorganisation for Customer Retention
Lack of Organisational Control & Coordination
Lack of Sensitivity
Insufficient linkage between
marketing & Operation
High Customer
expectation
Realistic target
turnover rates
Customer Retaining Marketing Mix
Product extras
Specialised Distribution
Post – Purchase
Communication
Reinforcing Promotions Sales force
connections
Customer Loyalty Programmes
Capturing customers
Rewards
Educating the
Customers
Companies are
adopting it
Evaluating Retention Programmes
Targeting the right
customers
Value Provided
Measuring increase in
Loyalty
Implementation Road Map
A CRM Roadmap is a strategic plan that identifies how an organization can meet and exceed its customers' needs. This includes, but is not limited to, assessing how the sales, marketing and service entities work together to:
1. gain insight from their customers (e.g. purchase history, desired products/services),
2. produce valuable offerings/products (e.g. personalized product) and
3. provide the ultimate customer experience (e.g. multiple touchpoints, 360 degree view of the customer).
So how do organizations know which CRM capabilities they have, and which they need to realize their strategic goal?
Now we will see primary steps (which have been used cross-industry, including financial services, electronics and high-tech, consumer products, manufacturing, etc.) to follow when developing a CRM Roadmap.
CRM Road Map…How?
The “sponsor” for a CRM Roadmap effort must have a vested interest in the project and ideally has P&L responsibility for the group to be impacted.
As with any project an organization undertakes that involves significant change to business processes, organizational structures, or roles and responsibilities, the lack of key, influential sponsorship reduces the effectiveness of the project, since there is no driving force for implementation.`
Step 1: Gain Senior Level Sponsorship
It is critical to gain insights of various key stakeholders and decision-makers within the organization.
Examples of questions that help gauge the health of the client's CRM include:
• How would you define CRM?• What types of customer information is
captured/tracked (acquisition/retention costs, churn, cost to serve, etc.)?
• What information would you like to know about your customers that you currently do not?
Done by interviewing Executives, Managers, Marketers, Front line staff…
Step 2: Gather Information
Through these meetings, we gain an understanding of the client's current CRM capabilities and significant opportunities to improve their customer relationships, and map out findings.
Also important to understand company's future direction (usually between 6 months and 2 years).
Then comparison of current state of CRM against best practices within the companies respective industry.
Step 3: Assess Current state and Define Future state Gaps
Value opportunities represent the potential benefits delivered by being more customer-centric.
Identify and categorize value opportunities along the lines of people, process and technology.
Example of a "process" value opportunity is improving data capture for all customer contacts across sales functions and touch points (e.g. phone, e-mail, etc.).
"People" value opportunities may involve additional training on service procedures for capturing customer data.
"Technology" value opportunities might include developing a data warehouse.
Step 4: Identify Value Opportunities
After determination of where the value opportunities lie. Identification of which strategic CRM capabilities are needed.Below is a sample of link between a specific value opportunity and its corresponding strategic CRM capabilities:
Value Opportunity :• Improve customer understanding
Strategic CRM Capability:• Possess good knowledge of the customer• Leverage customer information from the service
process• Understand customer profitability and cost-to-
serve.
Step 5: Link Value Opportunities to strategic CRM Capabilities
Once value opportunities are prioritized, specific CRM projects need to be developed. Defining and executing CRM projects will ensure the company masters the relevant strategic CRM capabilities.
An effective way to define relevant projects is through brainstorming sessions with the client. Samples of the outcome of a session might include:
• Understand customer profitability• Enhance call center operations by
implementing sophisticated touch-point technologies
• Establish a data warehouse• Improve sales force training
Step 6: Define CRM Projects and Requirements
Once the projects and requirements are defined, it is necessary to develop the business case to support or refute the criticality of a specific project. The business case seeks to justify the money investment needed and the ROI. Each business case should include:
• Details and costs of required resources (people, technology, training, outsourced resources, etc.),
• Projected duration of time of each project.• Potential benefits
For example, a typical CRM investment ranges from $10 to $25 million (or more) over a three to five year period. The amount is wholly dependent upon how many initiatives have been identified and how extensive those initiatives are. Examples:
• Marketing Insight initiative • Sales force automation initiatives
Step 7: Develop Business Case
Developing a roll-out strategy enables organizations to focus their resources, money and time on the most important projects that help them become customer driven.
Prioritization and phasing of projects is conducted with the executive team, a process in which they evaluate the results of the business cases, and consider for each project's financial results, duration, level of effort required, and technical impact.
Critical Success Factors
Step 8: Develop a Roll-out strategy
Achieving success in developing intimate and enduring relationships with customers begins with a holistic consideration of an organization's functions and abilities that affect its consumer's objectives.
Developing a CRM Roadmap therefore, is a continuous process and not just a one-time exercise, because customers' needs and preferences change constantly.
The correct strategy can help your organization form deeper relationships with its consumers, and also obtain a competitive advantage in the marketplace.
A Final Thought...
Emerging Trends in CRM
1. Near-field Communication 2. Location-based Services 3. Augmented Reality 4. Social Media on Mobile & Social Media as
Customer Service Channel5. Next Generation Mobile Apps
Process
• Companies are slow/unwilling to modify business process to support both customer relationship comfort zone of staff OR customer old way of doing things,tentative responsibilities etc.--Sleepary Scope.
Perception
• CRM must be viewed as job enabler not as latest in the series of doctrine to be implemented corporate policies.
• People are made to believe that they should be able to accomplice the test in less time and purpose new task as well.
Privacy
• Understand the quid procque are more lokely to share their personal informationwith the company if they