Rationale of CRM

7/31/2019 Rationale of CRM

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CRM(Customer Relationship Management)


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Rationale of CRM

CRM is about better understanding of

customers behavior & needs, &

developing & implementing businessstrategies & supporting technologies that

closes the gap between an enterprises

current & potential performance incustomer acquisition, growth & retention.


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Companies that need customers in order to build a

profit need to have a system in place that effectively &

successfully manages the customer/client relationship.

Many companies are choosing to have some of their

employees earn a certificate in customer relationshipmanagement or contact management. This type of

education will proper employees to interact with

customers & potential customers in a positive way that

encourages future communication & the sought aftersale


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Contact Management teaches the tools thatallows the employees to take contacts & turn

them into sales & profits.CRM denotes company wide business strategy

embracing all client facing department & evenbeyond. When an implementation is effective,people, process & technology work in synergy toincrease profitability & reduce operational costs.

Customer's expectations are not now only

limited to get best products & services , they alsoneed a face-to-face business in which they wantto receive exactly what they demand & in a quicktime.


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An ideal CRM system is a centralized collection of

all data sources under an organization & provides

an atomistic real time vision of customerinformation.

CRM is not only to deal with the existing customers

but is also useful in acquiring new customers. The

process first starts with identifying a customer &

maintaining all the corresponding details into the

CRM system which is also called an Opportunity of

Business". The sales & field representatives then trygetting business out of these customers by

sophistically following up with them & converting

them into a winning deal


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Growing Importance of CRM

CRM is not only pure business but also

strong personal bonding within the people

. Development of this type of bondingdrives the business to the new level of

success

Once this personal & emotional linkage isbuilt , it is very easy for any organization

to identify the actual needs of customer &

help them to serve in a better way.


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For making customer loyal, & thusincreasing customer base.

For increasing customer satisfaction , &

thus making more & more business out ofthem.

Reduce process time & increasing

productivity . It is cost effective. Less need of paper or

manual work


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For acquiring new customers.

For grouping the customers which helps

focusing & concentrating on each & every

customers separately.

For tracking the customers & can be used to

determine which customer can be profitable

& which not.


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Customers Need Customers Response

Customers Satisfaction

Customers Loyalty Customers Retention

Customers Complaints

Customers Service


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Misunderstandings about CRM

Identifying CRM with a software system

CRM is a complicating system, difficult to

understand

CRM is expensive & unaffordable by small

enterprises

Wrong assessment for the ROI in CRM

Responsibility for CRM implementation


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Why should a company adopt

CRM? A CRM solution is capable of providing

realtime access to the stored data about a

customer & related matters. Acc. to Pareto principle 20 percent of

customers are responsible for 80 percent of

company profit. It is absolutely necssary todo everything possible to retain loyalty of

these customers.


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Acc. To BCG, cost of selling to an existing

web customer is around 6US $ & cost of

acquiring a new customer is around 34US $. A 5% increase in expenses in keeping

existing customers translates into 25% or

more increase in profitability.


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CRM Systems

The old way of storing client information ,

such as customers names , address & phone

numbers are no longer enough these days.To succeed in this very competitive

environment , your business has to track

customers needs & behaviors in order tofoster stronger relationship with them.


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CRM systems involves gathering a lot ofdata about the customer.

The data is then used to facilitate customerservice transactions by making the

information needed to resolve the issue or

concern readily available to those dealingwith the customers.


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CRM systems are of much help to the Top

Mgt people in the following ways:-

It provide crucial data like customer

satisfaction & efficiency of service

Help to generate reports for product

development or new concepts

Help in deciding the companies future

course of action


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The reports generated by CRM systems are

also invaluable to your advertising &

marketing planners, as they will be able to

pinpoint which ideas works & which do not.

Because of the CRM systems, u will be able

to release advertisements or plan marketing

campaigns more in tune with your targetmarket


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BENEFITS OF CRM

(For different levels of organization)

For Operational Level of Management

For Tactical Level of Management

For Strategic Level of Management


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For Operational Level of

Management1.Improved customer data management

To be effective,CRM systems require

integrated & high quality customer data.

Identifiers for customer data management

are:-


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Improved accuracy of customer information

Improved completeness of customer

information

Decrease in the number of duplicate records

Reduction in time taken to access complete

customer information

Increase in timeliness of information

Improved customer data history


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2.Improved Process Management

For successful implementation of CRM

systems, the alignment of information

technology & business processes is

essential.Indicators for improved process

management are:-


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Reduction in the number of redundant

processes

Increase in efficiency at different stages ofmanaging the customer

Increase in efficiency in assignment of tasks


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3.Improved Customer Service

By aligning people, technology& processes

together , CRM systems assist organizationsin providing consistent & personalized

customer service. Indicators for improved

customer service are:-


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Increased number of resolution at first point

of contact

Reduce handling time for enquires

Increased access to high quality information

at the point of customer contact.


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4.Empowerment of Staff

By giving employees access to more

customer data, CRM systems provide themmore autonomy in their tasks to shape

procedures to the requirements of specific

customers. Indicators for empowerment ofstaff are:-


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Increased conversion rate of prospects

Increased staff satisfaction level

Reduction in administration of sales staff


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5. Improved productivity

Existing users of CRM results in improved

productivity. This is particular significantduring economic downturn when

productivity gains translate into increased

profit margins through cost savings.Indicators for improved productivity are:-


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Reduction in lost opportunity costs

Reduction in costs for lead

generation,marketing,customer service &sales

Each sales representatives handle more no:

of customers in the given length of time


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6. Enabling of Real-time Responsivenss totrends

CRM systems enhance relationship with the

customers by facilitating immediateresponse to their needs & foster continuous

learning & improvement. Indicators for

enabling of real time responsiveness to

trends are:-


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Increase in number of cross sales

Increase in number of up-sales

Earlier detection of trends

Increased number of effective campaigns


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For the Tactical Level Of

Management1. Improved facilitation of Market

segmentation

CRM analytics enables profiling ofcustomers from a heterogeneous market to

appropriate levels of aggregation to obtain

smaller, more homogenous groups.Indicators of Improved facilitation of

Market segmentation are:-


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Increase in campaign response rates

Increase in identification & utilization of

bussiness opportunities

Increase in target marketing driven revenue

Increase in profitability of market segments

Increase in target marketing initiatives


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2. Facilitation of Key Account Management

CRM systems enables better management of

key account customers. Indicators for

facilitation of Key Account Managementare:-

Increase in average customer lifetime

value

Increase in number of customers with

high lifetime value.


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3. Improved Channel Management

CRM systems allow the organization to

increase profitability by ensuring that the

most effective channel is used for specificproducts & customers. Indicators for

improved channel management are:-


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Increase in no: of transaction through cost

effective channels.

Increase in the no: of customer self serviceactivities

Reduction in the usage of cost ineffective

channels


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4. Improved Analysis , Reporting &

Forecasting

Organizations can improve analysis &produce more accurate forecasts using high

quality , integrated customer data from

CRM systems. Indicators for this are:-


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Improvement in monitoring of KPIs

Improvement in reporting at customer rather

than accounts

Increase in th no: of relevant reports

available.


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For The Strategic Level Of

Management1. Improved Customer Satisfaction

Indicators for Improved Customer

Satisfaction are:-

Improved Value Perception

Increase in period of customer loyalty

Increase in the no: of repeat customers

Reduced no: of complaints

Increase in word of mouth recommendation


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2. Improved Business Performance

CRM systems can lad to improved businessperformance in terms of reduced customer

complaints & increased customer retention,

revenue & profitability. Indicators ofImproved Business Performance are:-


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Increase in Profit

Increase in share of wallet

Increase in customer retention

Increase in revenue per customer

Increase in sales

Increase in no: of customers


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3 . Improved Innovative Use Of CRM

systems

Rationale of CRM

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